Socialism, Bureaucracy and the Market — 1

Socialism, Bureaucracy and the Market — 1

Genuine socialism entails the compulsory control of the banks and the major means of production by a genuinely democratic, worker-controlled government. Individually owned and operated and other small enterprises may be allowed to function, but their role in the overall economy would be very small.

One of the major criticisms of socialism is that state control of the vital economic machinery of a country leads not only to bureaucracy – ultimately, a subjective factor – but no less important, to a functional divorce of the economy from the real needs of the population – an objective consideration.

The “wonderful” market…

The theoreticians and apologists for the capitalist mode of production are exuberant about the virtues of the (capitalist) market. To their mind, the profit motive itself is a wondrous thing. Through competition and the law of supply and demand, the market presumably sorts everything out.

In a “market economy” (capitalism), a product – any product – must prove its “worth” within the hard, uncompromising conditions of the market. If a given item – large or small — cannot be sold or not sold in sufficient quantity to garner a profit, modifications must be made or the product eventually dies a “natural” death. If, for instance, the selling price is too high to attract sufficient buyers, the capitalist producer–distributor must (eventually, at any rate) lower the price. If the producer-distributor cannot make a profit at the lower selling price, the given item eventually goes out of production. No bureaucracy interferes in these magical market mechanisms; the “free market” itself decides.

The harsh market…

The process, however, is not that simple. If monopolies, for instance, effectively control a particular market, a less significant capitalist-producer-distributor may well find that he cannot effectively put his products on sale, at least to the necessary degree. The “small guy” may not have the resources to advertise his goods. Or he may not have the capital required to pay off government bureaucrats/mafia to allow him “fair” competition.

Yes, bureaucracy is a major factor – in fact, a major problem, often a major criminal problem – in capitalist economies.

But the social consequences are much worse than all of the above. Suppose a given company cannot make the grade, cannot sell sufficient goods at a profit to stay in business. An all-too-common experience.

What then happens to the company’s workers? They – possibly hundreds or even thousands or even more – are thereby thrown out of work. Notwithstanding that they may well have worked hard and diligently, They are the “refuse” of the “market” capitalist economy. Some may be re-hired somewhere else, but many are destined to become desperately poor. Lives are ruined, families are ruined. Good people die prematurely.

The same fate may then befall other companies which produced the machinery, raw materials and other goods for the failed company. These “feeder” companies — and their workers, of course — may well succumb to the failure of their erstwhile customer-enterprise.

When the “market” economy sinks into recession and even depression…

Moreover, the reality of the capitalist economic system is that crises are inevitable. See my series of posts “Modern Capitalism – The Marxist View.” Due to the extraction of surplus value from workers’ labor, the working class becomes unable to buy back an important portion of the goods which they themselves produced. This is the ultimate cause of crises.

This is an INEVITABLE process, which has only been delayed today by the massive issuance of growing and eventually unredeemable debt plus near-constant depreciation of money.

When the capitalist economy goes into a severe downturn, far more than merely individual companies are forced to close. Millions of workers lose their jobs, millions of others find that their income is reduced and working conditions become much harsher.

Even under current non-crisis conditions, the lot of the working class – after centuries of “glorious” “market economy” capitalism, human suffering is enormous. And much more so in the super-exploited subsidiary (“Third World”) countries which provide ultra-cheap labor and goods for the dominant imperialist lands.

To be continued.


Правительство США жестоко нарушало мои права человека при проведении кампании террора, которая заставила меня покинуть свою родину и получить политическое убежище в СССР. См. книгу «Безмолвный террор — История политических гонений на семью в США» — «Silent Terror: One family’s history of political persecution in the United States» —

Правительство США еще нарушает мои права, в течении более 13 лет отказывается от выплаты причитающейся мне пенсии по старости. Властители США воруют пенсию!! Всё это — ещё доказательство, что настоящий действующий закон в США — Закон джунглей.

ФСБ — Федеральная служба «безопасности» России — вслед за позорным, предавшим страну предшественником КГБ, выполняет приказы секретного, кровавого хозяина (boss) — американского ЦРУ (CIA). Среди таких «задач» — мне запретить выступать в СМИ и не пропускать большинства отправленных мне комментариев. А это далеко не всё…

Арнольд Локшин, политэмигрант из США

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