Socialist Optimism

An Alternative Political Economy for the Twenty-First Century

Paul Auerbach

• Publisher: Palgrave Macmillan
• Year: 2016
• ISBN:
  9781137563965
• Topic: Economics
• Subtopic: Macroeconomics
• Index: Economics

Paul Auerbach's Socialist Optimism offers an alternative political economy for the twenty-first century. Present-day capitalism has generated growing inequality of income and wealth, persistent high levels of unemployment and ever-diminishing prospects for young people. But in the absence of a positive vision of how society and the economy might develop in the future, the present trajectory of capitalism will never be derailed, no matter how acute the critique of present-day developments. The detailed blueprint presented here focuses upon the education and upbringing of children in the context of social equality and household security. It yields a well-defined path to human development and liberation, as well as democratic control of working life and public affairs. Socialism as human development gives a unity and direction to progressive policies that are otherwise seen to be a form of pragmatic tinkering in the context of a pervasive capitalist reality.

Part I

Socialism and Central Planning

Introduction

Why did all attempts to build a socialist alternative to capitalism in the twentieth century fail? An extensive answer to this question will embrace a large number of considerations, but a blunt summary in a British context would be as follows: ‘Much of the Left’s energy has been dissipated by industrial experiments in planning … it seems indisputable now that had the 1945 Labour government concentrated on rewriting the 1944 Education Act and reconstructing the university system, a genuine and lasting transformation of the society may well have been possible’.¹

Perhaps the reader will find these words naïve: do they not merely substitute ‘education’ for ‘planning’ as a deus ex machina that will solve or obviate the complex problems of social transformation? The point, as we shall see, is well taken. In rich societies, a successful educational programme is the most powerful single public policy intervention for the promotion of equality and democracy. But the societal context in which formal education takes place is crucial, with high levels of social and economic equality helping to engender a flourishing environment for learning. In addition, learning, broadly conceived, will be seen in Parts II and III to encompass a range of experiences from birth, many of which take place outside the domain of formal education. These experiences emerge from living and interacting in the world, within the family and at work. An environment offering broad-based opportunities for learning in these contexts can be important in itself and complement the provision of formal education. A good system of formal education is, therefore, no replacement for the promotion of equality and opportunity in the living and work environment.

The quotation above was not presented to initiate a debate on the efficacy of any specific act of nationalisation, but as a vehicle for questioning why educational reform and human development played such a peripheral role in schemes for socialist transformation over the twentieth and twenty-first centuries. A significant part of the explanation can be found in socialist ideologies in their dominant manifestations, Marxist and otherwise: education and human development were seen as merely part of the superstructure of a society, an aspect of social welfare provision and a secondary issue, one to be delegated to women. The primary concerns and defining questions for socialists focused on the substructure of the society: who owns the means of production, and how are societal resources allocated and distributed – by a market mechanism or by a central plan? The embrace of planning by socialist organisations worldwide was not an accidental or even a contingent event: the role of planning as an ideology and as a solution to society’s ills was pervasive, not only for socialists but across the spectrum of political views from left to right, for much of the twentieth century.

It is socialism, however, that has maintained the strongest, almost tautological identification with planning in its various manifestations, but most especially with central planning. Socialism has suffered from a collapse of faith because it finds itself associated with this decrepit ideology. The high tide of free-market liberalism may have receded in recent years, but liberalism (often disguising a social Darwinist agenda) continues to present a coherent vision of the future that is unmatched by any existing socialist alternative.

1

Planning and Spontaneous Order

Two grand conceptions have emerged in Europe on how to organise society on a secular basis. In the early modern period, a conscious moulding of society and its institutions was seen as a logical extrapolation from the way rational human beings ordered their lives. In a later view, society was seen to behave as a natural system capable of self-regulation. In this chapter, these approaches – planning and its antipode, spontaneous order – will first be introduced. The remaining sections and much of the discussion in Part I will address the false presumption that these two notions are not only competing, but mutually incompatible.

Planning as an aspect of rationality

For Karl Marx, the ability of the human being to envision, organise and plan activities is a characteristic and distinctive property of the species to which it belongs:

We presuppose labour in a form in which it is an exclusively human characteristic. A spider conducts operations which resemble those of the weaver, and the bee would put many a human architect to shame by the construction of its honeycomb cells. But what distinguishes the worst architect from the best of bees is that the architect builds the cell in his mind before he constructs it in wax. At the end of every labour process, a result emerges which had already been conceived by the worker at the beginning, hence already existing ideally. Man not only effects a change of form in the materials of nature; he also realizes his own purpose in those materials. And this is a purpose he is conscious of.¹

This link between human rationality and planning had, however, already been formulated at the dawn of the Enlightenment in the seventeenth century. René Descartes’ reflections in the Discourse on Method (1637) on how to reconstruct philosophy on a secure, rational basis were supported by analogy with the purposeful activity of the architect and the town planner:

buildings undertaken and completed by a single architect are commonly more beautiful and better ordered than those that several architects have tried to patch up, using old walls that had been built for other purposes ... ancient cities ... are commonly quite poorly laid out compared to well-ordered towns that an engineer lays out on a vacant plain as it suits his fancy ... [While] one does not see people pulling down all the houses in a city simply to rebuild them some other way ... one does see that several people do tear down their own houses in order to rebuild them ... Taking this example to heart ... I could not do better than to try once and for all to get all the beliefs I had accepted from birth out of my mind, so that once I have reconciled them with reason I might again set up either other, better ones or even the same ones.²

The correct approach for Descartes, one that accords with reason, is congruent with planned, purposeful behaviour. It may well involve reconstruction de novo, as if ‘on a vacant plain’.

The link in Western intellectual development between rational thought and the need for reconstruction de novo had been present at least as early as the late Renaissance, most prominently in a polemical context by Francis Bacon in his Novum Organum (New Method) of 1620. The stupendous and substantive achievements in natural philosophy (what we would now call the sciences) of the Enlightenment that followed were invariably characterised by a willingness to begin again, exemplified by the rejection of Aristotle’s physics and Ptolemy’s astronomy by Galileo. Cartesian philosophy emerged in the context of these scientific accomplishments (including those of Descartes himself); Descartes’ implied dismissal of tradition in favour of reason accounts for his perpetual difficulties with political, and especially church, authorities, despite his protestations of adherence to the Catholic faith. In the eighteenth century, Enlightenment rejection of the edifying role of tradition in politics – of traditional institutions, modes of thought and practice – reached a consummation in the English-speaking world with Thomas Paine’s Rights of Man (1791), written as a riposte to Edmund Burke’s Reflections on the Revolution in France (1790). Britain emerges in this period, with David Hume and others, as the most articulate opponent of radical critiques of the established order and defender of existing political and legal institutions and social practices.³

Descartes’ formulation of the link between rational thought, on the one hand, and the need for reconsideration and reconstruction of the foundations of all aspects of intellectual and practical activity, on the other, is the culmination and most articulate expression of the convulsion in Western thought that took place in the early modern period. Subsequently, in the wake of the French Revolution, applications of this Cartesian programme in the context of practical affairs represent early instances of a notion of planification: we see efforts to reform – to place in a proper, rational order and impose uniformity upon a range of social mechanisms that had emerged historically – weights and measures, the calendar and the law. These alterations to traditional practices imposed by the French Revolution played important roles in the promotion of capitalist development and were highly contested.⁴ As in other cases to be discussed below, these changes, which permitted the expansion and deepening of markets, often took place in the wake of conscious administrative reform rather than as emanations of a spontaneous order. While the charming reforms to the calendar (with a month beginning in the latter part of April named Floréal) proved to be short-lived, juridical reforms imposed by the Revolution, such as the imposition of the civil legal code and the abolition of the remnants of feudalism, stimulated nineteenth-century continental economic development.⁵

Conceptions of planning – redesigning de novo in the social sphere and intervention in the traditional order of society, especially by the state – entered a new phase in the nineteenth century. Their most prominent advocates were not to be found in the early working-class movements, such as the Chartists in England, or among radicals on the European continent, such as Pierre-Joseph Proudhon or even Karl Marx and Friedrich Engels at the time of the Communist Manifesto (1847–8). Rather, it was Henri de Saint-Simon (1760–1825) and his disciples who, imbued with the successes of the pure and applied sciences of their day, were eager to partake in a social engineering of society with the intention of increasing society’s productivity. In the France of the 1820s and 1830s, the role of Saint-Simonian ideology among engineers was a pervasive one.⁶

The Saint-Simonians came to be seen in retrospect as the chief progenitors of schemes for a planned economy. But, despite the fanciful aspects and the inflated language accompanying their ideas, Saint-Simonian notions of planning barely hint at the designs for controlling the economy that we will see materialise in the twentieth century in the form of technocratic central planning. Their concept of planning was firmly rooted in the nineteenth century, with a focus on an elite, meritocratic direction of society by the intellectual and productive classes, including industrialists and bankers. As in the case of the political economy of David Ricardo in England in the early nineteenth century, their enmity was directed at those idle groups, largely the landed classes, who stood in the path of the emerging industrial economy. Even when it developed a redistributionist tendency in the form of the advocacy of the abolition of inheritance, the Saint-Simonian movement was motivated more by a desire to promote the productive use of society’s resources than by a reformation of the class structure and property relations in society: ‘[We] Saint-Simonians are opposed to the institution of private property simply because it inculcates habits of idleness and fosters a practice of living upon the labour of others.’⁷

From our current perspective, it would seem inappropriate to label Saint-Simonian ideas for intervention in the economy as either utopian or revolutionary. Stripped of rhetorical flourishes, the central notion involved banking sector coordination between (and within) industrial groupings, with the intention of providing inexpensive finance to firms. These ideas were to be reflected in the development of industrial banking in France in the form of the Crédit Mobilier and, even more importantly, in the industrial banks of nineteenth-century Germany.⁸ Subsequently, these banks would play an important role in late-developing countries wishing to promote economic development.⁹

Saint-Simonian proposals for a rationalisation of industry deviated from the developmental nature of the overall strategy. Their purpose was to avoid the excesses that can emerge from the market economy – an anti-social depression of wages or the generation of industrial crises from overcapacity. But these policies, far from being an augury of socialist notions, were a manifestation of a defensive or even reactionary response to capitalism and its apparent destabilisation of traditional ways of life rather than a visionary, state-directed programme of economic change. The Saint-Simonians emerge less as the progenitors of twentieth-century technocracy, central planning and socialism than as an ideological antipode to British liberal ideology in the nineteenth century.¹⁰ Saint-Simonian projects in France, often sponsored by the state for expansion and modernisation of roads, industrial and agricultural infrastructure, and, most especially, railways, were imitated throughout late-nineteenth-century Europe. Such a conscious, planned, but limited strategy of economic development would have been thought exceptional only in Britain at the apogee of liberalism.

The Saint-Simonian movement in France had no more direct access to political power in the nineteenth century than did the early socialists, but its influence was widespread in France’s industrial revolution in the period up to the end of the Second Empire.¹¹ A striking example of planification in this period took place under that ‘Saint-Simonian on horseback’¹² Napoleon III and his prefect Georges-Eugène Haussmann, who renovated Paris and made it over ‘from a stinking and decrepitating rat-maze of slums into the epitome of everything we value about city life’.¹³ Slums were demolished, boulevards and an integrated network of roads were created; at the height of Haussmanian activity, one in five Parisian workers was employed in construction. As we shall see, many of these reforms had contentious aspects, but those related to public health were the most indisputably beneficial: by 1869, Haussmann, beginning a process that was to continue for several decades, had constructed over 300 miles of new sewers in Paris, thereby reducing the incidence of the cholera that had literally plagued the city.¹⁴

At least one [British] authority downgrades the significance of these Parisian health reforms as ‘much talk but little action’¹⁵ in comparison with public action taken in Britain. But it was in Britain that ideological opposition to any form of state-directed intervention in the economy took its most articulate form, with two arguments that would resonate in the future. The first was concerned with a defence of liberty: the Medical Officer to the Privy Council, John Simon, reported on hostility to state intervention, with opponents claiming that it had ‘interfered between parent and child [a reference to vaccination] between employer and employed [over sanitary measures in factories] and between vendor and purchaser [referring to legislation governing the quality of water and the adulteration of food]’.¹⁶ For Herbert Spencer, a thinker admired by Hayek, ‘The doctrine that it is the duty of the state to protect the public health ... rests upon the assumption, that men are not fit to take care of themselves.’¹⁷

The second argument against intervention was that it interfered with nature, or with natural mechanisms for resolving problems: The Times reminded us in 1848 that ‘the Cholera is the best of all sanitary reformers’, and in 1852, at a meeting of the Institution of Civil Engineers, one advocate informed his audience that the role assigned to sewers ‘should be left to nature’.¹⁸ For Spencer, society itself was a natural phenomenon: ‘Society, a living, growing organism, placed within the apparatuses of dead, rigid, mechanical formulas, cannot fail to be hampered and pinched.’ Through the natural evolution of this living organism, ‘existing social needs will be spontaneously met, though we cannot say how they will be met’; interference by the state would result in unintended consequences: ‘[Boards of Health] have, in sundry cases, exacerbated the evils to be removed; as, for instance, at Croydon, where, according to the official report, the measures of the sanitary authorities produced an epidemic, which attacked 1,600 people and killed 70 ... [W]hen ... remedies applied by statesmen do not exacerbate the evils they were meant to cure, they constantly induce collateral evils; and these often graver than the original ones.’¹⁹

But such contentions – that the regulation of public health was a violation of natural liberty and that epidemics were natural remedies – progressively ceased to have an audience. In 1892, the last great cholera epidemic in the cities of Western Europe took place in Hamburg and killed 10,000 people: it was linked in the public’s mind to that city’s distinctively ‘English’, liberal tradition.²⁰ Public health measures, usually state-sanctioned and often in the context of urban planning, led to a decisive improvement in the health and longevity of the populations of rich countries from the mid-nineteenth century onwards. It was not until the availability of antibi...

Table of contents

• Cover
• Title
• Introduction
• Part I  Socialism and Central Planning
• Part II  Human and Economic Development
• Part III  Socialism and Human Possibilities
• Conclusion
• Notes
• Bibliography
• Index