Monthly Review: Are there lessons to be learned?

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Are there lessons to be learned? - the future of socialism

Harry Magdoff

New features of twentieth century capitalism-such as the growing role of monopoly capital, imperialism, internationalization of production and finance, and the spread of the welfare state in the center-affected but did not change what was essential in the laws of motion discovered long ago by Karl Marx. Despite the great advances in science and technology, major wars, and other historic developments, one feature of capitalist development prevailed: the forces of production expanded side by side with the growth of misery; the gap between wealth and poverty among and within nations continued to widen.

The reason for this consistency is that there is a logical connection between the system's achievements and its failures. The market system under the guidance of the profit motive generates an urgent need for capital to accumulate, which by the inner necessity of the system leads to capital's exploitation of most of the people on the planet and of the planet itself. This interconnection is at the heart of capitalism's laws of motion: underlying tendencies which, even though approximate and modified by historical developments, assert themselves as a blind, elemental force, independent of the aims and decisions of those active in the economy.

But what about the postrevolutionary societies of the East? Have they too been subject to blind objective laws that led to the present disaster? What is important to recognize is that if there were "laws" that pushed some of these economies to the brink, they were primarily in the realm of politics and not economics. Every economy is of course limited by geography and the availability of labor, arable land, and other natural resources. Within these practical constraints, however, the countries that undertook revolutionary social transformations sought to create economic systems free of domination by the domestic and international market place, and hence free of blind, objective forces. Instead of a society subservient to the domination of the economy, politics was to be put in full charge.

But whose politics? Ideally, if the economy was to serve society, the people in the society would need to have the final say on what should be done with the available resources and technology. In other words, power would be in the hands of the people. That, as we know, was not the way it came to be. Thus, during the early years of the Soviet Union an attempt was made to get on the road to socialism. Before long, however, the train got off on another track, leading to a social system that was neither capitalist nor socialist. The blind forces of a capitalist economy were in large measure eliminated. Instead, control over the economy was concentrated in a state ruled by a small minority holding a monopoly of political power. Supporting the new rulers at the top were subordinate interest groups, specially created political and economic institutions, and an accommodating ideology-all of which influenced the patterns of accumulation and contributed to reproducing the new social formation.

This unique new society succeeded in achieving a major forward leap in industrialization without the aid of a capitalist economy, and at the same time fulfilling a number of significant social goals, including the elimination of unemployment. But it also produced its own contradictions: a bureaucratic structure which operated at a far remove from the masses and was so rigid and entrenched that it could sabotage economic and political reforms designed at the top to improve the efficiency of production and distribution. This led to wide differences in living conditions among classes, republics, and regions within each republic, upper and middle social strata militantly striving for higher status and a way of life similar to that of the upper classes of the West.

As long as the economy was able to sustain a rapid growth rate, there was enough maneuvering room to keep the contradictions from reaching a boiling point and exploding. But when the growth rate slowed down and the economy finally stagnated, the stage was set for a profound crisis-one that threatened the system's existence. Although the ruling elite recognizes that halfway measures can no longer stave off a major disaster, there clearly are divisions within the elite about what needs to be done. There are those who apparently seek a quick transition to capitalism, even though they are not prepared to put it that bluntly. Others are looking for major transformations short of a return to capitalism-a sort of halfway house. But on one thing they all seem to be agreed: that the Soviet Union and others in the East European bloc had been socialist societies guided by the principles of Marxism-Leninism. Accordingly, in the search for a way out of the crisis and the protection and improvement of their privileged status, the administrative and intellectual elite are abandoning not only the Stalin-to-Brezhnev versions of "socialism " but the earlier socialist vision as well, even though lip service is paid to key words. They are also in the process of throwing out all Marxist analysis along with the hidebound Marxism of the Soviet Academy.

It is, therefore, not surprising that in looking for lessons to be learned, the privileged sectors do not turn to a critical Marxist analysis of what went wrong. Instead, they turn to the advanced capitalist countries for guidance, attracted by the living styles of the advantaged sectors of those societies and the allegedly value-free bourgeois sociology and economics.

In one of history's ironic twists, the task of reexamining the past from a Marxist perspective has for the present shifted to the South and West, where the people know what capitalism is like and are aware of the apologetic core of the ruling so-called social sciences. Thoroughgoing critical analysis of the postrevolutionary societies, however, is much more than an intellectual game. It assumes significance only if it is linked with the people's wishes and actions, for the simple reason that a social system very different from capitalism must be constructed if hunger and the other ills of poverty are to be eliminated and if the biosphere is to remain suitable for life on earth. The ultimate criticism will come from the experience of future attempts by the masses to create a society which meets their needs.

Meanwhile, the ideological shifts in Eastern Europe, which totally ignore the root problems, have been setting the agenda for discussions in progressive circles in the rest of the world. Suddenly, the virtues of the market, the advantages of private over state ownership of enterprises, and the impracticality of attempting to build socialism in a capitalist-dominated world have entered and confused the discourse of radicals. These issues should not be overlooked, but it is important to recognize that they avoid more basic matters. They do not question basic features of the postrevolutionary societies and the root causes of their crises; in addition, they respond to the personal aspirations of the privileged minority in those societies. For the sake of clarity, we need to appreciate the historic specificity of the more prominent current questions and ask how they relate to the more basic, yes elementary, issues of socialism.

Before anything else, it is important to recognize that there is no foreordained model of socialism and certainly not one that is suitable for all cultures and all times. This does not mean the absence of general principles that flow from the Marxist tradition and the experience gained in national liberation and social revolutionary struggles. But with all the variety that is necessary and desirable, there are two questions that need to be clearly answered in each case: What kind of socialism? For what purpose?

The answers are needed not only at the start, but continuously at each step of the process of transition. The reason for this wariness is that challenges to socialist objectives arise over and over again during the many years and decades of transition. Obstacles along the road produce conflict between the practical and the ideal, calling for compromises which conflict with the socialist project. Often, alternative ways of dealing with these contradictions are available, ways which avoid or limit corruption of the ultimate goals. If, however, the compromises favor the pragmatic solution exclusively, the gap between reality and the original socialist vision gets ever wider. This is one of the major lessons to be learned from the experience of the East. There are other lessons that suggest themselves. A full measure of the lessons, however, waits upon a scholarly examination of the archives, assuming that they become fully available. Meanwhile, I would like to raise some subjects which seem to me especially worthy of inquiry and debate.

1. Can socialism be built without major changes in consciousness and standards of morality?

There is surely no disagreement that a central purpose of socialism is to combat racism, ethnic and nationalist rivalry, and patriarchal hierarchy. Indeed, great progress was achieved in these areas during the early years in most of the postrevolutionary societies. But the enthusiasm for radical change in the position of women, elimination of racial and ethnic hierarchies, overcoming chauvinism, etc. dies down after a while. Old prejudices and attitudes linger just below the surface. Although they may or may not be openly expressed, they affect what happens in practice. As political and economic difficulties mount, the social and human revolution not only takes a back seat but often seriously backslides.

A similar wave of advance and retreat takes place in other areas of morality as well, notably in the development of social consciousness. During the heyday of revolutionary fervor, the ideal of placing the common good above private interests proliferates. But the weight of bourgeois and earlier cultures weighs heavily as a countervailing force, especially when it comes to coping with day-to-day problems in difficult times. Moreover, pragmatic pressures that arise in the drive to industrialize tend to encourage reliance on the bourgeois cultural heritage as a goad. In the absence of adequate vigilance and institutional safeguards, opportunism and careerism creep in, and with them corruption and retention of the spirit of individual competitiveness.

What went wrong in the revolutionary societies with respect to these issues requires major attention. Under the best of circumstances, the change in consciousness is bound to be a long, long process. One thing though is clear: the needed progress will not take place without unending struggle and a suitable environment. This is of course easier said than done, and how to proceed is far from obvious. Propaganda, education, religious instruction, important as they are, will not do the trick by themselves. Real progress depends on the nature of revolutionary practice and mass struggle, which in turn calls for social conditions that encourage and provide room for involvement of the people. The repressive practices of the postrevolutionary societies were surely obstacles to initiatives by the masses to struggle against corruption of socialist ideals. Moreover, if the lifestyle and behavior of the upper echelons-and in general the operation and structure of society-are inconsistent with, or if they vividly contrast with the purported morality of socialism, then the most competent propaganda and education will fall flat, as well they should.

2. Are classes necessary or inevitable in socialist societies?

What we have learned by now is that new classes and social strata can arise and become consolidated even after capitalism is overthrown. Perhaps not classes in the strict Marxist sense, but nonetheless interest groups that dominate consciousness. During the heyday of revolutionary fervor, the ideal of placing the common good above private interests proliferates. But the weight of bourgeois and earlier cultures weighs heavily as a countervailing force, especially when it comes to coping with day-to-day problems in difficult times. Moreover, pragmatic pressures that arise in the drive to industrialize tend to encourage reliance on the bourgeois cultural heritage as a goad. In the absence of adequate vigilance and institutional safeguards, opportunism and careerism creep in, and with them corruption and retention of the spirit of individual competitiveness.

2. Are classes necessary or inevitable in socialist societies?

What we have learned by now is that new classes and social strata can arise and become consolidated even after capitalism is overthrown. Perhaps not classes in the strict Marxist sense, but nonetheless interest groups that dominate and/or benefit from the use of the surplus produced in the economy. A top layer that is responsible for the final shape of political and economic policies and for their execution is bound to be necessary. The crucial question is the extent to which the people are involved in these activities, and the extent to which the people can hold their leaders accountable. On that score, the experience thus far has not been a happy one: the upper political and economic echelons operate at a far remove from the masses; more importantly, in the process of trying to consolidate and retain their power, they assume many of the traits of a ruling class.

Subsidiary social groups emerge along with the development of the productive forces. Urbanization, economic growth, and advanced education bring about a proliferation of administrators and professionals. In the absence of countervailing measures, state and party officials, enterprise managers, professionals, and intellectuals, even if they originally come from the lower classes, develop a psychology and morality that conform with the division of labor. This is particularly the case if the potentially new middle and upper classes, together with coteries of their families and friends, are in a position to acquire status and privileges that set them apart, mentally and materially, from the bulk of the population. Stratification emerges in rural areas as well, between those with power or access to the centers of power and the plain people.

The more that differences among the people become a standard part of the society's operations, the more the emerging upper and middle classes are able to reproduce their advantaged status in ensuing generations. From the conventional view of practicality and its accompanying ideology, all this appears to be an efficient way for society to make the most out of administrative skills that grow with experience and to get the maximum return from the investment in higher, specialized education. But left alone, these social arrangements very soon lead to a self-reproducing class system.

History has still to determine whether a class structure is necessary to make an economy work. Clearly, alternative ways have not yet been explored in the modern world. The test of the inevitability of class structure will depend on future attempts to create a socialist transition which consciously works not only to do away with the old class system but also to frustrate the formation of new classes and social strata.

3. What about other differences among the people?

Class and status differences do not exhaust the sources of inequality. Major regional differences in income, infrastructure, and social services are common in the capitalist world. In fact, they are a natural product of that order. The most extreme differences are of course those between third world and advanced capitalist countries-differences created in the process of the expansion of the capitalist system from the center. But significant regional contrasts can be found in the advanced capitalist nations as well.

As an example of the latter it is worth observing that at the beginning of the industrial revolution in Great Britain there were marked contrasts in living standards between the richer southern part of England and the poorer Celtic fringe (Scotland, Wales, Ireland, and parts of Northern England). After more than two centuries of economic growth under industrial capitalism, the disparity between the same rich and poor regions still exists.

Postrevolutionary societies are bound to find that the regional differences handed over from a long history of capitalist exploitation are hard nuts to crack. The tension between principle and pragmatism is particularly troublesome in dealing with this type of inequality. In view of the concentration of skills, infrastructure, sources of supply, and managerial experience in the more advanced areas, it is more efficient to concentrate on developing the already more developed areas, and consequently largely to neglect the underdeveloped areas. But that view of efficiency has to do with speed in the growth of production, and not with what is best from the standpoint of morality and the aim of reducing the differences among the people. The issue is further complicated by regional economic differences that grow together with the oppression of subordinated racial, ethnic, and national sectors of the population.

There is no simple formula to cope with this dilemma. And because there is no formula, no simple solution, the issue needs to be faced head on at every stage in the inauguration and application of social policy. Notably, the more that maximizing the rate of economic growth is the overriding goal, the more likely it will be that class and regional differences among the people (including racial and ethnic discrimination) will become ingrained in the social structure as a more or less permanent feature.

4. When is democracy democratic?

It has become almost axiomatic on the left that socialism without democracy is an oxymoron. Some add, quite properly, that without socialism there can be no true democracy. Why? Because without equality democracy is severely circumscribed, and only through socialism can meaningful equality ever be achieved. But a long time has to pass and many things have to happen before the ideal of equality can be reached. What happens in the interim? As mentioned above, inequality lingers in many shapes and forms: not only between classes and social strata, but also between city and country, between developed and underdeveloped regions, and between racial, ethnic, and national populations.

Under the best of circumstances, these divisions hang on for a very long time. A major reason is that privilege, social status, and power are interrelated. They interact in two ways, depending upon the historic situation: power paves the road to economic and social privilege, but economic and social advantage can also help attain and retain power. Advantages accrue to selected people in various ways. For example, educated and articulate individuals have an obvious edge. Their writing and speaking skills help gain entrance to the media; their specialized knowledge and experience open doors to privilege. If they are not themselves in the seats of power, they have access to and influence in those quarters. In short, the differences among the people-even if not as great as in a capitalist society-are nevertheless tied in with diversity in power that can stand in the way of meaningful democracy.

This is not an idle academic proposition, because the interests of the various sectors of even a socialist-oriented society are not just different-they conflict with each other. There is never enough to satisfy all needs (or desires) at the same time. That being the case, traditional forms of democracy can easily become instruments for the more powerful getting still more advantages at the expense of the weaker and underprivileged sectors.

Does it have to be that way? Are there ways out of the contradiction between the aims of socialism and democracy, on the one hand, and the obstacles arising from ongoing inequality on the other? To be sure, this dilemma can be resolved only by ongoing, uninterrupted revolutionary practice-a practice that opens the way for the empowerment of the unempowered.

At the very least, the leaders must speak the truth. The people need to know the facts and learn about the problems associated with making realistic choices. Instead of critical decisions being made behind closed doors-decisions that will shape the future development of the society-the people need to be consulted and involved in determining such vital policy matters. But before that can be done, the people must be fully and frankly informed about the significance of the various options being considered. Clear-cut policies would be needed to underpin the move to a democracy that is really democratic: affirmative action to bring the common people into the corridors of power; leaders who trust and listen to the people; and ways to make leaders accountable, which includes the right of the people to recall political leaders and administrators.

The list of what would be needed for a meaningful democracy is bound to be a long one. Drawing up such a list is the easiest part, especially if provision is made for changes arising from trial and error. On the other hand, putting these policies into practice is complex and full of pitfalls. From the standpoint of a leadership caste, the authoritarian way or trusting to a formal democracy that can be manipulated would be preferable and more efficient. But as the experience of the postrevolutionary societies has shown, the allegedly more efficient practice before long leads to departure from socialism.

5. What sort of economic development? For what purpose?

It should go without saying that there are always constraints to economic growth and what can be made available. We can't all have everything. There is only so much land, raw materials, and labor available. Production forces can be enlarged and made more productive, but that takes time. For these reasons, arriving at a clear priority schedule consistent with society's social policies is of paramount importance. Priority choices have to be made at the most general levels of policy, such as investment in means of production vs. means of consumption, agriculture vs. industry, heavy vs. light industry, etc. Down the line of policy-making more immediate choices have to be made. For example, should a factory be built to make refrigerators which would lighten the daily household tasks, autos to add to the spice of life, or pipes to bring clean water to villages? Questions of that sort arise in the thousands when social needs rather than profits guide investment decisions.

It is, however, useful first to recognize that if priority is given to the needs of the poorest people, there is much that can be done at the outset even in the absence of growth of productive forces. This was seen in the early days of many of the postrevolutionary societies. The redistribution of wealth and the use of idle resources can bring quick improvement in health, education, and living conditions to large numbers of people.

Interestingly enough, the achievement of Kerala (described in the Review of the Month in MR, January 1991), operating within the confines of a capitalist and postcolonial India, shows some of the possibilities as well as the limits of what can be done in the absence of big advances in growth. Kerala is a state in India with a long history of militant mass struggle, and where for long periods a communist party (or parties) has been in power. Kerala is one of the poorest areas in India. Its per capita income is only 60 percent that of India as a whole. Yet when it comes to meeting the needs of the people, Kerala is strikingly ahead of the rest of India. It has enforced a progressive land reform, and brought about major social benefits precisely for the most disadvantaged. Infant mortality in Kerala is 27 per thousand compared with 86 per thousand in India as a whole and 106 per thousand in countries at the same income level as Kerala. Life expectancy in India is 57 years, in Kerala 68. Elementary and secondary schools operate in practically every village, where one can also find health dispensaries, fair price shops, bus stops, all-weather roads-a far cry from village life in the rest of India. This was accomplished without a social revolution, within the confines of a capitalist society, and where fortunately U.S. imperialism was not in a position to interfere.

At the same time, Kerala is no Garden of Eden. There is a great deal of unemployment, the people are still very poor, and further progress is severely circumscribed. To advance further, Kerala would need to escape from capitalism and the market economy, to industrialize, and to increase agricultural productivity. Nonetheless, the Kerala experience dramatically illustrates that much can be done to serve the interests of the people even with limited growth and underdeveloped productive forces.

Yet, despite the possibility of some improvement with limited resources, the simple fact remains that the poverty and misery of billions of people on this planet cannot be overcome without major advances in agricultural output, industrialization, labor productivity, and the application of advanced science and technology. Troubles can arise, however, when growth, ever-expanding growth becomes the overriding consideration; when, as in the Soviet Union, production for production's sake, rather than production for use, replaced production for profit. Although the logic of accumulation in the postrevolutionary societies differed markedly from that of capitalism, the direction of their productive activity, including the spoilation of the environment, largely resembled the patterns of capitalist development.

On the other hand, if the priority of a socialist society is unhesitatingly to put the needs of the poorest people and the most backward regions in the forefront, and to protect the environment, the nature of that society's growth will differ vastly from that of all other societies of the past and present. For that, though, an entirely new worldview is necessary-one far removed from the consumption standards and way of life of the advanced capitalist countries.

A revolutionary society needs a revolutionary world outlook, with totally new perspectives-for example, on housing, the design of cities, the structure of rural society, means of transportation, sources of energy, the uses of culture, opportunities for widespread creative activity, and the availability and use of leisure. A new social order can only work and be meaningful if it is shaped and directed by the will and consent of the people.

Sooner or later, the people in such a society would have to consider the need to slow down or limit growth for the sake of the quality of life and to have a habitat in which humans can breathe and stay healthy. The reasons for this are not only the earth's limited resources and the ecological effects of unending industrialization, though these should be sufficient to induce skepticism about the feasibility of unending growth.

Limitless expansion for the sake of ever higher material standards of living could only result in the replication of the worst features of class society. The drive for an incessant increase in production of an ever wider assortment of goods would entail, among other things, continuation of a rigid division of labor, concentration of manufacturing in large enterprises, and poisonous industrial centers. At the same time, equality in distribution would have to go by the board. In the absence of limits on consumption, there would be no practical way of satisfying every consumer's desire for an ever wider

assortment of goods. In a capitalist market economy, which must keep on creating new products in the incessant drive of capital accumulation, the disparity between supply and the desires of consumers is easily solved: those who have enough wealth and income get the goods, while the have-nots don't. Pretty much the same would apply to a society based ostensibly on production for use but governed by the principle of unending growth at high growth rates. The latter would call for heavy concentration on investment for new capacity, thereby imposing limits on production of consumer goods. The ever-wider assortment of consumer goods-necessarily limited in supply-would in the ordinary course become perquisites of the privileged and go to those with sufficient income to satisfy their hearts' desires. In the absence of socially determined policies that take into account limits to growth, inequality of distribution is bound to persist, along with the perpetuation if not intensification of the differences between the people.

It may seem strange, if not outrageous, to place so much emphasis on the need to think of limits on growth in light of the desperate need for an enormous expansion of production forces in the third world. And yet, wittingly or unwittingly, long-term growth considerations enter into policymaking early on. The question of what kind of growth a socialist-minded society needs to consider is very much interconnected with what was said above about morality, consciousness, new class formations, and meaningful democracy. From the very outset, the decisions made on how and for what purpose to transform the society will have a major effect on the direction of economic development for many years to come.

Thus, a social policy directed towards the ultimate elimination of differences among the people would have a decisive influence on the infrastructure to be built, the choice of technology, location of industry, etc. Ideally, the production forces created would then be consonant with social relations and policies which, for example, would and could respond to ecological imperatives. On the other hand, if the goal, implicit or explicit, is to reach for the consumption standards of the advanced capitalist countries (including, for example, the mass use of private automobiles), then another sort of infrastructure, technology, and industrialization would be needed. Once a society takes off this way, the resulting social relations and production forces impel staying on the same path. Barring a crisis resulting from inner contradictions, the bias towards unending, rapid growth would most likely persist.

6. Plan or Market?

Against this background, the issue of plan vs. market-so popular these days-assumes a special meaning. About one aspect of this question there should be little if any dispute. A market is needed at the very least to distribute goods and services to consumers. Wholesale markets for consumer goods and industrial supplies might also contribute to a smoother operation of the economy.

The crucial issue is not market or no market, but what kind of market? To what extent will the market guide the flow of investment? If the market is let loose as the guide for investment decisions, it must then pursue its own logic. For example, markets lose whatever rationality they have if the sellers are monopolies or near-monopolies. If markets are to serve as guides on investment decisions, competition is essential. But competitive firms risk becoming bankrupt. To avoid the shoals of bankruptcy, they need to secure a solid base for profit-making. This entails, among other things: keeping a tight rein on labor and other costs, an impetus for self-expansion to get a stronger hold on a share of the market as a defense against predatory competitors, a growing reliance on export markets to absorb the excess products flowing from the expanded capacity. To keep such a system going, capital markets are needed, and to be effective they need liquidity: in other words, a class of speculators always ready to buy or sell instruments of ownership or debt. The wheels of enterprises and capital markets need to be greased by a strong banking system. These institutions in turn must for the sake of self-defense be assured that the firms to whom they supply funds have good profit prospects; furthermore, the banks themselves need to keep an eye on their own profits and growth, if only as protection against competitive threats in the financial area. The inevitable result is that profit-making guides capital accumulation and thereby the destiny of the economy, determining the allocation of resources and the distribution of income.

There is no half-way house once the market is given its head. The state can, and indeed at times must, interfere to prevent abuses that will harm the population (e.g., adulterated food and drugs), and try to protect the population against the worst ravages of the market. But before anything else, the state is obligated to protect and smooth the way for industry and commerce-that is, if such a market economy is to work. Market economies are by their very nature anarchic and therefore subject to periodic downturns and stoppages. For that reason, the state needs to be wary of potentially dangerous breakdowns, taking steps to keep order if the breakdowns are especially severe. The more a society relies on a market economy the more must that society become subservient to the market economy. This is not idle theory, but a proposition that has been proven over and over again during hundreds of years of first commercial and then industrial capitalist market economies.

On the other hand, if the economy is to be subservient to society-to serve the welfare of all the people, to eliminate poverty, underdevelopment, and mass misery-then central planning is an absolute necessity. In addition, it cannot be stressed too strongly: national planning is equally essential before it is too late for the globe to remain a livable habitat for human beings. This does not necessarily mean that every detail of production and distribution should be dictated by authorities at the center. We know from bitter experience how counterproductive rigid, excessively bureaucratic planning can become. But there is no escape from the simple fact that resources are limited. A choice must be made as to how they will be allocated. Basically there are two ways. Resources can be allocated via a market, where price and profits do the rationing. The alternative is to allocate basic resources in a way most suitable to meet social needs. The necessity for central planning was shown in the United States during the Second World War when the national priorities were crystal clear (e.g., military airplanes vs. civilian autos, tanks vs. home refrigerators, barracks vs. civilian homes). Central planning was the only way an industrial miracle was achieved. In short order the armaments, transportation facilities, food, clothing, and housing for military forces fighting on two continents were supplied. Authorities in Washington in effect dictated what to produce and what not to produce (not in every detail but with sufficient direction to assure that the most urgent priorities would be met), what sort of new productive capacity was to be built, and how to distribute the insufficient output of metals, industrial supplies, metal-working machinery, etc.

One of the saddest misconceptions these days arises from equating the Soviet method with national planning. The failures of Soviet-style planning are then taken to prove that national planning is bound to fail. But there is no good reason to assume that the Soviet model is the only possible one. It is a system that evolved in given historic circumstances. If anything, its failures need to be exhaustively studied in order to avoid repeating its errors. A critical examination of this important experience would require, in my opinion, much more attention to the politics and social policies than to the technique of planning, faulty as some of the latter may be.

7. A socialist nation in a capitalist world economy?

It should be clear by now that the preceding discussion abstracts from some of the most severe problems of all, especially direct and indirect intervention by imperialist powers and the need for a military establishment. If we may continue with this abstraction, I believe it follows from the preceding set of questions and problems that a society wishing to turn to socialism-or those who by some other means want to overcome the obstacles created by colonialism and neocolonialism-in the midst of a capitalist world must work towards opting out of the international network of capitalist trade and finance. How soon it can do so and how far it can go in that direction depends on many practical considerations.

By no means is this a question of autarky. But the fundamental principle should be clear: the more an economy (socialist or not) is part of that network, the more it becomes dependent on it, the more its domestic economy must adapt to the world price system, the requirements of international finance (including the discipline imposed by the International Monetary Fund), and the capitalist business cycle. The net result is that the constraints of the world market become a dominant influence in a socialist society (or in alternate social formations that seek to control their own destiny). Planned economies that enter the international trade and financial network with both feet find that they increasingly lose control over their own destiny. Before long planning loses its effectiveness. It becomes the tail that tries to wag the dog.

The usual argument given for the need to actively participate in world trade is to get access to the most modern technology. This argument is surrounded by a mystique about the magical properties of modern science and technology, as if they are the keys to overcoming backwardness. But that is an evasion of the more basic questions raised earlier: What kind of socialism? For what purpose? Is it to get the maximum welfare for all the people, with the objective of giving first priority to meeting the needs of those most deprived? In that case, devoting scarce resources to the most modern technology may be wasteful. Yes, if what is being sought is to supply the privileged part of the population with the most modern gadgets and designs of the West, then diving headfirst into an ever-greater participation in the international economy is understandable. But if the aim is to meet the needs of all the people for decent food, housing, clean water, proper sanitation, greatly expanded food production, health protection, education, cultural opportunities, and the like, then there is little in the latest technology of the West that would make a significant contribution. What is useful and relevant in Western technology for improving the way of life of the masses is widely known, hardly arcane, and obtainable in the normal course of managed trade. On this question, as with those raised above, a critical review of Soviet experience from a Marxist and socialist perspective can teach important lessons.

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