To what extent, if at all, can economic forces be tamed to the collective human will?

[ITR_champion]

I believe that a hijack has taken place here.

[BrainGlutton]

@ITR_champion

I believe that a hijack has taken place here.

Especially as there’s no essential connection between the Nazis’ racial ideology and their economic ideology, such as it was. In practice, their economic ideology was that the state will intervene/nationalize/manage the economy to exactly the extent that seems good to it at the moment and take no backtalk, but they were not in any way committed to socializing the furthest reaches of the private economy, the way the Stalinists were.

Well. Democratic socialism, as distinct from Stalinism and as distinct from social democracy, is something that, somehow, has never yet been tried. In a democratic-socialist society, massive parts (by no means all) of the economy would be managed by – depending on the school of socialism – the state, or cooperatives, or unions/syndicates, but in all cases organizations where all affected have some kind of vote. And – this is essential – the elections would be for real, free and fair with no institutionally privileged ruling party. And there would be no noneconomic totalitarianism, no hubristic, heroic efforts to produce a “New Socialist Man” or to bring all organs of civil society in line with the state. One sees the political problem here? Democratic socialism, so defined, can happen only when a majority are willing to vote socialist and last only so long as that condition lasts; therefore, as any political consultant will tell you, its political viability depends largely on its economic success. That’s how I understand it, anyway. Here’s how George Orwell envisioned it in 1941:

What this war has demonstrated is that private capitalism that is, an economic system in which land, factories, mines and transport are owned privately and operated solely for profit–DOES NOT WORK. It cannot deliver the goods. This fact had been known to millions of people for years past, but nothing ever came of it, because there was no real urge from below to alter the system, and those at the top had trained themselves to be impenetrably stupid on just this point. Argument and propaganda got one nowhere. The lords of property simply sat on their bottoms and proclaimed that all was for the best. Hitler’s conquest of Europe, however, was a PHYSICAL debunking of capitalism. War, for all its evil, is at any rate an unanswerable test of strength, like a try-your-grip machine. Great strength returns the penny, and there is no way of faking the result.

When the nautical screw was first invented, there was a controversy that lasted for years as to whether screw-steamers or paddle-steamers were better. The paddle-steamers, like all obsolete things, had their champions, who supported them by ingenious arguments. Finally, however, a distinguished admiral tied a screw-steamer and a paddle steamer of equal horse-power stern to stern and set their engines running. That settled the question once and for all. And it was something similar that happened on the fields of Norway and of Flanders. Once and for all it was proved that a planned economy is stronger than a planless one. But it is necessary here to give some kind of definition to those much-abused words, Socialism and Fascism.

Socialism is usually defined as “common ownership of the means of production”. Crudely: the State, representing the whole nation, owns everything, and everyone is a State employee. This does NOT mean that people are stripped of private possessions such as clothes and furniture, but it DOES mean that all productive goods, such as land, mines, ships and machinery, are the property of the State. The State is the sole large-scale producer. It is not certain that Socialism is in all ways superior to capitalism, but it is certain that, unlike capitalism, it can solve the problems of production and consumption. At normal times a capitalist economy can never consume all that it produces, so that there is always a wasted surplus (wheat burned in furnaces, herrings dumped back into the sea etc etc) and always unemployment. In time of war, on the other hand, it has difficulty in producing all that it needs, because nothing is produced unless someone sees his way to making a profit out of it. In a Socialist economy these problems do not exist. The State simply calculates what goods will be needed and does its best to produce them. Production is only limited by the amount of labour and raw materials. Money, for internal purposes, ceases to be a mysterious all-powerful thing and becomes a sort of coupon or ration-ticket, issued in sufficient quantities to buy up such consumption goods as may be available at the moment.

However, it has become clear in the last few years that “common ownership of the means of production” is not in itself a sufficient definition of Socialism. One must also add the following: approximate equality of incomes (it need be no more than approximate), political democracy, and abolition of all hereditary privilege, especially in education. These are simply the necessary safeguards against the reappearance of a class system. Centralised ownership has very little meaning unless the mass of the people are living roughly upon an equal level, and have some kind of control over the government. “The State” may come to mean no more than a self-elected political party, and oligarchy and privilege can return, based on power rather than on money.

<snip>

I suggest that the following six-point programme is the kind of thing we need. The first three points deal with England’s internal policy, the other three with the Empire and the world:

1. Nationalisation of land, mines, railways, banks and major industries.

2. Limitation of incomes, on such a scale that the highest tax free income in Britain does not exceed the lowest by more than ten to one.

3. Reform of the educational system along democratic lines.

4. Immediate Dominion status for India, with power to secede when the war is over.

5. Formation of an Imperial General Council, in which the coloured peoples are to be represented.

6. Declaration of formal alliance with China, Abyssinia and all other victims of the Fascist powers.

The general tendency of this programme is unmistakable. It aims quite frankly at turning this war into a revolutionary war and England into a Socialist democracy. I have deliberately included in it nothing that the simplest person could not understand and see the reason for. In the form in which I have put it, it could be printed on the front page of the DAILY MIRROR. But for the purposes of this book a certain amount of amplification is needed.

1. NATIONALISATION. One can “nationalise” industry by the stroke of a pen, but the actual process is slow and complicated. What is needed is that the ownership of all major industry shall be formally vested in the State, representing the common people. Once that is done it becomes possible to eliminate the class of mere OWNERS who live not by virtue of anything they produce but by the possession of title-deeds and share certificates. State-ownership implies, therefore, that nobody shall live without working. How sudden a change in the conduct of industry it implies is less certain. In a country like England we cannot rip down the whole structure and build again from the bottom, least of all in time of war. Inevitably the majority of industrial concerns will continue with much the same personnel as before, the one-time owners or managing directors carrying on with their jobs as State employees. There is reason to think that many of the smaller capitalists would actually welcome some such arrangement. The resistance will come from the big capitalists, the bankers, the landlords and the idle rich, roughly speaking the class with over £2,000 a year–and even if one counts in all their dependants there are not more than half a million of these people in England. Nationalisation of agricultural land implies cutting out the landlord and the tithe drawer, but not necessarily interfering with the farmer. It is difficult to imagine any reorganisation of English agriculture that would not retain most of the existing farms as units, at any rate at the beginning. The farmer, when he is competent, will continue as a salaried manager. He is virtually that already, with the added disadvantage of having to make a profit and being permanently in debt to the bank. With certain kinds of petty trading, and even the small-scale ownership of land, the State will probably not interfere at all. It would be a great mistake to start by victimising the smallholder class, for instance. These people are necessary, on the whole they are competent, and the amount of work they do depends on the feeling that they are “their own masters”. But the State will certainly impose an upward limit to the ownership of land (probably fifteen acres at the very most), and will never permit any ownership of land in town areas.

From the moment that all productive goods have been declared the property of the State, the common people will feel, as they cannot feel now, that the State is THEMSELVES. They will be ready then to endure the sacrifices that are ahead of us, war or no war. And even if the face of England hardly seems to change, on the day that our main industries are formally nationalised the dominance of a single class will have been broken. From then onwards the emphasis will be shifted from ownership to management, from privilege to competence. It is quite possible that State-ownership will in itself bring about less social change than will be forced upon us by the common hardships of war. But it is the necessary first step without which any REAL reconstruction is impossible.

2. INCOMES. Limitation of incomes implies the fixing of a minimum wage, which implies a managed internal currency based simply on the amount of consumption goods available. And this again implies a stricter rationing scheme than is now in operation. It is no use at this stage of the world’s history to suggest that all human beings should have EXACTLY equal incomes. It has been shown over and over again that without some kind of money reward there is no incentive to undertake certain jobs. On the other hand the money reward need not be very large. In practice it is impossible that earnings should be limited quite as rigidly as I have suggested. There will always be anomalies and evasions. But there is no reason why ten to one should not be the maximum normal variation. And within those limits some sense of equality is possible. A man with £3 a week and a man with £1,500 a year can feel themselves fellow creatures, which the Duke of Westminster and the sleepers on the Embankment benches cannot.

Well. It all seemed far more plausible in 1941, when the achievements of Stalinism were so much more obvious than the failures, and vice-versa with capitalism. Orwell shows only a sophisticated layman’s grasp of economics. He is simply assuming that organs of democratic control (or experts answerable to such) can run industries and businesses better – meaning with more social benefit but also more efficiently, overall – than their capitalist owners/managers could. Based on the experience of Stalinist states we have much reason now to believe the contrary – even though the essential element of democracy has never yet been installed in the works.

Nevertheless, let us take it as a thought experiment that the political problems are overcome and Nationland – a big, modern, prosperous, pluralistic, fully industrialized country – establishes the world’s first democratic-socialist system, and in a purely political sense it all works like a charm and (almost) everybody is behind it with zeal. People still vote with their Currencies in the marketplace, but they also vote with their votes at the other end of the marketplace, as it were, and both forces act together to shape the economy.

What economic problems – that is, what unanticipated and insuperable iron laws of economics – would such a system run up against, in striving to outperform capitalism?

[John_Mace]

@foolsguinea

Would you accept, “repelled an invading force bent on the annihilation of the nation,” as “worked”?

First of all, that was not done without considerable help from several other nations, none of which had centrally planned economies.

Secondly, no, I wouldn’t accept that as “worked”. The USSR lost something like 20M civilians in WWII, so to a large extent, they just lured the Germans into a quagmire and sacrificed the populace in order to wear out the German military. Not to mention point #1, above.

[villa]

@John_Mace

First of all, that was not done without considerable help from several other nations, none of which had centrally planned economies.

Not true - the war time economies of those nations was, to greater or lesser degrees, centrally planned. While there wasn’t full state ownership of the means of production, there was a massive degree of central planning.

[RaleighRally]

@ITR_champion

I believe that a hijack has taken place here.

I apologize. This might be of more interest: Guild socialism - Wikipedia

Guild socialism is a political movement advocating workers’ control of industry through the medium of trade-related guilds. It originated in the United Kingdom and was at its most influential in the first quarter of the 20th century. It was strongly associated with G. D. H. Cole and influenced by the ideas of William Morris.

[BrainGlutton]

@RaleighRally

I apologize. This might be of more interest: Guild socialism - Wikipedia

Bertrand Russell thought highly of that form, I believe.

[BrainGlutton]

@BrainGlutton

Nevertheless, let us take it as a thought experiment that the political problems are overcome and Nationland – a big, modern, prosperous, pluralistic, fully industrialized country – establishes the world’s first democratic-socialist system, and in a purely political sense it all works like a charm and (almost) everybody is behind it with zeal. People still vote with their Currencies in the marketplace, but they also vote with their votes at the other end of the marketplace, as it were, and both forces act together to shape the economy.

What economic problems – that is, what unanticipated and insuperable iron laws of economics – would such a system run up against, in striving to outperform capitalism?

No one can think of any?

[BrotherCadfael]

@BrainGlutton

Well, I guess that’s what I’m getting at: Have economists found any reliable scientific rules regarding economic policy?

Only two: Mandating that producers receive more than the market price for a product creates a surplus. Mandating that producers receive less than the market price for a product creates a shortage.

An example of the first is dairy pricing - you may recall some years ago the government bought out and destroyed whole herds in an attempt to reduce the surplus caused by government-imposed above-market milk prices. An example of the second was the gas lines of the '70s, when price controls were imposed on gasoline products.

There has never been an exception found to these two rules.

[smiling_bandit]

@BrainGlutton

No one can think of any?

For a small but critical one, people are far smarter about spending their money than their votes, and money has the great advantage that it isn’t free.

For a much larger problem, zeal isn’t a part of healthy democracies, a fact that generations of arrogant, mad Leftists failed to understand. Zeal usually leads to the near-end of a democracy.

[BrainGlutton]

@smiling_bandit

For a small but critical one, people are far smarter about spending their money than their votes, and money has the great advantage that it isn’t free.

For a much larger problem, zeal isn’t a part of healthy democracies, a fact that generations of arrogant, mad Leftists failed to understand. Zeal usually leads to the near-end of a democracy.

We had zeal for democracy in early American history and survived it.

[RickJay]

@BrainGlutton

No one can think of any?

Your lengthy quote from Orwell doesn’t really give us a lot to go on.

But nationalization of industries? Talk to anyone who lives in a country where industries were nationalized; it has more cons than pros.

[BrainGlutton]

@RickJay

Your lengthy quote from Orwell doesn’t really give us a lot to go on.

But nationalization of industries? Talk to anyone who lives in a country where industries were nationalized; it has more cons than pros.

Not if it’s an oil industry, a transportation industry, or a health-care industry.

[Magiver]

@BrainGlutton

No, another great lesson of the 20th Century is that central planning, even Stalinism, works – at least for limited purposes, such as heavy capital formation. In 1924 Stalin took control of a backward, agrarian country, marginally industrialized by the onset of WWI and that little industry devastated by that war and the Russian Civil War, and – by methods which were bloody, brutal, repressive, wasteful, but effective – by 1939 had turned it into an industrial power capable of going head-to-head with Hitler’s Germany; and Germany had always been at the leading edge of the Industrial Revolution. No way could that have happened, if Russia had had a free-market system during that period.

Goodness no. If it were not for the United States and the UK then Stalin would not have had anything to take control of. The 1921 famine was mitigated by international relief even while the Russian government sold their own wheat to spur on industrial growth.

The USSR would have imploded if not for the free-world feeding it.

[BrainGlutton]

@Magiver

Goodness no. If it were not for the United States and the UK then Stalin would not have had anything to take control of. The 1921 famine was mitigated by international relief even while the Russian government sold their own wheat to spur on industrial growth.

The USSR would have imploded if not for the free-world feeding it.

All that was before Stalinism. Under Stalin, the USSR needed no foreign help to survive any thing save Hitler.

[Magiver]

@BrainGlutton

All that was before Stalinism. Under Stalin, the USSR needed no foreign help to survive any thing save Hitler.

Well slave labor does have it’s advantages.

[BrainGlutton]

@Magiver

Well slave labor does have it’s advantages.

Especially when you can teach at least some of the slaves to feel actual zeal for it.

[RickJay]

@BrainGlutton

Not if it’s an oil industry, a transportation industry, or a health-care industry.

Petro Canada was a frickin’ disaster. Air Canada was a frickin’ mess as a crown corporation. Fortunately, health care wasn’t nationalized. (Health INSURANCE is - and it’s struggling financially, so we’ll see.)

Again, try living in a place where such things are nationalized. The service is no better, if not worse, it’s no cheaper, and they don’t treat the employees any better. you’re going to have trouble selling anyone here on the idea that oil and transportation are better off in the hands of government.

[BrainGlutton]

One thing I do see: If politics has “laws,” they are essentially different from the laws of economics. The best definition of “politics” I have ever read is James Howard Kunstler’s (in The City in Mind, chapter on Boston): “management of human wills in the aggregate by the force of character.” That is a priceless skill to a corporate (or government) CEO, but a largely irrelevant factor to an economist. Isn’t it?

[BrainGlutton]

@RickJay

Petro Canada was a frickin’ disaster. Air Canada was a frickin’ mess as a crown corporation. Fortunately, health care wasn’t nationalized. (Health INSURANCE is - and it’s struggling financially, so we’ll see.)

Not familiar with those except for the health system, but, based on things I’ve been reading on this board and others over the years, I think you are in the minority of Canadians in your opinions (at least, WRT health care). Not quite as marginal as Sam Stone, but in the minority.

At any rate, it’s hard to see anything but a government running a passenger railroad well these days. (And in the U.S. it takes a quasi-governmental thing like Amtrak even to run a passenger railroad badly; private sector won’t touch it any more.) Can you imagine privatization of Europe’s railroads?

As for nationalized oil industries, for some reason all the OPEC countries seem to favor them.

[Voyager]

Let’s go back to first principles. Economic results depend on a number if input variables. In a pure free market economy, these are set by individual actors. If the results are not to your liking (and they probably won’t be) you can influence them through government action, and often you’ll make the results better under certain definitions of better.
That is a lot different from wanting a certain result, and thinking you can force the inputs to get it . The system is way too complex and chaotic for that to be possible. While no influence on the inputs doesn’t work, neither does exerting lots of influence.
I don’t think the Soviet Union is a good example for you. Forget the fact that changing the economy involved killing a lot of people in the way, the industrialization just got them to the point they should have been anyway if the Czarist government hadn’t screwed up so badly. Sure they repelled the Germans, but remember they had a tremendous advantage in people, material, and places to fall back into. Even after rebuilding, their economy was never as robust as it should have been, and lots of the positive statistics we saw at the time were lies.
To answer the question, economic forces can be influenced by human will, but never tamed.