Perhaps one of the largest, propagandistic triumphs of capitalism is to equate socialism as inefficient, bureaucratic bloat. In contrast, capitalism is portrayed as a lean, efficient system. Many argue that the market, instead of depending on a slow moving, centralized bureaucracy to produce and allocate the necessary goods, automatically balances supply and demand, with the price signal as the carrier of information on how to produce and distribute commodities. However, I believe that socialism, at least the version exposed by Marx, would be a free society with a very lean and bare-bones administrative apparatus (a minimal state). For socialism to be a qualitatively different stage of history than previous class societies, social structures need to be dictated by free time as opposed to the imperatives of slavery, survival and toil. In other words, the time outside the activities necessary for the survival of the human species, must dominate the course of history. This freeing of human life from drudgery and misery requires a lean apparatus that curtails all the extra socially wasteful industries and infrastructures in order to progressively reduce the length of the work day until the eventual abolition of toil. In short, the socialist state must be minimal. First, I will expose the arguments that portray socialism as bloated and inefficient, then I will argue why instead, capitalism is wasteful and swollen, and then I will sketch some of the key attributes of this minimal socialist state.
At first glance, the right wing case against socialism sounds sensible, both philosophically and empirically. In the philosophical realm, it seems unlikely that a central planner can possibly have all the necessary expertise to know what is happening “on the ground”. In the empirical realm, the former socialist bloc was sluggish, bureaucratically bloated, and authoritarian. In contrast, market-based societies appear much more efficient and freer.
However, I believe these arguments, although they may sound plausible, are ultimately wrong. The reason why these arguments appear correct, given that many of the socialist states tended to be more authoritarian, inefficient and “backward” than the West, is due to a combination of a couple of factors: (i) pre-modern forms of life that existed in the underdeveloped countries where “socialism” took root, (ii) geopolitical configurations where the periphery (socialist states were peripheral) is in an inferior bargaining position, and (iii) the ideology of instrumental reason in the West, that rationality that values the calculation of the means, over thinking about the end.
In the first case (i), as I mentioned in a previous post, many of the problems identified with the existing “socialist” countries are not formally related to the idea of a planned economy, but are linked to social forms that predated “socialism” sometimes for centuries. For example, clientelism is a large scourge in underdeveloped countries, where informal exchange of favours and services between powerful agents undermine the transparent functioning of institutions. These problems predate capitalism and “socialism” and where even formalized in ancient Rome. In the USSR, clientelism was evident through the way wealth was accumulated by the elite, where high ranking bureaucrats exchanged favours and privileges at the expense of society at large. The opacity of institutions due to these webs of corruption and hierarchies also created feedback loops where the citizen do not trust formal mechanisms anymore, creating the large-scale systemic problems that led to the USSR’s collapse. This generalized state of corruption also lead to various factions of the bureaucracy scamming and conning each other, by misrepresenting and exaggerating (e.g. how many widgets where produced in a factory) in order to lever a career advantage. The sum-total of all these dynamics led to massive wastefulness, scarcity of useable goods, and ultimately terror. The problem of corruption, wastefulness, and terror is common across much of the periphery (including peripheral capitalist states), and is not formally related to socialism.
The second case (ii) is very closely related to to the first case. Due to various historical factors, many of the countries that became “socialist” where peripheral societies (e.g. Cuba, Russia, etc.) that where economically subordinated to other more powerful countries. Their lack of capital-intensive technologies and working institutions made them dependent of the core economies for technologies (e.g. engines, computers, medicine, etc), turning them into bodegas to be ransacked for slave-like labour and cheap natural resources. This dependency not only assured that the periphery (and thus many socialist states) lagged behind, but also created other feedback loops that lead to other dysfunctions. In the case of the USSR, the State was forced to industrialize quickly in order to have the military capabilities to defend itself against a more powerful and hostile West. This fast, frenzied, and unscientific hyper-industrialization that appeared during the first Five Year Plan, created corrupted institutions due to unrealistic objectives that forced, for example, factory directors to inflate their numbers and share dishonest information.
The third case (iii), the focusing on the most efficient way to achieve the means, without thinking about the end, distorts the discussion on what does “efficiency” mean. Capitalism is extremely good at intensive development, where a novel technology or a service, is made progressively cheaper and more advanced as competition forces firms to cut down costs. This leads to the “lean” and “efficient” perception of the West. However, the efficiency that leads to profit, that is the optimization of processes related to the creation of random commodities, is not necessarily the socially preferable form of efficiency. For example, a key socialist demand is the shortening of the work day until its eventual abolition. Defenders of the market, such as Keynes, thought that capitalism by its own devices would create a shorter working day. However, the eight hour work week has persisted in the United States and Canada for about a hundred years, even if the economy grew exponentially in that same century.. Other more banal examples of capitalist “inefficiencies” are the coexistences of vacant buildings with homelessness, and long work-day with unemployment. In short, capitalist efficiency ultimately only concerns itself with profit, and although this logic can lead to various socially beneficial by-products, such as cheap computers and an abundance of calories, capitalism is not concerned with the realization of social-need, therefore it cannot reduce the work-day, create sustainable and psychologically beneficial urban spaces (as opposed to private condo towers and desolate suburban sprawl), and deal effectively with the question of climate change. Ultimately, capitalism, with its creation of random, socially unnecessary market and industries, becomes increasingly bloated. For example, a large percent of the GDP in core economies is related to Finance, Insurance, and Real Estate (FIRE), a sector that would be rendered irrelevant with the abolition of private property.
Ultimately the socialist, minimal state, would shrink the world’s administrative apparatuses (the bureaucracies of corporations, the executive and judicial powers, the administrative bloat of universities) by (a) the abolition of private property, and (b) through planning. The fact that private property is mediated through a contract, whether the contract is digital (e.g. ownership of stocks), or analog (the paperwork of a house), inevitably creates an administrative bloat of gentry-scholar like functionaries, both in the private and public spheres, that have to deal with the regulations, lawyering, and the legalese of these contracts. In addition, the increasingly fractal and abstracted labyrinth of private property creates an informational complexity in the form of FIRE, which is a socially unproductive sector, but is necessary for capital to “grease its wheels”, by bailing out companies through loans, stimulating investment, moving capital shares across thousands of miles at a fraction of the speed of light through optical fiber cables, etc. Once socialism abolishes private property, the informational complexity will be greatly reduced, transferring the world’s labour to socially necessary tasks.
Planning will be the central engine of the minimal socialist state. By planning, through a combination of accountable “planetary” central planners at the large scale, and machine learning algorithms and local committees at the granular scale, industries that are deemed socially necessary (e.g. agriculture, some IT, medicine, etc.) could be preserved and social waste eliminated. This would create a situation where only the minimum tasks required for comfortable survival will be the domain of labour and the bare-bones State. Once these socially necessary tasks are recognized (through a combination of scientific planning and grassroots consensus), work will only be spent in doing these socially necessary activities, in contrast to capitalism’s arbitrary tasks that have enslaved humanity to toil for centuries. Once labour-time is minimized, the majority of waking hours would not be spend in grind forced upon by survival, but in free time. Socially necessary labour will be rotated by all the citizens, and will be reduced to the social equivalent of “cleaning your room.” Thus socialism will create a different type of efficiency than capitalist optimization. Although socialism may not lead to the most effective janitor, or the most optimized smart phone, that does not imply that it will be more bloated, miserable, and labor intensive than capitalism. This emancipation of humanity from labor is the hidden potential of modernity, and would usher for the first time in history, a society that will be shaped by free time, not the constraints of survival.
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