Market Socialism or Socialization of the Market?
The virtues of the market and the deficiencies of central planning have become common sense for many socialist economists, both in the capitalist countries and in those of ‘actually existing socialism’.  For comments on an earlier draft, I would like to thank participants at seminars at the University of Manchester, and at New Left Review. Particular thanks for detailes suggestions to Andrew Glyn, Ben Fine, Geoff Hodgson and Ian Steedman. Some spirited defences have recently been made of non-market forms of economic co-ordination, particularly by Ernest Mandel,  E. Mandel, ‘In Defence of Socialist Planning’, New Left Review 159, September–October 1986, and ‘The Myth of Market Socialism’, nlr 169, May–June 1988. See also P. Devine, ‘Market Mania of the Left’, Marxism Today, June 1988, and Democracy and Economic Planning, Oxford 1988. but in my view these do not provide fully satisfactory responses to the advocates of market socialism. In this essay I shall discuss the arguments put forward by Mandel in recent issues of New Left Review, and those of his principal target of criticism, Alec Nove. I share Mandel’s view that, despite Nove’s argument to the contrary, there is an alternative between the market and bureaucratic planning. But I begin to explore an alternative along quite different lines. I agree with Nove that the price mechanism is an indispensable instrument of co-ordination for a socialist economy, but argue that it must be socialized if it is to work for rather than against socialism. The debate between Mandel and Nove is about the possibility of a society of freely associated producers in which commodity production has been superseded, rather than about the ‘marketization’ of actually existing socialism. It is necessary to recognize that advocates of market socialism see the market as a form of free association: indeed, this is one of the major points of their case. The market cannot be dismissed a priori: the argument should rather be about whether the conditions necessary for the market to function adequately as a form of free association can actually be sustained. Nor should the discussion be foreclosed by defining socialism in terms of the absence of commodity production and by making a simple equation between commodity production and buying and selling. I do not intend to enter here into a detailed consideration of Marx’s concepts of the commodity and of commodity fetishism. I shall simply propose that the aspect of these concepts that makes them analytically useful is the idea of commodities as ‘autonomous figures endowed with a life of their own, which enter into relations both with each other and with the human race’.  K. Marx, Capital. Volume One, nlr/Penguin, Harmondsworth 1976, p. 165. The commodity, in Marx’s writings, is not fundamentally a good which is bought and sold for money. To be sure, sentences can be isolated in which the commodity appears to have no more than this sense, but the structure of Marx’s texts as a whole suggests something less banal. The problematic status of commodities derives not from the mere fact of sale and purchase, but from the fact of sale and purchase under conditions which enable them to take on an independent life of their own. It is this independence of commodities which enables a social relation between men to assume the fantastic form of a relation between things: ‘The persons exist for one another merely as representatives and hence owners, of commodities.’  Ibid., pp. 178$9.
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