Mutual Coordination of Production

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Replacing Money with Aids for the Mind?

From the Non-Market Calculation wiki:

"Mises' other assumption is equally flawed. This is that without the market, no information is passed between producers beyond the final outcome of production. In other words, he assumed that the final product is all that counts in evaluating its use. Needless to say, it is true that without more information than the name of a given product it is impossible to determine whether using it would be an efficient utilisation of resources. Yet more information can be provided which can be used to inform decision making. As socialists Adam Buick and John Crump point out, "at the level of the individual production unit or industry, the only calculations that would be necessary in socialism would be calculations in kind. On the one side would be recorded the resources (materials, energy, equipment, labour) used up in production and on the other the amount of good produced, together with any by-products. . . . Socialist production is simply the production of use values from use values, and nothing more." [State Capitalism: The Wages System Under New Management, p. 137]

Thus any good used as an input into a production process would require the communication of this kind of information. The generation and communication of such information implies a decentralised, horizontal network between producers and consumers. This is because what counts as a use-value can only be determined by those directly using it. Thus the production of use-values from use-values cannot be achieved via central planning, as the central planners have no notion of the use-value of the goods being used or produced. Such knowledge lies in many hands, dispersed throughout society, and so socialist production implies decentralisation. Capitalist ideologues claim that the market allows the utilisation of such dispersed knowledge, but as John O'Neill notes, "the market may be one way in which dispersed knowledge can be put to good effect. It is not . . . the only way". "The strength of the epistemological argument for the market depends in part on the implausibility of assuming that all knowledge could be centralised upon some particular planning agency" he stresses, but Mises' "argument ignores, however, the existence of the decentralised but predominantly non-market institutions for the distribution of knowledge . . . The assumption that only the market can co-ordinate dispersed non-vocalisable knowledge is false." [Op. Cit., p. 118 and p. 132]

It is useful to remember that Mises argued that it is the complexity of a modern economy that ensures money is required: "Within the narrow confines of household economy, for instance, where the father can supervise the entire economic management, it is possible to determine the significance of changes in the processes of production, without such aids to the mind [as monetary calculation], and yet with more or less of accuracy." However, "the mind of one man alone -- be it ever so cunning, is too weak to grasp the importance of any single one among the countlessly many goods of higher order. No single man can ever master all the possibilities of production, innumerable as they are, as to be in a position to make straightway evident judgements of value without the aid of some system of computation." [Op. Cit., p. 102]

A libertarian communist society would, it must be stressed, use various "aids to the mind" to help individuals and groups to make economic decisions. This would reduce the complexity of economic decision making, by allowing different options and resources to be compared to each other. Hence the complexity of economic decision making in an economy with a multitude of goods can be reduced by the use of rational algorithmic procedures and methods to aid the process. Such tools would aid decision making, not dominate it as these decisions affect humans and the planet and should never be made automatically.

That being the case, a libertarian communist society would quickly develop the means of comparing the real impact of specific "higher order" goods in terms of their real costs (i.e. the amount of labour, energy and raw materials used plus any social and ecological costs). Moreover, it should be remembered that production goods are made up on inputs of other goods, that is, higher goods are made up of consumption goods of a lower order. If, as Mises admits, calculation without money is possible for consumption goods then the creation of "higher order" goods can be also achieved and a record of its costs made and communicated to those who seek to use it.

While the specific "aids to the mind" as well as "costs" and their relative weight would be determined by the people of a free society, we can speculate that it would include direct and indirect labour, externalities (such as pollution), energy use and materials, and so forth. As such, it must be stressed that a libertarian communist society would seek to communicate the "costs" associated with any specific product as well as its relative scarcity. In other words, it needs a means of determining the objective or absolute costs associated with different alternatives as well as an indication of how much of a given good is available at a given it (i.e., its scarcity). Both of these can be determined without the use of money and markets." (