Information Technology and Socialist Construction

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* Book: Daniel Saros. Information Technology and Socialist Construction. The End of Capital and the Transition to Socialism. Routledge, 2014



Evgeny Morozov:

"Why insist on central planning, when a more decentralized, automated and apparatchik-free alternative might be achievable by putting the digital feedback infrastructure to work? The most ambitious effort to sketch what such an alternative might look like—think ‘guild socialism’ in the era of Big Data—was undertaken by the American radical economist Daniel Saros, in his rigorous, lucid—and unjustly neglected— Information Technology and Socialist Construction."



"The failure of command central planning in the twentieth century has led to a general disillusionment within the socialist movement worldwide. Some alternatives to capitalism have been proposed since the end of the Cold War, but none has offered an alternative form of economic calculation. This book explains how modern information technology may be used to implement a new method of economic calculation that could bring an end to capitalism and make socialism possible.

In this book, the author critically examines a number of socialist proposals that have been put forward since the end of the Cold War. It is shown that although these proposals have many merits, their inability effectively to incorporate the benefits of information technology into their models has limited their ability to solve the problem of socialist construction. The final section of the book proposes an entirely new model of socialist development, based on a "needs profile" that makes it possible to convert the needs of large numbers of people into data that can be used as a guide for resource allocation. This analysis makes it possible to rethink and carefully specify the conditions necessary for the abolition of capital and consequently the requirements for socialist revolution and, ultimately, communist society."




Part I: The Logic of Capital

1. The Seemingly Unbreakable Capitalist Laws of Motion

2. The Great Silence: Marx and Engels on Socialism

Part II: The Defense of Capital

3. The Socialist Calculation Debate: The need for a reckoning

4. Capitalism’s Defenders: Morality and Organic Economy

Part III: The Renewed Challenge to Capital

5. Proposals for Worker-Managed Market Economies

6. The Proposal for a Participatory Economy

Part IV: The End of Capital

7. Introducing Socialist Laws of Motion

8. The Transition to Socialism and the Meaning of Communism


Evgeny Morozov:

"Saros’s plan has some gaps and omissions, and the level of technological power available in 2019 is much greater than it was even five years ago. Still, the book’s overall vision provides inspiration and encouragement to those searching for alternative ways of coordinating economic activity on a large scale.

After an exhaustive summary of the positions taken in the Socialist Calculation Debate, Saros contends that the socialist economists couldn’t envision a superior, more decentralized form of planning simply because the technology at their disposal was inadequate. The technology he has in mind, though, is not the kind used for solving equations or crunching numbers for the Central Planning Board, but one that powers the sort of ‘feedback infrastructure’ described earlier.

Saros’s elegant solution disaggregates the many uses of the price system for social coordination, keeping some and replacing others with the ‘feedback infrastructure’ itself. At the centre of his system stands a General Catalogue, something of a mix between Amazon and Google, where producers, who are organized in guild-like ‘worker councils’—worker-run startups if you will—list their products and services in a way that would be familiar to users of Apple’s App Store or Google’s Play Store. Consumers, equipped with a unique digital id card, turn to the catalogue to register their needs during the so-called ‘needs registration period’ at the beginning of each production cycle; they rank the products they want, specifying their quantities for the next cycle. Consumers can still purchase products they didn’t request after the need-registration period ends, but they receive higher bonuses if their purchases do not deviate from their initial predictions. To encourage consumers to order no more than they need, bonuses are given for buying fewer items than the average consumer. Bonuses, which are awarded for other things, too—e.g. for staying in the same job for a long time—are added to the universal basic income that all citizens receive.

At the end of the need-registration stage, producers—whose products are ranked, Amazon-style, in the General Catalogue, with ratings affecting worker bonuses—calculate expected production figures and register their need for inputs in the Catalogue. Producers can fine-tune their production numbers using the consumption patterns analysed by Big Data, as well as the prior specifications of needs by consumers. This information also allows any shortages to be socialized, since it is possible to calculate the share of the total remaining supply of the good that a particular consumer is entitled to, in light of the needs expressed by all the other citizens. Worker councils decide on the price to charge for each product, but since they are not profit-seeking entities, their compensation is not tied to sales or profits, and so their main criterion in setting the price is getting rid of all their inventory before the next production cycle begins. Should demand for them be particularly low, certain products could be given away free.

These are just the basics of the sophisticated system outlined in Saros’s remarkable work. Some of its features would certainly offend the eco-socialist creed: consumers are allowed to express and fulfil all their desires, however excessive—though there are built-in incentives, like bonuses, fostering restraint. Some critics, like Supiot, might also consider the system’s dependence on feedback mechanisms and ratings a high price to pay, especially as it involves much-maligned quantification. On the other hand, Saros’s system might help minimize the power that would normally accrue to the technocratic class—though Saros concedes that system administrators and scientists evaluating resource scarcity will have something of the classic role assigned to bureaucrats.

How realistic is Saros’s system? An examination of how big technology firms organize their platforms reveals that some aspects of it are already in operation. Amazon, for example, rewards customers with lower prices for registering their expected future needs and ‘subscribing’ to periodic deliveries of regularly consumed products; it also carefully studies product searches and the offerings of other suppliers in its own ‘general catalogue’ to locate gaps in the market. Democratizing access to that information infrastructure, so that all producers can build on these emerging product insights, would surely result in a system that is far less centralized than today’s, where just one firm (Amazon) monopolizes all the planning based on that data. One may quibble about the details of Saros’s system, but it’s indisputable that this is not a model based on ‘central planning’ in any formal definition of the term. Yes, there’s plenty of market design, as well as plenty of social coordination based on information, not prices; but even neo-Hayekians, by now, have conceded that these are acceptable. Under Saros’s system, the price mechanism retains some of its functions, but, wedded to a non-capitalist ethos, it plays no role in setting the level of compensation."