Central Planning

Discussion

Summary of the anarchist critique of central planning

From the Non-Market Calculation wiki:

"As Hayek summarised, the crux of the matter was "the impossibility of a rational calculation in a centrally directed economy from which prices are necessarily absent", one which "involves planning on a most extensive scale -->. Thus the "one central authority has to solve the economic problem of distributing a limited amount of resources between a practically infinite number of competing purposes" with "a reasonable degree of accuracy, with a degree of success equally or approaching the results of competitive capitalism" is what "constitutes the problem of socialism as a method." ["The Nature and History of the Problem", pp. 1-40, Op. Cit., p. 35, p. 19 and pp. 16-7]

While this was a common idea in Marxian social democracy (and the Leninism that came from it), centralised organisations are rejected by anarchism. As Bakunin argued, "where are the intellects powerful enough to embrace the infinite multiplicity and diversity of real interests, aspirations, wishes, and needs which sum up the collective will of the people? And to invent a social organisation that will not be a Procrustean bed upon which the violence of the State will more or less overtly force unhappy society to stretch out?" Moreover, a socialist government, "unless it were endowed with omniscience, omnipresence, and the omnipotence which the theologians attribute to God, could not possibly know and foresee the needs of its people, or satisfy with an even justice those interests which are most legitimate and pressing." [Bakunin on Anarchism, pp. 268-9 and p. 318] For Malatesta, such a system would require "immense centralisation" and would either be "an impossible thing to achieve, or, if possible, would end up as a colossal and very complex tyranny." [At the Café, p. 65]

Kropotkin, likewise, dismissed the notion of central planning as the "economic changes that will result from the social revolution will be so immense and so profound . . . that it will be impossible for one or even a number of individuals to elaborate the social forms to which a further society must give birth. The elaboration of new social forms can only be the collective work of the masses." [Words of a Rebel, p. 175] The notion that a "strongly centralised Government" could "command that a prescribed quantity" of a good "be sent to such a place on such a day" and be "received on a given day by a specified official and stored in particular warehouses" was not only "undesirable" but also "wildly Utopian." During his discussion of the benefits of free agreement against state tutelage, Kropotkin noted that only the former allowed the utilisation of "the co-operation, the enthusiasm, the local knowledge" of the people. [The Conquest of Bread, pp. 82-3 and p. 137]

Kropotkin's own experience had shown how the "high functionaries" of the Tsarist bureaucracy "were simply charming in their innocent ignorance" of the areas they were meant to be administrating and how, thanks to Marxism, the socialist ideal had "lost the character of something that had to be worked out by the labour organisations themselves, and became state management of industries -- in fact, state socialism; that is, state capitalism." As an anarchist, he knew that governments become "isolated from the masses" and so "the very success of socialism" required "the ideas of no-government, of self-reliance, of free initiative of the individual" to be "preached side by side with those of socialised ownership and production." Thus it was essential that socialism was decentralised, federal and participatory, that the "structure of the society which we longed for" was "worked out, in theory and practice, from beneath" in by "all labour unions" with "a full knowledge of local needs of each trade and each locality." [Memoirs of a Revolutionist, p. 184, p. 360, p. 374-5 and p. 376]

So anarchists can agree with Mises that central planning cannot work in practice as its advocates hope. Or, more correctly, Mises agreed with the anarchists, as we had opposed central planning first. We have long recognised that no small body of people can be expected to know what happens in society and plan accordingly ("No single brain nor any bureau of brains can see to this organisation." [Issac Puente, Libertarian Communism, p. 29]). Moreover, there is the pressing question of freedom as well, for "the despotism of [the 'socialist'] State would be equal to the despotism of the present state, increased by the economic despotism of all the capital which would pass into the hands of the State, and the whole would be multiplied by all the centralisation necessary for this new State. And it is for this reason that we, the Anarchists, friends of liberty, we intend to fight them to the end." [Carlo Cafiero, "Anarchy and Communism", pp. 179-86, The Raven, No. 6, p. 179]

As John O'Neill summarises, the "argument against centralised planning is one that has been articulated within the history of socialist planning as an argument for democratic and decentralised decision making." [The Market, p. 132] So, for good economic and political reasons, anarchists reject central planning. This central libertarian socialist position feeds directly into refuting Mises' argument, for while a centralised system would need to compare a large ("infinite") number of possible alternatives to a large number of possible needs, this is not the case in a decentralised system. Rather than a vast multitude of alternatives which would swamp a centralised planning agency, one workplace comparing different alternatives to meet a specific need faces a much lower number of possibilities as the objective technical requirements (use-values) of a project are known and so local knowledge will eliminate most of the options available to a small number which can be directly compared.

As such, removing the assumption of a central planning body automatically drains Mises' critique of much of its force -- rather than an "the ocean of possible and conceivable economic combinations" faced by a central body, a specific workplace or community has a more limited number of possible solutions for a limited number of requirements. Moreover, any complex machine is a product of less complex goods, meaning that the workplace is a consumer of other workplace's goods. If, as Mises admitted, a customer can decide between consumption goods without the need for money then the user and producer of a "higher order" good can decide between consumption goods required to meet their needs. In terms of decision making, it is true that a centralised planning agency would be swamped by the multiple options available to it. However, in a decentralised socialist system individual workplaces and communes would be deciding between a much smaller number of alternatives. Moreover, unlike a centralised system, the individual firm or commune knows exactly what is required to meet its needs, and so the number of possible alternatives is reduced as well (for example, certain materials are simply technically unsuitable for certain tasks)." (http://non-market-calculation.wikispaces.com/A+critique+of+its+assumptions)