What Marxists Say about "Market Socialism"
After the collapse of socialism in the Soviet Union, many socialists, reluctant to abandon their socialist convictions, shifted to a belief in “market socialism.” The great Marxist philosopher G.A. Cohen was not among them, and in this week’s column, I’d like to examine what he says about market socialism in his essay “The Future of a Disillusion,” published in the New Left Review (November–December 1991).
Cohen acknowledges that socialists were wrong to think that the market is inefficient:
We now know that the traditional socialist view about the market’s lack of planning was misconceived. It failed to acknowledge how remarkably well the unplanned market organizes information, and, indeed, how difficult it is for a planning centre to possess itself of the information about preferences and production possibilities dispersed through the market in a non-planning system. Even if the planner’s computer could do wonders with that information, the problem is that there are systematic obstacles to gathering it: to that extent, Von Mises and Hayek were right.
Some socialists who defended central planning argued that it enabled the economy to be under the conscious control of society. Usually, these people claimed that a consciously controlled society was more productive than its allegedly irrational market rival, but, as Cohen points out, the claim of superior rationality is distinct from the claim of greater efficiency. Remarkably, Cohen rejects the conscious control argument, even though it was one of the mainstays of the socialist movement:
There was, however, in the traditional socialist objection to the absence of a plan, a separate emphasis that the market’s generation of massive unplanned outcomes, considered just as such, that is, apart from the particular disbenefits and injustices of those outcomes, means that society is not in control of its own destiny. Marx and Engels did not favour planning solely because of the advantageous economic consequences that they thought it would have, but also because of the significance of planning as a realization of the idea, derived no doubt from the Hegelian legacy under which they laboured, of humanity rising to consciousness of and control over itself. . . .
In my view, that idea is entirely misplaced. Individual self-direction, a person’s determining the course of his own life, may have value per se, but collective self-direction does not. . . . It is not the same thing as democracy, for a democracy can decide that some things should not be subject to collective purpose. And I think that it should decide what to put within collective purpose on a purely instrumental basis, that is, according to the tendency of collective action to promote or frustrate other values. . . . There is harm to no one in the mere fact that social purpose is lacking.
For Cohen, the problems of market socialism lie elsewhere. Even if turns out that the system “works,” he worries that it could lead socialists to change their preferences in a morally questionable way. People tend to have “adaptive preferences”—they tend to adjust what they think is the best possible outcome to the existing situation, and this can lead to the acceptance what is actually less than the best possible thing, and what might in some respects be downright bad.
Among these bads, Cohen thought, was the increasingly common idea that people should earn income and wealth because of their abilities and achievements. This contradicted the fundamental socialist imperative of equality:
Marx criticized the principle of reward for contribution because of the (unjust) inequality that it generates . . . he did not doubt that reward for contribution is a bourgeois principle, one which treats a person’s talent “as a natural privilege”. Reward for contribution implies recognition of what I have elsewhere called the principle of self-ownership. Nothing is more bourgeois than that, and the Gotha critique lesson for market socialism is that, while market socialism may remove the income injustice caused by differential ownership of capital, it preserves the income injustice caused by differential ownership of endowments of personal capacity.
It is clear from the context that Cohen endorses the line of thought he attributes to Marx. It would be difficult to conceive of a more fundamental opposition between the socialist and libertarian outlooks. The very thought that a person owns himself and is entitled to what he produces is dismissed as “bourgeois.”
Cohen sees a related problem with market allocation of resources, whether socialist or capitalist. In a market system, people are motivated to produce by how much money they can make. Instead, they should aim to produce along with others, in a spirit of cooperative endeavor. The market
motivates contribution not on the basis of commitment to one’s fellow human beings and a desire to serve them while being served by them, but on the basis of impersonal cash reward. The immediate motive to productive activity in a market society is usually some mixture of greed and fear, in proportions that vary with the details of a person’s market position. In greed, other people are seen as possible sources of enrichment, and in fear they are seen as threats.
The history of the twentieth century encourages the thought that the easiest way to generate productivity in a modern society is by nourishing the motives of greed and fear, in a hierarchy of unequal income. That does not make them attractive motives, and the fact that the first great experiment in running a modern economy without relying on avarice and anxiety has failed, disastrously, is not a good reason for giving up the attempt, forever. Philosophers least of all should join the contemporary choruses of dirge and hosanna whose common refrain is that the socialist project is over. I am sure that it has a long way to go yet, and it is part of the mission of philosophy to explore unanticipated possibilities.
Cohen has a fixed idea of what motives human beings should have, and he condemns a system that does not actively prod them to have these motives. Cohen’s quest for an economic system in which individual acquisition does not play a major role is a futile one. As Murray Rothbard reminds us, equality is a “revolt against nature.”