Comrade G

I wanted to ask a few questions about how you think industry should be managed. Reading Towards a New Socialism and speaking to you it looks to me that you’d organize labor along cooperatives.

Firstly, do you know how labor was organized in ex-Yugoslavia?

Paul

Broadly yes, and it depends on what you mean by cooperatives when you talk about our book.

Comrade G

I am talking about cooperatives in a socialist organization, not cooperatives where you have a capitalist business but it is organized & owned by the people working there.

Paul

Yes, but there is still the question of whether the unit of production owns the resources it operates and whether it covers its costs including payments to workers out of its own revenues.

Comrade G

Anyways, there are some problems that came from Yugoslavian worker’s self-management and I don’t think that all of the problems can be attributed to the market economy of Yugoslavia. For an example nepotism often developed on a factory level between the workers. Since there was much comradery between factory workers under self-management they usually didn’t follow some formalities. An example is how this caused unemployment to a degree, with workers from the factory hiring their sons & daughters in an ad-hoc way, knowing that their co-workers would approve of it since they all know each other personally and know they could teach their children how to work fairly quickly.

The problem comes from the fact that usually, these professions required an education that took 5-6 years to complete, and these people usually went without employment when someone decided to hire their son un-formally. This was a well-known practice but it wasn’t so closely followed by statistics.

How would this be solved while still giving the laborers full control over the industry?

There are other larger problems but let’s start with this.

Paul

OK, I think I should start with how we envisage the budgetary process working since the employment is secondary to that.

Since we do not see the factories as economic subjects of right, ie, they do not own money or resources, nobody is employed by an individual factory in a communist system.

If you have a non-monetary economy, then a unit of production cannot be a cost center or a payer of wages.

Instead, all of the workers have to be employed by some higher body, which could either be a ministry of employment or alternatively guilds or trades unions.

The individual unit, whether it is a unit of production, or a service delivery unit like a hospital, is allocated a total budget in terms of labour time. This budget is divided into a part that is made up of goods supplied to the factory or hospital, and partly made up of the amortised trained cost of the labour allocated to the unit.

So people would not be employed by the local factory or hospital. They would join a union, and the union would negotiate with the state how many workers it would supply, and the individual units would then be allocated a certain number of workers. That does not mean that people would have no say where they worked, but they would only be able to apply for places that had been allocated to their union.

Comrade G

This existed in Yugoslavia as well. The laborers within that factory specifically didn’t really have the rights to employ somebody of their own volition, yet it happened anyway un-formally. Should there be a commissar of this employment agency to inspect workplaces for these discrepancies? It would certainly be easier if the workplaces were connected via internet or telephone connection and such things were more easily tracked.

Paul

Well since the payments of labour vouchers would all come from either the ministry of employment or the union, they would know where everyone is working. That, of course, would not prevent the interview panel at a given workplace favoring relatives.

That would have to be done by employment law and by people having the right to appeal to tribunals if they thought that they had been discriminated against.

Comrade G

Ah, I think I understand now. It worked a little differently in Yugoslavia. Wages were decided on & paid by the laborers of the individual workplace. The way it worked was that individual workplaces received a budget & the workers there organized locally and decided how much of the budget went to their pay. If the ministry of employment handled wages then this problem would be solved.

Paul

You need to have socialized decisionmaking on the division between surplus and consumption. In my view that is one of the distinguishing features of a socialized economy. Unless you have that it is very difficult to avoid unemployment of the sort Yugoslavia had.

Comrade G

Another problem from worker self-management was that workers, given their autonomy, would usually cut corners during production rather than calculate the exact amount of resources they needed from the state for production. You mentioned that the Soviet bureaucrats did similar things to make work easier for them. Basically, they asked for more resources than they really needed to produce a given product, and this surplus of the resource usually stayed at the factory and other factories had shortages. Another problem was factories not reporting broken/malfunctioning machinery to avoid having to take responsibility for it, lowering production overall, until the machine was in such a poor state that it had to be reported.

Regarding my first point, I think most of that would be solved through electronic planning & decision making at the workplace, still, I wanted your opinion on it.

Paul

Yes you are right but it also needs an incentive structure. In my view that can come from two sources. 1 would be what amounts to socialist competition. If the planners ensured that there were usually several plants making each kind of product, the planners then know which is the cheapest in terms of total labour – living and embodied. They can then threaten to shift workers from the less efficient plant to the more efficient one unless the less efficient one improves.

In those areas like power production or water supply where you have natural monopolies, there would have to be targeted to save total cost by perhaps 2% or 3% a year – in line with what we know is the long-term possibility in a developed industrial society.

Comrade G

Understandable, from what I know this is the way the Soviets handled such things. At least in the 50’s-60’s.

Paul

Not the first point, but yes for the 2nd. I don’t think that in practice they ever shifted people much from less efficient plants.

Comrade G

This is unrelated to the discussion but I was curious what you’d think about it. Working in various baker industry over the years I noticed that consistently lots of bread is thrown out daily to keep the market price of it the same, as well as because of competition with other firms they fail to put all of their stock onto the shelves. I am talking about a room full of bread being thrown out daily. Would it make sense with such large production to shift from production for exchange to production for use and to make bread ‘free’? Bread is not a good that is exported and we produce so much of it that even if somebody was greedy and took ten pieces there would still be some of it left. The same thing could be said for a few other commodities, especially food products.

Paul

We assume in our book that all goods produced are offered for sale by public shops and that the prices are reduced until all are sold. If the price they are sold for is below their labour value, then the planners reduce overall production.

With crops whose production is unpredictable because of weather, you would still have to plan to produce at least enough even allowing for bad weather, which means some waste in times of bumper harvests.

Comrade G

Our food industry is already functioning at a minimum. I don’t think production can get any lower actually, as I have told you we aren’t even exercising our agricultural potential due to destruction and selling off of civilian industry, as well as farmers being subjected to worse and worse conditions. I could see two alternatives

Diversification of production, as in mass-production of many kinds of pastry etc, which could all be done by the same basic machines. The other would be reducing the work hours of people in the food industry to very, very short hours.

Paul

I think your account of Serbian conditions would have considerable interest for comrades in Scotland.