What would be the essential features of a socialist economy, one the would be really achievable?

If you go back to the 19th-century socialists like Marx they saw the elimination of a monetary economy as being absolutely essential. One can read the whole of Marx’s Capital as a prolonged argument to the effect that a monetary industrial economy leads inevitably to the whole set of capitalist institutions. From money and industry comes the buying of labour power, from this comes exploitation and the class system. From exploitation stem all the other evils of the system.

Any attempt to introduce a reformed monetary economy leaves the basic logic untouched. The underlying tendencies implicit in the monetary economy re-assert themselves. The experience of hitherto existing socialism which altered property ownership without eliminating money and monetary calculation are a testimony to this inner logic. There was a constant pressure to re-introduce more and more capitalist elements to the economy since these capitalist institutions are an inner necessity of monetary logic.

But what does getting rid of money imply? Is it even feasible? What is the alternative?

Marx was pretty clear that he saw the immediate alternative as being a system based on the use of personal labour accounts:

the individual producer receives back from society – after the deductions have been made – exactly what he gives to it. What he has given to it is his individual quantum of labor. For example, the social working day consists of the sum of the individual hours of work; the individual labor time of the individual producer is the part of the social working day contributed by him, his share in it. He receives a certificate from society that he has furnished such-and-such an amount of labor (after deducting his labor for the common funds); and with this certificate, he draws from the social stock of means of consumption as much as the same amount of labor cost. The same amount of labor which he has given to society in one form, he receives back in another. (Critique of the Gotha Programme)

With this institution there is no exploitation – the worker gets back what they have contributed. There is no surplus going to a property owner.

There still has to be something equivalent to an income tax, what Marx calls deduction of labour for common funds.

But there is still a unit of account. Marx was not proposing an economic free for all. He was not saying that you simply go to the common store and remove as much as you want. Clearly, were this to be allowed you would be encouraging parasites no better than those in the old society. But how does this system of labour accounts actually differ from money?

Does it not, in the terminology of thinkers like Heinrich, not just ‘reproduce the value form’. Marx answers this in a footnote in Capital I.

The question — Why does not money directly represent labour-time, so that a piece of paper may represent, for instance, x hours’ labour, is at bottom the same as the question why, given the production of commodities, must products take the form of commodities? This is evident, since their taking the form of commodities implies their differentiation into commodities and money. Or, why cannot private labour — labour for the account of private individuals — be treated as its opposite, immediate social labour? I have elsewhere examined thoroughly the Utopian idea of “labour-money” in a society founded on the production of commodities (l. c., p. 61, seq.). On this point I will only say further, that Owen’s “labour-money,” for instance, is no more “money” than a ticket for the theatre. Owen pre-supposes directly associated labour, a form of production that is entirely inconsistent with the production of commodities. The certificate of labour is merely evidence of the part taken by the individual in the common labour, and of his right to a certain portion of the common produce destined for consumption. (Capital I Chap 3)

So here he is saying that the precondition for the sort of labour certificate he talks about is directly associated production, that is to say, production that is organised according to a common plan and not carried out by private businesses. But would this not just re-create money?

Would these labour certificates not start to circulate like bank notes?

Well Marx was explicit that this would not happen.

In the case of socialised production the money-capital is eliminated. Society distributes labour-power and means of production to the different branches of production. The producers may, for all it matters, receive paper vouchers entitling them to withdraw from the social supplies of consumer goods a quantity corresponding to their labour-time. These vouchers are not money. They do not circulate.(Capital 2, Chap 18)

How, though, did he propose to prevent these certificates or paper vouchers from circulating. He does not spell it out but when you think of it, the implication is pretty clear. The vouchers would bear the name of the worker who had performed the x hours work. In the small mill towns of the 19th century, when store counter workers would know the other workers by name, this would have been enough. In a big city, a purchaser might have to produce an identity document. This would have prevented them from circulating and acting like money.

But all that is based on the technology of the early 19th century. By the late 19th century socialist authors like Bellamy were proposing to harness the then very modern punched card technology. Bellamy envisaged a socialist economy in which citizens would have social credit cards, punched cards, that they would use to buy things from common stores. When they bought something the credit would simply be canceled out by punching it away on the card. The goods would then be delivered in Amazon-style using pneumatic tubes that would run to every house.

What this shows is that an earlier generation of socialists had no hesitation about using the best technologies of their day when thinking of getting rid of money. Today, of course, we have the infrastructure of smart cards and their readers. Changing this over to a labour accounting system would be simply a matter of :

Changing the unit of account from the Euro to the labour hour. Amending the software so that transfers between private accounts were impossible. Withdraw all Euro’s from circulation.

But in order to mark goods in terms of their labour content, you need both the direct association of production, its carrying out in accordance with a common plan, and the ability to do the necessary calculations.

Back in the 1920s the right wing economist Mises claimed that socialist calculation without money would be impossible. He did concede that Marx’s labour time would be an alternative way of reckoning but said that working out labour content was impossibly difficult. The economy was far to complex, far too many different types of labour were involved indirectly in the making of any one product, for this to be feasible.

Mises was writing before computers and before the internet. In his day calculations were done by clerks with paper and pen in ledgers. What was once daunting, becomes, with modern digital technology a relatively easy task. Even back in the 1980’s Allin Cottrell and I showed that with then available network technology and 8-bit microcomputers, you could maintain a system of social labour values that was updated daily. With modern equipment, the updating could be even more rapid.

The technical and theoretical problems associated with abolishing the capitalist monetary economy are readily solvable. The solutions have been public for years. The problem is political. It is promulgating and persuading the great bulk of the population that they stand to gain directly and in the short term from such a transition.