The Socialist Blueprint

5. So would that family likeness between commercial and socialist economy which the reader cannot have failed to notice all along. Since this resemblance seems to have given pleasure to non-socialists and some socialists and to have annoyed other socialists, it is just as well to restate explicitly in what it consists and to what it is due.

It will then be seen how little reason there is for either the pleasure or the annoyance. In trying to construct a rational schema of a socialist economy we have made use of mechanisms and concepts traditionally specified by terms that are familiar to us from our discussions of the processes and problems of capitalist economy. We have described a mechanism which is immediately understood as soon as we utter the words “market,” “buying and selling,” “competing” and so on.

We seem to have used, or barely avoided using, such terms savoring of capitalism as prices, costs, incomes and even profits while rent, interest, wages and others, money among them, have, as it were, hovered about our path.

Let us consider what to most socialists would certainly seem to be one of the worst cases, that of rent, meaning thereby returns from the productive use of natural agents, let us say “land.” Our schema evidently cannot imply that ground rent would be paid to any landholders. What then does it imply? Simply that any kind of land which is not plentiful beyond all requirements in the calculable future must be used economically or allocated rationally exactly like labor or any other type of productive resources, and that for this purpose it must receive an index of economic significance with which any new use that may suggest itself must be compared and by means of which the land enters the social bookkeeping process. If this were not done the commonwealth would be behaving irrationally. But no concession to capitalism or to the spirit of capitalism is implied in doing it. All that is commercial or capitalist about ground rent, in both its economic and its sociological associations, and all that can possibly be sympathetic to the advocate of private property (private income, the landlord and so on) has been completely removed.

The “incomes” with which we endowed the comrades at the start are not wages. In fact they would on analysis be seen to be composites of disparate economic elements of which one only could be linked to marginal productivity of labor. The premiums which we introduced later have more to do with the wages of capitalist society. But the counterpart of the latter really exists nowhere except in the books of the central board and again consists in a mere index of significance associated, for the purposes of rational allocation, with every type and grade of labor—an index from which has vanished a whole bundle of meanings that pertain to the capitalist world.

In passing, we may observe that since we can call as we please the units into which we split the vouchers that represent the comrade’s claims to consumers’ goods, we can also call them hours of labor. And since the total number of these units is—within the limits set by convenience—no less arbitrary we could make it equal to the hours actually worked, adjusting all kinds and grades of labor to some standard quality in the Ricardo-Marxian way. Finally our commonwealth can adopt, just as well as any other, the principle that “incomes” should be proportional to the hours of standard work contributed by each comrade. Then we should have a system of labor notes. And the interesting point about it is that barring technical difficulties which do not concern us now such a system would prove quite workable. But it is easy to see why even then these “incomes” would not be “wages.” It is no less obvious that the workability of such an arrangement does not prove anything for the labor theory of value.

It is hardly necessary to perform the same operation on profits, interest, prices and costs. The cause of that family likeness is by now clearly visible without doing so: our socialism borrows nothing from capitalism, but capitalism borrows much from the perfectly general logic of choice. Any rational behavior must of course display certain formal similarities with any other rational behavior, and it so happens that in the sphere of economic behavior the molding influence of mere rationality goes pretty far, at least with regard to the pure theory of it. The concepts which express the behaviorist pattern are then drenched with all the particular meanings of a historical epoch and will tend to retain, in the layman’s mind, the colors thus acquired. If our historical acquaintance with economic phenomena had been made in socialist environments, we should now seem to be borrowing socialist concepts when analyzing a capitalist process.

So far, there is nothing for capitalist-minded economists to congratulate themselves on in the discovery that socialism could after all only use capitalist mechanisms and categories. There should be as little reason for socialists to object. For only the most naïve mind can feel disappointed at the fact that the socialist miracle does not create a logic of its own, and only the crudest and most stupid variants of the socialist creed can be endangered by any demonstration to that effect—those variants according to which the capitalist process is nothing but a wild jumble without any logic or order at all.

Reasonable people of both persuasions can agree on such resemblance as there is and remain just as far apart as ever. But an objection on the score of terminology might remain: it may be argued that it is not convenient to use terms loaded with adventitious yet very important meaning which not everyone can be trusted to discard. Moreover, we must not forget that one may accept the result arrived at about the essential sameness of the economic logic of socialist and commercial production and yet object to the particular schema or model by means of which we have arrived at it (see below) This is not all however. Some socialist as well as non-socialist economists have been not only willing but anxious to recognize a particularly strong family likeness between a socialist economy of the type envisaged and a commercial economy of the perfectly competitive type. We might almost speak of a school of socialist thought that tends to glorify perfect competition and to advocate socialism on the ground that it offers the only method by which the results of perfect competition can be attained in the modern world.