Market greed or a planned economy for human need?

Market greed or plan

By Dave Holmes

[This is the text of a talk given as part of Melbourne Socialist Alliance’s Socialist Ideas Seminar series on July 28, 2010.]

The starting point for a discussion of planned economy or the present market-based capitalist one has to be the situation we are facing today. Humanity faces some huge problems.

Global warming is an unprecedented crisis. If not tackled effectively and urgently it could lead to the decimation of the human race, leaving a small population of survivors living in desperate circumstances in a radically changed and inhospitable environment — if not to the very end of human life on the planet.

Then there is the global economic crisis and its attendant attacks by the capitalist class on the living conditions of the people; mass poverty and hunger in the Third World (and not only there); and finally there is the permanent imperialist war drive, aimed at subjugating the Third World and consuming vast resources which might otherwise be used to give a better life to all.

These problems are directly due to the operations of the capitalist system. They cannot be overcome — in the interests of working people — except by radical anticapitalist measures.

That is, we can't rely on the capitalist market to solve them: capitalism is the source of the problem, not the solution.

Under capitalism, the economy is privately owned. In Australia, a small number of people — probably a few thousand at most — effectively own all the factories, communications media, banks, mines, supermarkets, freight systems, and so on.

The basic operating principle of capitalism is to maximise profits. The whole system is focused on this. Any talk about a "triple bottom line" — in which profit and social and ecological concerns rate equally — is pure fantasy. There is only one bottom line and that is profit. Look at BP: some years ago it painted all its service stations green but we now know just how much that was really worth.

Under capitalism social needs are only satisfied incidentally. If a person has a need and money, then to that extent their need will be met. Otherwise it is not.

Take housing, for example. In Australia there are an estimated 100,000 plus people without a home and probably a lot more living in truly dire conditions.

Objectively, we have the resources to easily give everyone decent accommodation. Federal and state governments could take over unoccupied dwellings, take over and convert empty office blocks, and embark on a crash program to build tens of thousands of quality public housing units. But the various Lib-Lab outfits at the helm simply refuse to take the measures necessary and as the homeless don't have the necessary purchasing power, they remain homeless.

No overall economy-wide planning

Socialists have long accused capitalist economy of being anarchic. What does that mean?

There is no overall plan for production and other economic activity. There is no overall plan to meet social needs. Each capitalist company operates to maximise its profit. Until they try to sell what they produce they have no idea what will happen. It may be they can't produce enough of what customers want — or they may produce way too much and be unable to sell it, which will lead to a crisis for that company (or even the whole economy).

That is, the verdict on what the company has done — was it "rational" or not — comes after the fact of production. The market then "corrects" the decisions previously taken. That is, the company is forced to adjust its production and/or its prices; in extreme cases it may even collapse or be taken over by a competitor. As Ernest Mandel puts it:

Production for the market is production for unknown customers, in unknown quantities, and with unknown financial results.[1].

This is why the whole economy must endure the boom and bust of the business cycle, an immensely wasteful and dislocating phenomenon repeated roughly every 7-10 years. In the boom period, profits rise, everyone wants to get in on the act, investment and production rises, eventually leading to saturation of the market and overproduction a given sector. Investment stalls, workers are laid off, there is a big consolidation as companies are taken over or merge. Eventually excess inventories are cleared, the surviving firms start investing and producing, workers are hired and so it all starts again.

Planning — irrespective of whether it is good or bad, dictatorial or democratic — is different. A goal is set in advance and then resources are allocated to try and realise it. Thus in the Soviet Union under Stalin there was the First Five Year plan from 1928 to 1932. A whole set of production targets were set down and various measures (factories, workforce, etc.) taken to achieve these objectives.

Planning within capitalism

However, we should be clear: capitalism does know planning — not on the level of the economy as a whole, but on the level of the corporation.

Think of the Ford Motor Company. It is a huge multinational corporation — US-owned but producing and selling across the globe. Parts and components are produced in various locations and then moved to where they are assembled. The "just-in-time" system, which radically reduces the inventories that are held, means planning of the production process must be intense and effective.

Airbus A380

Another example of the tremendous amount of planning that takes place in capitalist production is provided by the Airbus A380, a giant double-decker aircraft which can carry up to 850 passengers over long distances.

Airbus is a consortium of a number of European aviation companies. All the component parts for a given aircraft have to be made or obtained and delivered to the plant in which they are needed at precisely the right time. It is a vast international planned economy as the following description vividly makes clear.

Major structural sections of the A380 are built in France, Germany, Spain, and the United Kingdom. Due to their size, they are brought to the assembly hall . . . in Toulouse in France by surface transportation, though some parts are moved by the A300-600ST Beluga aircraft used in the construction of other Airbus models.

Components of the A380 are provided by suppliers from around the world; the five largest contributors, by value, are Rolls-Royce, Safran, United Technologies, General Electric and Goodrich.

The front and rear sections of the fuselage are loaded on a roll-on/roll-off . . . ship leased to Airbus . . . in Hamburg in northern Germany, from where they are shipped to the United Kingdom. The wings, which are manufactured at Filton in Bristol and Broughton in North Wales, are transported by barge to Mostyn docks, where the ship adds them to its cargo.

In Saint-Nazaire in western France, the ship trades the fuselage sections from Hamburg for larger, assembled sections, some of which include the nose. The ship unloads in Bordeaux.

Afterwards, the ship picks up the belly and tail sections . . . in Cádiz in southern Spain, and delivers them to Bordeaux. From there, the A380 parts are transported by barge to Langon, and by oversize road convoys to the assembly hall in Toulouse.

Roads and canals were widened and replaced; and new barges were developed to deliver the A380 parts. After assembly, the aircraft are flown to Hamburg Finkenwerder Airport . . . to be furnished and painted . . . Airbus sized the production facilities and supply chain for a production rate of four A380s per month.[2]

Such aeroplanes are not produced and stacked on supermarket shelves; they are produced in response to definite orders by specific airlines. Nevertheless, when it embarks on a project like the A380, Airbus does not know if it will be a commercial success. That depends on whether it can gain sufficient orders in the teeth of competition from its main rival, the US giant Boeing. So here too we see an intense planning process within the corporation versus anarchy and struggle outside it in the marketplace.

Ernest Mandel has termed this contradiction of capitalism partial rationality and it is profoundly characteristic of the system.

Huge waste of precious human and natural resources

Capitalism wastes human and material resources on a prodigious scale. If the economy were in public hands and operating according to a conscious plan aimed at addressing climate change and the satisfaction of basic human needs, there are a lot of resources that could be mobilised.

Free up economic resources for useful activity

For a start, a large part of the economy is purely specific to capitalism and would be pointless without it: insurance, real estate, advertising (which accounts for a major part of the cost of goods), most of the financial sector, luxury goods and services for the rich.

We should also mention organised crime which is a very specific sector of the economy (characterised by a very high rate of profit and a propensity to settle disputes by killing people). In some countries the drug trade is the biggest single sector of the economy by profit. Globally, profits from drug trafficking are estimated at about $600 billion.[3]

In a rational system the resources and workforce currently committed to these sectors could be redeployed to socially useful areas.

Existing productive forces not fully utilised

Capitalist economies have very substantial excess capacity, i.e., they can produce much more without any new investment in plant or labour. In the developed capitalist countries in normal times this is typically around 20%. This is inherent in an economy made up of competing private interests, without overall economic planning. Every capitalist builds plant to get into the game and the products can’t be sold so production is cut back.

Capitalist recessions and depressions represent a massive waste of resources. For a greater or lesser period the economy partially shuts down. Too much production is the very cause of want and misery. (During the Great Depression of the 1930s coffee and oranges were dumped in the ocean and milk was poured down coal mines in an effort to keep prices up.)

Even in normal times (i.e., not during a recession) capitalist economy is marked by substantial unemployment and underemployment. Official unemployment in Australia today is 5.1% but the real figure is probably at least twice this. What a crazy situation! One section of the workforce is suffering from overwork — whatever happened to the eight-hour day? — while another section suffers from lack of work and yet we have so much that needs to be done.

In the Third World unemployment and underemployment is massive and large numbers of people are forced to try to survive in the so-called "informal economy".

Conserve precious resources

Capitalism is consuming resources as if there is no tomorrow, e.g., fish stocks, minerals and metals, fossil fuels. (If, for example, we are going to use fossil fuels — the heritage of immense geological ages — they should at least used conservatively and for a definite purpose, such as bridging technologies while sustainable alternatives are brought on-line.)

We should also mention the waste of precious material resources in industry. If the economy were guided by human need and conservation we would move to closed loop processes where the "waste" from one process would be the feedstock for another; absolutely everything possible would be recycled.

Climate change means we will have to look carefully at what we produce. If products are consuming large amounts of energy (aluminium) or water (rice, cotton, dairy products) we would have to consider how much of these we should produce and what we do with these products.

For instance, from the point of view of energy and water conservation, we should try to produce food near to where it is to be consumed. It is irrational to produce wine in Victoria, with its high embodied water content, and export it across the globe to wipe out the wine industry in France or Italy where they have produced wine for millennia.

In the supermarkets at the moment you can buy cans of Italian tomatoes for 75 cents and tins of South African peaches at $1.50. How can it make sense (from the social point of view) to export these things half-way around the world and sell them so cheaply? How are they produced? How much scarce water do they embody? How much energy is expended in transporting them? Get rid of the profit motive and we can make a rational assessment of what is going on here and what we should do.


Capitalist militarism consumes vast resources worldwide. According to the figures of the Stockholm International Peace Research Institute, in 2009 some US$1.5 trillion was spent on arms — 47% of this by US imperialism. This amounts to $225 for every person on the planet, 2.7% of world GDP.

A large proportion of the world's scientists and engineers work for the global "military-industrial complex".

It is also worth noting that the Pentagon is a major contributor to global warming. It is the world's largest institutional consumer of oil products. This plus the wars it wages (Iraq in particular) creates huge amounts of greenhouse gas emissions.[4]

A recent report revealed that some 850,000 people work for a myriad of US "security" agencies.

Consumerism, planned obsolescence

Capitalism must sell "stuff" — endless quantities of it. If the consumers don't realise they want it they must be conditioned to want it. This is where "consumerism" comes from. Of course, people's psychology is affected ("shop till you drop") but that is purely derivative — the driving force is capitalism and its imperative to sell commodities to realise profit.

Of course, people need to buy the necessities of life (today we might include computers and internet connections in this category). But so much stuff produced is crap which we do not rationally need and the production of which the planet cannot sustain.

A key part of capitalist consumerism is ensuring that products wear out prematurely so that you have to buy replacements (clothes, appliances, cars, etc.). Instead of "planned obsolescence" we should make things so that they last a lot longer. Capitalism has no real interest in this because it undercuts its essential need to keep selling stuff — year after year after year.

We should also mention here the waste represented in having numerous companies produce the same product. "Choice" is one thing but, really, how many different brands of toothpaste do we need? Surely a few dentally significant variations should be enough.

Can capitalism be reformed?

The key question we have to answer is whether capitalism can be improved or reformed. Can a mixture of government regulation and incentive bring about fundamental changes — for the better? The short answer, in my opinion, is that no, it can't.

Capitalism has certainly changed over its centuries-long existence. Even imperialism — what Lenin termed the highest stage of capitalism — has changed since its approximate inception around 1900. But has its rapacious, exploitative essence changed? I don’t think you can make any convincing case that it has.

Even the welfare state which developed in major western countries in the postwar period now seems to have been simply an episode, a product of working-class pressure in the context of the cold war and the postwar boom. Everywhere it is being dismantled as fast as the bosses can overcome popular resistance. The "global financial crisis" has simply provided an excuse for savage attacks on living standards (privatisation, layoffs, cutbacks, etc.).

And in a number of Third World countries (India, Iran, etc.) the "state capitalist" economies (i.e., capitalism with strong state sectors, often with subsidies on key necessities) are being dismantled and opened up to foreign firms.

When we consider the scale of what is happening, the idea that the private profit system can be tamed or humanised by regulation or somehow induced by bribes (more politely called "economic incentives") to radically change its behaviour, seems simply fantastic — an exercise in wishful thinking that has absolutely no basis in reality. Everywhere today we see ever more corporate rapacity and less and less real control.

Regulation a farce

In a whole number of areas real regulation, enforced by vigilant inspectors, has been replaced by the farce of "self-regulation". In Victoria and NSW, for instance, the state used to regularly inspect restaurants for breaches of the health code. That has fallen away drastically and today the only activity seems to take place after a food poisoning scare: there will be a rash of inspections to reassure the public and then it's back to business as usual.

The business pages of the Age are full of accounts of corporate scams and rackets — all detected by the so-called "regulators" only after the culprits have vaporised the life savings of hundreds and thousands of investors.

The massive BP oil spill in the Gulf of Mexico has shown that the "regulators" were asleep at the wheel — or rather, they weren't ever expected to do anything else. Incredibly, the incident seems unlikely to lead to a halt in deep-sea drilling.

It would seem so much more rational to invest the huge sums expended in searching for the last remaining pockets of oil on building windfarms and solar power plants, on radical energy conservation measures, on public transport and so on. But the "rationality" that operates here is the unbridled thirst for profit by huge energy monopolies like BP and Exxon; the government does their bidding — that’s what it's there for.

The recent book Death by Rubber Duck deals with the alarming effects of the host of chemicals we are exposed to every day (in food, in plastics, and so on).[5] There are some 70,000-80,000 chemicals out there, the real effects of which on humans are largely unknown. The attitude is pretty much that if people don't straight away drop dead on contact, then it's safe for commercial exploitation. So much for "regulation".

Not in their class interest

The only realistic conclusion is that capitalism remains true to itself. The sort of changes we want to see are simply not in their class interest. The whole tide is going in the other direction, towards even more unbridled rapacity, towards a more exploitative system.

I'm reminded of some lines in Brecht’s play St Joan of the Stockyards. It's set in Chicago in the early 1920s during a desperate strike in the stockyards. In one scene the financial magnate Pierpont Mauler (after robber-baron J.P. Morgan) has had an apparent epiphany and declaims:

And as for the thing made of sweat and money

Which we have erected in these cities:

It already seems as though a man

Had made a building, the largest in the world and

The most expensive and practical, but —

By an oversight, and because it was cheap — he used dog-shit

As its material, so that it would have been very difficult

To live in and in the end his only glory was

That he had made the biggest stink in the world.[6]

'Commanding heights' of economy must be in public hands

The only way around out of the impasse to which capitalism has brought us is to take over bulk of the economy and put it in public hands (whether federal, state or municipal). This publicly owned economy would then be operated according to a rational nationwide plan.

If the greater part of the economy — if not almost all of it — were in public hands then crises such as we are experiencing today would be avoided because the bulk of production would be for other parts of the state-owned economy and would not be subject to the market.

In the 1921 debate in the Soviet Union on the New Economic Policy Lenin referred to the "commanding heights" of the economy — heavy industry, banking and foreign trade — and argued that if the Soviet state retained control of these its rule would be secure whatever compromises it had to make with capitalist forces at home and abroad.

Here too we say that the "commanding heights" of the economy must be in public hands.

Soviet example

The Great Depression of the 1930s was eventually "overcome" on a capitalist basis only by World War II. But there was another path of development and at the time it made a great impression on masses of people suffering under the anarchy and madness of the capitalist crisis. This counter-example was the Soviet Union. As the capitalist world was in a tremendous crisis due to an "overproduction" of goods, the USSR was surging forward in the mighty collective effort of the first Five-Year Plan.

At the beginning of his classic 1936 work, The Revolution Betrayed, Trotsky sums up what was achieved:

The vast scope of industrialisation in the Soviet Union, as against a background of stagnation and decline in almost the whole capitalist world, appears unanswerably in the following gross indices. Industrial production in Germany, thanks solely to feverish war preparations, is now returning to the level of 1929. Production in Great Britain, holding to the apron strings of protectionism, has raised itself 3 or 4% during these six years. Industrial production in the United States has declined approximately 25%; in France, more than 30%. First place among capitalist countries is occupied by Japan, who is furiously arming herself and robbing her neighbours. Her production has risen almost 40%! But even this exceptional index fades before the dynamic of development in the Soviet Union. Her industrial production has increased during this same period approximately 3½ times, or 250%. The heavy industries have increased their production during the last decade (1925 to 1935) more than 10 times . . ."

Gigantic achievement in industry, enormously promising beginnings in agriculture, an extraordinary growth of the old industrial cities and a building of new ones, a rapid increase of the numbers of workers, a rise in cultural level and cultural demands — such are the indubitable results of the October Revolution, in which the prophets of the old world tried to see the grave of human civilisation . . . Even if the Soviet Union, as a result of internal difficulties, external blows and the mistakes of leadership, were to collapse . . . there would remain as an earnest of the future this indestructible fact, that thanks solely to a proletarian revolution a backward country has achieved in less than 10 years successes unexampled in history.[7]

Problems of Soviet development

Of course, the Soviet experience was marked by some grave problems and in the eyes of many people this fatally compromises the whole project of planned economy. I think this view is mistaken but we have to be able to respond to it.

Soviet industrialisation was undertaken under Stalinist bureaucratic leadership. It was delayed for five years (the Left Opposition led by Trotsky argued for it from 1923) and then rushed with unsupportable targets. Light industry and the consumer goods sector was neglected in favour of heavy industry. The working class suffered a big decline in its living standards, which undermined productivity. There was tremendous waste of human and material resources. Extreme social inequality developed between a privileged bureaucracy and an impoverished working class and peasantry. There was no democracy, no corrective to bureaucratic mistakes and arbitrariness. The whole thing was overcentralised and relied on managers motivated by economic incentives.

As Trotsky explained at the time, great gains could be registered by these priority-shock methods as long as it was a question of extensive growth — taking up the slack of underdevelopment at whatever cost. But as soon as that phase ended and quality became an issue, problems would develop because that needed democracy, the active creative involvement of the workers, and rising living standards.

The Soviet industrialisation under Stalin and his successors was marked by extreme environmental degradation. But as John Bellamy Foster explains in his book Marx's Ecology, Lenin had a different approach and the early Soviet conservation movement prospered while he was at the helm. Under Stalin it was attacked and destroyed.[8]

Bureaucratisation, social inequality, lack of workers' democracy, the command-and-administer economy, and the disregard for the environment were not essential parts of what happened — these were due to the Stalinist counter-revolution which began in the mid-1920s.

What we should take from the Soviet experience of planned economy is the tremendous resources available when a whole country is mobilised behind an overriding goal. But it can all be done much so much better with genuine workers’ democracy.


Revolutionary Cuba provides an alternative model of a planned economy. Cuba has had to contend with the US blockade. It has made some serious economic mistakes but it has been able to acknowledge them, make the necessary changes and is still moving forward.

Bureaucracy has so far been held in check, there is real workers' democracy and popular mobilisation and enthusiasm. There has been a great emphasis on developing a communist and revolutionary consciousness among the people and relying primarily on motivation and idealism rather than monetary incentives. The conduct of the leaders (especially Fidel and Che) has set an example which still resonates with tremendous force.

However, today the revolution faces arguably the biggest challenge in its history. The historic revolutionary leadership is passing from the scene; there are serious economic problems (especially food self-sufficiency); extreme weather events have battered the country setting back its economic development by years; the spread of bureaucracy and corruption appears quite alarming; social inequality has grown; and a section of the population (including many young people) is disengaged from the revolution.

We should certainly not write off the Cuban Revolution nor cease to publicise its remarkable and inspiring achievements but we should endeavour to have a realistic view about the dangers that it confronts.

The mechanism of economic planning in Cuba differs markedly from what took place in the Soviet Union. A draft central plan is elaborated and then discussed in workplaces across the island in a vast process of consultation and feedback. Changes are then made and the plan is adopted.

Cuba’s ongoing "energy revolution" shows what can be achieved when the key economic levers are in the hands of the state. There is an illuminating account on the Renewable Energy World website.[9] This is an example which should be studied by climate activists. These impressive results didn't require setting a "carbon price" or using other devious market mechanisms but came about as a result of political will, planning, and consciousness in a context where the economy was in the hands of the people.


I would urge comrades interested in the idea of a socialist planned economy to read Ernest Mandel’s 1986-88 debate with Alec Nove in New Left Review. Mandel’s basic argument is that:

. . . I believe that it can be shown that there are objective tendencies in the most advanced countries which indicate the presence of the material, technical and human resources needed for planning, and at the same time these advanced societies also show the heavy cost that is paid for the absence of planning.[10]

Modern economy too complex to plan?

One the arguments Alec Nove advanced against Mandel was that the modern economy was too complex to plan. In the case of the Soviet Union, Nove estimated there were about 12 million products. Only the market could ever allocate these rationally.

However, Mandel pointed out that many if not most of these were intermediary products and spare parts. These are generally not allocated by the market but are made to order. The same applies in capitalist economy today.

Within the Ford Motor Company or the Airbus consortium, for example, once the decision has been taken to produce so many units of a given model, the production of various intermediary products and components is determined. Planning takes place with the firm to make sure that every part arrives on time where it is supposed to in the requisite quantity. The key "political" decision is which primary products to produce and how many.

As for the remaining products, studies show that most people’s consumption patterns are relatively stable and little subject to change. As Mandel explains:

. . . what do studies of actual consumer behaviour, including of working-class consumption, in the advanced capitalist countries tell us . . . They show that the great majority of currently produced goods are bought in customary shops, or from customary service distributors, independently of price fluctuations. It is no exaggeration to say that this holds for at least 80% of the consumption of the average consumer.

… Economic relations of this kind involve neither a real market economy, nor bureaucratically centralised planning. What they represent is elementary forms of spontaneous cooperation. They will often remain relatively stable for years, if not decades.

… That is how most business is conducted today in capitalist — and "socialist" — countries: based on habit, custom, routine and the natural cooperation that grows from mutual knowledge and foreseeable results."[11]

What replaces the profit motive?

Capitalist economy operates according to the profit motive. Competition between the corporations drives innovation as each attempts to get an edge over its rivals by producing goods more cheaply or finding a new killer product. What would take the place of competition in a non-capitalist, publicly owned economy? What force would promote innovation?

The answer is simple: the boundless creativity of the masses of ordinary people. As Mandel points out, historically, most key discoveries and inventions have had little to do with the profit motive. Who wasn't affected by the deeply moving sequence in Michael Moore's movie Capitalism: A Love Story about Jonas Salk and the discovery of the polio vaccine in the mid-1950s. Salk refused to patent his life-saving discovery ("Could you patent the sun?" he asked an interviewer) and the vaccine remains in the public domain.

Competition under capitalism may drive some innovation but it also stifles it. If a company with a big investment in one technology discovers a completely different one it is unlikely to simply write off its existing plant and equipment — that would be irrational from the point of view of its economic self-interest. Many inventions have simply been suppressed or simply not taken up.

The other point to make here is that the innovation may be in socially retrograde areas. How much creative energy is sucked up by the "defence" sector (i.e., militarism) to work out new and more effective technologies of domination, destruction and killing people?

Freed from the constraining shackles of capitalism, massive amounts of creativity could be freed to concentrate on solving the problems facing humanity (medical, environmental, social). If ordinary people really did control their working environment what might they be motivated to do?

Bureaucracy and corruption

The Soviet bloc countries were bedevilled by bureaucracy, privilege and even outright corruption. On a different level Cuba is grappling with it too. Some years ago Fidel warned that the Cuban Revolution could not be overthrown by attack from without but could be fatally damaged from within. Lack of revolutionary idealism, corruption — these are the challenges.

Historically the Cuban Revolution has waged a tremendous struggle against bureaucracy, almost from the moment of taking power. The weapons have been democracy, the repeated mobilisation of the people, the great example of commitment and self-sacrifice of the leaders, the tremendous resources put into improving the life of the people, constant self-criticism and rectification, the very real egalitarianism practiced, and so on.

As I mentioned early, there seem to be some very serious challenges right now. There seems to be a real softening of revolutionary fibre in sections of the apparatus and some spectacular examples have come to light in the last year or so.

It is not foreordained that these things will always get the better of a revolutionary process. Cuba has so far lasted for over 50 years in the teeth of hostility from the US imperialist colossus across the Florida Straits and it would be defeatist and not a revolutionary attitude to say that it cannot surmount its current difficulties.

Workers' self-management

Real democracy in the country and the economy is vital to the socialist project. Self-management in a nationalised economy is the best framework to develop the revolutionary initiative and creativity of the working class. Control in the factories and workplaces is also the best corrective to bureaucracy and corruption. Managers should be elected by the workforce and should be accountable to them.

The national plan is decided by the elected bodies of popular power but it has to be implemented (and corrected) in the local production units.

How will we get there?

Of course, at the end of the day, the key question is how will we get from our current capitalist economy to a rationally planned one?

Obviously, this will only happen as a consequence of fundamental social change — a social revolution which replaces the rule of the capitalist class with that of the working people. And as we know there is no roadmap to that. We will have to find our own way, albeit bearing in mind the experiences and lessons of the past and standing on the shoulders of the generations who have struggled before us.

But right now we need to put forward certain ideas as part of our transitional program to address the multiple crises we face and mobilise the people.

Tackling climate change demands that we nationalise — at the very least — the entire energy and power generation and distribution sector, the transportation sector (including the vehicle makers), and the banks. We should have no faith in market mechanisms to play any positive role here, except an absolutely marginal one.

We have to push the idea of public ownership and a rational, nationwide plan. Nothing else will do. Eventually the idea of bringing the bulk of the economy into public hands and elaborating a plan for social need will gain more traction. More and more people will come to understand that the capitalist profit-driven economy is way, way past its use-by date and will kill us all if we don't replace it with a people-centred socialist one.


1. Socialist Planning and the Market, p. 55.


3. See

4. See the December 16, 2009 article by Sara Flounders at

5. Slow Death by Rubber Duck by Rick Smith & Bruce Lourie (University of Queensland Press: St Lucia, 2009).

6. Bertolt Brecht Plays, vol. II (Methuen: London, 1965), p. 173.

7. Trotsky, The Revolution Betrayed (Pathfinder Press: New York, 1972), pp. 6-7.

8. Marx's Ecology (Monthly Review Press: New York, 2000), pp. 243-244.

9. See

10. Socialist Planning and the Market, p. 8; it is also available online at

11. Ibid., p. 25.

The distinction between plan and market depends far more on the complexity of inputs into the production process, and the sensitivity of the good or service to feedback mechanisms for allocative efficiency.

As Trotsky wrote: "Economic accounting is unthinkable without market relations."

Holme's dogmatic article misses out on these subtleties and suggests a serious lack of familiarity in economic science.

But still, the opportunity is there. I welcome attempts for those advocate a planned economy sans market to show the actual plan.

I suspect if such attempts are made they will very soon be tearing their hair out when they encounter the issue of input-output complexity and the simultaneous equations involved in this process - and that's *before* dealing with the feedback mechanisms of what consumers actually want.

Show me the plan - and then I will believe you that it's possible.

A practical example: South China tiger is the most endangered cat species in the world. They are so vulnerable that some scientists believe that they have disappeared in the wild. In captivity they remained 50-60, unfortunately, can not the mate among themselves, as are all related, so that they will soon disappear. People hunt them for their fur and because of traditional Asian medicine. They have disappeared because of human negligence and greed.