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Thoughts on planning vs. the market


Been reading The People's Republic of Walmart: How the World's Biggest Corporations Are Laying the Foundation for Socialism. It's a good book: provides useful ammunition to deal with the arguments of free-market enthusiasts. Planning on very large scales not only can work, contrary to Hayekian dogmas, but is nearly ubiquitous and does work. (In our present society, it works primarily to uphold the power of the ruling class.) Corporations, for one thing, are planned economies. And the state amounts in many respects to one vast planned economy. I just wanted to observe here that the economist J. W. Mason, whom the authors quote, makes a good point on the utility-to-capitalists of the "free market" ideological bludgeon:


A society that truly subjected itself to the logic of market exchange would tear itself to pieces, but the conscious planning that confines market outcomes within tolerable bounds has to be hidden from view because if the role of planning was acknowledged, it would undermine the idea of markets as natural and spontaneous and demonstrate the possibility of conscious planning toward other ends.

That's something worth keeping in mind. The constant paeans to free markets are useful, first and foremost, for providing an excuse to deregulate, lower taxes, bust unions, downsize the welfare state, etc., but also, as Mason says, to sustain the myth that the economy isn't political. Whatever happens to workers is automatic and spontaneous--"there is no alternative." "It's not our fault, you just have to adapt to the rigors of market society!" Of course that's bullshit: it's all planned, all of it. We could plan a totally different society if we wanted to.


Aside from that point, we should also always keep in mind the lesson of Mariana Mazzucato's The Entrepreneurial State, that the public sector is in many ways more dynamic, efficient, far-sighted, and "entrepreneurial" than the private sector:


In her book The Entrepreneurial State, Mazzucato laments that while the myriad examples of private sector entrepreneurial activity cannot be denied, this is not the only story of innovation and dynamism. She asks: ‘How many people know that the algorithm that led to Google’s success was funded by a public sector National Science Foundation grant? Or that molecular antibodies, which provided the foundation for biotechnology before venture capital moved into the sector, were discovered in public Medical Research Council labs in the UK?’ Far from the slander of the state as slow-moving and bureaucratic, and the myth of the nimble private sector, she argues that businesses are in fact ineluctably risk averse, due to the need for a relatively short-term return on investment. Instead, the reality is that the state, from the internet and personal computers to mobile telephones and nanotechnology, has proactively shepherded new sectors out of their most uncertain, unforeseeable periods—and in many cases even through to commercialization. And this is not a case of the state filling the gaps of the private sector, correcting market failures. The state was central: ‘None of these technological revolutions would have occurred without the leading role of the state. It is about admitting that in many cases, it has in fact been the state, not the private sector, that has had the vision for strategic change, daring to think—against all odds—about the “impossible.”’
...Mazzucato lists twelve crucial technologies that make smartphones ‘smart’: (1) microprocessors; (2) memory chips; (3) solid state hard drives; (4) liquid crystal displays; (5) lithium-based batteries; (6) fast Fourier transform algorithms; (7) the internet; (8) HTTP and HTML protocols; (9) cellular networks; (10) Global Positioning Systems (GPS); (11) touchscreens; and (12) voice recognition. Every last one was supported by the public sector at key stages of development.

In short, to paraphrase the absurd movie Love Actually: planning actually...is...all around. We only have to make it democratic.

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