I finished Nove’s Economics of Feasible Socialism a few days ago. It’s good stuff, recommending some form of “market socialism” without being in the least bit dogmatic: he’s proposing broad outlines, and he’d like to see others fill in the gaps. After a very critical reading of Marx, in which Nove concludes that Marx was a utopian who decried utopianism, Nove moves into a review of Soviet socialism and what went wrong, then into some countries that have transitioned into and out of socialism, before finally making his own proposal.
He proposes that certain industries ought to be nationalized — namely those that are on such an enormous scale that centralized coordination is necessary and practical, like power systems or enormous factories. To the extent possible, Nove believes that we ought to be using the market for efficient allocation. The absence of competition leads to wretched customer service, bad resource allocation and low-quality products. When demand is easier to predict — as it is for quantities like electricity — Nove sees central administration as the only efficient approach.
Nove’s attack on Marx is especially biting. According to Nove, Marx foresaw an era in which the central problem of economics — how to allocate scarce goods given potentially unlimited demand — would be solved. In the West this is true, but it’s by no means true in much of the world. If we assume that the world will in fact still have problems of scarcity, then we’ll still have to figure out the allocation problem. And if that’s so, we have to assume that there will still be conflicts amongst humans. At least any feasible form of socialism will have to, and that’s what Nove is after: a socialism that’s acheivable within the life of a child who’s already been born, and that is worthy of the label “socialism.”
I liked his book an awful lot, but a lot of the time the defense of socialism itself seemed forced. The idea was to produce the strongest form of socialism that was practicable, and Nove quite often decided the market worked better. At which point I wondered: what’s the difference between “market socialism” and a mixed economy? Shouldn’t we focus on the evils that we care to fix in the capitalist system and see how “piecemeal social engineering” — Popper’s phrase, to which Nove gives a nod in an appendix — could address them? Nove didn’t adequately convince me that a progressive tax policy, a near-100% tax on estates, a rigorous literacy program for all of America’s children, etc., wouldn’t buy us nearly all of what his market socialism would buy.
Correct me if I’m wrong, but the answer I’d expect from devoted socialists is 1) that the current capitalist system fundamentally debases human existence, and 2) that capitalists would never stand for the piecemeal social changes mentioned above; power must be taken from them, because they will never relinquish it voluntarily. Nove does a pretty good number on item 1), I think: the Soviet system debased the human soul quite well on its own; read Solzhenitsyn or Hungry Ghosts and you get a sense of what the blind pursuit of an economic system free of contradictions buys you. With that kind of pedigree, I’d like to spend a long time looking before I leap. But then, I’m probably not part of the class that Marx wanted to save.
As for item 2), I have no good response. Certainly the Depression and World Wars I and II nearly led to the collapse of capitalism along with the rest of the West, and the system managed to at least halfassedly correct itself. I’m still not convinced that a violent revolution is the only way out, and I don’t think Nove is, either — particularly if the new world is to maintain the same standard of living as the old one. Nove argues persuasively that Marx wasn’t looking to return to an agrarian idyll; Red Monday would see the factories cranking away just as vigorously as they had been the preceding Friday. Is a violent revolution really our best way to get there?
That’s where Nove excels: he points out all the things that would necessarily have to be the same from Friday to Monday. It’s unreasonable to expect, for instance, that “the workers” would be able to take over the functions that their bourgeois leaders carried out the previous week: management is a skill on its own, and we can’t expect that everyone would be able to do it equally well. There has to be a division of labor to handle the efficient allocation of resources — there will still be airline pilots to pilot airplanes, managers to manage, cooks to cook, and dentists to dent. Read Herbert Simon — not an apologist for capitalism by any means — and you’ll get a fairly good idea of why hierarchies arise in any natural system. Which isn’t to say that dictatorial corporate hierarchies are the only conceivable ones. But it’s surely unreasonable to expect that hierarchy itself will disappear.
The book argues all of this better and at more length than I could, at the same time respecting its forebears. (Except maybe Milton Friedman. Nove really doesn’t seem to like him very much.) You should go read it. Then come back and argue with me.
I know it’s juvenile, but I do still love to read