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Our debate does not concern the most adequate strategy for assuring immediate rapid economic growth and increasing social equality in relatively less developed countries. Neither is its object . . . " property="og:description" /><meta content="New Left Review" property="og:site_name" /><meta content="website" property="og:type" /><meta content="summary_large_image" name="twitter:card" /><meta content="@newleftreview" name="twitter:site" /><meta content="@newleftreview" name="twitter:creator" /><meta content="Ernest Mandel, The Myth of Market Socialism, NLR I/169, May–June 1988" name="twitter:title" /><meta content=" We must be grateful to Alec Nove for keeping the controversy to the essentials, avoiding red herrings and side issues. Our debate does not concern the most adequate strategy for assuring immediate rapid economic growth and increasing social equality in relatively less developed countries. Neither is its object . . . 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class="cell small-1 text-right"><svg xmlns="http://www.w3.org/2000/svg" width="11.876" height="22.339" viewBox="0 0 11.876 22.339" class="icon"> <path id="backward_icon" data-name="backward icon" d="M2008,4372l10.816,10.816L2008,4393.632" transform="translate(2019.523 4393.985) rotate(180)" fill="none" stroke="currentcolor" stroke-width="1"></path> </svg> </div><div class="cell small-5"><h1>Back to issue</h1></div><div class="cell small-6 text-right"><div class="back-to-issue__name">I/169<span class="divider">•</span>May/June 1988</div></div></div></a><div class="show-for-print text-center">NLR I/169, May–June 1988</div><div class="grid-x"><div class="cell large-9"><article class="article article--summary article--article" data-articles-article-type-value="article" data-controller="articles" id="article_929" itemscope="" itemtype="https://schema.org/ScholarlyArticle"><meta content="The Myth of Market Socialism" itemprop="name" /><meta content="Ernest Mandel" itemprop="author" /><span itemprop="publisher" itemscope="" itemtype="https://schema.org/Organization"><meta content="New Left Review" itemprop="name" /></span><span itemprop="isPartOf" itemscope="" itemtype="https://schema.org/Periodical"><meta content="New Left Review" itemprop="name" /></span><div class="grid-x"><div class="cell small-6"><div class="article-publication-details"><span class="issue-breadcrumb show-for-medium"><span class="article-issue" itemprop="isPartOf" itemscope="" itemtype="https://schema.org/PublicationIssue"></span><span class="article-publication-details__issue_number">I/169</span><time datetime="1988-06-01" itemprop="datePublished">, May June 1988 </time><meta content="108" itemprop="pageStart" /><meta content="120" itemprop="pageEnd" /><meta content="https://newleftreview.org/media/W1siZiIsIjIwMTkvMDMvMDkvbTN0eDI2a25fTkxSMTY1LmpwZyJdXQ?sha=c2d8446eb6fdfd42" itemprop="image" /></span></div></div></div><div class="article-page"><p class="article-authors">Ernest Mandel</p><h1 class="article-title" itemprop="headline">The Myth of Market Socialism</h1><div class="article-exporters hide-for-large hide-for-print"><h1>Share</h1><div class="grid-x article-exporters__links align-middle"><div class="cell small-3"><a href="http://www.facebook.com/sharer.php?u=https://newleftreview.org/issues/i169/articles/ernest-mandel-the-myth-of-market-socialism"><svg xmlns="http://www.w3.org/2000/svg" width="9.898" height="18.621" viewBox="0 0 9.898 18.621" class="icon"> <g id="facebook_icon" data-name="Facebook icon" transform="translate(-288.867 -413.325)"> <path d="M298.117,423.72l.513-3.345h-3.21V418.2a1.672,1.672,0,0,1,1.886-1.807h1.459v-2.847a17.808,17.808,0,0,0-2.59-.226c-2.643,0-4.371,1.6-4.371,4.5v2.548h-2.938v3.345H291.8V431.8a11.657,11.657,0,0,0,3.616,0V423.72Z"></path> </g> </svg> </a></div><div class="cell small-3"><a href="http://twitter.com/share?text=Ernest Mandel, The Myth of Market Socialism, NLR I/169, May–June 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href="#access-options"><svg xmlns="http://www.w3.org/2000/svg" width="20.277" height="17.444" viewBox="0 0 20.277 17.444" class="icon"> <g id="download_icon" data-name="download icon" transform="translate(-116.848 -2769.409)"> <path d="M361.371,419.7l-8.866,8.948a.991.991,0,0,1-1.3,0l-8.865-8.948" transform="translate(-224.867 2357.014)" fill="none" stroke="currentcolor" stroke-miterlimit="10" stroke-width="1.75"></path> <line y2="17.152" transform="translate(126.987 2769.409)" fill="none" stroke="currentcolor" stroke-miterlimit="10" stroke-width="1.75"></line> </g> </svg> </a></div></div></div><div class="article-body-wrapper"><div class="article-body"><p class="body_text"><span class="dropcap" data-articles-target="dropcap">W</span><span class="small-caps first-words">e must be</span> grateful to Alec Nove for keeping the controversy to the essentials, avoiding red herrings and side issues.<a href="#note-1" data-articles-link-param="#note-1" data-action="click->articles#scrollToElement:prevent" class="article-body__note-ref" id="reference-1"><span class="show-for-sr">footnote</span><sup>1</sup></a> Our debate does not concern the most adequate strategy for assuring immediate rapid economic growth and increasing social equality in relatively less developed countries. Neither is its object the cause(s) of the growing malfunctioning of the bureaucratically managed economies of the <span class="small-caps">ussr</span> and Eastern Europe, and the next step forward for these countries; nor is it the determination of the way to break with capitalism in the West, or the discovery of some ‘general laws’ governing the transition between capitalism and socialism. Our controversy turns only around two questions: whether socialism as conceived by Marx—i.e. a society ruled by freely associated producers, in which commodity production (market economy), social classes, and the state have withered away—is <em>feasible</em>, and whether it is <em>desirable—</em>a necessary prerequisite for the maximum possible emancipation and self-realization of the maximum number of human beings. My answer is categorically ‘yes’ to both questions. Alec Nove’s answer is a categorical ‘no’ to the first question, and a rather hesitant ‘no’ to the second one. This does not mean that the other questions to which we have alluded are unimportant or irrelevant to the debate about the relative weight which should be given to market mechanisms <em>hic et nunc</em>, in the East and in the West. It is quite possible that resolute partisans of ‘Marxian socialism’ as a society without commodity production advocate an extension and not a restriction of market mechanisms in postcapitalist societies at a given stage, as did Trotsky in the early thirties. We shall come back to that question later. But it is a <em>different</em> question from the one whether a society without commodity production is both possible and desirable. If we don’t solve that problem first—i.e. the problem of the <em>goal</em> of socialists’ endeavours—we find ourselves in the unfortunate situation of Louis XVIII’s restorationist minister, the Duke of Richelieu, who didn’t know where he was going, but was absolutely adamant that he would arrive there.</p><p class="body_text">Nove begins by making a statement about the lessons of the Soviet experience. He writes: ‘Mandel asks: is it appropriate to use evidence culled from Soviet experience? Yes, there were specifically Russian or Soviet factors—backwardness, “bureaucratic misrule”. But there are lessons to be learned, concerning (for instance) scale complexity, conflicts between partial and general interest, plan-fulfilment indicators, investment criteria, prices in theory and practice, labour incentives, diseconomies of scale in agriculture, the influence of user needs on plans and on output, the role of regional policy, and so on. While the Soviet record in handling these and other issues (including environmental pollution) may leave much to be desired, it would be foolish to ignore Soviet experience because of a prior decision to classify it as “not socialist”’ (p. 99).</p><p class="body_text">Nobody would seriously argue that one should ‘ignore’ Soviet experience because it is obviously not socialist, i.e. has not led to a classless society.<a href="#note-2" data-articles-link-param="#note-2" data-action="click->articles#scrollToElement:prevent" class="article-body__note-ref" id="reference-2"><span class="show-for-sr">footnote</span><sup>2</sup></a> On the contrary, one should indeed study that experience most carefully, if only to try to avoid the many pitfalls into which bureaucratic mismanagement has led the Soviet economy and society. Our difference with Nove in that respect concerns above all the fact that most of the lessons he wants to draw from the Soviet experience have to be seen <em>within the framework</em> of relative backwardness, isolation and bureaucratic mismanagement of the <span class="small-caps">ussr</span>.</p><p class="body_text">The problem is to determine to what extent the shortcomings of the Soviet economy result from the ‘principles of central planning’ in and of themselves, and to what extent they are rather the products of backwardness and bureaucratic despotism, which can be avoided under more mature circumstances. To give just one example: to what extent are the famous queues in the <span class="small-caps">ussr</span> the result of scarcities flowing <em>unavoidably</em> from ‘central planning’, and to what extent are they the products of the wrong decision systematically to neglect investment in transportation, distribution and agriculture as compared with investment in industry, especially heavy industry? Such a disproportion in investment is neither economically rational nor an automatic product of central planning. On the contrary, it is the proof of immature, wrong, lopsided, ‘unplanned’, incoherent, wasteful bureaucratic mismanagement. It could be avoided, and will be avoided, in a <em>democratically</em> centralized system of workers’ management in mature industrialized countries, on an international scale.</p><p class="body_text">This is not at all an argument against drawing upon concrete experience, out of some ‘socialist’ (certainly not Marxist!) dogmatism and prejudice. On the contrary. But it is an argument in favour of drawing <em>also</em> upon the formidable body of statistical data about consumers’ and producers’ behaviour in the most developed countries of the world—and not just<pb n="110"></pb> in the <span class="small-caps">ussr</span>—in order to project possible patterns of behaviour in a socialist world. Indeed, it is our contention that the boot is on the other foot. It is the partisans of the alleged ‘eternal’ advantages of market economy, including of ‘market socialism’, who show an obstinate dogmatism, a growing blindness to empirical data, in the unfolding of the debate about the ‘feasibility’ of socialism, opposing less and less relevant trends (either of the past or of more backward economies) to what really has been going on in the advanced economies during the last forty to fifty years.</p><p class="body_text">This leads us to another boomerang effect of Nove’s argument. He contends that ‘an unregulated market can give rise to large-scale bankruptcies and mass unemployment, which are wasteful ways of registering error. This is why (among other reasons) I enter into dispute with “Chicago” ideologists and those infected with the disease of privatizationitis’ (p. 103). But why does Nove dismiss more than two hundred years of experience of attempts at ‘regulating’ markets, all of which have failed to prevent periodic economic crises, periodic mass unemployment? Why does he hide behind the apologetic formula that ‘an unregulated market can [!] give rise to . . . mass unemployment’, when we have witnessed that phenomenon in all Western countries based upon the market economy during at least twenty-one business cycles since 1825 and are now witnessing it for the twenty-second time? Is it logically inconsistent to insist strongly upon the need to draw lessons from 160 years of ‘real’ international market economy in the Western world?</p><p class="body_text">The fact that no market economy has been able to avoid the ills of periodic economic catastrophes like mass bankruptcies (mass destruction/devalorization of capital/productive equipment), mass unemployment, periodically declining living standards and periodically increasing moral misery for millions, is of course not accidental. 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