From the February 1983 issue of the Socialist Standard
Capitalist enterprises plan their production as far as possible in line with short- and long-term estimates of "effective” market demand for their products. Within the constraints of market limitations, decisions are taken “centrally” by small minorities appointed by the owners and controllers of capital. Socialist production decisions will differ from this in two major ways. First, in place of “market” demand, the limits of production will be set only by the total, freely expressed needs of people and by the absolute aggregate of available resources. Second, all decisions about production can be freely arrived at and implemented by the people whose lives they affect.
There are a number of reasons for centralisation in capitalism. As a system based on the competitive accumulation between separate units (companies, states), it has a tendency to produce increasingly large conglomerations of capital. With this profitable concentration goes a concentration of housing, employment, and power. Transport costs for getting workers to work and products onto the market are reduced by a dense concentration of population in urban centres such as London, Buenos Aires or Hong Kong. Three-quarters of the North American population inhabits less than two per cent of the land surface area.
The market system is often held up as a free, fluid and balanced arena of enterprise. The truth is the opposite. It is in the nature of the market system that there is an increasing amount of wealth in fewer and fewer companies, fewer and fewer shareholders. Companies or individual investors who fall behind slightly in the rat race go to the wall and fall out of the competition. The bigger, more successful units buy up the smaller units, or what is left of them, and grow larger still. This problem of uneven development operates on an international scale, as well as locally. The parts of the world where capitalism developed first, Europe and America, still contain greater concentrations of capitalist power than many other parts of the world. Several hundred billion dollars are now owed by "underdeveloped" capitalist countries to a handful of more powerful banks and states.
In the market system, the state tries centrally to regulate the competition between enterprises. There is intervention in the market by the state as a centralised expression of the interests of the capitalists as a whole, to try to regulate prices, profit, interest, wages (exchange rates internationally) and so on. The state is also used to exert political control over the working class of the world. Police forces, armies and courts necessarily involve a high degree of centralised power.
The state also often runs power supplies (gas, water, electricity) and transport services, with subsidies where necessary, in order to allow the capitalist class as a whole to control production profitably on a “sound” and safe foundation of reliable services. Again, class interests demand that the capitalist state be a highly centralised power, for the administration of property and accumulation.
There has been a certain amount of debate recently about the conflict between local autonomy and central control. This has included the attempts by some local councils to question the state control exerted by Michael Heseltine, and the London GLC “Fares Fair” policy being ruled illegal. What these developments demonstrate is how much the running of a world-wide profit system depends on the universal submission of social production to the profit-based dictates of the central power in each national state. This link between property and centralised (rather than diffused) control goes right back to the idea of the aristocrat on a landed estate. Sitting in the country manor-house, control emanates from the centre, across the expanse of the territory. The hierarchy of the power structure is reflected geographically. In the same way, ex-colonies which gain political independence such as India, Africa and Latin-America, have tended to remain economically weak in capitalist terms, relative to the old “metropolis” countries in Europe, for many years.
None of the above factors of market competition, state power and uneven development can exist in socialist society. Democratically planned production in socialism cannot be "centralised". It will be global, conscious, controlled, and it can be described quite unequivocally as “planning” — but this need not imply centralisation. Local, regional and global councils, or other meeting points for the democratic discussion of ideas can be used to formulate and implement dynamic, flexible plans of production to meet needs. These resolutions can be initiated locally, passing through regional and global channels of liaison, and can then return to the local area for local implementation. World projects, such as space travel or the mass production of simple and essential goods such as paper or water, can also be initiated freely, locally, voluntarily, even if their implementation will require global co-ordination. The basis of socialist production is freely available, constantly modified information about what is being produced, where, how much and using what resources.
To avoid dismissing socialism as a distant future prospect, we must be prepared to think in terms of present institutions being immediately taken over for use by a socialist society. This includes present council and government offices and lines of communication, international bodies such as the United Nations, local community organisations such as housing co-operatives or even tenants' associations, and, perhaps most important of all, companies.
The means of wealth production so often referred to in socialist propaganda are organised at the moment into thousands of separate companies, each with its own head offices, distribution facilities, computers and so on. These networks of centralised power could be democratised for socialist use directly. Once the working class has taken over state power, the problem becomes purely an administrative one. At the moment, the forces of the state are used to defend property, in other words to step in and use violence if this process of democratisation were attempted now. Once the state has been taken over, however, it is a matter of using channels which are currently oneway, in two directions. For example, most companies have communications systems, from computers to notice boards, which allow workers to have handed down to them their wages and instructions. For a democratic control of production, all that is required is that each unit, whether it is a factory, a village, or a region, should comprise sophisticated networks which allow those involved in production to express their views. The desires of producers and consumers can be expressed individually, and collectively through votes in each unit, and these desires can be implemented in consultation with other units.
Clearly, we must consider in greater detail how the transition can be made from the present dictatorship of the boardroom, to the democratic control of society. For example, most companies today employ market analysts to estimate “effective” demand, and advise on production levels. In a socialist society, it may be necessary to elect people with the task of co-ordinating between units and regions, and matching “supply" to “demand". This task is less daunting than it may seem, since the modern computer systems allow inputs and outputs to be constantly monitored and displayed on a screen. Also, if too much of something is produced relative to what people decide they need, it can be stored or disposed of without too much trouble. In capitalism, on the other hand, the “surplus" production of commodities relative to market demand can lower prices, wreak havoc through the world market, and lead to crises and depression.