The following piece, written by the late Pieter Lawrence, is the eighth chapter of his 2006 work, 'Practical Socialism - Its Principles and Methods'.
Chapter 8
Information, Planning and Decision Making
Whilst the self regulating basis of production and distribution so far outlined may be adequate for an established structure of production, it could not provide for any large scale development. Expansion would require the work of information, planning and decision making.
It remains a permanent feature of the capitalist system that its structure of production is inadequate to supply the needs of all people. Agriculture, mining, energy, industrial and manufacturing organisation, construction and distribution systems are all limited in their productive capacity to what the market will bear as sales of goods. The present evidence is that on a world scale, productive capacity in relation to total human needs is decreasing. I repeat the example that in 1975, approximately 435 million people were seriously malnourished; by 2000 this number had increased to 820 million (FAO). Similarly with housing; over the past 25 years the numbers of people existing in shanty towns, slums and sub-standard housing has greatly increased. But even the world production system that does exist is distorted by waste, allocates vast resources of labour and advanced technology to armaments and sophisticated death machines and creates more and more socially useless jobs such as those in finance and banking.
The great projects that communities in socialism would need to undertake would involve a rapid expansion of all useful parts of production. Practicality would require this to be carried out in some order of priority. Its aims would be achieved in stages, first doing what was manageable, monitoring the progress made and then taking further steps. Such a strategy would provide an overall direction for day to day action in all countries as part of world wide co-operation.
Planning of large-scale development would begin with information. As an open society there would be a great contrast between the supply of information in a socialist system compared with the industrial secrecy of rival corporations in capitalism, which is supported by state secrecy with its networks of spies. In socialism there could be no trade or state protection of information on production methods, technology, design, disposition of production units or use and stocks of materials. For example, there could be no corporate or state monopoly of “strategic materials” such as scarce metals. With all parts of world production sharing a common purpose, there would be no difficulty in making information available through a decentralised world information system. Such an information system would be easily within the capability of existing technology. Information technology cannot achieve its full potential for the benefit of all people except in a socialist world.
We can anticipate that in socialism, industrial and manufacturing organisation would be structured in an economical way throughout the world, regional and local scales. This would be partly determined by distribution of population and such natural factors as the world distribution of resources. Mining and processing of raw materials such as metals, chemicals, oil and coal and some basic agricultural products, particularly cereals, could be organised as a world resource with its products distributed to regions.
Once processed, materials would be supplied to regions for manufacture of component parts and final assembly of goods; these regional units could serve the needs of regional populations. At the smallest scale the supply of some needs would take place within the local community, as for example, local food production for local consumption.
Such a structure of world, regional and local production could operate together with a decentralised information system. On the smallest scale, a local information centre, could collect statistics on the position of stocks, productive capacity, use of materials, energy etc. By collating these local statistics, regional information centres would be in a position to know the complete picture of demand and supply within a region. On the largest scale, a world information centre could collate regional statistics in a similar manner. This would present a mapping of world production. It would be achieved by an integrated but de-centralised information system, providing any combination of information people may require on any local, regional and world scale.
There have in fact been previous attempts to produce a comprehensive mapping of an economy on a national scale. We can recall the work of W.W. Leontief which was published in the l950/60’s as “Input-Output Economics”. This was defined as, "Concerning a new method which can portray both an entire economy and its fine structure by plotting the production of each industry against its consumption from every other." Leontiff worked with statistics on the US economy and produced a table showing the exchange of goods and services for the year 1947.
One aim of Leontiff’s work was to use input/output analysis to indicate disproportionality. (This is the recurring problem of the market system where over-expansion of one sector of production in relation to other sectors leads to a pile up of goods surplus to market capacity. Such disproportionality can lead to cut backs in a sector which may have knock on effects throughout an economy, sometimes leading to general recession.) Leontiff argued that if such disproportion was indicated by input/output analysis steps could be taken to keep the steady expansion of the economy in even balance, thus avoiding the problems of the trade cycle. (A good account of Leontiff’s work can be seen in the “Scientific American”, October l951, April 1965 and April 1966.)
This part of the work on input/output analysis was irrelevant to how a socialist system could work because disproportionality would not be a problem. If one sector over expanded in relation to other sectors this would be adjusted without the devastating effects of a market system recession. In fact there could be circumstances in which it could be desirable to go in for intense production runs of components, etc., which would be surplus to immediate requirements and then stock pile them for use over a period. This could suit the work practices of people in socialism without in any way disrupting general production. In socialism it would not be necessary to maintain production in even balance.
The methods that Leontiff had to use were so slow they almost defeated the object of the work. This is what he said. “. . . the construction of an input/output table is a highly complex and laborious operation. The first step, and one that has little appeal to the theoretical imagination, is the gathering and ordering of an immense volume of quantitive information. Given the inevitable lag between the accumulation and collation of data for any given year, the input/output table will always be an historical document."
It might be argued that if Leontiff had been able to work with modern information technology he could have been more successful. There may be some truth in this; however, he also hit up against a different problem which was more intractable. Even equipped with computer power his reliance on Government statistics, drawn partly from tax returns, would always result in a time lag between the actual position of production and consumption and the publication of his tables. Also corporate secrecy rules out any possibility of immediate and direct public access to the state of production and consumption. An added difficulty was that Leontiff worked within a single national economy, albeit a large one, the United States. Even so, modern production is world production with events in one national economy having repercussions in other national economies. This means that even where Leontiff was able to produce a retrospective mapping of a single economy, in the context of world production, it was of very little use.
Nevertheless, although the work of Leontiff may now seem naïve and perhaps doomed to failure, its general aim was useful. Perhaps like other such useful ideas, it could best be practised only in a socialist society. We could look again at the work of Leontiff with a view to seeing what part a mapping of production could play in planning any significant expansion of production.
An up to the minute mapping of world production, broken down into its various regional and local parts could be maintained though the work of a decentralised information system. To begin the work of housing the world’s population in decent conditions our proposals should anticipate a large scale expansion of building and construction, part of which is the glass industry. We noted that a unit producing flat glass uses at least eight basic materials as follows, silica sand, soda ash, limestone, magnesium oxide, aluminium oxide, potassium, so3 and iron oxide. In an open society producing glass directly for needs, a glass works could post its figures on orders, current output, stocks and required materials to its local and regional information centres. At the same time units supplying the materials for glass manufacture would post their figures on to the same centres. In combination these related statistics would give an up to the minute view of the state of glass production and stocks throughout a region. With regional figures posted on to a world information centre it follows that the state of glass production throughout the world would be known.
With the same procedure practised by every main branch of mining, industry, manufacture, transport and energy supply, the total state of world production would be readily known. This is not to suggest that every kind of production activity would need to be added to the list of statistics. For example, with food production, it is likely that most local food production for local needs would not be relevant. A probable exception here is regional cereal production which is already collated and recorded by the International Wheat Council. As a basic foodstuff, cereal production would need to be co-ordinated on a world scale. With information on current production being fed into local, regional and world information centres, it would mean that although dispersed amongst the many thousands of production units, the overall state of the most important parts of total production would be readily known.
This could provide an overview of world production and stocks with cross section or horizontal views, that is, of production as it is dispersed throughout the various regions and localities. It could also provide vertical or sequential views of production from mining of raw materials, to processing, through worked up components in manufacture and industry, then to final assembly and distribution. It could also include statistics on resources such transport and energy supplies. From this pool of statistical information there would be no difficulty in extrapolating any particular input relative to output, for example, how much energy y is used for the production of a tonne of steel.
This would be a statistical, input/output mapping of the production system but it would not be drawn up by a central bureaucracy. It would be kept up to date by producers themselves in the de-centralised manner described. It should also be emphasised that the function of such a world information system would be to assist the various production initiatives that may be taken by local or regional communities. It could not replace the self-regulating mechanisms on which the operation of the whole production system must continue to depend. Its important function would be to supply data, indicating how some parts of production should be expanded in response to needs. Information would therefore be an aid to planning and decision making enabling any particular expansion to be undertaken in a balanced way, that is, in proportion with other lines of expansion according to the priorities of policy.
We anticipate that in the early stages of socialism planning will be concerned with world wide initiatives to increase food production, housing and the construction of a safe world energy system. . However, with an increased demand for building materials, resources would first need to be allocated to creating the means of producing them. Building materials are produced throughout the entire structure of production which means that any large scale increase in their supply would first be an input into industry and manufacture. Accordingly, planning offices in the various world, regional and local spheres of organisation could have the job of presenting specific proposals for development in agriculture, mining, industry, manufacture, transport, communications, energy supply, etc.
In line with the principles of democratic organisation, such planning offices would work within the policies decided by the wider community. There is nothing inherently wrong in many of the present local procedures for planning and decision making. For smaller scale development, planning proposals could be placed before councils. For some proposals, perhaps the siting and construction of a new factory or workshop, or the use of land for housing, sports facilities or any other purpose, councils could be delegated the responsibility of making a decision. The practice of delegating various responsibilities is one which would operate within a wider framework of democratic checks. These could include local or regional polls in, perhaps, controversial cases.
For informed decisions on large scale development, councils or parliament could have the option of setting up a public planning enquiry. Such enquiries are already in use, but the decisions arising from their reports and recommendations are mostly made by a government minister. It is unlikely that this could be an acceptable practice. The functions of ministries should be technical and administrative and more directly accountable to the wider community through parliament. Public enquiries in socialism concerned with large scale development would assemble information on the widest possible basis from every relevant or interested source. This would involve priorities of need, required materials in relation to their world supply and reserves, technologies in relation to alternative technologies, siting, conservation, protection of the environment, available skills and so on. As with planning in general, the job of such enquiries would be technical and would not include decision making. Their work would be to collate information and issue a report, so that democratic decisions might be better informed.
Planning would extend to a world scale. It should be assumed that communities in socialism would inherit an uneven world distribution of production facilities. In these circumstances, communities in the more developed countries, as part of their world responsibilities, may want to respond to the needs of people in other, less developed regions. In these places, although people would be doing what they could through their own initiatives, it is likely that they would have urgent needs which they would be unable to provide for themselves. This would apply particularly to areas where farming methods are basic and over dependent on favourable weather. Also in areas where millions live in shantytowns.
For example, for every 1,000 hectares of arable land in Europe, up to recently, there were 60 available tractors and over 6 combine harvesters, while in Africa, for the same land area, there were only 2 tractors and 0.2 combine harvesters. In South America, where food production could be vastly increased through irrigation schemes, of the 108 million hectares of arable and permanent crop land in use, only about 6 million (5.5%) irrigated. Similarly in Africa, only 4% of the arable land was irrigated. With the much greater problem of housing, before large scale housing projects could begin, it would be necessary to construct the extra brick making facilities, cement and glass works, etc., for producing the materials.
So, for needs such as food and housing, and to assist with greater self sufficiency of local production in all places, initially, the regional centres of developed industry and manufacture would be called upon to supply machinery, installations and storage facilities, etc., to assist with such projects as irrigation schemes and housing development in these areas. Also, there is likely to be an urgent need for the setting up or improving of services and infrastructures such as those needed for health, transport and communications. This would also be part of inter-regional co-operation.
To achieve this, a world planning office, assisted by specialised world bodies such as the Food and Agricultural Organisation, and working with data provided by a world information system, could present proposals for inter-regional co-operation, through a world council. This, as suggested, could be an adapted form of the United Nations Organisation. As now, but with its procedures thoroughly democratised, it would comprise delegates from every country and region, and would have direct links through its own administrative bodies with every kind of regional organisation.
Nor would inter-regional co-operation in socialism arise solely from uneven development inherited from the capitalist system. A safe world energy system would be necessary, treating the planet as a single resource and as a common environment for all people. The use of natural materials would also be a matter of world concern. Inter-supply of some foods would continue to take place between the tropical and temperate regions. For a varied diet of good quality food, this would be in the interests of all people. Therefore, inter-regional co-operation and development would be a necessary feature of world organisation. A strategy for the solution of problems could be achieved through supply of information, planning, democratic decision making and finally the actions of people across the world, co-operating in a common world interest.
Pieter Lawrence
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