Against the market? (1994)

Book Review from the May 1994 issue of the Socialist Standard

Against the Market: Political Economy, Market Socialism and the Marxist Critique. By David McNally. Verso. 1993.

The title of this book is wrong. David McNally is not against the market. He is only against the regulation of the production and distribution of wealth by the free play of market forces. He goes out of his way to deny that he is suggesting "that markets can be eliminated overnight" and states that "the issue of contention, therefore, is not the use of market mechanisms within the framework of socialist planning". So, despite his repudiation of so-called "market socialism" as an absurd contradiction in terms he too is one, seeing "a continuing role for some market mechanisms within a socialist society".

This sort of position only makes sense if you conceive of socialism as being the state ownership and operation of the means of production, which, as a Canadian academic who supports the SWP in Britain (he has written a pamphlet for them), McNally does. But of course this is state capitalism not real socialism.

If this is your idea of socialism then the market can be seen as one possible way of allocating consumer goods and services, and it is here that McNally sees a continuing role for the market. He is, however, informed enough to know that Marx envisaged socialism as being a society entirely without markets, money or any buying and selling, but gets round this by arguing that a "socialist" government should pursue "the logic of demarketization, decommoditization and demonetization of economic life". In other words, that these basic economic categories of capitalism should be abolished but only gradually.

What he has in mind is the progressive introduction, as economic circumstances permit, of free services such as health care, education, nurseries, water, heating, lighting, electricity, local transport and housing. In addition people are to be given coupons which they can exchange for a growing range of basic foodstuffs and clothes as well as an increasing supply of free tickets to the theatre, sports matches and long-distance transport; individuals would be able to swap with other individuals coupons they don’t want ("eg transport coupons for cultural events"). Finally, they would be paid a sum of money to purchase luxuries and non-basic items which as today would be produced for sale.

Whatever this is, it isn’t socialism and in some respects would be worse than today. Imagine the extra paperwork involved in administering the coupon system, and why give people coupons that they can only use to get certain goods? Why not give them the money to buy them? As for swapping coupons . . . 

What this is in fact is a proposal that the government, as virtually the only employer, should pay people partly in kind, partly in coupons — increasingly in kind and coupons — and partly in money. Socialism does indeed involve the disappearance of money, but not in this way, which would replace the limited choice people now have in being paid in money rather than in goods.

But it wouldn’t work anyway. Implicit in the idea of the state ownership and operation of the economy is that this is established on a national scale. Which means that the state is not at all the free agent in economic matters that McNally’s scheme assumes.

Today there is a world economy on which all parts of the world are dependent for some of their raw materials, components and consumer goods. So a national statified economy would have to purchase these; to do this it would need money and the only way to get this would be to offer some of its products for sale on the world market. But to find a buyer their prices would have to be competitive, and this could only be achieved by cutting costs through investment in the up-to-date machinery and methods of production.

In this way the world market would restrict the amount of resources the state could allocate to the consumption of its workforce and so impede McNally’s cosy image of a steadily expanding provision of free goods and services. If, alternatively, the state decided to try to isolate itself from world market conditions by trying to produce substitutes for the needed imports, this would raise its costs of production and so, once again, restrict the amount available for consumption.

The fact is that there is no way-out on a national scale. And if McNally is not convinced he should read the two latest books of his fellow (but more independent-minded) SWPer Nigel Harris (The End of The Third World and National Liberation).

Despite this, most of McNally’s book is genuinely interesting. He describes now the ruling class in Britain took measures, through enclosures and abolishing the old poor law system, to create a working class that was entirely dependent on working for an employer for their livelihood. He also discusses the views of Adam Smith (apparently he wasn’t as bad as his present-day supporters make out), Malthus (who was) and of the early 19th century critics of capitalism.

At the risk of being accused of being pedantic, we must point out that someone who presumes to give "the Marxist critique" ought not to make the elementary mistake, repeated three times, of saying that "capitalists pay the full value of labour as established on the market". What workers sell, and what capitalists normally pay the full value of, is their labour-power, which is capable of producing a greater value than its own. If capitalists paid "the full value of labour" they wouldn’t make any profits.

Adam Buick