Book Review from the April 2013 issue of the Socialist Standard
Remaking Scarcity: From Capitalist Inefficiency to Economic Democracy, by Costas Panayotakis. Pluto Press, 2011
Economics, as taught in schools and colleges, defines itself as the study of the allocation of limited resources amongst competing wants where these are greater than resources and teaches that markets and prices arose as the best way to do this. In fact, since it assumes that human wants are infinite, it teaches that scarcity – and markets and prices – will always exist.
Panayotakis rejects the traditional socialist argument that ‘scarcity has been conquered’ because ‘the problem of production has been solved.’ He sees scarcity as a fact but argues that free market capitalism is not the most efficient way to deal with it. Naturally, he has no difficulty in showing that capitalism does not allocate resources efficiently to meet human needs.
This, he points out, is due to the fact that ‘the true goal of capitalist economies is not to satisfy the wants of consumers, but to pursue profit and a never-ending accumulation of capital.’ This ‘logic of capital accumulation escapes people’s control and subordinates them to its imperatives,’ including even the owners and top executives of capitalist firms:
‘... the pressure of capitalist competition means that, even to preserve their capital and continue enjoying the privileges, prestige and power associated with their class position, capitalists must tirelessly pursue profit and capital accumulation.’
This makes them essentially ‘functionaries of capital,’ who don’t have a free hand to do what they might want, but only a greater power than the rest of society ‘to influence the terms under which they and all other socio-economic groups are subordinated to the logic of capital.’ So far, so good.
Panayotakis’s thesis is that capitalism fails to deal with the problem of scarcity efficiently because it is an economic oligarchy. The alternative to capitalism is, then, an ‘economic democracy’ where everybody would have an equal say in how scarce resources are used. He recognises that this implies that the means of production should no longer be owned and controlled by a minority but seems to favour particular productive units being run by workers’ co-operatives or councils.
The two models of ‘economic democracy’ he discusses in detail are so-called ‘market socialism’ (as in David Schweickart’s proposal) and Michael Albert’s ‘Parecon.’ He can see the drawbacks of retaining production for the market, but doesn’t make the point that, with market competition, workers’ co-operatives too would be forced to behave as ‘functionaries of capital’ if they wanted to survive.
He is more favourable to ‘Parecon’ but mentions one critic’s description of it as an ‘off the shelf utopia.’ As indeed it is, though ‘off the wall’ might be a better description given its endless form-filling and voting to try to fix prices and pay that conform to some ideal allocation of scarce resources.
Panayotakis and the others have got themselves into this position of discussing how to calculate prices and pay because they reject the traditional socialist view that, given the abolition of capitalism, enough to satisfy people’s needs could be produced and that therefore a socialist society would not have to price or ration goods but could implement the principle of ‘from each according to their ability, to each according to their needs’.