Planning and the climate

The only way humanity has a chance of avoiding a climate disaster will be through a global plan based on common ownership of resources and technology that replaces the capitalist market system. In a new book by Scottish Marxist economists Paul Cockshott, Alin Cottrell, and Jan Philip Dapprich, entitled Economic Planning in an Age of Climate Crisis, the authors take up this issue.

Over the years, Cockshott and Cottrell have done sterling and important work in showing that planning in a non-capitalist economy is feasible and would work so much more effectively than the capitalist market economy.  In this new book, the authors go further to show how planning is vitally necessary if the disasters of climate change, already with us, are to be mitigated and the planet is no longer degraded by greenhouse gas emissions.  And they spell out how planning by replacing the market would work.

The authors first explain the basic science of climate change before looking at the transformations needed for a ‘green world’.  Then they look at the previous successful history of deliberate planning practised in the UK during WW2 and then how, using modern computing techniques, it would be possible to organise resources to save humanity and the planet. The authors argue that “we can longer go on with a system that just maximises private profit without consideration for its effects. Instead we have to consciously plan how to change to a fossil fuel free society.

In arguing their case, they start by showing how successful planning for the allocation of resources can be so much more successful even when capitalism still operates – for example during World War 2, when governments took over the war effort and controlled production allocation. “It’s clear that the profit motive is not going to do the job, transition to carbon neutrality will have to be driven by the state. But state-driven economic restructuring does not necessarily equate to socialism, and the experience of planning in the UK economy during World War II provides an interesting case in point.”

They present data that show, when compared to previous and subsequent periods, during the war years the UK had the best economic performance on record.  The ‘war economies’ of the UK (and to a lesser extent the US) showed how much can be achieved in a short time via planning—even without comprehensive state ownership.  

Of course, that was only possible because capitalists were told what to do by government directives. “Despite the fact that no formal transfer of capitalists’ property into the hands of the state took place during the war, in the circumstances of the time it seems to have been widely accepted that government could tell firms what they had to produce and what resources they were allowed to acquire. Indeed, in some cases government officials effectively took over the management of private firms.”

The authors address the usual objections to planning raised by mainstream ‘market’ economists and by the Austrian school in the so-called ‘socialist calculation’ debate.  They have shown before that it is perfectly possible to plan the allocation and production of resources to a high degree of efficiency given modern computers and ‘big-data’ technology. Indeed, it is now much more feasible than in that war-time period.

They refer, in particular, to the work of Kantorovich whose linear programming showed that it was possible, starting out from a description in purely physical terms of the various production techniques available, to determine which combination of techniques will best meet plan targets. There can be a ‘non-monetary’ objective function—the degree to which given plan targets are met—which can replace the capitalist profit motive.  And further, there was the work of Wassily Leontief, whose signal invention was the input–output table, which displays the interrelationships between sectors and so allows for the allocation of resources and production within an economy.

Now the theory of economic planning is considerably more developed than in the 1940s, while the computing technology needed for planning has advanced not only relative to WW2, when computers were in their infancy, but also relative to the Soviet Union in the 1980s, when planners had sound methods at their disposal but lacked the computing power to implement them. In addition, the required data are now easily available; in the 1940s planners had to collect the data they needed more or less from scratch.

The obstacle now is not the feasibility of planning but the political one of the class interests of the capitalist class.  Expecting planning to work without the expropriation of the capitalist class and the ending of the law of value and the market economy is really utopian, except for the short ‘emergencies’ of war time.  As the authors point out: “We have suggested that planning of the sort that was implemented during World War II— effective as it was in achieving a very specific goal—is ‘second best’ to a system where the economy as a whole is under public ownership and regulated to serve the needs and interests of the population.”

But the major innovation in this book is to consider how to plan for environmental needs as well as production per se in a non-market economy.  In Marxian political economy, the labour value of an item is the socially necessary labour time required to produce it. Given the technological, environmental and social conditions of a society, it is the labour time that is generally required to produce an item that can be used to cost or ‘value’ it.  But the labour time model for planning does not account for the ‘external’ impact of  greenhouse gas emissions.  So the authors propose a measure of value in planning that considers all factors of production, including both labour time for production and the emission effects.

First it is important to understand, as Marx explained, there are two main parts to the planning of resource allocation and production.  The first is the macro allocation for social needs eg investment in capital goods, health care, education, transport, public services and basic consumer goods – free to all at the point of production.  But second, there needs to be a mechanism for allocating other resources for personal consumption beyond the ‘social wage’.  These personal consumer needs will be determined by the labour time used to produce them and individuals will ‘buy’ them based on the ‘labour time vouchers’ issued to to a worker for the individual contribution to overall production in labour time. 

Now the authors propose an adjustment to that model based on the economic category of opportunity cost. “To specify the cost of a product, we must thus determine what else could have been produced instead.  Moreover, we must be able to measure this on a common scale so that costs of various products can be compared.”  So if the planners ‘priced’ products with an extra constraint on greenhouse gas emissions that they generate, this require a higher ‘opportunity cost’ valuation for high emission products. This would result in a shift of demand towards low-emission products.  “Rather than simply reducing the economy’s overall output to abide by emission constraints, the composition of output is changed to emphasise green products.”

This book offers a further development of technical feasibility of socialist planning that incorporates the climate crisis.  It further enhances the advantages of the planning mechanism for human organization over the anarchic, crisis-ridden, exploitative capitalist market economy that is failing to deliver the needs of humanity and is destroying the planet. It offers yet more powerful arguments for planning over the market.

21 thoughts on “Planning and the climate

  1. Effective planning is more feasible now than in the Soviet era not only because of far more powerful mainframe computers, but also because each of us has a minicomputer in our pockets — a smartphone — that can signal wants and needs to the central planners. In other words, a planned economy can be both centralized and democratic.

  2. 1) Let us assume that society – that is, a commune, or even better: a network of communes – has all the important means of production at its disposal. Your first and most important decision is not which distribution system do we want, but: Which products do we want and which products can we do? Timesheets don’t help at all with these questions. These questions must be decided before the first timesheet can be filled.
    2) What we need and want is, above all, needs-based production. Suppose there are 100 elderly in a community, 10 of whom need a wheelchair, 20 need insulin daily, 30 need Makromar, 90 need daily care and attention. None of these 100 old people work in production. How can we meet their specific needs? Timesheets and working time calculations don’t help us a bit either. A non-capitalist, moneyless distribution system would therefore have to practice a distribution system beyond “work slips” for the majority of people who do not work.
    3) “Timesheets” are a simple thing. Anyone who works and has a watch could do the bookkeeping themselves. However, the distribution does not distribute hours or labor time, but a product of labor. The quantity and quality of the product of labor cannot be measured by the clock. “Payment according to performance” does not actually work for hourly wages, but rather for piecework wages. Anyone who wants to pay “based on performance” will sooner or later end up with piecework wages – that’s my first concern.
    “… I must take this opportunity to state that just as the cost of production differs for labor of different grades, so must the values of labor employed in different branches of industry differ. The call for equal wages is therefore based on a mistake, is an unattainable, foolish wish.” K. Marx, Lohn, Preis und Profit, MEW 16, 131.
    My second concern relates to the comparability of different work performances. Let’s take bicycle production as an example. On the one hand, there is a factory that makes two bicycles a week because they do almost everything by hand. There is also a modern factory that produces ten bicycles a week with the same number of workers. How are the respective workers paid with time sheets? Are factory workers paid five times as much as factory workers? After all, your work output is five times higher.
    My third concern: You can only ever distribute what has been produced beforehand. “Distribution by performance” is a distribution by quantity or, in capitalist terms, a distribution by value. But the value or total amount of social labor is not known in advance.
    The price printout for each product contains a specific working time in which this product is to be manufactured. But the labor productivity of each enterprise (and of each individual worker) is individual and different. The individual values that a company creates are therefore different from the values of other companies. Capitalism compensates for this through competition and “punishes” the companies with below-average value production by the fact that they receive less added value from the common “added value pot” via the market price than they have generated individually. At the same time, capitalist companies with above-average value production are rewarded with an extra profit from the common surplus value pot.
    In “managerial socialism” the employees of the state-owned companies punish their planning elite by deliberately producing less or more of the products for which the planned prices do not correspond to the company’s value production – measured in working hours multiplied by labor productivity.
    The planners then claim these employees lacked “proper awareness”. In fact, these employees get the relationship between prices/distribution and labor input/values quite correctly. What these employees lack, however, is blind obedience.
    From the capitalist production chaos follows (in the best case) the drive to increase labor productivity. Inevitably, the socialist chaos of production leads to the increasing oppression and dictatorship of the working people.

    1. Your assumptions are wrong because socialism and communism presuppose a superior stage of the development of the productive forces in relation to capitalism.

      Marx has correctly observed that, with all the variations and oscillations in History, the tendency is for the development of the productive forces to move towards more and not less automation. And automation means standardization not individual or geographic differentiation.

      We can clearly observe this phenomenon in capitalism, where productivity of land tends to equalize over time because of investment and automation of agriculture, which Marx had already solved in life (see the last part of book III of Das Kapital). But this phenomenon is general in capitalism, even for the areas we perceive as individualistic and artistic par excellence: e.g. the streamer market, which is very popular nowadays in the USA with the newer generations: they all manifest their “individuality” and “talents” on the free market of streaming – but all of them tend to use the standard equipment to stream with quality (the Sony A7 camera being the gold standard for the most successful streamers, and a necessary investment if one wants to become one eventually) and they all tend to use the same “platforms” to stream (i.e. YouTube and/or Twitch).

      That is, even the areas of the economy that transpire free competition and absolute individual freedom (artistic freedom) are, in essence, heavily industrialized and standardized: you have to make a certain investment in money terms in a given set of tool-machines and pay the rent for the specific circulation capitalist (infrastructure) in order to exercise the rights and privileges of individual freedom and of the free market. Either one does that or one will simply offer an inferior commodity in the market, no ifs or buts.

      In communism, it is evident the problem would never arise in the first place, because the production would be predetermined by a central planning system. There would be no concept, on the limit, of individual and geographic misapplication and misallocation of productive resources because geography itself would already be rationalized (e.g. a communist society would never even try to cultivate almonds in the desert, like the USA does in California). That’s why socialism and communism are only viable in full control of the entire world, not just one country or continent (although, in theory, there is a critical mass of resources beyond which they already are viable, but we don’t know where such limit lies yet.)

      You also have a very romanticized view of how capitalism works. Capitalism only promotes efficiency and quality by accident, never by design. And it does that in a very wasteful manner and by constant trial and error. Capitalism on “checks” for the profit rate – everything else is purely accidental. There are a lot of ways to skin a cat, and, indeed, rising profit rates often involve disinvestment, not investment, which is specially visible in the Third World, where industrialization is purposely stifled, by military force if necessary, so that the capitalist world can keep its profit rate afloat.

      The only thing one can say about capitalism is that it is the most potent suction bomb of living labor in History. But what it does with such amounts of living labor is another story, it does not equal to efficiency.

  3. History never repeats. The problem with proposing a revival of the proto-planned war economies of Western Europe during WWII is that the objective conditions that enabled them are not here anymore; the key ingredient missing here is the Soviet Union, which threatened existentially capitalism in the European Peninsula as it arose as a superpower in 1945.

    So, not only not every war produces a planned war economy – Europe itself was ravaged by war for centuries before WWII, and those didn’t produce any modicum of war economies – but the conditions that produced the war that could produce such type of economy do not and will not be replicated ever again*.

    * We can already see that the capitalist world is choosing another kind of “war economy” against the new socialist superpower, China, as China, contrary to the Soviet Union, is integrated into the capitalist circuit. Instead, they’re doubling down on laissez faire, pouring trillions of dollars into the big corporations, which are taking over all the functions of central government, while putting the entire state machine (including the military and the propaganda ministries) to said corporations. This second Cold War is different from the first in the sense that the economic, the political and the ideological are now completely fused together, while in the first the ideological was still unglued to the economic and the political. The most glaring illustration of this process right now is NASA essentially becoming an appendix of SpaceX, and the cult of personality of American oligarchs such as Elon Musk – who now also owns the USA’s main news outlet, Twitter.

  4. I plan to read this book, but can you (anyone) tell me whether the environmental impact measure is integrated with the labour measure – eg, by the effort it is anticipated will be needed to manage the anticipated environmental impact?

  5. While I agree that Cockshott has made a number of contributions, I do not believe it lies in the field of planning. I intend to review this book on my website and this being so, I will keep my comments brief.

    While linear programme is a useful tool, it remains that, a tool. The USSR collapsed as I have shown repeatedly because it could not systematically economize on labour time, and this was not an issue of a lack of tools but due to the modal contradiction between the socialization of labour and its exploitation. Had there not been exploitation but workers’ control and participation the telephone and adding machine would have sufficed to make planning possible from the 1930s onwards. Cockshott first raised, I believe, the work of Kantorovich in a 2008 paper, which I critiqued showing that the results would vary from that proposed by Cockshott were it to be governed by the need to economize on labour time. http://theplanningmotive.com/2021/11/22/the-complex-grandeur-of-communism-built-by-workers-to-the-rhytm-of-universal-labour-time/

    What I would like to mention here once again, is that there are two distinct forms of planning in a communist society. Firstly there is consumer led planning where producers-as-consumers instruct the planners what to produce based on their individual preferences and wants. This is sacrosanct. Workers give of their labour and receive back the product of their choice. Anyone who suggests otherwise, that committees will decide what can and can’t be consumed on environmental grounds for example, have not broken from the paternalistic bureaucratic planning that helped destroy the USSR. It goes without saying that all goods are priced at their actual cost of production which includes environmental redress allowing individual workers the opportunity to make informed and conscious choices.

    The second form of planning arises out of the social fund or as Marx called it the ‘common fund’. This is where society’s collective effort is found. Workers’ collectively agree through a quintessentially democratic process how much to deduct from their contribution in order to donate it to the fund. It is the resources made available by this fund, a substantial element of the social product, which is planned in the sense most Marxists mean today. The problem is they do not know this applies to this particular form of planning and that it must not to be confused with consumer led planning. It is ironic, the social fund, the vital escalator between the lower and higher stages of communism as first found in the Critique of the Gotha Programme, therefore its most consequential element, is also its most neglected element. This must change, especially in the light of the USSR and especially if we are going to save the planet by mobilizing the social fund.

    The rest of the book looks good.

    1. ”The USSR collapsed because it it could not systematically economise on labour time.” So what followed? ”In “The Shock Doctrine,” Naomi Klein writes how between 1991 and 1998 “more than 80 percent of Russian farms had gone bankrupt and roughly seventy thousand state factories had closed creating an epidemic of unemployment.” This resulted in 74 million Russians living below the poverty level. Klein adds “25 percent of Russians—almost 37 million people—lived in poverty described as ‘desperate.’”

      During the 1990s, when Yeltsin was dramatically changing the country under the direction of the Clinton administration, the rate of drug addiction in Russia increased by 900 percent. The suicide rate almost doubled. HIV, which had previously only infected no more than fifty thousand Russians, became a nationwide epidemic with millions contracting AIDs.

      Bradley described the neoliberal mindset in crude, albeit accurate, terms.

      An entire population of people who had lived with guaranteed employment, guaranteed healthcare, old age pensions, and a planned economy saw the social safety net swept from underneath them, as widely unpopular policies, backed by Washington, were imposed on the country. US Senator Bill Bradley describes the tone of US diplomats in their interactions with Russia, saying Clinton administration officials spoke of “stuffing shit down Boris throat,” gleefully taking pleasure in ordering him to wreck his country’s economy.

      This wrecking ball approach to taking out a possible future competitor resulted in the premature death of millions. Russian academic Vladimir Gusev, according to Klein, said “The years of criminal capitalism have killed off 10 percent of our population.”

      Russia’s population decreased by 6.6 million between 1992 and 2006. Klein quotes US Economist Andre Gunder Frank calling what took place in Russia as “economic genocide.” Russian Vice President Alexander V. Rutskoi used the same words as the policies were beginning in 1992, saying it would have catastrophic results for children and the elderly.

  6. Hi Robert, thank you, but now you sound like Ernest Mandel.
    I object to this sort of literature for several reasons.
    1) Before saying a word about planning, explain how we can get there so that ‘we’ can plan. If you cannot explain this, there is no rationale for explaining everything which can be done – you can talk about it in theory, what you need are conditions in practice. Then all sorts of possibilities will arise that you never thought beforehand about anyway. In the meantime, how are you going to get governments in place that will tell capitalists what to do? Are you going to win elections? Will Keir Starmer favour the plan? Who will do it? You know very well that the pendulum went to the other side. The extreme right is in power in several European countries. There is no social democratic party worthy of that name left in the whole of Europe. Instead of writing books about planning that, one day, magical governments all over the globe will implement, the questions to be asked are if and how the left can regain power. Or perhaps these are not the right questions either. There is something unworldly religious and messianistic in the idea that, one day, the left will regenerate, become potent, have splendid ideas, implement great policies for the benefit of all womankind. The left didn’t do this in the past, why would it do this in the future? I am not bashing at anyone, not at all. I just find that it is time to think through these things.
    2) I did not read this book and so I do not know which sources the authors use to explain the ‘basic science of climate change’ but from what I get from you, it seems that they seriously underestimate the cataclysm that we are facing. It is far from clear that we can keep the world habitable even if we all – all governments – implement the best possible policies tomorrow morning.

    1. Actually, I think giving people the sense that planning can work is an important part of how we can get there – not the only part, but an important one. One of the major problems we face is that so many people assume that “there is no alternative” because all they’ve been told is that they’ve got a choice between capitalism and the various 20th century communist regimes which, whatever you say about e.g. Cuba, clearly don’t offer an attractive alternative to the 21st century Western imagination. Books like this are necessary to break through that impression and give people the sense that there’s an alternative worth fighting for. I think it’s a terrible thing that they’re so marginal in the collective consciousness of the left. Building awareness is part of the movement, and one of its main conditions for success. You don’t just have a revolution and then look around and ask, ok, what do we do now, anyone got any ideas?

  7. “In arguing their case, they start by showing how successful planning for the allocation of resources can be so much more successful even when capitalism still operates – for example during World War 2,”

    and

    “In arguing their case, they start by showing how successful planning for the allocation of resources can be so much more successful even when capitalism still operates – for example during World War 2, when governments took over the war effort and controlled production allocation. “It’s clear that the profit motive is not going to do the job, transition to carbon neutrality ….”

    Priceless. Pathetic. Hilarious. All. WW2 as an example of “planning…” as if “planning in WW2 was NOT all about rescuing PROFIT from the self-devaluation of capital; as if the war itself was not pursued because of profit motives. This is the example socialist “economists” want to use– with the attendant rationing, inflation, and destruction?

    I expect nothing other from Cockshott given political discussions have had with him over the years where he exemplifies the warning The Who issued in “Won’t Get Fooled Again,” “Meet the new boss, same as the old boss.” Explains Daltry’s heart stopping scream.

    Make no mistake, economics is the dismal science because it’s really about imposing scarcity in the face of the overproduction of value.

  8. a) Climate change, extinctions of plants and animals, ocean acidification, exhaustion of soil and water are already here and increasing; b) severe decline of consumption is the only way to palliate somewhat the state of the planet; c) the left has nothing to offer except 1. redistribution of resources; 2. after it much less consumption, 3. Strict population control. Politically speaking it is impossible to convince population in so called developing countries that they should decrease consumption for instance energy (China, India, Vietnam, etc.) and in developed countries worst. How people is going to embrace that steep economic de-growth is the only way? After disasters of unforeseeable magnitude ( epidemic diseases–covid 19: 1 million deaths in the US only — wars, famines, floods, drought, etc.) and large population contraction perhaps humanity, given the state of the planet, would adopt a more sustainable way of life. See, first Report to the Club of Rome about trends an dates.

  9. To save the planet from fossil fuels poisoning there is no need to lift a finger. Just wait and watch. -> “Global conventional crude oil production peaked in 2008 at 69.5 mb/d and has since fallen by around 2.5 mb/d.” Page 45 of the World Energy Outlook 2018 by the International Energy Agency. -> “Listen, and understand! That Terminator (oil depletion) is out there! It can’t be bargained with. It can’t be reasoned with. It doesn’t feel pity, or remorse, or fear. And it absolutely will not stop… ever, until you (industrial society, capitalist or communist, who cares) are dead!”

  10. Climate change is caused by people’s way of living or aspiring way of living. This way of living to a high degree is a secondary result of repression. As long as this is not being addressed, climate crisis cannot be solved.

  11. ”-consumers instruct the planners what to produce based on their individual preferences and wants.” absolutely not. It is socially determined NEED that a socialist economy addresses.

  12. Why do Cockshott and Cottrell continue to publish independently? Is socialist planning theory really so dismissed on the left that they can’t get published by a publishing company? It seems unlikely (Verso recently published Vettese and Pendergrass’ Half-Earth Socialism). Or is it a positive choice to avoid big publishers? If so, it seems a bad (ultra-leftist) choice – this is serious work, but independent publishing just screams “crank”, and many people will take one look at this book, with its *awful* cover design (who chose the font?), and dismiss it as such. With those aesthetics, you really have to be already interested and know they’re serious people to be willing to look at it. Not publishing in a big publishing house does much less to bring down capitalism than getting a serious audience! I picked up on Vettese & Pendergrass’ book when I saw it in Waterstones! You won’t see this book there. Perhaps someone who knows the authors could have a word?

  13. Hi Michael, interesting book to read.

    I usually read your blog but I can’t recall you writing about your approach towards degrowth. Do you have a post that I have missed talking about that?

    Greetings from Argentina.

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