Economic Calculations and Policy Formation (Routledge Revivals)

Grahame Thompson

• Publisher: Taylor & Francis
• Year: 2014
• Print ISBN: 9781138829640
• eBook ISBN: 9781317570646
• Edition: 1
• Topic: Economics
• Subtopic: Commercial Policy
• Index: Economics

These essays develop a Marxist response to and approach to aspects of the recent economic past in the United Kingdom. They reflect issues and controversies that have arisen within economic policy debate and the economic theory associated with the debate, highlighting the problematic nature of economic policy in the period since the mid-1970s. The book, first published in 1986, develops a line of argument organized around issues of 'calculation', thus challenging the orthodox Marxist framework and presenting a neo-Marxist analysis.

CHAPTER 1

Introduction

1

The essays presented in this book form a particular kind of commentary on aspects of the recent economic past in the UK. They reflect a response to a number of issues and controversies that have arisen within both economic policy debate and with respect to the economic theory associated with that debate. In large part they are an attempt to take up arguments and controversies which were already under way and to which a socialist response was felt to be either lacking, ineffective or seriously underdeveloped. Indeed a number of the arguments generated in the essays were orientated towards debates where forces totally outside (and sometimes hostile to) socialist influence were rapidly gaining influence.

In the period since the mid-1970s economic policy has become in one way or another distinctly problematical. But in attempting to deal with the economic controversies so generated, the essays here demonstrate the increasingly problematical nature of socialist argument itself and particularly its Marxist variant. Thus the papers are also evidence of an attempt first to develop a Marxist response to and analysis of these pre-existing debates and then subsequently to push ahead with neo-Marxist forms of analysis. In order effectively to engage and contend with the current controversies it was found necessary to displace an orthodox Marxist framework and develop a line of argument, contained in later chapters of this book, which is organized, broadly speaking, around issues of ‘calculation’. What this means is discussed later in the Introduction. In so doing the attempt has been neither simply to deride the nature or terms of the debates addressed nor to expose them as being symptoms of some dreadful and general systemic malaise.

The organization of the rest of this Introduction is firstly to say something about the general terms of analysis offered in the following chapters and the relationship of these to wider intellectual developments. Secondly, the issues of ‘policy formation’ and ‘calculation’ are highlighted and discussed further. Finally, the particular essays appearing as chapters in the book are commented on one by one and some attempt is made to place these in terms of subsequent developments.

2

Whilst the issues addressed in these essays are not comprehensively organized around either a developed theoretical position or a closely linked set of policy issues, they nonetheless share a common approach towards policy discussion and calculation which above all else is typified by its opposition to essentialism. This is a broadly shared perspective within which all the original essays were prepared. This position was perhaps originally and most clearly demonstrated in the book Marx’s ‘Capital’ and Capitalism Today (Cutler et al. 1977 and 1978 – hereafter referred to as MCCT). The work and manner of approach adopted by the papers reprinted here largely developed in parallel to MCCT and the subsequent positions adopted by its authors.¹ This is not to say that the articles discussed below are simply a slavish empirical application of the general position advanced in MCCT. Rather, it is to suggest that that book located the object and terrain with respect to which the papers offered here are closely organized. But what are those positions and how have they influenced the analyses presented below?

In general terms MCCT argued for: (i) a rejection of general theories of value creation; (ii) a rejection of epistemological criteria as the basis for distinguishing between different forms of economic analysis; and (iii) a rejection of the conception of society as a ‘totality’, however conceived. Traditionally Marxism has approached the social order and the analysis of it through a series of concepts which do presume just these features – an ordered hierarchy of instances and elements articulated around a general principle which form some kind of cohesive unity that can be known (base-superstructure, mode of production, social formation, for instance). The question posed in MCCT is why should the conditions of social existence give rise to some kind of necessarily ordered totality of unity? This is rejected in the book along with any kind of rationalism that postulates such a necessary order and which as a consequence would read that order onto any object of analysis. MCCT argues that the forms of social existence provide the mutual conditions of each other’s existence but that these are not necessarily organized in any overt or covert ‘rational’ manner on the basis of a unity (whether a contradictory one or not).

An important implication of this kind of approach is that discussions of the economy are no longer underlayed by attempts to reduce the operations of that economy to the working of some central principle of the totality (whether this be the law of value of whatever), or to rule on economic arguments on the basis of scientific truth versus ideological misrecognition/mystification. The rejection of the notion of totality leads to a multiplication of points of intervention in economic discussions and sites of analysis; if there is no central principle to the economy’s working there is no central ‘contradiction’ around which attention should be focused. Thus everything from accounting practice of enterprises to the credit-giving criteria of financial institutions, as well as more obvious sites of socialist intervention and discussions are open to and worthy of investigation. But none of these practices needs be determined by the capitalist economy in general.

3

Given this general rationale the focus of attention of the essays is around the role of state institutions and apparatuses in these policy areas. However, this is by no means an exclusive focus. Economic policy is conceived of as being much broader than simply state or governmental policy. Policy here is taken to include the objectives and practices of any agent in the economic sphere (and not just individual agents but also collective and corporate ones), with the associated means and instruments through which these objectives are to be articulated and realized. Thus, in principle, policy could include the objectives of enterprises, political parties, trade unions, state apparatuses and so on, each of these being the site of a complex of processes and mechanisms of organization and operation.

Discussions of economic policy are commonly arranged around two features: (a) debates about the ends or objectives of policy and (b) debates over the means of implementation or realization of these ends. The former concerns tend to dominate in such discussions while the latter are largely subordinated within it. There is no shortage of objectives in economic policy debate, particularly from socialists, but the instruments of policy are less well developed. In addition, another element in the debates over the means of implementation of objectives, namely the constraints that might be operative, are often ignored altogether.

In the context of specifically socialist argument economic policy is usually discussed in terms of a strategy which combines a range of objectives with at least some discussion of the means of their implementation. But any concept of a coherent overall and total strategy is at least problematical and perhaps impossible; it assumes that if adequate knowledge were available then such a strategy could, at least in principle, be developed. This would require formidable resources of organization and information. In the absence of any such adequate knowledge or organizational capacity there cannot be such a thing as the correct strategy.

What would be the effect of abandoning this form of conceptualizing strategy? It would be to see strategies as irreducible to either ‘theories’ or ‘principles’; they would have no unitary locus. If we want to retain the term we might say that their global character belongs to the order of effects; strategies are formed from the effects of the outcomes of the branching of one set of practices onto another set in the result that a relatively stable system of mutual support is formed. Thus strategic principles have neither a unitary locus, a necessarily stable form of existence, nor a fundamental constitutive role or logic. They may be variously stated in different arenas, subject to controversy, or even fail to find adequate expression at all. In addition, statements of intention may mislead, what is pursued is not necessarily achieved, and action need have found no prior discursive expression or rationale.

By and large this is the conception that informs the essays reprinted in this book. Whilst it rejects the idea of a or the correct strategy in a totalizing form, it does not eschew the use of the concept of strategy altogether. Rather it would foreground the notion of ‘socialist strategy’. What marks all political ideologies is their committment to a calculated set of actions. Thus the idea of a calculated set of policies and programmes based upon socialist forms of argument and objectives could be retained. It is here that specifically socialist principles would intervene in the analysis and generation of strategy – and help retain its particular ideological character. For instance, the principles of co-operative organization and common ownership, of democratic decision making, the suppression and control of market mechanisms in allocation and distribution, the commitment to equality of opportunity in various forms, the generalization of job and cultural competence and so on, have all been advanced at various times as major principles or objectives of socialist social organization and would need to be foregrounded. But whilst these may inform any debate and struggle around socialist strategy, they are unlikely to be unambiguously secured by it. Any such strategy would inevitably be subject to the dictates of particular social, historical and institutional constraints (amongst others) which impinge upon the resulting course of action. This is what is meant by the irreducibility of strategies (in terms of their outcomes) to principles or theories. Indeed it is likely that the objectives of strategies will themselves alter and new ones arise during the course of any social action. Socialist principles thus operate as a set of theoretical a prions, informing the character of debate and ‘intention’, rather than like some ‘end state’ objectives which could be finally secured, if only in the fullness of time.

When this is the case what exists will be a set of particular policies and programmes backed up by socialistically informed arguments. It is these that will be secured (or fail to be secured) rather than the socialist strategy as such. This later notion is put under a strong question mark if not jettisoned. It is important to recognize as a consequence that we may never ‘know’ in advance exactly what that strategy actually is. The programmes and policies with respect to different objectives may be a somewhat ambiguous, contradictory and disparate set – a bricolage of ends and means within which an equally diverse set of what are conceived to be socialist arguments might circulate and be articulated. Policy discussions would then become a continual process of examining and re-examining the various possible contradictions and reconciliations between policy objectives, their calculated effectiveness, means of implementation and past performance, but where there can be no guarantee that these will ever be resolved in the form of totally adequate socialist strategy. If we want to call the outcomes of these arguments and conflicts, (i.e., their effects) the strategy that is fine, but this largely undermines the normal manner in which strategy is debated and understood; these debates are usually articulated around the search for an overarching ‘meta-objective’ or means of reconciliation and calculation which unifies in one way or another the particular policies and programmes, and which stamps them with their particular significance.

It should not be thought, however, that such a conception rather perversely guarantees a continual set of ‘failures’. At each stage of implementation in the context of socialist strategic action definite criteria of success need to be formulated and a scrutiny conducted with respect to these. Such criteria of success will themselves be contingently formulated in the context of the particular policies and programmes so outlined. The branching of one set of practices onto another in the formation of a network of relatively stable support – within the realm of effects and outcomes, the strategy – can also be treated in a similar manner.²

In relation to the second feature of policy discussions mentioned above the approach would be to stress the importance of investigations into the means of implementation of policy. This is usually very much neglected and relegated to a secondary position. In relationship to, say, the financial system, current arguments on the Left are still conditioned by an emphasis on the desirability of nationalization or the creation of alternative institutions as objectives. Very little is said of the problems of the various means by which control of the financial system might be implemented and the varying conditions and effects of the use of such means.

Whilst concerned to stress the point about means and conditions of implementation the articles included below should bear witness to the fact that this is not an easy task. There is no strong committment to the adequacy of the formulations suggested on this score. To some extent this lack of confidence reflects an unease regarding the characterization of ‘ends’ and ‘means’ as different aspects of policy discussion. The burden of the argument outlined above when discussing the concept of strategy would seem to suggest that the objectives of policy must incorporate their means of implementation. The means of calculation and administrative implementation are always a constraint on the range of possible policy options and objectives, so that the ‘ends’ cannot be properly considered independently of the ‘means’. They are both part of a single process.

As stressed above, economic policy is not seen as coterminous...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title Page
• Original Copyright Page
• Table of Contents
• Chapter 1 Introduction
• Chapter 2 The relationship between the financial and industrial sector in the United Kingdom economy
• Chapter 3 Capitalist profit calculation and inflation accounting
• Chapter 4 Capitalist profit calculation and inflation accounting: a comment
• Chapter 5 Economic calculation as 'sign'? A reply to Angelo Reati
• Chapter 6 Monetarism and economic ideology
• Chapter 7 The firm as a 'dispersed' social agency