Political Economy of Socialism
By Makoto Itoh
MacMillan Press
$39.95
Review by Sarah Peart
Makoto Itoh's Political Economy of Socialism is a refreshing contribution to the debate around socialism, in particular socialist economics, following the collapse of the Soviet Union.
After the experiences of Stalinism in Russia and Eastern Europe, social democracy in a number of Scandinavian countries and "market socialism" in Yugoslavia, the discussion around what are the essential characteristics of a socialist economy is much needed. Itoh stresses not only the desirability but also the feasibility of socialism.
Itoh emphasises the failure of capitalism and the market economy to provide basic needs for the majority of people. The book contains an excellent overview and critical analysis of the ideas espoused by utopian socialists such as More, Fourier, Saint-Simon and Owen.
Itoh lays out the central tenets of Marx's historical materialism and its importance for socialism. He provides some interesting discussion on the labour theory of value. The role of surplus value and the functions of profit under socialism are other aspects among many explored.
Itoh considers the problem of a lack of a flexible work force that faced Eastern European countries. Though full employment was a reality, it often meant difficulties in adjusting the supply of goods and services to changes in social needs.
Itoh proposes a "socialist reserve army of labour" based on arranged leave from work with a guaranteed income, the possibility of further study, extra training and the guarantee of work in the future. He argues for a social consensus among workers which encourages them to change jobs across industries and regions to maintain the flow of workers from surplus to deficit industries.
Itoh repeatedly stresses the crucial importance of all such economic decisions being made by the workers themselves through democratic forums.
One of the outstanding chapters is on "Market Economy and Socialism". Here Itoh provides a very detailed and concise chronological account of the theories and debates around market socialism covering theorists such as Hayek, Lange, Dobb, Brus, Kornai, Nove and Sweezey. It includes the theoretical issues presented in the so-called socialist economic calculation debate in the 1920s.
While strongly criticising the anti-democratic nature of Stalinism and its radical departure from Marxism, Itoh argues against those who also seek to reject the centrally planned economy. The book reviews the huge economic achievements of the Soviet Union's planned economy as it grew from being a backward country prior to the 1917 revolution to the second biggest industrial power.
Itoh is vague in outlining the essential aspects of a socialist economy. After the collapse of Stalinism, he writes, "the range of conceptions of and options for feasible models of socialism has been much extended ... We can conceive of a type of socialism containing a free competitive market for a certain range of goods and services, or another type in which prices are set by a central board by simulating the market."
Itoh says that various "models of socialism, combining plan and market, or with a variety of property rights in the means of production, as well as organisational forms of enterprise, are theoretically feasible".
Marx talked about the need for stages in building a socialist economy. These corresponded to specific historic conditions such as the education and technical ability of the workers and the balance of forces internationally.
Itoh recognises that a "wide range of feasible economic models of socialism" need to be applied "depending on the given historical and social conditions of a society", but he fails to outline exactly what these conditions are, leaving space for wide interpretation.
Itoh's message is that there exists a broad range of future socialist alternatives. This is much wider and more agnostic than Marxists such as Che Guevara and Ernest Mandel. It is a little frustrating that Itoh points no clear alternative after criticising these theorists' models of socialism.
Itoh avoids the question of the strategy needed to win socialism. This may not have been his aim in writing the book, but it is a question that is difficult to omit. While an important part of socialists' role is arguing the desirability and feasibility of socialism, the question of how to get there is just as important.