THE COLLAPSE of the old Soviet Union has meant many commentators, even some on the left, have dismissed the idea that you can plan the economy. So Ken Livingstone said last week, 'My biggest failure was not to realise earlier that the centrally planned economy didn't work.' It is true that there is no way every aspect of a modern economy can be controlled in every detail by a single centralised body. However, that does not mean that planning is out of date or impossible to achieve.
Planning is, in fact, a central feature of the modern economy. If you wander down a supermarket aisle you will see food from all over the world. Firms like Tesco boast that their fresh foods are flown in from countries such as Kenya, Israel or the Caribbean. This means a local producer and workforce has to be found. The right crop has to be grown, harvested and packaged for Western consumption.
Freight ships or planes have to be booked. Transport from the port to the central distribution centre has to be in place at the right time. Someone has to plan how much cabbage Tesco in Milton Keynes needs, and how much passion fruit it is going to shift in Islington. This adds up to a huge centralised planned operation involving different transactions, workforces, raw materials and 'brain power'. The car industry is another example. Giant car firms take investment decisions and draw up detailed plans about multi - billion pound plants years in advance.
They also 'outsource' the manufacture of components to smaller firms. The manufacture and delivery of the component has to be planned to match the level of production in the 'mother' plant. But all such planning under capitalism is geared entirely to the making of profit and the anarchic competition between rival firms. When plans are drawn up they are based on guesses about who will win out in such competition, guesses which are guaranteed to be wrong in many cases. Plans and products are kept secret by rival firms, leading to huge waste and duplication of research and products.
Huge sums are wasted on advertising designed to help one firm win out against its rivals. Competition and the pursuit of profit also mean that natural resources are wasted, areas of the world are devastated and workers' lives are wrecked. The ups and downs of the market also mean competing firms over reach themselves, produce too much for the market and then go bust.
We saw evidence of this on a small scale last week when newspapers reported that the publisher Dorling Kindersley was on the rocks after a 'failed bet'-a Star Wars film craze failed to materialise, lumbering it with ten million unsold books! The notion that the market is the best way to organise the economy just doesn't hold.
On the other hand, there is no reason in principle why the economy could not be directed to meet the needs of the many. It would be a hundred times more rational for people to sit down and decide what priorities needed to be tackled and how we could deliver them. It would cut out replication of goods and services. Look at any major industrial sector and you can see ways in which its resources could be used for the common good, whether it be pharmaceuticals, food, transport or manufacturing. And there are industries such as armaments where the skills of the workers and technology that exists could be used to build wheelchairs, adapted transport and so on.
Free market defenders always say that a planned economy would lead to gridlock as every nut and bolt would need 'the say so' before it was made. This is nonsense. If you decided that the Vickers factory should turn out wheelchairs instead of tanks you would give the workers on the ground the responsibility to make that happen. A planned economy would mean that the broad outline of what was produced would need to be set. But it would also mean an increased flexibility to turn out whatever was needed quickly, without having consideration of its 'profitability' dominate the decision.
However, there is one iron rule to the success of such a planned economy. Factories, raw materials and resources are now in the hands of those who own and run the giant firms fighting to grab ever more profit. This needs to be halted, and all those resources turned into public property-belonging to and under the control of the mass of people, those who do the work and produce the goods. And that needs a revolution by those producers so we can collectively plan what we produce for the common good.