Tuesday, August 5, 2008

Part 9. Kantrovich

History of Market Socialsm

First published by Irish Communist in 1971

Kantrovich's The Best Use of Economic Resources was published in 1959. This work begins by posing certain problems of economic technique but proceeds to generalisations in the sphere of political economy. Rent, Interest and profit make their appearance and so do market prices, under the guise of "objectively determined valuations". This was one of the first substantial works of revisionist economic theory. (Libermans articles were flimsy and transparent by comparison).

The significant thing is that it was not a sudden product of the 20th Congress of the CPSU, but had been in the process of development since the 1930's.Kantrovich writes in its preface " The present author wrote a study on the mathematical Methods of Organising and Planning (Leningrad University 1939) arising from work on production problems, such as the least wasteful allocation of work to machines, the cutting of material with minimum loss, and the distribution of loads over several means of transport. The investigations were continued in 1940-4 and 1948-50..Soon after the this work began it became clear that the methods being developed could find a larger field of application.

Kantrovich's work in the late 1930's was done in the Leningrad Plywood Trust. He was commissioned to work out efficient combinations in which to use certain range of machine tools of various qualities. And "It became clear" as he puts it ,that the method used to solve this problem could be applied to general problems of a planned economy: it provided an automatic method for determining investment.

When Kantrovich was commissioned to do this work Voznesensky was head of the Leningrad Planning Commission, and it appears that Voznesensky appreciated the significance of Kantrovich's views for the development of sophisticated form of market socialism and enabled him to carry on discreet propaganda in favour of them in influencial circles in the 1940's.

The 1939 article is now constantly referred to as a milestone in the development of market socialist political economy. In the 1940's however when discretion was the better part of valour for bourgeois tendencies in the Soviet Union, it was modestly represented as a specialist work on economic technique.

It is significant was that it provided an apparently socialist alternative to political working class control of a socialist economy, in view of the automatic method of determining investment.The problem of the overall development of the economy a social matter, was represented as being of the kind of problem of finding the most effective combinations in which to to use a range of machines of different qualitiy to do a certain piece of work.

Economic technique was to replace political economy and class questions were thereby excluded from economics. This was not said publically in 1939, but it was clear it was understood in certain circles.

Stalin made a clear distinction between political economy and economic policy and it was directed against the Voznesensky, Kantrovich and Kosygin tendency.

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