A central goal of socialism is to transition into an economy without commodity production for profit. A socialist economy would co-operatively create goods and services for their use values rather than their exchange values, with production planned by the producers themselves.
The question that we want to ask readers to consider is, How do we empirically assess the capacity of a given economy to move beyond capitalism?
Firstly, we can say that the extent to which an economy can create use values, from raw materials to the finished goods and services, ultimately represents how advanced its forces of production are, and hence how capable it is of transcending capitalism as a system and moving to socialism. This is why, for example, a country that hosts the facilities of transnational corporations might appear to have advanced means of production, but does not in fact have the ability to nationalise a TNC and continue to produce use values, because the TNCs spatially disperse their production processes among multiple countries.
An additional issue arises from the need for essential imports, which necessitates the development of industries to produce goods for international exchange to gain access to hard currencies. In the 1980s, when the purchasing power of the US dollar fell, the effective purchasing power of a barrel of Soviet crude oil fell in unison. This became an area of strategic weakness for the socialist bloc throughout the 1980s, ultimately undermining its long-standing policy of self-reliance and entrenching a dependence on Western imports and loans.
Fast forward to 2017, and two Chinese billionaires (Liu Qiangdong, CEO of the e-commerce giant JD.com, and Jack Ma, chairman of the Alibaba online retail group) proposed that China was reaching the required level of productive forces and technical capability to move beyond markets, money and capitalism to a direct-allocation economy, where all firms are socially owned.
In reality, even such a modern socialist economy, with minimal reliance on foreign powers, would require some imported products, while some domestic production for market exchange would be needed to support this.
The question then becomes, Can a socialist economy of domestically produced use values operate in parallel with an economy of international commodity trade without the latter undermining the former? Is this sustainable in a world dominated by imperialism? After all, imperialist (OECD) countries benefit from massive value-transfer subsidies from the labour of the billions-strong working class of the global South by means of the TNCs and their hundreds of thousands of subsidiaries.
This ability to take advantage of vastly different rates of exploitation allows imperialist countries to capture surplus value and build their service-based economies upon that platform. These are subsidies that are not available to socialist countries.
We believe that, in place of GDP, socialist planners need a framework for measuring the production of use values, both at the national level and among the bloc of states that are seeking to develop to socialism. Such a measure could be based on a greatly expanded (and modified) version of Maslow’s “hierarchy of needs.”
The internet, input-output tables, individual product identification codes and mass data storage allow for what was technically impossible for socialist governments of the twentieth century: the ability to precisely detail which specific goods and services are used in which value chains, sector by sector. Within each value chain they can categorise which goods and services are imports, which are produced entirely within their own economy, which are domestically produced but dependent on foreign imports (and precisely how), and which are produced for foreign markets.
Using such a framework, it would then become clear which countries are relatively poorly or well positioned to move beyond a commodity-production economy, which in turn would inform any socialist plan of which goods and services have to be brought into the realm of domestic production as a matter of priority.
A realistic representation of economic capacity is required, from the most critical value chains for social reproduction (energy, food, water, medical supplies, etc.) to requirements for transport, education and public services, the provision of social and educational activities, and finally provision for meeting individual demand for different types of non-essential goods and services, which—contrary to neoclassical economics, and as proved brilliantly by Anwar Shaikh in his book Capitalism (2016)—can be derived by planners from analysis of aggregate behaviour.
The covid-19 emergency has revealed which goods and services are required for a basic level of social reproduction and which ones are less critical. It is time that socialists matched what is commonly observed with a clear empirical framework, and explained how socialist economies of the future can decommodify economic and social life.