Competitive socialism

As competition Socialism (also market socialism called) is called economic models that an alternative to a pure planned economy represent. They are also referred to as the “ third way ” between capitalism and socialism .

Lange and Lerner's competitive socialism model

After u. a. Ludwig von Mises discovered the theoretical inadequacies of a purely planned economy, competitive socialism was developed by Oskar Lange and Abba P. Lerner . (cf. the debate between Mises and Lange about economic accounting under socialism ).

The model envisages offering products at cost and socializing companies. The state acts as a body to direct investments , while the quantities depend on the actual demand .

What are the basic assumptions made by Oskar Lange?

In the socialist model of society according to Oskar Lange, the property of all means of production (with the exception of labor) is public. There is therefore no market for production goods (and capital goods ) and a fixed bookkeeping price takes the place of a variable market price. Individuals consequently participate not only as consumers and employees in the economic system, but also as owners / producers. They receive an income on the terms of labor costs and a social dividend. Oskar Lange leaves open what is counted as 'corporate accumulation' (total capital and natural resources in a society).

It is also assumed that there is freedom of choice in the consumer goods market and in the labor market and that consumer preferences can / should be mapped via the demand price. This demand price (price for consumer goods) is the main criterion for resource allocation and the production process. The aim is to find or determine the set of product and cost prices at which the demanded amount of each asset corresponds to the supply amount - the equilibrium price.

Oskar Lange then examines the systemic conditions of a rational allocation of resources (correct distribution of consumer goods as well as allocation of different occupations) and the guiding principles of efficient production of economic goods.

What role do the state, the market and society play and how should the competitive socialist society function?

In the socialist economic model according to Oskar Lange, the Central Planning Board (CPB) and the individuals exist in the roles of consumers , workers and producers / owners.

The authoritarian administrators in the CPB have to follow the preferences of the consumers and set the right price for capital goods and other means of production (excluding labor). The theoretical price of the CPB is specified outside the market (consumer goods and labor market) and reflects the conditions under which alternatives (opportunity costs: leisure, safety, health, etc.) are offered. The function of the market (consumer goods and labor market) is now to provide a method of resource allocation and production processes through trial & error. Over several production and demand periods, the equilibrium price can finally be found or determined by balancing demand and supply quantities.

The employed offer their services to the industry / factory that pays the highest wage. (Whereby in the industry / factory for capital goods and other means of production the prices are fixed.)

In addition to wages (market price taking into account opportunity costs), consumers also have a given social dividend (bookkeeping price determined by CPB). They know the given price on the consumer goods market (market price resulted from the history) and want / should achieve the maximum benefit of their expenditure, which determines the demand for the consumer good.

The producers / owners pursue under the provisions of the CPB (accounting rate for costs of factors of production and market price of the prices of consumer goods) is not the goal of profit maximization, but that of the best possible satisfaction of consumer preferences. Their function is to achieve the minimum average costs in production through the combination of production factors and the output quantity.

Considered formally and theoretically according to Oskar Lange, the distribution of resources in "competitive socialism" takes place exactly as in the competitive regime of private entrepreneurs via the "scientific technology of economic equilibrium theory", i.e. correctly . Judged as satisfactory and practical according to Oskar Lange, the production process is more rational and efficient . More rational because it generates a price in an adequate system of economic calculations that takes into account all alternatives (opportunity costs: leisure, security, health, etc.) and more efficient because it enables maximum social welfare (common good) through the distribution of income.

The competitive socialism model of Austromarxism

In the Austro-Marxist phase, the Austrian Social Democratic Workers' Party developed an elaborate transformation model with which it wanted to achieve the transition from capitalism to a socialist form of society. In this, the public service organizations (gwA) should serve as the basic units.

Unlike in the case of the central administrative economy of the USSR and other countries of the Eastern Bloc , the market economy should not be overcome, but industry should be transferred to social ownership and administered democratically while maintaining the framework of the market economy.

Organizational pattern

It was intended that Austria's industry should be reorganized into public service institutions as part of comprehensive socialization measures and consolidated into democratically administered trusts .

For this purpose, it was planned to set up an operative holding company for each branch of industry at the state level in the form of a gwA, which should offer goods or services in the area assigned to it through its subsidiaries and cooperation with the companies of the cities and municipalities. The direct participation of employees at the institution Assembly was a holding company to be established in this group works council provided.

The gwA should be linked nationwide in accordance with their area of activity according to the principle of vertical association in accordance with Section 11 of the Act on Public Enterprises by sending representatives to the general assembly of the other company, d. H. networking between upstream and downstream production stages (e.g. coal mining and steel production) of all socialized companies should be achieved.

In addition, all public service holding companies should be required by law together a trade association to form, which as a political mouthpiece for the socialized sectors and as social partners of the trade unions should act. These should be divided into regional associations and a federal association as an umbrella organization.

Medium-sized companies and cooperatives

Small and medium enterprises and cooperatives should be excluded from the socialization, since only the " exploitative ownership" of the bourgeoisie should be annulled and the technical development is not sufficiently advanced, efficient order also to be able to manage enough.

literature

Otto Bauer : The socialization campaign in the first year of the republic . Vienna 1919.
Otto Bauer: The way to socialism . Berlin 1919.
SDAP : Linz program . 1926.
SDAP: Agricultural Program . 1926.

Individual evidence

^ Lange, Oscar (1936): On the Economic Theory of Socialism: Part One, in: The Review of Economic Studies, Vol. 4 No. 1, Oxford University Press: pp. 53-71.
^ Lange, Oscar (1937): On the Economic Theory of Socialism: Part Two, in: The Review of Economic Studies, Vol. 4 No. 2, Oxford University Press: pp. 123-142.

[1] Lange, Oscar (1936): On the Economic Theory of Socialism: Part One, in: The Review of Economic Studies, Vol. 4 No. 1, Oxford University Press: pp. 53-71.

[2] Lange, Oscar (1937): On the Economic Theory of Socialism: Part Two, in: The Review of Economic Studies, Vol. 4 No. 2, Oxford University Press: pp. 123-142.