How a Planned Economy Will Solve “Resource Scarcity”
Artificial scarcity
We produce enough food globally to feed every single human being. Yet, hundreds of millions of people experience food insecurity. In the United States, there are nearly sixteen million vacant homes. But 650,000 people experience homelessness. Additionally, millions go without adequate medical care – but we have enough doctors. The data is clear. The resources themselves are not scarce. Yet the inability to access resources essential for survival is a major source of suffering. Why is it that so many people are going without – and what is to be done about it?
Capitalism holds resources hostage
The most fundamental of all human social activities is production – the process of procuring and creating the things needed to live. Each society does this through its own relations of production – the material relationships that link those involved in the process of production. Who produces the goods in a society, how they produce them, who has control over the process of production, and who enjoys the surplus – these are all examples of relations of production.
We live in a world dominated by capitalist relations of production. Society’s means of production – the tools and resources a society has at its disposal, such as factories and raw materials – are privately owned by the ruling class, the capitalists, who make up a minority of the population. Their control of money and resources allows them to secure political power, using politicians to pass laws in their favor and the state instrument to enforce those laws through violence. But the application of human labor-power is necessary to actually make use of the means of production; otherwise, factories would lay dormant, fields of crops would remain unharvested, minerals would lay unmined, and no production would occur. Even in industries with widespread automation, human labor is still required. Therefore, the capitalists need people to make use of the means of production.
Because they own the means of production, the capitalists also have control over who is allowed to make use of them. To this end, they employ the working class, who receive wages in exchange for time spent engaging in labor.
Another consequence of capitalist ownership is that the capitalists control the output of production – despite not performing the labor to create the products, they determine how these products are used and who has access to them. Because the capitalists have control over both the means of production and the commodities produced, the working class is at the mercy of the ruling class for its survival.
The average worker needs money to survive, to pay for food, medicine, housing – resources that they can only acquire by buying products from one capitalist or another. Imagine that this worker applies for a job at a bakery, for a position baking loaves of bread. The owner of the bakery, collectively with the owners of every other company, has full control over whether this worker is even able to get a job. And if the worker does get the job, every hour they spend working and every loaf of bread they bake is controlled completely by their employer. If the worker, despite having a job, can’t afford enough food and as a result goes hungry, the bread they worked so hard to bake is completely inaccessible to them. If they try to make use of the products they made with their labor without paying, the owner can fire them or make use of the vicious mercenaries that exist to guard private property (otherwise known as the police) and the worker can be fined or even imprisoned. It doesn’t matter how desperate the worker is, how precarious their situation is, or even how hard they work to make a living; they are beholden to the whims of the capitalists.
This state of affairs, where the people who make all of society run go without the resources they need, is the default in capitalism. The simple truth behind resource inequality, then, is that a minority of the population has control over the means of production and their output, while the majority subsists on the meager handouts (in the form of wages) given to them by the ruling class, and must then use these wages to buy the necessities of life. In the end, the people who perform the labor and create the products don’t have a say in how they’re distributed.
The misery of the working class is undeniable, with capitalists holding the means of human survival hostage – but why? Why are the bourgeoisie content to let the working class languish in poverty, struggling to survive? Are capitalists simply greedy and cruel – and if so, is a “kinder” and more “compassionate” capitalism possible? The bourgeoisie utilize the government to create policy which is in their interests, true, but could the working class participate in the bourgeois government to pass laws and elect candidates who can keep capitalism “in check”?
The unfortunate reality is that capitalism cannot be made gentler or kinder. No amount of caring, good-natured CEOs and bosses will alleviate the suffering of the working class, and no amount of laws are enough to provide sufficient reform. That workers have no guaranteed access to the resources they need is not an accidental byproduct of capitalism – it is an inevitability of the capitalist mode of production.
Capitalism Inherently Produces Inequality
At its core, capitalism is about producing commodities so that they can be sold. From a bakery producing loaves of bread, to a coal mining company selling coal, and even to seemingly abstract enterprises like high-tech software companies selling cloud computing resources – the sale of that which is produced is the final step in the turnover of capital. The process of production has costs – buying or renting land for factories or stores, purchasing raw materials, and labor. After all, the capitalist doesn’t get these for free – they need to buy them from someone else. For a capitalist to run a business, they need to invest money so that they can pay for these costs. And interestingly, the necessity of investment is a big part of the vicious cycle that leads to artificial resource scarcity for the working class.
Let’s imagine a capitalist has $100,000 to invest in starting a business. Let’s also imagine that the total costs involved in starting and running the business for a year – buying a small factory and machines, materials, and labor costs – is also $100,000. And if, after running the business for one year, the total revenue they make is also $100,000, has the capitalist made a sound financial decision? No, not at all – if you take a sum of money, invest it, and after one year make the exact same amount of money back, you would have been better off just keeping the money you started with. For a capitalist company to be worthwhile and for the capitalist to make their living, the capitalist expects a return on investment – they want to make back more money than they spent in the first place.
Maximizing revenue and minimizing operating costs is tricky. A company can try and save money by buying cheaper machines, getting materials from vendors that charge less, getting a good rate on the rent for your factory – but these aren’t guarantees. A business owner can’t control the prices other capitalists charge, and can only “shop around” so much to find the best deal. Companies can try and sell their products for a high markup, but there’s no guarantee that customers will buy, and if the prices are high enough they could be prohibitive to people buying in the first place. Ultimately, the way capitalists make their profit is by paying their workers as little as possible. In other words, by ripping off the people who actually keep the business running. Additionally, the nature of capitalism expounds this problem in the long run, by necessitating that companies expand.
In capitalism, companies compete with one another, aiming to attract customers to purchase their products instead of another’s. This leads to a drive to produce a higher volume of products faster and cheaper than one’s competitors. As a result, businesses want to expand so they can outcompete and outproduce the competition. This also drives technological growth – to facilitate expansion, they need machines that themselves produce more in a shorter span of time, and that are also cheaper to operate, which means the least amount of workers possible, paid as little as possible. After all, as we’ve already shown, it’s the exploitation of workers themselves that is the main source of capitalist profit.
The very nature of how capitalism operates directly causes the suffering of workers, depriving them of the ability to access the items they need to survive. And as previously stated, using the bourgeois state to pass laws and elect pro-worker candidates cannot resolve this contradiction. But why? Because, unfortunately, capitalists have the money and resources to influence elections and politicians moreso than workers ever could. If workers use the legal system in a way which threatens capitalism to a sufficient degree, the capitalists’ wealth gives them leverage to utilize forces like the police and military to respond with violence. There is historic precedent for this – the tragedy of Chile’s 1973 fascist coup against Salvador Allende, the country’s democratically elected socialist president, proves that we cannot vote the bourgeoisie out.
To end the misery and impoverishment of the working class, we need to end capitalism. We must establish Revolutionary Democratic Control by the Working Class, building worker organizations which can materially challenge the power of the bourgeoisie and working to establish socialism. The capitalist way of producing the items humans need for survival – which is primarily based around producing items capitalists can sell and extracting the surplus value produced as profit for themselves in the process – needs to be replaced with completely new relations of production. To guarantee that every human has the resources they need to live, to make sure that surplus is not concentrated in the hands of the minority, we need to work towards a planned economy.
An Economy Structured Around Need
The state of California has a population of approximately 40 million people. Currently, 43 million acres of California’s land are used for agriculture, and California is a major producer of various crops, producing one-third of U.S. vegetables and three-quarters of its fruit and nuts. 80% of the world’s almonds are grown there, over 40 billion pounds of milk are produced each year (making it the highest milk producing state in the US), and for some crops California is the US’ sole producer.
Given current agricultural output, the state produces more than enough food to feed all its citizens and then some. However, approximately 27% of households in California are experiencing food insecurity. Where is the disconnect? Currently, over 110 million tons of California’s fruit and vegetables are sold to retailers. Of that total, nearly a third rots in the fields unpicked, whether due to pricing, labor costs, or retailers not wanting “imperfect” produce. Clearly, the free market is not leading to the equitable distribution of commodities. Under worker control, prices on agricultural goods would be brought down to a nominal fee – only what is needed to cover the cost of production and distribution. This would dramatically increase the number of people being fed. It would also lead to less money spent on production due to the reduction of waste.
We can use this same data-driven approach to determine all kinds of aspects of the economy. How many hospitals should there be, to adequately care for the medical needs of the population? This can easily be determined by plugging in data such as how many people require a hospital each year, how many people one hospital can serve, and how quickly doctors can be trained. Based on the number of hospitals, we can also calculate the amount of medical supplies that need to be produced – scalpels, gauze, medication, and complex medical equipment. These items all have their own associated requirements of production – how much steel does it take to make one scalpel? How many steel refineries are required to produce enough steel to make scalpels? With enough data and planning, these questions have definitive answers that can be determined.
A socialist planned economy is one in which meeting the necessities of human life is the main driver of productive activity, rather than a system in which a capitalist ruling class dictates productive activity so that they can make a profit. A planned economy is the answer to the chaos of production that is the result of capitalism. It is a necessity so that people can be free of worry and fear over being able to simply survive. Whether it’s hoping to make enough money so that you can afford to pay for food and rent, or scrabbling to compete with other businesses so you can continue to make a profit, a planned economy eliminates these concerns altogether by completely restructuring production.
Conclusion
This is not a utopian pipe dream. This is an achievable reality, one that can only be realized by the working class seizing power in society and reshaping it for collective human benefit. A world free from hunger, poverty, and homelessness is ours for the taking, waiting to be built. To build it, we need to organize and unite the working class, build organs of workers’ power, and establish Revolutionary Democratic Control by the Working Class. This is the way forward to a world in which the needs of all humans are fully met. As Karl Marx so succinctly put it – “we have nothing to lose but our chains.”