Commenter: There are many reasons why Venezuela is facing a humanitarian crisis of malnutrition. American sanctions are certainly a factor, but it is also equally certain that self-inflicted harms played a greater role.

If one looks at the history of socialism as and when it has been implemented then it quickly becomes apparent that socialism might have a better chance of succeeding if its implementers simply learned to leave farming as a sector completely alone (other than to prevent monopolies).

China only began to recover from the Cultural Revolution when Deng Xiaoping implemented his reforms, particular in agriculture.

Me: Bad take. There was no collectivization of agriculture in Venezuela. I don’t think there are any state run farms. The public agriculture enterprises are all run by labor cooperatives and towns and small cities and they all operate on a FOR PROFIT BASIS.

What reforms in China? All agricultural land is owned by the state in China. Most agriculture is small farms and cooperatives, all managed by local villages. All irrigation is public.

The state is involved massively in helping these small village controlled enterprises.

There are no large corporate farms in China. They’re illegal.

They did get rid of the Maoist state farms though.

You realize that they economy grew by 10% every year in the GPCR? What do you mean recover from the Cultural Revolution?

Also, Maoist state farms and villages are very popular in China. A village decided to organize itself on a strictly Maoist basis, collective agriculture and all. The town of 6,000 is full and there is a years-long waiting list of people wanting to go live there.

Since then a number of others have sprung up around the land, and they are all extremely popular. People flood to them and they fill up very quickly. I’m not saying this is the way to go, but it’s clear that some folks like to live this way.

If the state farms were forced to compete with other public farms of all sizes and even international agriculture, I think you might see other results.

The problems of collectivized agriculture were many, mostly that people simply don’t work very hard, but that can be remedied by subjecting them to competition.

In present day China, public firms compete against other public firms, and all compete against international capitalist firms. In that case it’s sink or swim.

Russia went capitalist and was quickly taken over by large scale agriculture. These enterprises largely failed for some reason.

There are still quite a few collective farms around.

Most importantly, 50% of Russian produce comes from very small gardens and orchards that ordinary citizens cultivate on their dachas in the countryside.

But this shows once again how productive small enterprises can be.

Commenter: We seem to be talking at cross purposes here, mainly because of things which I didn’t mention. I am not opposed to worker owner cooperatives. I’ve done a fair bit of research on Mondragon, the largest worker owner cooperative in the world.

And I am not opposed to socialism provided it’s not centrally run, it doesn’t rely upon the thinking of a distant technocratic or ideological class, and is not treated as an all-encompassing ideology.

Socialism is properly thought of as one possible tool in a toolbox of many, and this is amply demonstrated by the manner in which you make your case, making granular distinctions, and looking at practical considerations on the ground.

If we look at both of the examples, then we can see the same pattern at work. An initial bout of catastrophic failure is followed by a period of adjustment with changes which gradually make all the difference.

One of the key changes which made all the difference in Venezuela was the shift to local government and local communes.

There is absolutely no problem with these sorts of ground-up innovations, because the entire problem is scale and distance to coalface (?), and it doesn’t really matter whether the culprit involved is a distant government or a distant multinational – both produce the same dehumanizing and poverty-inducing results.

The problem is that most socialist experiments begin run by a cadre of ideologues looking to make drastic changes, which by the very nature can only be accomplished by central mandate. Usually the fact that they are ideologues means they are happier in the world of ideas, disinclined to solve problems at the coalface (?).

Labor unions can be a specific exception in this regard and often produce deeply admirable leaders.

And I quite agree with you on large scale corporate agriculture, by the way. When I lived in America for a year decades ago, food was considerably cheaper than the UK. Now it considerably more expensive.

Why? Because the number of serious competitors in the American market has shrunk considerably at several layers of the supply chain. Matt Stoller’s BIG site on Substack in very good in this regard and covers American monopolization by corporations in great detail.

I am aware of the changes which occurred in the later-stage Soviet period. I have had long and spirited discussions with a spirited defender of that period.

And I won’t dispute the fact that what the West did with Russia with ‘Shock Therapy’ was both diabolical and ideologically-driven drivel, as it induced labor shocks which should have been avoided at all costs.

I would only point to the case of Poland, where the process has been significantly more gradual and less destructive. Some are now claiming that Poland’s living standards and income per person will surpass that of people in the UK by 2035.

I would advise young people to move there if it weren’t for the fact that house prices in Poland have followed familiar and alarming European pattern.

And I agree with you on competition. I actually agree with using any means available to add extra sources of competition to the market and would even include modest one-off subsidy and/or a system of start-up grants for these purposes.

I would even agree with a degree of force and coercion when it comes to banks – I have friends in the construction sector, who despite twenty years in the trade and the fact that borrowing money to buy a building plot is the definition of secured lending, cannot secure borrowing facilities from banks.

Why? Because the British banking system doesn’t want a legion of small builders jeopardizing the inflation of mortgage-debt as an asset class.

I would also support raising the VAT threshold, and turning many of the recent reporting and regulatory additions into directives, rather than regulations, for small businesses.

In a recent Yanis Varoufakis podcast, he implored his fellow socialists to avoid the urge to deploy what he called totalitarianism to achieve their objectives. This means not destroying existing interests, although it probably means curtailing their lobbying power.

It means discarding the Richard D. Wolff version of market socialism which would involve simultaneously deploying penalties to capital interests and subsidies to worker-owner cooperatives to the extent that the state is picking winners.

It means free and fair competition between different models of business ownership. It means adding competition, the lack thereof being one of the reasons why the West seems caught in a economic death spiral.

I would argue that the Chinese model has succeeded because they’ve mirrored the market in government, and in many ways it looks as though they’ve created a self-correcting autocracy with meritocratic features.

The competition is fierce between those regional and local appointees, and the promotions are strictly driven by results.

It’s a fiction that the Chinese state is some unwieldy behemoth. They only tax around 28% of GDP, and most of that goes out to the regions to be deployed in economic development. Their biggest problem is housing – same as all the advanced economies.

I would really like a link on the Maoist state farms. I am always eager for any information which confounds my expectations. Do they allow for workers to benefit from their work for example?

That wasn’t Mao, that was part of the Four Modernizations under Zhou and Deng Xiaoping, and the ownership might have remained public, but in practice the system evolved to a system of long-term leaseholding which is functionally the same.

Regardless, wheat production grew from 41 million tonnes to 87 million between 1978 and 1985, and this was by no means an isolated phenomenon in Chinese agriculture.

I would be particularly interested in structural and political management changes. Did they move to a system run by the local communes, or did do they still emulate the same strictly-run centralized control model prevalent under Mao.

And not for nothing, I do appreciate that somebody from the Left is willing to argue competition. Most people miss it, but Adam Smith was huge critic of the East India Company, and if he were alive today, he would be one of the worst critics of the current economic regime.

What we currently have is not a market. The basic flaw of ‘capitalism’ is it’s susceptibility to capture by monopolistic interests.

The later-stage communist models are generally a little more successful because they move away from the monopoly of government and push control of economic activity down to the community level, effectively producing what boils down to a market system.

It’s also worth noting that in a 2018 survey of workers, 80% of workers said they were either ‘very’ or ‘extremely happy’ with their work and workplace.

What government department or corporation could say the same? Small is better for humans in almost every conceivable way.

Me: Yes we even agree on most here.

I have no idea how these Maoist communes operate! I know that they rise early every morning and line up to sing Maoist era songs, and they love it! It’s sort of a freakish thing in China.

I guess some local communities decided that they wanted to do it that way, asked permission, and it was granted. It looks like a lot of people enjoy that life.

In China, the cities compete. Like LA and Chicago would both have steelworks and they would compete against each other!

Also, for a while the 3rd largest TV producer was a Chinese state owned firm with 1,500 workers. They competed internationally and they were beating the capitalist competition.

They had a Mao-era program of being officially owned by the workers, something the “reformers” have been screaming to get rid of as a “reform.”

All of the proceeds from the firm went back to the workers in a paycheck, and then the firm took ~95% of the wages out of that check to sink back into the firm. The rest went in your pocket.

So as the firm does better, your paycheck goes up. I heard that the workers in this successful TV manufacturing firm were taking home large paychecks.

I’ve also heard that many municipally owned firms in, say, cities of 50,000, are doing very well. The ones that do best sink a lot of their proceeds back into the city. The worker housing is mostly city owned.

They turn the city into a better and better place to live. This in turn attracts more workers applying for jobs, and the city and its enterprises grow. It’s great!

In Venezuela, yes, there are state owned firms, but many of these were created by workers themselves.

You read stories all the time of workers going on strike and demanding that the state take over the firm because a lot of private companies there treat workers like dirt. So the idea of becoming a state firm is appealing.

I read about an enterprise in a neighborhood in Caracas that makes bread. It makes bread for the neighborhood. It’s neighborhood-run by the people themselves.

The people want it to run well so they hold it to high standards, and you can’t screw off or be lazy or the neighborhood itself fires you.

They’re producing for their own community, so they all work hard. Their customers are their neighbors so they treat them well. The owner-employee relationship has been smashed.

The communes are in the countryside. They are run by villages and small cities. Some of them make products but a lot of them grow crops or raise animals. They produce products and then sell them to others at an agreed upon modest profit.

They are all part of the people, there’s no need for high rip-off profits, and if they try that, the buyers will just go elsewhere. Everyone’s in it together.

The workers all work for a salary, and any profits are sunk back into the city or town. Everyone is a local and wants the enterprise to stay afloat, so they work hard.

The city-run enterprises in China are similar. Everyone in that city wants that enterprise to stay afloat because so many people work there, so people have an interest in working hard.

Lack of competition doesn’t seem to work. You take away the punishment of firing, and people don’t work hard. In the late USSR, they used to say,

We pretend to work and they pretend to pay us.

I would really like to see more worker-run enterprises, even say the local Starbucks. Everyone who works there would become a literal partner. Your paycheck would literally go up or down depending on how successful the enterprise was.

If it went out of business, you’re all out a job, so that’s motivation to work hard. If the business booms, you take it home in your pocket, so there’s motivation to make a nice business.

I heard that in the USSR, restaurant service was often very poor because the restaurants had no competition, and you had no choice where to go. People won’t act good or right unless you threaten them.

Although it would retain the problem of for profit enterprises, I do think that worker run corporations would work better than the present capitalist ones.

I consider Mondragon to be non-capitalist. That’s the cooperative mode of development, distinct from the socialist and capitalist modes.

It seems to me that if corporations were run by workers they would act a lot less evil than they do presently when they are owned by exploiting capitalists, and even worse, shareholders.

The stock market is also a serious problem.

Germany has a stock market where most shares are owned by two or three large banks.

China doesn’t particularly care about its stock market.

So it doesn’t seem to be necessary to have a booming stock market where all the rich people are bought in (in the US, 10% of the population owns 90% of the stocks).

The US stock market goes down when wages go up! It rises when unemployment falls and soars when unemployment rises. It’s almost an index of evil.