The Problem of Social Planning

POLITICS, ECONOMICS AND WELFARE: PLANNING AND POLITICOECONOMIC SYSTEMS RESOLVED INTO BASIC SOCIAL PROCESSES, by Robert A. Dahl and Charles E. Lindblom. Harper & Brothers, New York. 1953. 557 pp.

The past ten years have not been easy for democratic socialist theoreticians. Their economic models, so long shielded from the rough winds of reality, were put to a decisive test during the tenure of the British Labour Government and found to be about as realistic as the systems of their academic colleagues working in the neo-classic tradition. It may not have been a fair test of socialist doctrine (some of the circumstances were distinctly inauspicious), but unfortunately it’s the results that count, and the results were sufficiently disappointing to put socialists on the defensive for a long time to come. In particular, the failure of nationalization of industry to work its expected miracles has left a void which is as much emotional as intellectual.

It will be cold comfort to these bereft souls (and I include myself) to know that two Yale professors, Messrs. Dahl and Lindblom, have salvaged what they thought salvageable from the “ruins” of left-wing economic thought and, having done likewise with neo-classic theory, have put together an academic patchwork which, though neither particularly neat nor inspiring, carries with itself the solid virtue of down-to-earth pragmatism and an almost obsessive sense of its own limitations.

The book advances the theory that any fairly complex society—capitalist, socialist, totalitarian or what have you —must be ordered by a variety of political and economic processes. Some of these processes, like the price system, have been associated exclusively with the idea of capitalism, others, like goverr ment ownership of industry, with socialism; actually all of them, as we are shown with overwhelming documentation, are indispensable for the functioning of a viable economy. A capitalist society finds itself dependent on government owned enterprises and agencies (at the very least: the army), a socialist society will find it advantageous to make use of the price system in certain sectors of the economy.

There are four of these basic processes: the price system, hierarchy (meaning leadership from above, whether found in government, business, unions or even in a household), polyarchy (meaning control of leaders by non-leaders, for example voting and consumers’ sovereignty) and bargaining among leaders (of unions, government agencies, etc.). All of these processes are both political and economic in nature, and the authors’ insistence that they deal with the political economy as an organic entity stresses not only the political aspects of economics and the economic basis of politics, but above all the fact that political and economic measures and processes can be considered as alternatives in specific situations. This in turn implies that political and economic ...