 Yes, so as the chair has alluded to, this term, ECP, the Economic Calculation Problem, is one that you won't necessarily come across unless you go online a lot, particularly if you visit socialist YouTube channels like our own. And there you'll find under the video in the comments section, lots of right-wing trolls saying, ECP, ECP. And in fact, I don't think we're being livestreamed, but when this video goes up, I imagine underneath that video will be lots of right-wing trolls saying ECP, ECP. They probably Googled the term and accidentally stumbled across a Marxist perspective on the question. And now it's seen by libertarian zealots and defenders of capitalism as one of the key arguments against socialism and in favor of capitalism and the free market. In short, it's the assertion that planning of the economy is impossible due to the immense complexity of the modern economy and that instead we should put our faith in the invisible hand of the market and the so-called dynamism and rigors of competition. Now, in reply to these right-wing trolls, we might suggest that they simply open up a copy of the newspaper today, or in fact, if they can pull themselves away from the keyboard, head down to the shops and the petrol stations, well, they'll find a very fine demonstration of the wonders and efficiency of the so-called free market. What we see is that it's not Hugo Chavez's Venezuela, but Boris Johnson's Britain where we have basic necessities like food and fuel in shortage and scarcity, where we have 100,000 pigs, I think it is, that are going to be slaughtered and thrown to waste simply because of the cold logic of profit and the anarchy of the market. Where we have hundreds of thousands of empty homes used as vehicles for speculation, meanwhile, a huge housing crisis, where we have the choice this winter between heating and eating or in the energy sector between blackouts and bailouts. And on a global scale, you see, of course, the massive breakdown of supply chains. You see the huge amount of labor shortages across the economy, alongside the threat of mass unemployment. These are the kind of contradictions that we see under the free market. And last by no means least, of course, is the existential question of the climate catastrophe whereby capitalism and the free market are literally killing the planet. Now, all of this really highlights the bankruptcy of capitalism, a system of production for profit rather than need. It shows the limits of the market. And it shows why we need to be able to argue for a socialist alternative based on economic planning, public ownership, and workers' control. Now, all of these examples I've just highlighted, they've certainly led the frenzied free marketeers to go a little bit more quiet online and on the streets in recent years. Now when we're selling the socialist appeal, you don't get quite so many people coming up to you telling you that communism and socialism don't work because it's their system that isn't working. Nevertheless, the fundamental position that they defend, the idea of the efficiency of the market is the one you will find put forward in economic departments of universities across the world and of course in the textbooks that the bourgeois promote as well. Where they say that the economy is basically a set of graphs, a set of equations of mathematical models. And it's some sort of idealized system in their heads, which would be in perfect kind of equilibrium and harmony if only it weren't for pesky trade unionists demanding higher wages or central bankers printing too much money, or in fact politicians erecting barriers to free trade. Now it's vital therefore that we arm ourselves with the arguments, as I said, to make the case for socialist planning instead of this chaos of capitalism. But most importantly, we need to arm ourselves with an understanding of how capitalism works and how it doesn't. And that understanding can only be provided by the ideas of Marxism. Now, this so-called economic calculation debate has been going on for roughly 100 years. And really you'll see it's a theoretical battle that's waged on one side by the libertarians with the support of big business and right wing politicians, of course. And on the other side, you've got socialists of various stripes who've defended socialist planning. Now it's worth first of all going back really and looking at the origins of libertarianism, which can trace its theoretical lineage back to something called the Austrian school. And the most famous infamous, if you like, representatives of the Austrian school were people like Friedrich Hayek and Ludwig von Mises. And they in turn saw themselves really as the inheritors, the true inheritors of the liberal classical economists, the bourgeois economists, like Adam Smith and David Ricardo. Now, economics as a field of study really emerged with the rise of capitalism. And it was a field known as political economy. And what it saw was thinkers who tried to understand capitalism scientifically. They tried to understand and examine this system of capitalism with its laws and its dynamics. They didn't see it as simply a set of mathematical models and abstract series of equations. And really the high point of this came, as I said, with figures like Adam Smith and David Ricardo, the British economists, who were these kind of liberal enlightenment types who themselves reflected the rise of the bourgeoisie and the rise of British capitalism in particular, which was seeking to break open the world market in its own interest. And therefore, the idea of free trade in the free market that Adam Smith promoted was really the interest of the bourgeoisie in Britain that dominated world capitalism at the time. Now, Marx really left off where, really continued rather where Ricardo left off in terms of trying to theoretically and scientifically understand the capitalist system. But unlike Ricardo, Marx was trying to put himself at the service, not of the bourgeoisie, but of the rising working class movement and the labor movement. He started actually from the same assumptions as David Ricardo and the classical economists, but developed their ideas further showing that capitalism was riddled with contradictions, that it was inherently prone to crises because of its own laws and dynamics. The bourgeois economists who followed David Ricardo therefore actually had to throw the baby out with the bathwater. They actually had to throw away the scientific materialist method that had been developed by Ricardo and his predecessors. And for that reason, Marx called these people the vulgar economists because he said now that their job was no longer to try and examine and explain capitalism, but they became mere apologists for capitalism, Marx said. Now, historical developments also played an important role in this. Most notably, obviously, the rise of the organized working class and the international socialist movement. Towards the end of the 19th and early 20th century, you saw the development of huge trade unions, mass trade unions, mass socialist parties, and also the foundation of the second international, the socialist international, all of which on paper at least ascribed to Marxism, to scientific socialism, to revolution. And these social democratic parties, by the early 20th century, were winning large percentages of the vote in places like Germany and Austria. 20 or 30% of these workers' parties were winning in elections. The ruling class, therefore, could very much see and sense the threat of this rising workers' movement, and they therefore began an all-out ideological and political offensive. And the center of this ideological offensive, really, happened to be in Austria, particularly the University of Vienna, became the epicenter, really, of these kind of intellectual attacks. Around the turn of the 20th century, you had the development of kind of positivist philosophy, a man called Ernst Mac, who was a professor at University of Vienna, who came up with a very subjective idealist philosophy known as imperial criticism, which started to become quite popular, and Lenin actually felt it so necessary to respond to this philosophy that he wrote the book, Materialism and Imperial Criticism, putting forward a defense of the materialist philosophy. And I don't have time to go into that. I'm sure it's covered and has been covered in other talks this weekend. But Mac and the University of Vienna were then very influential on later philosophical developments, like logical positivism, and also particularly people like Karl Popper, another Austrian, who also tried to wage an ideological attack against Marxism, and in particular, the idea of historical materialism. But the economic attack coming out of Vienna was waged by figures, and I'm gonna mispronounce this name, I'm sorry in advance to any of the Austrian or Germanic comrades in the room. It was waged by figures like Jürgen von Baum-Bauerk, anyone? Yeah, all right, good. And a man called Karl Menger. That's the last time I'm gonna try and say their names today. They waged the opening shots against Marxism, against scientific socialism as it was known. Their opening shots were fired at what's called the labor theory of value, which is really the foundations of Marxist economics. It explains the law of value, which in turn underpins all of the dynamics really of the capitalist system. And in place of the labor theory of value, they had their own theory called marginal utility theory, which again was a very subjectivist, very idealist perspective, based on individual consumer preferences. And this subjectivist theory hadn't just developed out of Vienna, it actually emerged out of other vulgar economists, people like William Stanley Jevons in Britain and Leon Volvers in Switzerland. But it was starting to become popular amongst these bourgeois academics as an alternative to the labor theory of value. Now it's worth pausing here and asking exactly what is the labor theory of value? Now it's really a theory that can be traced all the way back to Aristotle if you wanna go far enough. I'm not gonna do that today. But it's the idea fundamentally that it's the application of labor in the process of production that makes things valuable. Nature gives us a certain amount of wealth for free, if you like, but it's the application of labor that creates new value within society. And this was a theory that was actually developed by the classical economists, by people like Smith and Riccardo, as a centerpiece of their ideas. And it was then also the foundations, as I said, for Marxist economic ideas also. But the classical view of the labor theory of value, Marx showed, was very incomplete. It was really imbued with all of the kind of individualism that you get because of the liberal traditions and the liberal perspective, the bourgeois perspective that Adam Smith and David Riccardo were coming from. For them, the economy was little more than an addition of lots of individuals. You look at one man working on an island, you look at the writings about Robinson Crusoe slaving away on his island. And the value for them was to say, okay, well, Robinson Crusoe is stranded on his desert island. He makes a raft out of some trees. He gets some coconuts down from some other trees. It takes half a day to make the raft. It might take half a day to get 10 coconuts. So 10 coconuts are worth one raft. That was effectively the kind of very individualistic viewpoint of the labor theory of value in terms of the amount of labor time going into these different processes, these different commodities. That was really how the classical economists saw the question. And the economy was just scaled up. And these individuals on a desert island might meet someone else and trade with them. And that would be the basis for the trading is how much individual labor time had gone into these processes, into these commodities. But obviously that's not what capitalism actually looks like. None of us are trading directly with each other in barter. We go and earn a wage and we use that wage, that money to go and buy other commodities. And we don't then approach other individual sellers. We go onto Amazon probably or other online stores. And we're confronted not with someone's subjective preferences, but with an objective market price that confronts us. And in that sense, Mark said, the labor theory value had to be developed. Nevertheless, he took the basic premise of the labor theory value, which is that labor is the source of all new value. And he developed it on this basis. He explained that it's not individual labor time that makes commodities valuable. Commodities being products for exchange, I should have mentioned earlier, as opposed to things that we produce and consume ourselves. Those aren't commodities. The capitalism is a system of generalized commodity production and exchange, Mark says. Everything is produced for sale, for exchange. And the question is, how much do you exchange of one thing for another? That's really what the question of value is all about. But he said it's not individual labor time that determines how much things are exchanged for each other, but socially necessary labor time. That's what makes commodities valuable. In other words, it's the average labor time that goes into a commodity given certain technological or historical conditions. And this idea of Mark's of socially necessary labor time, the labor theory value, was then what underpinned all his other developments, he writes, in capital and his other economic writings. In particular, the theory of exploitation, i.e. the fact that profits come from surplus value. And surplus value is, in effect, the unpaid labor of the working class. There is a profit is produced in the course of the working day or week because the capitalist pays the worker back less than the value of what that worker produces. The wages that the worker gets for their labor power, this commodity that they sell, are less than the value that they are producing in the course of the day. And that difference is surplus value that is then divided up amongst the capitalists in terms of profit, rent, and interest. Now, this law of value, in turn, explains all the other dynamics, as I said. It explains why there's a drive to intensify labor, to squeeze more work out of the working class, extending the hours of the working day, why the capitalist will raise productivity by investing in machinery and technology, again, to try and out-compete the competitors to lower the value of their own commodities. To invest and to accumulate and to expand and to grow, all of these come from the labor theory value. And most importantly, it also explains why you see crises of capitalism, crises of overproduction because the working class cannot afford to buy all of the goods that capitalism is producing. Therefore, there's always production outstripping the limits of the market. Now, the Austrians sought to attack Marxism at what they perceived to be its weak spot, in particular, as I said, the labor theory of value. They believed that if they could undermine this foundation, they thought the whole of the rest of Marxist theory would just come crumbling down and with it the whole socialist movement, which is a bit of an idealistic idea in itself. They thought as these kind of academic bourgeois types, if you could disprove the theory, then suddenly the whole workers movement would just give up and go home, which obviously shows the view of history being one of great men and great ideas being what drive society rather than people's struggle over their class interests. Now, they made various critiques of the labor theory value of Marxism. Most of these can be really put down to a misunderstanding or a purposeful confusion, if you like, of the difference between labor and labor power, which I won't touch on that much, but the difference there is labor is what the working class produces. Labor power is the ability to work. It's what the capitalist buys, their time in a day, a week, a month, and they then try and squeeze as much labor out of the labor power that they bought as possible. That was one of the misunderstandings. The other was, and the primary one, was over the difference between value and price. Now, Marx didn't deny the idea of prices. He didn't deny that there is a market out there with supply and demand that pushes prices around. But the thing is, Marx pointed out that these prices were like some sort of fuzzy noise, if you like. That's what we see, the noise. But underneath that noise, there was some sort of signal that these prices were oscillating around. In other words, behind this kind of seeming randomness and chaos and accidental movement of prices, there is something lawful. There is an order. There is a necessity, if you like, behind these accidents. Marx uses the analogy with gravity, the law of gravity, which governs the celestial motion of the planets. We see the motion of the planets, but we know that behind that motion lies laws of motion, that gravity and motion that we can understand and develop into laws and theories to explain further motion, to explain further phenomena in nature. And it's the same with prices and value. We see the market prices. That's what we're confronted with. But below that appearance, there is something more fundamental that is causing the motion of these prices on the market. And that is the idea of value that is determined, as I said, by socially necessary labour time. The socially necessary labour time can yield within a commodity, which can be broken down into the dead labour. That is the labour embodied within raw materials, means of production and tools and so forth that go into production and pass on their value to the new commodity. Or there's also the living labour, the new labour that's added in the process of production, which is what creates new value. And what supply and demand do is to push prices above and below this value. And that's really the case most of the time. In reality, you never really see prices equal exactly to their values. There's always distortions. There's always monopolies. The real world is not the perfect idealised models of the capitalist and the academics. On average, though, you can say over time, you see some sort of prices that can be smoothed out, if you like. And also over time, you see prices and values tending to go down because of technological developments reducing the amount of social necessary labour time that needs to go into them. And therefore, on average, when supply and demand match, if you like, something else has to explain why certain things are more valuable than others. Why is it that on average, a pen will be worth less than a car unless it's a really old banger, although secondhand cars are actually weirdly more expensive than new cars these days. Not going to go into that. But anyway, we can discuss that later if people really want. But the point is, most of the time, unless you've got a really expensive pen or a really shitty car, your pen is going to be less valuable than the car. Now, for these reasons, therefore, we've got to understand the idea of value underpinning prices. The marginal utility theorists, on the other hand, they only see the appearance. They only see the superficial, which is the prices. One might say they know the price of everything and the value of nothing. Now, they also really just focus on consumption. They don't really look at production at all. For them, everything value is just something subjective. It's a purely subjective quantity or quality, really, based on the utility of a commodity. So the usefulness to the consumer compared to other commodities. They talk about the margin, i.e. the idea of how useful is a commodity compared to the next other commodity you could get to perform the same sort of function. Now, again, Marx didn't deny the idea that things have to have a usefulness and a utility. He said, unless there is some sort of use to society, then something will not be sold and therefore it cannot be taken to the market. It will therefore have no price and no exchange value. So use value is a precondition to exchange value. But the point is that this exchange value, how much we exchange of one thing for another, has to be, it's something relative and it has to be something quantifiable and objective. Because as I said, we're presented not with people's subjective needs. I don't know on Amazon how much the other person really wanted to have that thing themselves. All I know is that there's a price that is through competition averaged out for any given commodity. It's something objective that you're confronted with. The problem with utility is it's completely arbitrary. It's something completely subjective and it's also something qualitative. Certain things have different uses. How do you compare the use of one thing to a use of something that might be useful for a different task or that might be useful for one person but not for another? It's completely arbitrary and completely subjective. The only thing Mark said that all commodities, or rather the primary thing he said that they all have in common that makes it possible for them to be compared is the fact that they are products of labor and in particular social labor. So in the end really you see the marginal utility theorists tying themselves in knots. They created a theory that in reality could explain nothing because all genuine theory in science has to be based on the discovery of objective laws and dynamics, not analyzing subjective whims. That's not economics. That's not science. That is psychology or anthropology which can be sciences in different fields but not when it comes to the question of this question of exchange of commodities and how capitalism works. The result with marginal utility is a theory, inverted commas if you can call it that, very ahistorical, very abstract, very idealistic and it basically reduces economics to a certain amount of eternal truths, if you like. Laws that are based on so-called human nature. And again, like with Smith and Riccardo they inherit this worst aspect of talking about really abstract examples of a man by a waterfall or someone looking for diamonds or a man on an island trading. It's all completely divorced from the realities of capitalism. Most of us are not out hunting for diamonds day in, day out. We're trying to put food on the table. Now, all of that really reflected, Baccarin wrote a good analysis of this called the economic theory of the leisure class, he said. It reflected the rise of this rentier economy where you've just got these stockbrokers who are completely divorced from production and they just see, as I said, the superficial, the consumer side of things. Now, on this subjectivist basis, the ruling class couldn't really challenge Marxism. As I said, it wasn't an explanation for capitalism, it was a mere apology for it. And above all, they couldn't stop the rise of the socialist movement. They were particularly scared, obviously by the wave of revolutions that broke out in the wake of the First World War, the Russian revolution, the German revolution and others. And also they were scared by the tendency in this same period, towards state planning and towards monopolization away from private ownership and competition. Even layers of the bourgeois, because of the experiences of the First World War, were coming round to the idea that a certain amount of state planning would be required and necessary and indeed preferable. And hence, you had a new wave of attacks led by an even more frenzied generation of the Austrian school, particularly led by figures like von Mises. In the 1920s onwards, started to again bring up this question of the economic calculation debate and that's what I move on to now. What von Mises tried to say is that socialism wasn't something that was right in theory but wrong in practice. But in his words, it was wrong in theory and in practice. That was what he was trying to assert. Again, as I said earlier, because socialist planning was impossible because of the sheer complexity of the economy. So many things to produce and distribute and allocate that only the information provided by price signals through the market could efficiently allocate resources and labor. He said the amount of calculation required was too much for any centralized bureaucracy, any computer, and that in fact any state involvement or regulation, he said, von Mises said, would only distort prices and impede the power of the market. Therefore, his conclusion was only the competitive free market, completely free and competitive market would work. There needed to be no state involvement, no regulation at all. Now, where am I? Yes, okay. Now, what you had of course was that very, you know, around the same time that von Mises is talking about this, you have the very concrete examples of on the one side, the Soviet Union, and its huge leaps forward economically. On the other side, the Great Depression and both of these were huge blows to the extremely abstract and idealistic argument of von Mises. As Leon Trotsky explained in his masterpiece, The Revolution Betrayed, which I really recommend, if anyone wants to get anything to help them understand this question more, I recommend buying The Revolution Betrayed from the book still downstairs, a little plug. He explained in his masterpiece, The Revolution Betrayed, he talked about the huge economic progress that had been made under the socialist planned economy or the Soviet planned economy rather. He said, socialism has demonstrated its right to victory not on the pages of dust capital, but in the industrial arena comprising a sixth part of the Earth's surface. It has proven itself not in the language of dialectics, but in the language of steel, cement, and electricity. Now, meanwhile, on the other side, as I said, you had the Great Depression, the Wall Street Crash, the deepest crisis in the history of capitalism, which the Austrians had no explanation for, no genuine explanation for, and more importantly, no solution to get out of that crisis. Enter Hayek, who then moves the goalposts in terms of this debate in a series of essays. And he says, instead of being impossible, he says socialist planning was technically difficult, less economically efficient, and morally and politically undesirable. Now, to prove his point, he mainly attacked this strawman of this caricature of socialism in the form of Stalinism and the top-down bureaucratically planned economy that you had in the Soviet Union at the time. This is late 20s, early 30s that he's writing by this point. And in turn, he also mainly attacked people who fell into two camps. He boasts most of his argument on attacking people like, on the one side, Stalinist apologists like Maurice Dobbs, who was an English communist and economist. And on the other side, these kind of reformist academics like Oscar Lang and Fred Taylor, who were people who succumbed to bourgeois pressure and were advocating a kind of utopian mixed economy, some sort of market socialism, which was a weird permanent confused blend of centralized planning, common ownership, but capitalist market prices and signals. And the only person really in all of this confusion who could offer a real defense of socialist planning at the same time as offering an explanation and a criticism of the Soviet bureaucracy was Leon Trotsky in, as I said earlier, the revolution betrayed. And also in an excellent article, which I recommend comrades reading not so long, called The Soviet Economy in Danger, which was written in October, 1932. And in these, Trotsky explains the origins of the bureaucracy. He explains in Revolution Betrayed, the bureaucracy was not an inevitable part of socialism, but it was inevitable, if you like, within conditions of economic isolation and backwardness, which was what you saw in the Soviet Union. In other words, because you had scarcity and not superabundance, you had a state bureaucracy that was basically trying to distribute scarcity and allocate resources first and foremost to themselves. And it was kind of a policeman of a bread queue that didn't have enough bread was the analogy that Trotsky used. And he was critical of the bureaucracy. He said it wasn't a positive development, but actually something that strangled the socialist planned economy. Socialist planned economy needs the oxygen of workers' democracy, he said. And the bureaucracy was stifling that, leading to all sorts of mad kind of schemes and results that had very destructive effects. That's what he writes in the Soviet economy in danger. Now, Hayek, actually, the only time he referred to Trotsky was to take these quotes against the bureaucracy and rip them out of context and use them to say, look, there you go, even Trotsky, the leader of the Russian Revolution, doesn't support the socialism and the Soviet Union, which is not true. So Trotsky started from the very clear position of saying he defended the gains of the Soviet planned economy, but was against the bureaucracy and wanted a genuine workers' democracy. Trotsky says, for example, in one of these essays, there is no universal mind that exists, that could register simultaneously all the processes of nature and society in order to draw up a faultless and exhaustive economic plan. He was criticizing the idea of top-down centralized bureaucratic planning, but Hayek ripped that kind of quote out of context and used it to try and justify his argument. So what did Trotsky really have to say on this question? Well, actually, as early as 1922, in his speeches to the common turn, Trotsky had outlined the problems facing the young Soviet economy. You had the introduction of what was called the NEP, the New Economic Policy, in which the Soviets were trying to use prices to stimulate growth in certain sectors. And Trotsky actually pointed out that in general, actually, in the transition from socialism to communism, that is, in the transition after the revolution, from scarcity to superabundance, yes, you would need to use market prices and signals in certain places to ascertain where the scarcity was, but to use those signals under the democratic planned controlled economy to then actually invest in those areas and get rid of that scarcity and bring them in harmony with the rest of the economy. And these points he reiterated actually a decade later or more in revolution portrayed in the other article I've just mentioned. But Trotsky emphasized that the precondition for using market prices as a signal was that the revolution had first of all abolished capitalism, seized the means of production and put them in the hands of a worker's state. In other words, that you had not bureaucratic planning from the top down, but a genuinely rational socialist democratically planned economy based on a system of worker's democracy, control and management. And the information then of the worker's democracy would gradually replace the price signals and it would be used to indicate then in a democratic way with the involvement of the working class themselves, they would then decide what needs to be produced. They would have the best knowledge of what could be produced, what needs to be produced, where investment needs to go, how resources and so forth need to be distributed and allocated. All the while Trotsky emphasizes using the most advanced technology, logistics, data and planning bequeathed by modern capitalist technique. But the important point that Trotsky really emphasized in all of this is that the problem, so to speak, is not an economic calculation one. You can't simply calculate your way to communism. You can't have just a bigger and better computer that's gonna solve the socialist algorithm. The economy is not a set of simultaneous equations to be solved. It's not a computer model that can be programmed from above. Nor is it the abstract isolated individualistic model of the economy portrayed by the bourgeois in the textbooks with people, abstract people trading on a desert island. The economy is a living, breathing, dynamic thing composed of flesh and blood. It is us, it's ordinary people, workers, ordinary people trying to put food on the table, a shelter over their head, trying to make ends meet. In that sense, the important point is its class struggle between the exploiters and the exploited, between the capitalists who are trying to squeeze out more profits and the working class that is seeking to defend their lives and their livelihoods. The real point Trotsky was emphasizing therefore is it's not an economic calculation problem, but a political one. It's a class question, a question of power. It's a question of which class owns and runs the means of production and according to what laws on what basis. Is it production for profit or production for need? Now the fact is that we see immense levels of planning already in the economy today under capitalism, but it's not socialist planning. It's planning within huge multinationals and monopolies that span the globe. What you see is actually the most vocal libertarian defenders of the market, the capitalist bosses. They do not leave this sacred market of theirs to decide how they produce within their firm. They don't leave it to the market to decide how production operates within their own companies. No, they plan everything from the farms and the factories through to the shops and the supermarkets. They buy up their suppliers and their distributors to try and extend the amount of planning and control they have over the production. And as an aside, whilst they talk about liberty and freedom, they are the most brutal dictators inside these factories and firms because they give workers no choice, no freedom, no individuality. Now the problem is that whilst there's this incredible level of planning within firms, there is still complete anarchy and chaos between them under capitalism. Each of these firms is blindly producing for an unknown market. And that arises from the fact of private ownership and the fact that this is production for individual profit, not under a common plan based on society's needs. Now you see the enormous potential for planning with the modern technology today. In fact, I just want to highlight one article here. I think this is from two weeks ago in The Economist. It's called Enter Third Wave Economics. They talk about the idea of the real-time economy that's developing where they say, because of modern technology, it's not a question now of planning things year by year, a month by month. But now big firms like Google, they know what we're doing day by day and minute by minute. They are tracking our every movement and everything that's being produced. There's a huge amount of data out there and policy makers are semi trying to utilize this, but they can't because it's not their data that they control. So instead of us having control over our lives, we see that this data is used to control us. We therefore see the complete limits of planning under capitalism because at the end of the day, you can't genuinely plan what you don't control and you don't control what you don't own. And that's the key question. The question of ownership, which is a class question. Now, all of this planning has arisen because of the objective laws of capitalism. It's a tendency that Marx explained in his writings, the tendency towards monopolization, centralization and concentration of production. We see on the one hand, an incredible level of planning across the economy, an incredible level of division of labor as well, incredible level of specialization, but all of this division of labor has then been brought under one roof, so to speak, with this huge concentration of the means of production in the hands of these big multinational monopolies and their capitalist owners. Now, this is an objective tendency under capitalism. It's not an aberration. It's not a political mistake, which is what Hayek and the libertarians assert. Marx explained in Capital and his other economic writings that because of the law of value, precisely because of this, free competition turns into its opposite. It turns into monopoly. If you want a proof of it, go play the board game monopoly. It was invented to prove precisely this point. Everyone starts out with the same amount and one person gets Mayfair and then wins the game. That's my experience of it anyway, and it's normally not me. But the point is that you have the most competitive companies gobbling up the weakest ones. You have those who can invest and get these bigger and bigger economies of scale, more efficiency. They then squeeze out the smaller firms from the market and when there's a crisis, they gobble up all of the firms that go bankrupt. That is the objective tendency under capitalism. And it's those same laws of capitalism that lead to crises of overproduction. And that's really the important point that we see, that it's not socialism, but capitalism, that neither works in theory nor in practice. In Capital, Marx actually starts from the exact same assumptions as Ricardo and Adam Smith and the classical economists. He starts actually by assuming the kind of ideal capitalism that Hayek and the libertarians want. They want a capitalism where there's no distortions, no monopolies, where there's complete freedom of supply and demand. Marx assumes that in his analysis as his starting point. But the point is, he says that even on that basis, even with these assumptions, the laws of capitalism are such that you inherently see crises of overproduction due to the nature of where profits come from. And that's very easy to demonstrate. I'm gonna do it one minute. Kal and I are gonna be rational entrepreneurs, okay? Because we're told everything is rational in economics. Now I'm gonna employ you guys on this half of the room. On this half, Kal's gonna employ the other half of the room. That's already an assumption because in reality, probably quite a few of you are unemployed and haven't got any job. But let's just assume that half and half are employed for me and Kal. Now I'm very rational. I'm gonna pay you guys here as little as possible in order to boost my profits. Kal hopefully will be paying you guys over there as much as possible to buy all the things that you guys are producing with your blood, sweat, and tears. Kal's also a very clever rational capitalist, so he's doing the same, pushing down your wages, trying to boost his profits, hoping you guys are getting paid a lot on this side. Everyone here, I'm sure, can see the overall result. Everyone's wages are getting driven down. And whilst in theory, we should be able to make lots of profits, we can't sell the goods that we're producing, the whole system grinds to a halt. That's the organic crisis of capitalism you saw in 2008 in the Great Depression. And what does this create? Does it create efficiency? No, it creates enormous waste. We see mass unemployment, the most scandalous waste of human potential. You see idle factories, you see the destruction, not the development of the productive forces. And this all leads to a situation not of genuine scarcity, but of poverty amidst plenty. Look at what Marx says in the Communist Manifesto. You have a lot of devastation, not because there's too little, but because there's too much Marx says. And Trotsky makes the same point in Revolution Betrayed. He says, the fundamental evil of the capitalist system is not the extravagance of the possessing classes, however disgusting that may be in itself, but the fact that in order to guarantee its right to extravagance, the bourgeois maintain its private ownership of the means of production, thus condemning the economic system to anarchy and decay. That's the point. Even when everything and everyone is behaving rationally, that's precisely when you end up with a system that is irrational for the whole of society as a whole. In other words, even when or rather you could say exactly when capitalism is behaving as it should, that's precisely when it's not working. That's what the Austrian school can never really explain. Why does capitalism go into these periodic crises? Instead, they entertain themselves with these red herring debates about trying to allocate scarce resources, but we don't have scarce resources. We have a super abundance. We have immense productive forces. The real question is, how do we put those super abundance and productive forces under a common ownership and workers control in order to develop these forces further, eliminate any scarcities that might still exist and put all of this to rational use democratically in order to meet our needs and not the capitalist profits? Now, for all these reasons, actually, the ruling class were never actually convinced by Hayek. And in fact, you could even say even Hayek wasn't really that convinced by Hayek because he actually retreated away from these economic arguments towards more political arguments, moralistic arguments about freedom and choice and individuality. And that's what you'll read if you ever have the mispleasure as I did for this talk of having to read Hayek's road to serfdom. I really do not recommend it, unless there's another toilet paper shortage, in which case I will know where to go. But the point is he complains moralistically in this. And later in life, actually, however, hypocritically, he and his acolytes had absolutely no qualms about supporting the iron fist of the Pinochet regime in order to crush the socialist government of Allende in Chile in order to install forcibly the invisible hand of the market. Now, instead of this nonsense, the ruling class turned in the Great Depression in the 1930s towards the pragmatism, the so-called pragmatism of Keynesianism. This in itself actually is a tacit admission of the need for planning and the failure of the market. The ruling class couldn't handle what Hayek and his followers were suggesting in terms of the social consequences, a mass unemployment, huge cuts to living standards. That's what Hayek was suggesting by saying just let the market sort itself out and in the long run, everything will be fine. Keynes quite humorously said, yes, in the long run, everyone's dead. But the point is that Keynesian and Keynesianism, as opposed to this, seem to offer a solution based on managing and patching up capitalism. The bourgeois weren't interested in trying to justify or apologize for this free market that wasn't working clearly. They were looking for a solution or so-called solution based on saving capitalism from itself using the state. And that's what we see in more recent crises today with the pandemic, the most ardent defenders of the free market running cap in hand to the government asking for money and loans and bailouts. In the wake of the 2008 crash, you had huge giant financial monopolies coming to the state and the governments asking for bailouts saying that they were too big to fail. Now, we've got to be clear on this question. Keynesianism and Hayekianism are two sides of the same capitalist coin. Both fundamentally defend the idea of capitalist system. The differences were over the form of this system, not the content. It was about over degrees of how much capitalist state intervention versus how much capitalist free market. Neither of which offers a way forward for the working class. Keynesian attempts to manage capitalism don't work, but neither does leaving our lives and our futures in the hands or rather the invisible hand of the market. Today, as I said, libertarians have largely abandoned any of these economic arguments and instead they've reduced themselves to these moralistic individualistic prejudices about liberty and freedom. As I said, you know, road to serfdom is the Bible in this respect. And the ideas that Hayek put forward today are mainly really just promoted by various right-wing reactionary, well-financed think tanks and free market institutes funded ironically most of the time by the very monopolies that Hayek claimed to abhor. And they're used by right-wing politicians, obviously as a fig leaf behind which to hide whilst attacking workers' rights and wages and boosting the profits. Now, in answer to these questions of individual freedom and so on, we've got to tell the truth. There is no freedom for any individual within a system that is out of our control, within a system that imposes itself upon us, in a system where the economy and its laws do not work for us but against us, where all the real decisions in society are not taken by us but by unaccountable, unelected bureaucrats, bosses, bankers and billionaires. Real freedom, in this sense, Frederick Engels outlined very astutely, he said, real freedom lies in understanding necessity. He's actually paraphrasing Hegel in this respect. Real freedom lies in understanding necessity. What does he mean by that? He says, real freedom does not come about from imagining ourselves to be free. You know, I can imagine myself to be free of the law of gravity but I jump out the window and I'll be very brutally reminded that there is a law of gravity that imposes itself upon us. Real freedom comes from understanding laws and turning them to our advantage. You know, breaking the law of gravity, how? Not by imagining that it doesn't exist but by inventing machines that can fly. You know, aeroplanes and drones. These are what allow us to actually manipulate these laws to our own advantage. Today we need to manipulate the laws of the economy to our advantage and that we can't reform the laws of capitalism though. What we need to do is understand the laws of capitalism in order to overthrow them through revolution and replace them with a new set of laws based on socialist planning and workers control. That's the task that lies before us. That's what Engels called would be the leap from the kingdom of necessity to the kingdom of freedom. That's what we need to do. The only way to do it is organizing through revolution. So you haven't already joined socialist appeal, joined the international Marxist tendency and help us in this task.