Editor’s Note: In this interview, Dr. Philipp Dapprich talks to After the Oligarchy about his work on refining the model of economic planning first proposed by Cockshott and Cottrell in Towards a New Socialism (1993). Discussion includes opportunity cost, labour cost, calculating opportunity cost in central planning, calculating environmental costs (such as GHG emissions), calculating opportunity cost of capital goods.
Philipp Dapprich is a political economist and philosopher working at the Free University Berlin. His PhD was entitled Rationality and Distribution in the Socialist Economy (2020), and today we’ll be discussing his work on refining the model of economic planning first proposed by Cockshott and Cottrell in Towards a New Socialism (1993).
Today’s conversation is in association with meta: the Centre for Post-capitalist Civilization if you’re not familiar with Towards a New Socialism you can buy the book or find a free PDF online you can also find interviews with Paul Cockshott on this channel and I’ll put links in the description to Philipp Dapprich’s doctoral thesis as well as a relevant paper.
Philipp Dapprich, thank you very much for joining me.
[Philipp Dapprich] Thank you very much for this conversation.
[ATO] Before we begin with the questions, I was talking to Paul Cockshott yesterday and he mentioned that actually you, Paul Cockshott, and Allin Cottrell, have finished a book, a new book, on economic planning called Economic Planning in an Age of Environmental Crisis. And that’s just with the publishers now, and it’s going to come out sometime this year . So, do you want to say few words about that?
[PD]Yeah. So, what we’re trying to do in in this book is two things.
First of all, we want to demonstrate that you need some kind of economic planning in order to tackle the huge task of transforming the economy away from fossil fuels. Paul Cockshott actually did a calculation, for the book, of the investment that would be necessary in the UK, as an example country, to completely transform the energy system. And the amount of investment that is needed actually exceeds the annual total private investment in the UK. So, if that’s correct then there’s no way that private investment alone will be able to tackle this, and you need the state to step in and take a significant role in this.
The second thing that we’re doing is showing how economic planning techniques can be applied precisely to this problem of transforming an economy towards a completely different energy source. So, one of the things that we’ve looked at is how you can do long-term plans that gradually transform the economy or the basis of the economy. And the other thing, which is something that I worked on in my PhD thesis as well, is to look at how we can consider environmental constraints in planning and also in valuation of goods.
[ATO] Just one more thing on that. It’s a book primarily about long-term planning and about applying that to the environment, or will there be material about relating a long-term plan to, say, a yearly plan?
[PD]The techniques we describe are, of course, generally applicable for long-term planning and they could be applied to any kind of long-term objective that you might have. But what we’re arguing in the book is that this would be particularly relevant when you’re trying to drastically change the way that the economy is structured, and especially the way the production of electricity and energy is done.
[ATO] Well, it sounds like it’ll be very interesting, and I’ll make sure to get a copy when that is released.
But our conversation today is about something else. It’s about your work on introducing opportunity cost valuations into the Towards a New Socialism model. But before we get into what new techniques and methods you introduced, I’d like to situate that in the history of this problem, and also talk a bit about Towards A New Socialism. So, to give the background to viewers, can you frame the issue of economic calculation so viewers can understand why the issue of opportunity cost is important? And we can go on from there.
[PD]Generally speaking in a socialist economy, a similar problem applies as in any other economy, which is how to apportion resources, labour, the means of production, towards various uses. How much labour are we going to use to produce food versus energy, versus other things? And you want to do that in a way that is in some sense efficient.
And there are techniques to do that. There are optimal planning techniques that that can be used to do that, but what they can’t necessarily tell you is which kinds of products are needed. Do we need more food, do we need more laptops, do we need more smartphones? They can’t really tell you that.