If, then, even when the producers own the means of production, the money the workers are paid still has a value less than what it would cost to purchase their products, then there is still a tendency toward simultaneous overproduction and underconsumption. This tendency might be reduced by purchases by those unable to work, as under capitalism it is reduced by purchases by the profit-making classes. Narayan in the passage quoted properly assumes that where the bulk of the people live on wages the purchases of the non-working classes will not be enough to stabilize the system. The situation is not likely to be different when there are fewer non-workers. A socialist dictatorship might solve the problem by force. If there is enough surveillance and enough discipline, then people might be compelled to continue producing even where there are no willing buyers with enough money to buy their products. Or as Che Guevara proposed, people might be persuaded to engage in economic activity when it is not profitable or in their self-interest to do so by moral suasion. Or by some combination of force and moral suasion. If production does not depend on profit, or on people thinking it worth their while to work, but can instead by motivated by other motives –including but not limited to fear of punishment—then factories need not lie idle for lack of effective demand. Nor need the products lie in warehouses unused for want of buyers. They could be given away free, or they could be allotted through a rationing system in which money plays a reduced or even negligible role.

 

In 1936 Narayan offered the Soviet Union as proof that his argument was true. He pointed out that all the capitalist countries were mired in the depths of the Great Depression, in which idle hands, idle lands, and idle factories coexisted with unmet needs. Only the Soviet Union, he said, had full employment and a stable economy. He was not, by the way, quite right to single out the Soviet Union in this way, since there was also full employment and a stable economy in another country which disregarded the laws of capitalist economics and made the economy run with other motives, Hitler’s Germany. (3) In any case, if the reflections made here are valid, the Soviet Union did not prove Narayan’s point. The problem to be solved was harder than Narayan thought it was. If the Soviet Union solved it, it did not do so by making wages equal to the sum total of consumption goods produced. It had to use other means. After 1936, as credible evidence of atrocities poured in, Narayan gradually changed his mind about the Soviet Union. He ended up concluding not only that the Soviet experience represented a cure worse than the disease, but also that its evils were not simply due to sociopathic personalities like Stalin, but were inherent in its principles.