How a socialist planned economy can solve the climate crisis

Unlike most utopians, Otto Neurath had a chance to change the world. One of the polymaths that fin de siècle Vienna seemed to produce in droves, Neurath – a leading philosopher, economist, designer, civil servant and curator – was appointed as head planner for the short-lived Bavarian Soviet Republic.

This revolutionary state, which lasted little more than a month in the spring of 1919, emerged from the ruins of Germany’s defeat in the First World War, when the hardship and social unrest of the period helped foment the 1918-19 German Revolution. The new republic’s leaders confronted adverse circumstances not dissimilar from our own as they attempted to build a new society threatened by a pandemic, war and nascent fascism.

But Neurath was never able to enact his utopian plans because the Social Democratic government in Berlin dispatched the proto-Nazi Freikorps to strangle Bavarian socialism in its cradle. Unlike some of his peers, Neurath was lucky to survive the terror they wrought.

He blamed the Left’s defeat less on adverse circumstances than on a failure of the imagination in the years that preceded the revolution. Neurath argued that the Left was unprepared for power because of the longstanding Marxist aversion to utopian thought, which he saw less as daydreaming than the practical work of building a new society. “This misery has befallen us not at least because we lacked clear aims,” he lamented in the aftermath of defeat. “Marxists killed playful utopianism paralysing the resolve to think up new forms.”

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In his work as a planner and in his later writings, Neurath deftly outlined the principles of socialist governance. He argued that any system based on a single metric would be “pseudorational” because it would lead to the optimization of one criterion, while life was actually a messy mix of ethical, environmental, social, and political goals. This is why the capitalist pursuit of profit alone led to illogical outcomes.

Neurath believed that planners should see the economy as composed of discrete and incommensurate “natural units” that related to each other as a whole – be it watts of energy, bushels of wheat, or tons of steel. He envisioned that a “central office for measurement in kind… would have to design the economic plans for the future”, which would then be decided upon by “the people’s representatives”. Socialism would enable a new kind of freedom by allowing society to survey “total plans” and then democratically decide its future.

Neoliberalism: a conservative response

Neurath is largely forgotten today, but his arguments catalysed another, much more influential ideology – neoliberalism. That neoliberalism’s roots extend a century ago to the Bavarian Soviet Republic might surprise many who focus on the late-20th-century governments of Augusto Pinochet, Ronald Reagan, and Margaret Thatcher. But neoliberalism emerged as a conservative response to Neurath’s uniquely clear definition of socialism, indeed as its mirror image: instead of making the economy visible through total plans, the market was unknowable and therefore beyond democratic control.

Neoliberals have succeeded in transforming the world to conform to their ideology, but the Achilles’ heel of their thought was apparent from the very beginning. In his exchange with Neurath, the conservative economist Ludwig von Mises conceded that the market would often fail to protect the environment because markets would not price environmental services properly. Neurath, however, failed to take advantage of this weakness because he was hardly an environmentalist himself. Socialists today should not repeat this mistake. Indeed, we need a new socialist theory that combines Neurathian planning with ecological insights if we are to overcome the environmental crisis and dethrone neoliberalism.

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