In an earlier message Gil Skillman said that while he could not endorse
my call for a vision with an economy with zero markets in the limit, that
he could certainly endorse a call for having n-1 markets if we have n right
now.
That amounts to saying that some sort of market socialism would be an
improvement over capitalism, which few on pen-l have disputed, and I have
explicitly agreed with. But I have yet to hear an answer to a problem I
posed for advocates of market socialism a while back, and Gil's posting
brings the issue up clearly.
I assume that the 1 market Gil would eliminate is the labor market, and I
assume that the reason is that a labor market does not distribute income
equitably in Gil's view [which I would share]. So the logic is eliminate
the labor market, set income differentials through some sort of political
process that is more equitable than free market labor outcomes that pay
even middle talented professional baseball players millions per year while
paying hard working garbage collectors less than $25,000 per year. Or, the
example that catches my attention at the moment, the basketball coach at the
University of Maryland -- who I like as an avid Terps fan -- negotiating a
multi-million dollar multi-year salary that will pay him $250,000 annualy with-
out endorsements while no faculty member at this institution of higher earning
[a truly Freudian slip] earns over $100,000 -- no matter how wise and famous.
But the problem is if we set wages and salaries fairly, and if that means out-
comes different from marginal revenue products -- otherwise what's the point? -
then what does that imply about the price structure in the other n-1 markets
that Gil is considering retaining? I once saw an estimate that on average
two thirds of costs are labor costs. In which case, on average two thirds of
the cost of all final goods would be miscalculations of true social opportunity
costs. To make a long story short, how can one pretend to eliminate the labor
market and keep the other n-1 markets without recognizing that the highly vaunt
ed, and highly over estimated, efficiency properties of the pricing mechanism
in all those other markets would go completely by the wayside?
In Solidarity,
You Can't Have Your Cake and Eat It Too!
