As you say, we have been through all this before. I do not defend
capitalism. I defend markets with self-management. However, capitalism with
all its defects beat state central planning hollow. Hayek's "fantasies" are
the best explanation of why. We can do better than capitalism, but not by
instituting central planning even with a more democratic flavor. --jks
>
>Justin, we have been over this before. The Austrians merely assert that
>somehow
>in all of the entrepreneurs and will be able to coordinate their decisions,
>even
>though many of these decisions depend upon them being able to anticipate
>each
>other's plans in the future. In a static world, prices could offer a
>signal to
>allow coordination, but not in a dynamic world.
>
>Then you ask about incentives. The Austrian world is a world of
>entrepreneurs.
>The capitalist world is a world in which the owners are short-term
>stockholders. Their incentives are for a quick profit rather than the
>long-term
>health of the company. What incentive do the masses of workers have?
>
>The success of the socialist economy does not depend so much on the wisdom
>of
>planners, but on the potential of encouraging the masses of workers to feel
>a
>part of the overall operation. I once worked in junior management. I can
>tell
>unequivocally that the people I work with would not lend credibility to the
>fantasy of Hayek.
>
>But then, we've been over this. What is the use of covering the same
>terrain?
>
>Justin Schwartz wrote:
>
> > The question is: incentives for what. The Austrian argument that I
>accept
> > foicus not on incentives to work hard and avoid shirking, but on
>incentives
> > to gather accurate information. I think you overstte the importance of
>the
> > tactic dimension in Hayek: you are relying a lot on Polyani. I consider
> > myself a sort of Hayekian, and Hayek's theme was incentives to get
>accurate
> > information much more than inarticulable "how to" tacit knowledge. The
> > Hayekian point is that plans need accurate information, but pure
>planning
> > systems create incentives to generate inaccurate information. I am a
> > pragmatist and not a bigor about planning: we know empirically that some
> > things can be well planned--medicine, the military, utilities,
> > education--and maybe better than markets can do. Those things we should
> > plan. But we also know from experience that many things cannot be
>effective
> > planned,a nd I think Hayek was right about why not.
> >
> > --jks
> >
> > Austrians are very interested in
> > >"planning", just household, firm, individual plans, but not the
>planning of
> > >other social groups--communities (unless privatized?), state, nation,
>etc.
> > >i want to know what the logical reason is for permitting some social
>groups
> > >to
> > >plan but not others. i thought the Austrian argument was that the
> > >successful
> > >plan negotiates a terrain in which meaning is not always obvious, so
> > >interpretation requires discovery which requires both tacit and
>explicit
> > >knowledges, and tacit powers are denied agents of the state. if
> > >policymakers and
> > >planners can draw on tacit powers than this is not the case, and we
>would
> > >be in
> > >a situation in which these different spheres are not treated as so
>separate
> > >and
> > >different, rather states, markets, and other settings are intersecting
>and
> > >overlapping and there are probably some kinds of problems more
>conducive to
> > >being solved through certain institutional mechanisms under certain
> > >conditions
> > >and others through others or even combinations. but there would be no
> > >LOGICAL
> > >reason for privileging market mechanisms a priori. and there would be
>no
> > >justification for the dichotomous treatment of "markets" and "states."
> > >
> > >but the key to your position may be revealed in your response to
>Peter's
> > >question about alpert and hahnel: your focus on incentives. but then if
> > >that is
> > >the case, the argument is not about what institutions are most
>conducive to
> > >tacit knowing.
> > >
> >
> > _________________________________________________________________
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>
>--
>
>Michael Perelman
>Economics Department
>California State University
>[EMAIL PROTECTED]
>Chico, CA 95929
>530-898-5321
>fax 530-898-5901
>
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