Kantorovich did a lot of work on this at the Soviet Academy. He ended up concluding that you really can't do without a system of market prices (and required a bit of fast footwork to keep himself out of trouble for saying so). The information requirement to set these shadow prices is too big.
best dd > ----- Original Message ----- > From: "Jim Devine" <[EMAIL PROTECTED]> > To: PEN-L@SUS.CSUCHICO.EDU > Subject: How is socialist cost-benefit analysis possible? > Date: Thu, 15 Nov 2007 08:59:20 -0800 > > > On Nov 15, 2007 8:34 AM, Max B. Sawicky <[EMAIL PROTECTED]> wrote: > > Now I'm wondering how the masses with the encouragement of JD would derive > > shadow prices. > > the basic principle is that political officials should be controlled > democratically (unlike at present). Those officials would have to > propose general principles (such as what percentage of the total > product should go to accumulation and the division of the product > between collectively-consumed and privately-consumed products) which > would then be translated into shadow prices. (They're duals, right?) > Big issues would have to be passed by public referendum, while smaller > would be (1) at the discretion of public officials when dealing with > collectively-consumed goods; (2) at the discretion of individuals when > dealing with individually-consumed goods; and (3) on the basis of > public/private negotiations for mixed cases. > > BTW, the economy should be set up as a system of competing > not-for-profit agencies, sort of as sketched by Charlie Andrews in his > FROM CAPITALISM TO EQUALITY. >
