Re: Re: Up a Hayek in a kayak without a paddle
>>> [EMAIL PROTECTED] 07/13/00 11:29PM >>> I guess I do not see the force of this objection. As I see it, the key point of the Mises-Hayek line of thought, and I follow Hayek more than Mises, I should explain, is that there cannot a be universal mind that can grasp all the information we need about the needs people have, the resources we have to meet them, and the various means that we might employ to geyta match, particularly as the future is hard to know. _ CB: Why a universal mind ? Why not numerous planning minds that find out the needs people have in little bits and slices like the entrepreneurs ? and then collect them all in a collective "mind " ? _ Markets address this problem by creating incentives for entrepreneurs to find out these things in little bits, focusing on narrow slices of them, while the operatioon of the market provides some degree of coordination among their various activities. There is no comparable incentive in planningl indeed, the incentive in planning is to give misinformation, to overstate your needs and understate your resources,s o you can better meet your plan targets. Markets punish waste and inefficiency because if you use more resources or time than your competitors, you will have a harder time staying in business unless you find out how to improve. There is no comparable incentive in planning,w here politics means that inefficient enterprises are kept afloat. ___ CB: This seems to ignore the enormous historical evidence that markets also create incentives for entrepreneurs to be wasteful and inefficient at the expense of others, as when they leave all their dirty work for governments to do or clean up, or ruin the health of workers, or create a surplus population etc. Also, entrepreneurs have incentives to create needs as well as "find them out" . The statement that "the market provides some degree of coordination among their (entrepreneur's) various activities" seems to be sneaking in through the back door a universal mind coordinating the whole. "Coordination" is centralization. How does the market do this , and why does it have to be unconscious and unplanned ?
Re: Re: Re: Up a Hayek in a kayak without a paddle
I did reply. --jks In a message dated Tue, 18 Jul 2000 6:52:27 PM Eastern Daylight Time, Ken Hanly <[EMAIL PROTECTED]> writes: << This was the post from Timeworks that I had in mind in an earlier missive. I don't recall that Justin replied to it. Cheers, Ken Hanly Charles Brown wrote: > > Hear, hear. > > CB > > >>> [EMAIL PROTECTED] 07/13/00 09:48PM >>> > Or, if one wants to get even more rigorous about the contingency of the > Hayek-Mises critique of planning, one could go back to the feeble > 1908 Baronial cornerstone upon which the whole papier-mache edifice is > constructed. Barone's calculus implicitly assumes (as does Mises') the > perfect commensurability of units of labour of a particular kind. What > this means in practice is if I currently work 8 hours a day and wish to > double my income doing the same kind of work, I simply work 16 hours a > day. Triple my income? No problem -- work around the clock. > > The fact that duration and intensity of work are interdependent variables > displaces "price" from its ideal regulative function and thus has to be, > that is, MUST, be ignored by the Barone/Mises/Hayek critique of > planning. It is only by turning several billion blind eyes to the ubiquity > of price-fixing in the history of market economies can one even dream of > price as a neutral regulative principle. If prices aren't ALWAYS AND > EVERYWHERE ultimately fixed, who the heck is Alan Greenspan and what the > heck is he doing fixing the price of credit and worrying incessently about > the cost of labour? > > But, you see, this particular critique of Barone/Mises/Hayek is > INADMISSIBLE -- must be incomprehensible -- because it is decisive. It > would shut down whole industries of Hayek chatterers, both pro and contra. > > There's also an important partial truth to the Mises/Hayek critique of > planning: socialism cannot be calculated. That truth is partial in the > sense that it is simply part of a larger (and systematically > disregarded) critique that economy is itself beyond calculation. > > Temps Walker > Sandwichman and Deconsultant >>
Re: Re: Up a Hayek in a kayak without a paddle
This was the post from Timeworks that I had in mind in an earlier missive. I don't recall that Justin replied to it. Cheers, Ken Hanly Charles Brown wrote: > > Hear, hear. > > CB > > >>> [EMAIL PROTECTED] 07/13/00 09:48PM >>> > Or, if one wants to get even more rigorous about the contingency of the > Hayek-Mises critique of planning, one could go back to the feeble > 1908 Baronial cornerstone upon which the whole papier-mache edifice is > constructed. Barone's calculus implicitly assumes (as does Mises') the > perfect commensurability of units of labour of a particular kind. What > this means in practice is if I currently work 8 hours a day and wish to > double my income doing the same kind of work, I simply work 16 hours a > day. Triple my income? No problem -- work around the clock. > > The fact that duration and intensity of work are interdependent variables > displaces "price" from its ideal regulative function and thus has to be, > that is, MUST, be ignored by the Barone/Mises/Hayek critique of > planning. It is only by turning several billion blind eyes to the ubiquity > of price-fixing in the history of market economies can one even dream of > price as a neutral regulative principle. If prices aren't ALWAYS AND > EVERYWHERE ultimately fixed, who the heck is Alan Greenspan and what the > heck is he doing fixing the price of credit and worrying incessently about > the cost of labour? > > But, you see, this particular critique of Barone/Mises/Hayek is > INADMISSIBLE -- must be incomprehensible -- because it is decisive. It > would shut down whole industries of Hayek chatterers, both pro and contra. > > There's also an important partial truth to the Mises/Hayek critique of > planning: socialism cannot be calculated. That truth is partial in the > sense that it is simply part of a larger (and systematically > disregarded) critique that economy is itself beyond calculation. > > Temps Walker > Sandwichman and Deconsultant
Re: Re: Re: Up a Hayek in a kayak without a paddle
In the hope of redeeming myself, this nice quote from Robert Cox to hone Carrol's rather rash, but not altogether nonsensical, pronouncement: "Critical awareness of potentiality for change must be distinguished from utopian planning, i.e. the laying out of the design of a future society that is to be the end goal of change. Critical understanding focuses on the process of change rather than on its ends; it concentrates on the possibilities of launching a social movement rather than on what that movement might achieve. Utopian expectations may be an element in stimulating people to act, but such expectations are almost never realized in practice. The consequences of action aiming at change are unpredictable. Once a historical movement gets under way, it is shaped by the material possibilities of the society in which it arises and by resistance to its course as much as by the (invariability diverse) goals of its supporters." COX, Robert (1986) Production, Power and World Order. Social Forces in the Making of the History New York: Columbia University Press, p.393. Carrol had written: >Marx made many errors, but on one point he really was infallible: his refusal >to write recipes for the cookshops of the future. And on that I'm willing to >be sectarian and dogmatic: Anyone who demands or pines for such recipes is not >a marxist -- by which I mean, one should not trust such a person not to turn >one in to the cops or vote war credits. Cheers, Rob.
Re: Re: Up a Hayek in a kayak without a paddle
>>> [EMAIL PROTECTED] 07/13/00 10:12PM >>> Timework Web wrote: > > There's also an important partial truth to the Mises/Hayek critique of > planning: socialism cannot be calculated. That truth is partial in the > sense that it is simply part of a larger (and systematically > disregarded) critique that economy is itself beyond calculation. As far as I can tell, almost all (or all) critiques of the possibility of planning assume that the planning must be *successful* in some large and sweeping sense. But there is no reason whatsoever to make such a demand. Why shouldn't there be numerous shortages and surpluses? Why shouldn't there be huge inefficiencies? The human species has gotten along so far with such inefficiencies -- and if we eliminate huge wealth plus a few other really gratuitous wastes of capitalism we should do quite well if the core economy operates at (say) 50% of capitalist effiiciency. CB: Yea, the best laid plans of mice and men have often gone astray, but it would be foolish not to plan, plan and plan again. Marx made many errors, but on one point he really was infallible: his refusal to write recipes for the cookshops of the future. And on that I'm willing to be sectarian and dogmatic: Anyone who demands or pines for such recipes is not a marxist -- by which I mean, one should not trust such a person not to turn one in to the cops or vote war credits.
Re: Re: Re: Re: Up a Hayek in a kayak without a paddle
In a message dated 7/16/00 10:02:06 AM Eastern Daylight Time, [EMAIL PROTECTED] writes: << G'day Justin, >Or any sort of philosopher. But he was analytical, among his other virtues. Awright, comrade. You've said this twice now, so I'll chance a nibble. Why was Marx not any sort of philosopher? Why, for instance, should *A Contribution to the Critique of Hegel's Philosophy of Right* and *The German Ideology* not be considered philosophical works? I mean, he 'abandoned' philosophy only insofar as he'd moved on to investigating political economy, didn't he? I mean, it's not as if he went on to refute his stance on Hegel's irksomely privileged predicate or the 'materialist conception of history'. It's just that he thought the job was done, innit? Do tell. >> The Marx of 1842-44 saw himself as doing a sort of philosophy, left-Hegelian "criticical criticism." In 1845, Marx broke decisively from the idea that criticism could do the job of liberation, and came to regard philosophy as mere ideology, as he says quite clearly in the German Ideology, The Manifesto, and everywhere else he discusses philosophy thorough the rest of his life. He restained ana biding respect for Hegel, but he didn't do Hegelian conceptual analysis. He did critique of political economy and sociological analysis as well as a lot of political commentary. I would consider giving up philosophy to do womerthing else to be abandoning philosophy. He didn't givea philosophical explanation of why he did that--unlike Rorty,w ho can't seem to get out of philosophy. Daniel Brudney, Marx's Attempt to Escape Philosophy, adumbrates the Feuerbachian roots of this turna way from philosophy. It is an excellent book. I recommend it. --jks
Re: Re: Re: Up a Hayek in a kayak without a paddle
G'day Justin, >Or any sort of philosopher. But he was analytical, among his other virtues. Awright, comrade. You've said this twice now, so I'll chance a nibble. Why was Marx not any sort of philosopher? Why, for instance, should *A Contribution to the Critique of Hegel's Philosophy of Right* and *The German Ideology* not be considered philosophical works? I mean, he 'abandoned' philosophy only insofar as he'd moved on to investigating political economy, didn't he? I mean, it's not as if he went on to refute his stance on Hegel's irksomely privileged predicate or the 'materialist conception of history'. It's just that he thought the job was done, innit? Do tell. Cheers, Rob.
Re: Re: Re: Re: Up a Hayek in a kayak without a paddle
You misconstrue what I meant. Yoshie and I are old friends from Columbus. I didn't take her to say that I was an armchair theorist, and I know she does excellent practical work. My point was just that I have no magic bullets, no new ides about how to achieve our goals. --jks In a message dated 7/14/00 10:08:28 PM Eastern Daylight Time, [EMAIL PROTECTED] writes: << On Fri, 14 Jul 2000 [EMAIL PROTECTED] wrote: > Yoshie, you asked me a while ago how I planned to get support for > antiimperialism. I said, organize, agitate, join groups, propagandize, etc. I > belong to Solidarity, the NLG. I write acdemic papers. I engage in thsi sort > of discussion. I do strike support work. In other words, the usual drill. If > I knew something better, I would tell you. I would not keep in a secret. The > difference is, I am struggoing for something intelligible and demonstrably > superior to what we have. You and much of the far left are not, and taht is > part of our problem. People don't believe you have anything better, and they > are right. > --jks It seems we might do well to keep in mind that much of what goes on on these lists are disagreements between people who are committed to struggle at most of the levels it takes place. We on this list know should know that Justin is a quite committed human being and committed to activism just as we should also know that Yoshie is quite committed to activist work, in addition to all else that she is doing. Then what we have left are debates over theoretical issues and no need to remind others that we are engaging in x, y, or z type of activity. >>
Re: Re: Re: Up a Hayek in a kayak without a paddle
On Fri, 14 Jul 2000 [EMAIL PROTECTED] wrote: > Yoshie, you asked me a while ago how I planned to get support for > antiimperialism. I said, organize, agitate, join groups, propagandize, etc. I > belong to Solidarity, the NLG. I write acdemic papers. I engage in thsi sort > of discussion. I do strike support work. In other words, the usual drill. If > I knew something better, I would tell you. I would not keep in a secret. The > difference is, I am struggoing for something intelligible and demonstrably > superior to what we have. You and much of the far left are not, and taht is > part of our problem. People don't believe you have anything better, and they > are right. > --jks It seems we might do well to keep in mind that much of what goes on on these lists are disagreements between people who are committed to struggle at most of the levels it takes place. We on this list know should know that Justin is a quite committed human being and committed to activism just as we should also know that Yoshie is quite committed to activist work, in addition to all else that she is doing. Then what we have left are debates over theoretical issues and no need to remind others that we are engaging in x, y, or z type of activity. Steve > >
Re: Re: Up a Hayek in a kayak without a paddle
In a message dated 7/14/00 7:36:46 PM Eastern Daylight Time, [EMAIL PROTECTED] writes: << Without masses of people involved in social movements against capitalism, it's sort of pointless to discuss relative merits of various proposals on paper (although Justin would probably say, "regardless, we got to get it right," whatever "it" is). >> As I say, we will not get masses of people involved if we do not have a plausible answer to well-founded worries they might have. Writing recipes is not an abstract exercise in getting it right. It is a tool of struggle. --jks
Re: Re: Up a Hayek in a kayak without a paddle
In a message dated 7/14/00 6:49:24 PM Eastern Daylight Time, [EMAIL PROTECTED] writes: << How do you and Justin propose to introduce socialized market & market socialism respectively in _this_ world (not as science fiction or utopian plans on the shelf in the marketplace of ideas)? Can you guys do better than Carrol's all-purpose answer which doesn't seem to satisfy you: "it's a struggle"? >> \ Yoshie, you asked me a while ago how I planned to get support for antiimperialism. I said, organize, agitate, join groups, propagandize, etc. I belong to Solidarity, the NLG. I write acdemic papers. I engage in thsi sort of discussion. I do strike support work. In other words, the usual drill. If I knew something better, I would tell you. I would not keep in a secret. The difference is, I am struggoing for something intelligible and demonstrably superior to what we have. You and much of the far left are not, and taht is part of our problem. People don't believe you have anything better, and they are right. --jks
Re: Re: Up a Hayek in a kayak without a paddle
In a message dated 7/14/00 5:38:19 PM Eastern Daylight Time, [EMAIL PROTECTED] writes: << Marx wasn't an analytical philosopher. >> Or any sort of philosopher. But he was analytical, among his other virtues. --jks
Re: Re: Re: Up a Hayek in a kayak without a paddle
I am sorry for breaking the rule (shut up! shut up! agghhh!), but somebody always *learns*... Mine > >>>Well, the first Marxist lesson is that what looks like > >"'economic'/technical" issues can't be divorced from what looks like > >>"social/political/moral" ones. The system couldn't have reproduced > >>and expanded itself economically without state repression of various > >>kinds (from policing to union busting to war) as well as hegemony > >>(of the kind that Gramsci, among others, discussed). > > >Wow, I didn't know that. There's just no end to what I'm learning on > >PEN-L lately. > > -- Mine Aysen Doyran PhD Student Department of Political Science SUNY at Albany Nelson A. Rockefeller College 135 Western Ave.; Milne 102 Albany, NY 1 NetZero Free Internet Access and Email_ Download Now http://www.netzero.net/download/index.html Request a CDROM 1-800-333-3633 ___
Re: Re: Up a Hayek in a kayak without a paddle
Yoshie Furuhashi wrote: >You know it, of course, _at one level_, but you and Justin are >asking questions & contemplating solutions _as if you didn't know >it_, and that's the problem. Market socialism & socialized market >may sound OK if presented as academic papers, but both are being >discussed here in a way that is divorced from the real world of big >guns & expansive hegemony. How do you and Justin propose to >introduce socialized market & market socialism respectively in >_this_ world (not as science fiction or utopian plans on the shelf >in the marketplace of ideas)? Can you guys do better than Carrol's >all-purpose answer which doesn't seem to satisfy you: "it's a >struggle"? How do you plan to introduce nonmarket socialism in the world of big guns and expansive hegemony? Of course it's a struggle; that's trivially obvious. What are you struggling for? "Planning"? What does that mean? I really don't think you, Lou, or any of the other anti-MS people have any idea. Which is why you just invoke "struggle" in some apotropaic fashion. Doug
Re: Re: Re: Re: Up a Hayek in a kayak without a paddle
Doug, any reader of the Wall St. Journal could multiply examples like this by some large exponent. But it wasn't my point to argue from this that Capitalism is about to topple. My point is that markets aren't all that omniscient -- or anything like even perceptive. Gene Coyle Doug Henwood wrote: > Eugene Coyle wrote: > > >Both ends of this marvelous corporate decision-making totally missed the > >mark. > > > >Low prices led to no orders. Now high prices lead to voluminous orders. > >Odd. So much for the market and the taking into account of prices and > >demand. > > Gosh, I don't know how capitalism has survived all these centuries, > eliminating all rival systems, if the capitalists can't do anything > right. > > I think capitalism's critics and enemies will have to do a lot better > than come up with single examples of bad decisions. This is the > corollary of Hayek's critique of planning: having spotted a problem, > you conclude the malady is fatal. > > Doug
Re: Re: Up a Hayek in a kayak without a paddle
Yoshie Furuhashi wrote: >Well, the first Marxist lesson is that what looks like >"'economic'/technical" issues can't be divorced from what looks like >"social/political/moral" ones. The system couldn't have reproduced >and expanded itself economically without state repression of various >kinds (from policing to union busting to war) as well as hegemony >(of the kind that Gramsci, among others, discussed). Wow, I didn't know that. There's just no end to what I'm learning on PEN-L lately. Doug
Re: Re: Up a Hayek in a kayak without a paddle
Yoshie Furuhashi wrote: >>Gosh, I don't know how capitalism has survived all these centuries, >>eliminating all rival systems, if the capitalists can't do anything >>right. >> >>I think capitalism's critics and enemies will have to do a lot >>better than come up with single examples of bad decisions. This is >>the corollary of Hayek's critique of planning: having spotted a >>problem, you conclude the malady is fatal. >> >>Doug > >You also wrote a while ago: >>Someone with an income of $25,000 is richer than 98% of the world's >>population; even the bottom decile of USers have incomes higher >>than 2/3 of the world's population. > >Sounds like a fatal defect, from the point of view that deplores >relative deprivation & resource use inequality. This problem has >not proven fatal in the real world, but that's because the other >side (= those who don't find this to be a problem) has won military >and publicity campaigns. I'm a bit mystified by this. Capitalism creates poverty alongside wealth; polarization is one of its distinguishing characteristics. Every Marxist schoolchild knows this. That's a completely different issue from whether the system can reproduce and expand itself economically, which it has managed to do for centuries, despite all the good reasons why it shouldn't. A social/political/moral critique is a completely different ball of wax from an "economic"/technical one. Doug
Re: Re: Re: Up a Hayek in a kayak without a paddle
Eugene Coyle wrote: >Both ends of this marvelous corporate decision-making totally missed the >mark. > >Low prices led to no orders. Now high prices lead to voluminous orders. >Odd. So much for the market and the taking into account of prices and >demand. Gosh, I don't know how capitalism has survived all these centuries, eliminating all rival systems, if the capitalists can't do anything right. I think capitalism's critics and enemies will have to do a lot better than come up with single examples of bad decisions. This is the corollary of Hayek's critique of planning: having spotted a problem, you conclude the malady is fatal. Doug
Re: Re: Up a Hayek in a kayak without a paddle
Doug Henwood wrote: > Timework Web wrote: > > >That is unless one wants to go all the way back to 1946 and the very > >trenchant observation that the fashion for Hayek has nothing to do with > >objections to planning per se -- corporations do it all the time -- it is > >selectively an objection to DEMOCRATIC planning on behalf of the public. > > Not to be an apologist for Hayek or anything, but corporate planning > occurs within competitive, decentralized (or polycentric) markets, > forcing the planning to take account of price, demand, and taste > changes. A Hayekian critique applies to the macroeconomy, where the > wisdom of planners replaces market signals. You could say that > planners could take account of demand and taste changes, and that > volume could replace price as a signal, but that's a different > argument. > > Doug Just a simple example about corporate planning. Today a power plant builder cannot get a turbine delivered for a couple or more years, so great is the demand. General Electric has booming world-wide sales, and of course is doing the world a favor by sending a price signal about this state of affairs. Yes, prices are going up. News item: Wall St. Journal, March 4, 1998: "GE's Power Unit to Slash 1,200 jobs and Report a Charge of $437 million." The company cited industry over-capacity, among other reasons for closing plants and layoffs. Why didn't GE plan a little better? Put some stuff into inventory? And why didn't the power plant builders buy some turbines, only yesterday, when there was world-wide overcapacity and low prices? Both ends of this marvelous corporate decision-making totally missed the mark. Low prices led to no orders. Now high prices lead to voluminous orders. Odd. So much for the market and the taking into account of prices and demand. Gene Coyle
Re: Re: Re: Re: Up a Hayek in a kayak without a paddle
Jim says: > The problem with [the Hayek argument] is that it's not talking about a real-world >situation but instead about ideal models inside economists' heads. I am presenting the argument abstractly, but I think it is amply confirmed the real world experience of planning. > Market incentives . . . encourage the willful ignorance of external costs (pollution) and the unwillingness to provide external benefits. No shit. That's why we have governments and regulation. > market incentives encourage the interpretation of legal contracts to benefit oneself, theft, and embezzlement. Well the first of those is certainly terrible, and no doubt could be avoided by planning. As for the rest, yes, markets encourage self interested behavior. But planning doesn't? The USSR was a kleptocracy. > The process of competition is also not the passive supply-and-demand process described by orthodox economists, but is profoundly affected by the drive to accumulate capital. Really, you should (a) read some Hayek. Austrians and Marxsits agree in their contempt for neoclassical economists. Both of them, btw, write political economy with (generally) few equations. The Hayek arguments do not presuppose "orthodox" Walrasian models of markets. (b) In a capitalist economy, you are right, but in a market socialist economy, not. That is because workers cannot accumulate capital: they can use it and capture the income from it, but the capital assets and fianncial assets are the state's. > As Polanyi made clear, the market requires a governmental and societal framework to keep it from self-destruction. Oh, gee, so market socialism can't be anarchism? That never occurred to me. > This assumes that planning is of the sort that prevailed in the old USSR. No it doesn't. Or explain in precise dretail how it does. > Trotsky, among others, argued that planning worked better when it was under democratic control, because this encouraged the flow of information from the "bottom" to the central planners, in addition to keeping the central planners honest. As I have explained, the more information, the worse the problem with managing it. Undemocratic planning was overwhelmed with the amount of inforamtion it hjad to deal with,a nd your solution is to add more information to the mix? Moreover,w hat makes you think that the information from below will be honest? You would expect the opposite. Consumers who want more will ask for more than they want. Producers who want to work less will say they can do less than they can do. Etc. > I think it would be useful to talk about the ideas of Pat (no relation) Devine, Albert & Hahnel, Laibman, Cockshott, etc. (Since I am far from an expert on such things, it will shut _me_ up. But I'd like to learn this OK, let a fan of participarory economics speak up. The Albert-Hahnel model, which I know best, does not, to my mind, address the Hayek concerns _at all_. I had a go aroundf with Hahnel a few years ago, which he as apparently, without asking me, published on his Z-notes website, giving himself the last word of course. Cockshott & Cantrill at least recognize that the problem isa problem, but they think it can be solved with computers, they don't see that it is a dynamic problem involving incentives. > An individual capitalist conception of efficiency ignores external costs and benefits (which violates NC strictures about allocative efficiency). As I say, Hayek and the Austrians are not NCE-ists, and dispsie the stuff. By "waste" I mean that resources, inclusimng human timem are either used making stuff that no one wants, or more of these resources are used in making stiff that someone wants than is necessary, or that resources are used that could be used to make stuff that people want less than they want more. The problem with planning is that it promotes waste in all these senses in part because we have no idea how much things cost in resources, lacking a measure of price. >You use the word "politics" as if it were a dirty word. I think we should avoid the illusion that collective decisions that affect large numbers of people can be insulated from "politics." I would like the economy to be subject to political control. But not absolutely: theory and experience teach us that that leads to too much waste and inefficiency. However, I am not a fan of laissez-faire markets either. I said: >Please note that none of this depends on any assumptions about the >commensurability of labor--an assumption, by the way, that Mises shared >with Marx, at least for market economies, but never mind that. Jim expalined: I don't know about Mises, but Marx's view was that capitalist accumulation makes labor so that it was commensurable, through an historical process of the reduction of concrete labors to abstract labor. That was my point. --jks
Re: Re: Re: Re: Re: Up a Hayek in a kayak without a paddle
Doug Henwood wrote: > [EMAIL PROTECTED] wrote: > > >Carrol, haven't you heard of efficient market theory? There are no > >inefficiencies in a capitalist market economy. > > Those two sentences use two different meanings of "efficient." The > second uses it in the colloquial sense, of minimizing waste. The > first uses it in the sense that financial economists do, which means > "instantaneously (or almost instantaneously) reflect changes in > available information." Market fundamentalists sometimes confuse the > two, but I'm surprised to see someone on PEN-L do that. Irony impaired? This was Pope's core method -- collapsing two different meanings of a word -- sometimes without even repeating the word. Here Thou, Great _Anna_! whom three Realms obey, Dost sometimes Counsel take -- and sometimes _Tea_. Carrol
Re: Re: Up a Hayek in a kayak without a paddle
Since planning has an abundance of meanings and the price system[s] we observe seem[s] to be as much an effect as cause of planning [see Minsky, 1986, Samuels and Tool, 1989]; what would Hayek, von Mises, Marx, Roemer, and anyone else think about, say, the WTO? Is that not the result of immense planning that will help overdetermine the course of prices and help make corporate planning easier in the future by attempting to reduce uncertainty at multiple spatial and temporal scales as well as effect the future course of what kinds institutional and organizational innovations will occur that both create and fulfill peoples needs and wants? Would Hayek et al regard such planning, as well as the planning for "the transition" to market structures as suspect, or would there be, as Geoffrey Hodgson suggests, a double standard here? As for efficiency and it's meanings, where's Mark Jones? Ian
Re: Re: Re: Up a Hayek in a kayak without a paddle
Justin wrote: >there cannot a be universal mind that can grasp all the information we >need about the needs people have, the resources we have to meet them, and >the various means that we might employ to geyta match, particularly as >the future is hard to know. > >Markets address this problem by creating incentives for entrepreneurs to >find out these things in little bits, focusing on narrow slices of them, >while the operatioon of the market provides some degree of coordination >among their various activities. The problem with this is that it's not talking about a real-world situation but instead about ideal models inside economists' heads. Market incentives -- what C.B. MacPherson called possessive individualism -- encourage the willful ignorance of external costs (pollution) and the unwillingness to provide external benefits. As the modern NC economics of information notes, market incentives also encourage moral hazard and adverse selection. In simple terms, market incentives encourage the interpretation of legal contracts to benefit oneself, theft, and embezzlement. The process of competition is also not the passive supply-and-demand process described by orthodox economists, but is profoundly affected by the drive to accumulate capital. As E.K. Hunt notes, this implies the drive to internalize external benefits -- taking over the common land, as in the enclosure movement or turning the World Wide Web into a commercial swamp -- and to seek ways to externalize internal costs, i.e., to figure out how to dump costs on others (e.g. dumping toxic wastes in the woods). Without popular resistance and the capitalist efforts to prevent mutually-destructive competition, this market-driven process would be even worse than it is. As Polanyi made clear, the market requires a governmental and societal framework to keep it from self-destruction. To some extent, this societal framework is created by capital itself, but it's usually in the form of corporate paternalism or the government's technocratic fixes to preserve capitalist class power. But the "market" requires an institutional framework the way fish need water. > There is no comparable incentive in planningl indeed, the incentive in > planning is to give misinformation, to overstate your needs > and understate your resources, so you can better meet your plan targets. This assumes that planning is of the sort that prevailed in the old USSR. Trotsky, among others, argued that planning worked better when it was under democratic control, because this encouraged the flow of information from the "bottom" to the central planners, in addition to keeping the central planners honest. Instead of this total focus on Soviet-style planning, I think it would be useful to talk about the ideas of Pat (no relation) Devine, Albert & Hahnel, Laibman, Cockshott, etc. (Since I am far from an expert on such things, it will shut _me_ up. But I'd like to learn this stuff.) BTW, I see no reason why we should eschew thinking up recipes for the cookshops of the future. After all, it's best to think about things before acting (especially when there's no real-world model to imitate). The problem only comes when the recipes become fixed in the mind and imposed on others (as when the utopian marketeers at the IMF force the market recipe on the world). As Draper argues, Marx and Engels thought that the discussion of utopian schemes was a reasonable part of the workers' collective self-education. They were very different from the image put forth by those who translate Engels' book as "Socialism: Utopian _versus_ Scientific." >Markets punish waste and inefficiency because if you use more resources or >time than your competitors, you will have a harder time staying in >business unless you find out how to improve. The problem with this statement (specifically, the words "waste" and "improve") is that it assumes the individual capitalist's own definition of efficiency -- i.e., profitability -- which many NC economists follow even though (strictly speaking) it goes against their own theory. An individual capitalist conception of efficiency ignores external costs and benefits (which violates NC strictures about allocative efficiency). >There is no comparable incentive in planning,w here politics means that >inefficient enterprises are kept afloat. You use the word "politics" as if it were a dirty word. I think we should avoid the illusion that collective decisions that affect large numbers of people can be insulated from "politics." (I think that the point of Marx's theory of commodity fetishism is that markets are really political processes, despite superficial appearances.) Further, I must say I prefer democratic politics (one person/one vote) to market politics (one dollar/one vote). To paraphrase Kenneth Arrow, market incentives encourage people to not act on their social values. This encourages the rampant free-riding t
Re: Re: Re: Re: Up a Hayek in a kayak without a paddle
If you are going to be sarcastic, I will have to observe that USSR, Inc, went belly up, after suffering the kinds of failures that Hayek predicted for precisely the reasons he argued. Every planning system has had to reform itself by adding huge market sectors. The issue is comparative. Markets are not perfectly efficient. But planning is far worse, at least without external correctives. If these external checks do not come from the market, where do they come from? You will get nowhere hammering away at the real limitations of markets. I will concede these. The question is, is there any reason to think that we can escape these limitations and do better? In a message dated 7/14/00 12:07:04 AM Eastern Daylight Time, [EMAIL PROTECTED] writes: << Carrol, haven't you heard of efficient market theory? There are no inefficiencies in a capitalist market economy. We all know that inefficient enterprises like Chrysler in the 80's are never kept afloat. I just don't know where you get all these insightful ideas from. >>
Re: Re: Re: Re: Re: Up a Hayek in a kayak without a paddle
At 12:29 AM 07/14/2000 -0400, you wrote: >If these external checks do not come from the market, where do they come >from? ideally, from the democratic citizenry. Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~JDevine
Re: Re: Re: Up a Hayek in a kayak without a paddle
Carrol, haven't you heard of efficient market theory? There are no inefficiencies in a capitalist market economy. > As far as I can tell, almost all (or all) critiques of the possibility of > planning assume that the planning must be *successful* in some large and > sweeping sense. But there is no reason whatsoever to make such a demand. Why > shouldn't there be numerous shortages and surpluses? Why shouldn't there be > huge inefficiencies? The human species has gotten along so far with such > inefficiencies -- and if we eliminate huge wealth plus a few other really > gratuitous wastes of capitalism we should do quite well if the core economy > operates at (say) 50% of capitalist effiiciency. and further, JKSCHW writes: >There is no comparable incentive in planning,w >here >politics means that inefficient enterprises are kept afloat. We all know that inefficient enterprises like Chrysler in the 80's are never kept afloat. I just don't know where you get all these insightful ideas from. Paul Phillips, Economics, University of Manitoba
Re: Re: Re: Up a Hayek in a kayak without a paddle
Since Carroll has now denounced me as a cop and an imperialist, iIfeel free to say that he is a brainless, orthodox bucket of shit, and if he is a Marxist, I am proud not to be one. --jks In a message dated 7/13/00 10:13:28 PM Eastern Daylight Time, [EMAIL PROTECTED] writes: << As far as I can tell, almost all (or all) critiques of the possibility of planning assume that the planning must be *successful* in some large and sweeping sense. But there is no reason whatsoever to make such a demand. Why shouldn't there be numerous shortages and surpluses? Why shouldn't there be huge inefficiencies? The human species has gotten along so far with such inefficiencies -- and if we eliminate huge wealth plus a few other really gratuitous wastes of capitalism we should do quite well if the core economy operates at (say) 50% of capitalist effiiciency. Marx made many errors, but on one point he really was infallible: his refusal to write recipes for the cookshops of the future. And on that I'm willing to be sectarian and dogmatic: Anyone who demands or pines for such recipes is not a marxist -- by which I mean, one should not trust such a person not to turn one in to the cops or vote war credits. >>
Re: Re: Up a Hayek in a kayak without a paddle
I guess I do not see the force of this objection. As I see it, the key point of the Mises-Hayek line of thought, and I follow Hayek more than Mises, I should explain, is that there cannot a be universal mind that can grasp all the information we need about the needs people have, the resources we have to meet them, and the various means that we might employ to geyta match, particularly as the future is hard to know. Markets address this problem by creating incentives for entrepreneurs to find out these things in little bits, focusing on narrow slices of them, while the operatioon of the market provides some degree of coordination among their various activities. There is no comparable incentive in planningl indeed, the incentive in planning is to give misinformation, to overstate your needs and understate your resources,s o you can better meet your plan targets. Markets punish waste and inefficiency because if you use more resources or time than your competitors, you will have a harder time staying in business unless you find out how to improve. There is no comparable incentive in planning,w here politics means that inefficient enterprises are kept afloat. Please note that none of this depends on any assumptions about the commensurability of labor--an assumption, by the way, that Mises shared with Marx, at least for market economies, but never mind that. In the argument that I laid out (from Hayek), labor can be highly incommensurable. Doesn't matter. Markets will tell you whether you are awsting it, plans won't, not without an external corrective that they cannot provide. --jks In a message dated 7/13/00 9:50:00 PM Eastern Daylight Time, [EMAIL PROTECTED] writes: << Or, if one wants to get even more rigorous about the contingency of the Hayek-Mises critique of planning, one could go back to the feeble 1908 Baronial cornerstone upon which the whole papier-mache edifice is constructed. Barone's calculus implicitly assumes (as does Mises') the perfect commensurability of units of labour of a particular kind. What this means in practice is if I currently work 8 hours a day and wish to double my income doing the same kind of work, I simply work 16 hours a day. Triple my income? No problem -- work around the clock. The fact that duration and intensity of work are interdependent variables displaces "price" from its ideal regulative function and thus has to be, that is, MUST, be ignored by the Barone/Mises/Hayek critique of planning. It is only by turning several billion blind eyes to the ubiquity of price-fixing in the history of market economies can one even dream of price as a neutral regulative principle. If prices aren't ALWAYS AND EVERYWHERE ultimately fixed, who the heck is Alan Greenspan and what the heck is he doing fixing the price of credit and worrying incessently about the cost of labour? But, you see, this particular critique of Barone/Mises/Hayek is INADMISSIBLE -- must be incomprehensible -- because it is decisive. It would shut down whole industries of Hayek chatterers, both pro and contra. There's also an important partial truth to the Mises/Hayek critique of planning: socialism cannot be calculated. That truth is partial in the sense that it is simply part of a larger (and systematically disregarded) critique that economy is itself beyond calculation. >>
Re: Re: Up a Hayek in a kayak without a paddle
Timework Web wrote: > > There's also an important partial truth to the Mises/Hayek critique of > planning: socialism cannot be calculated. That truth is partial in the > sense that it is simply part of a larger (and systematically > disregarded) critique that economy is itself beyond calculation. As far as I can tell, almost all (or all) critiques of the possibility of planning assume that the planning must be *successful* in some large and sweeping sense. But there is no reason whatsoever to make such a demand. Why shouldn't there be numerous shortages and surpluses? Why shouldn't there be huge inefficiencies? The human species has gotten along so far with such inefficiencies -- and if we eliminate huge wealth plus a few other really gratuitous wastes of capitalism we should do quite well if the core economy operates at (say) 50% of capitalist effiiciency. Marx made many errors, but on one point he really was infallible: his refusal to write recipes for the cookshops of the future. And on that I'm willing to be sectarian and dogmatic: Anyone who demands or pines for such recipes is not a marxist -- by which I mean, one should not trust such a person not to turn one in to the cops or vote war credits. Carrol
