Efficiency

Mathew Forstater forstate at levy.org
Mon Aug 10 17:52:57 PDT 1998


Brett- I reject the concept of "efficiency" as defined in neoclassical economics. It means something more (or less, depending) than the everyday usage of the term. Same with "rationality" and many other terms. I also don't believe that an alternative should be based on the neoclassical concept of "efficiency." In fact, I think that the failure of some attempts at alternatives were at least in part due to adherence to things like the neoclassical notions of "efficiency" "optimality" and "rationality." I think the critique of capitalism and the argument for an alternative should include discussions of things like "justice" "equality" "community" etc. best, Mat

Brett Knowlton wrote:


> I've decided to put in my 2 cents here. I think this is a little unfair to
> Max. There is nothing wrong with the concept of efficiency. If you have a
> certain amount of batter, its better to get 5 pancakes from it than only 3,
> keeping other things constant. It seems that this is really Max's point.
>
> I agree that the right uses "efficiency" as an excuse to ram its agenda
> down our throats - cutting welfare and social services generally, trying to
> privatize social security, etc.
>
> But just because they've usurped it for this purpose doesn't mean we should
> throw out the concept, does it? If capitalism is ever successfully
> replaced with something better, we should use efficiency as one criteria
> (among many, and not necessarily the most important criteria) in evaluating
> alternative economic visions.
>
> In fact, I've found that "efficiency" is usually one of the most common
> reasons given for opposing an alternative to capitalism. Capitalism is
> seen as somehow ruthlessly efficient, that the free market ensures every
> penny is spent "optimally," or "efficiently" (although most people can't
> really expound on what optimal or efficient mean). Capitalism has its
> flaws, they may admit, but everyone would be poor in YOUR society.
>
> In this sense I think its very important to 1) have an alternative vision,
> and 2) be able, in a broad sense, to make the argument that a) capitalism
> isn't as efficient as all the economist claim it to be, and b) that
> alternatives to capitalism could come close to or even surpass the level of
> economic efficiency we have now.
>
> Brett



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