Ulhas
----- Original Message ----- From: <JKSCHW at aol.com> To: <lbo-talk at lists.panix.com> Sent: Saturday, April 22, 2000 10:42 AM Subject: Hayeking
> Second, the point about markets is true, and the deeper point is that
the
> question of design of social institutions has to be comparative. In view
of
> that we have to look at the balance of costs and benefits involved in
> markets versus other inntiututional forms of allocation.
>
> However, Hayerk';s point is that you cannot even do the analysis unless we
> have a reasaonably accurate way of ascertaining costs. He argued that of
the
> institutions available, markets were necessary to provide the incentives
to
> get that information, aggregate it, and create incentives to act on it.
You
> may not agree, but you need a plausible story about what other
institutions
> we have or might have that could do at least as good a job. Doug D said,
> "nearly right will do," and that is right too. Hayek's point is the for
many
> purposes, competitive markets are a lot more nearly right that any
> alternative, and no other alternative is nearly right enough.
>
> I have yet to see a story about what Jim D called (was it here or on
Pen-L?)
> democratic decentarlized planning that even looked remote credible.
Cockshott
> & Cotrill have a credible effort; other attemts have been made by Mandel,
> Albert & Hahnel, and Pat Devine. I don't think any of them are adequate.
>
> I don't mean planning never works. We know planning works better in some
> areas, health care, for example. But that doesn't mean it works better
> globally. This is the reply to the objection that corporations plan
> effectively. They do, but in a market context. Take away that context and
the
> incentive to get things right, and the planning is not so effective. That
is
> what is wrong with monopoly, and why we have antitrust laws.
>
> Likewise with the point, due to Doug D, that markets create incentives to
lie
> about available capacities and needed resources. Quite true. But they also
> create systematic incentives for individuals who would profit by the
> information get find out the truth and publicize it. The question for
> pro-planners is, what are the analogous incentives that a planning system
> would have? The lying problem was pervasive in centarlly planned
economies.
> Yoshie says that class power creates incentives to lie, and that is true.
But
> the market punishes lies in the end, as the dot.com sector just found out.
> What punishes lies in a planned economy? Thus Yoshie is correct that we
need
> the hard budget constraint of bankruptcy and failure to make an economy
work.
> That ain't a bug; it's a feature. Surely she does not want wasteful
> enterprises taht produce nothing that anyone wants using up resources in a
> socialist economy?
>
> Doug D and others empahsized that some of what counts as waste in
capitalsim
> might a benefit in socialism, for example more leisurely work conditions.
> True, but Hayek's point is more abstract and deeper than that. He contends
> taht the problems with planning lead to waste by socialism's criteria.
People
> produce stuff that no one wants because no one has found out accurately
what
> people do want. They have wasted their own time and the resources that
they
> used making the stuff. Surely we would want more leisure. But that would
call
> for more efficient production with less waste, less necessary worktime, so
> instead of goofing off at hated jobs, we could work less time at jobs we
> liked and have more real free time. But this requires accurate information
> about wants, costs, and resources. This is why Gorden's point that the
> problem with efficiency is that it doesn't say anything about what's
coming
> out the end is quite misguided. Efficiency does not tell us what to
choose.
> It allows us to choose intelligfently according to our other values. If we
do
> not know about costs and waste our resources, we cannot effectively
promote
> the values we care about.
>
> Finally, Carroll assues us, in classical Marxist purity, that it is
utopian
> and silly to think about hwo a future socialist society might be organized
to
> attain its goals. Marx thought that, but he was wrong. We knwo know a lot
> more than Marx did about how a socialist society can screw up. More to the
> point, thew orking classes of the world know that too, and they will quire
> rationally refuse to surrender their paltry birthright of wage labor for a
> mess of of undefined pottage at the end of the Historical Process.
>
> People should reread the essays in Individualism and the Economic Order--a
> great book, as I said, of socialist economics, and quite accessible.
>
> --jks
>