<< What's wrong with prices as a signalling mechanism for democratically
planned societies to choose between alternatives? This, as I understand
it, is the crux of Hayek's critique - planned economies don't have price
mechanism to allow them to accurately determine the costs and benefits of
varying proposals. The Albert/Hahnel model (and possibly others) is able
to generate these kinds of prices based on the production and consumption
plans sent in by each workplace and consumer.
>> Among the other problems with the A-H model, people and production units will lie about their needs and capacities, overstating what they want and understating what they contribute. They will also misestimate how much they need in the future even if they are trying to be honest. Moreover, even they estimate correctly based on present conditions, conditions will have changed by the time the plan is implemented so that the estimate is no longer accurate. Furthermore, the need to get things through the plan will stifle innovation, since a better production method will be resisted if it means, as it will, inconvenuencing something agreed upon by ripping up all the previous estimates; innovatuionbs will have to wait until the next cycle, when they will have to be introduced at once together, creating new uncertainties in the plan and leading to new wrong estimates.
All this is elementrary Hayek. I have been around the block with this with Hahnel, but I don't think either of us were satisfied with the response of the other.
--jks