>>“Command economy.” It’s interesting, because the term was coined by
>>bourgeois opponents of socialist economics. If what people mean by
>>“command economy” is that a bunch of bureaucrats just issue arbitrary
>>orders and directives, without any regard for the objective requirements
>>of social production, it’s an absurd proposition. If economies were run
>>according to the whims or best intentions of bureaucrats, they would
>>indeed fall apart. Economies are complex phenomena that obey certain laws.
>>
>>In this era of world history, economic development will be guided by one
>>of two economic mechanisms: either by the law of value, with the
>>production of exchange value and surplus value dominating production and
>>the labor process; or by conscious social planning carried out to in
>>accordance with the interests of the world revolution.
>
>
>Well, there is such a thing as transaction cost economics (TCE) of which
>the writer seems blissfully oblivious. The basic aTCE argument goes as
>follows: there is a cost to every business transaction carried under a free
>market condition (e.g. surveying the market, drafting and enforcing
>contracts, dealing with contingencies, etc.); the more complex the economy,
>the more transaction it requires, and thus the higher the transaction cost;
>transaction cost can be substantially reduced, inter alia, by
>"organizational hierarchies" (TCE lingo for planning; ergo - in complex
>economies large monopolistic organizational structures can be more
>efficient than free markets.
>
>
This is mot a correct description of TCE (more or less invented bt Ronald Coase, in his paper The Problem of Social Costs, and pioneered by Oliver Williamson; Joseph Stiglitz,k to refer to someone who is closer to us than these guys, uses a lot of TCE). TCE emphasizes that _every_ transaction has costs, not not market transaction in free market economies, and drawing the proper boundary between the firm or enterprise and the market is a tricky question. At some point the TC can be minimized by drawing in the boundary in a particular place, which is supposed to explained why firms are the size they are, why, for example, the large corporatuion can be efficient enoughto survive. But Lotta and Windy Storm (unfortunate tag) would put the entire economy inside the firm, making the whole thing one big GM or ATT. TCE suggests that decision woukd have catastrophic efficiency costs,
jks
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