>I'm not a big fan of capital markets.
That's not the issue. The issue is the behavior of prices in financial markets, which are a poor informational guide to capital allocation because of noise and overreaction. One reason financial market prices are interesting is that they're almost completely unregulated and float with almost no hindrance: i.e., they're a pure laboratory for the markets-as-information position. And they don't pass the test with flying colors.
>I think we need markets for stuff like CDs and
>toothpaste and food and clothes and books and toys
>(adult and other). The notion that Bill and Ernest
>Mandel have that you plan from last year's demand
>doesn't take account of the fact that both supply and
>demand changes. As does technology and production
>methods. I mean, look at this Asian dissster, for one
>thing, it would fuck up your five year plan real good.
Some stuff sells, other stuff doesn't sell. But that's mostly volume information, not price information. If unwanted inventories pile up, something's wrong. Even Soviet planners noticed things like that.
Capitalists plan the future based on the past. They do market research to see what products people want, how they use them, etc. There's no reason a socialist regime couldn't do the same. The role of prices is often exaggerated. iPods are the most expensive MP3 players around, but they're also the most popular. What does that tell us? Pricing often bears no relation to costs of production; how much do you think it costs to assemble that iPod in China?
We live in a world saturated with markets. We could use more social planning, not less. Prices aren't much help in planning a post-fossil fuel future, nor are they much help in getting people housed or providing health insurance. We're not about to contemplate mass conversion to central planning, so I don't see this debate as all that urgent.
Doug