> > What people really mean when they argue that markets are necessary,
>> or more efficient, is that such an incentive system is necessary, or
>> more efficient, as part of a social economy.
>
>Not exactly. Soviet planners used wage levels as incentives, though I
>suppose some state cap type would say "I told you so" on that news. A
>lot of people who argue that markets are necessary do so because
>planners can't know everything about the present much less the
>future, so some kinds of decentralized adjustment mechanisms are
>necessary. I really don't want to set off another market vs. plan
>debate though.
You make it sound as if such a debate is bad thing. I can't fathom what the danger might be.
But then, I'm a bit dense. I can't immediately comprehend what you are getting at above about the Soviet system using wages as an incentive. So what? However your argument that:
"people who argue that markets are markets are necessary do so
because planners can't know everything about the present etc"
avoids the issue. Market economies are not entirely unplanned obviously and their plans are no more perfect than non-market plans. The main difference is they have a different objective, profit. As opposed to satisfying needs.
If centralised planning turns out to be less efficient than decentralised planning though, I can't see any fundamental reason why an economy prioritising human needs can't also make use decentralised planning. But I can see why a market economy can't prioritise human needs. So no matter how efficient it might be, a market economy can only accidentally maximise the satisfaction of human needs, since profit rather than the satisfaction of human needs is the imperative.
Any such accident would be an abberation though. Markets are a system designed to efficiently manage unavoidable scarcity, particularly to create an elite with an incentive and capability to improve on productive capacity, despite current scarcity. (That is harder to do if 100% of people are cold and starving.) In the absence of scarcity, markets are highly inefficient, in that they tend to artificially create the scarcity they need to function. A saturated market is an unprofitable market, leading inevitably to stalling in the chain of supply until a state of scarcity sufficient to restore profitability returns.
So long as the means of production is materially incapable of saturating the market, then markets make rational sense, but otherwise it seems insane to continue using a mechanism which is inherently incapable of realising the potential of the means of production to satisfy human needs. The rational thing in that situation is to put markets out to pasture and move to a socialist system of distribution. Perhaps, at worst, maintaining some parallel market-based distribution system for whatever goods and services the means of production is incapable of producing sufficient to satisfy demand. (If simple rationing of a few peripheral goods and services in scarce supply proves less efficient, which is a dubious proposition.)
Opps, looks like you've set off another market debate. ;-) At least its not a market vs planning debate though, if that's any consolation. This is the real deal, market vs socialism.
Bill Bartlett Bracknell Tas