> As SA (I think) said last time we talked about this, the problems of
> organising a whole economy are totally different from those involved
> in managing public production in a generally capitalist economy.
>
Yes, the last time we talked about this, I described this as a fallacy of composition - the idea that planning a whole economy is just a bigger version of planning a single entity within a market economy (e.g., a library, a corporation, a national health service). It occurs to me now that this is *exactly* the same fallacy of composition that neoclassical macroeconomists underwrite when they try to analyze a whole economy as just a simple aggregation of individual decisions by economic agents.
In reality, the macroeconomy is a complex system whose dynamics are nothing like the dynamics of individual decision makers. To take an example I saw recently: as a partial equilibrium analysis it's reasonable to say a rise in the price of bread will necessarily lead to a smaller quantity of bread demanded. But in the complex system of an economy, a rise in the price of bread not only causes agents to demand less bread, it also increases the income of bread producers, which could cause them to demand more bread; depending on the distribution of preferences and endowments, the net result could be an increase, not a decrease, in the total quantity of bread demanded.
Likewise, as I said last time, public library managers in a market economy can simply take the market prices of books, supplies, labor, etc., as given and make their decisions accordingly, in light of their budget. But in a planned economy, adding a public library means having to recalculate a multimillion-line input-output matrix for the whole economy, whose results will depend on the accuracy and timeliness of a staggering amount of data concerning millions of separate individual enterprises and commodities. It's not *at all* a merely bigger version of the problem facing library managers in a market economy.
SA