There are, however, two points that I would like quickly to address. The debate whether the Soviet style socialism was substantially different than capitalism is not just quibbling over technical details - it touches a much more fundamental question whether a classless society is possible in an advanced economy. The convergence view, to which I subscribe, suggests that the division of labor that is a necessity in advanced economy will inadvertently lead to class divisions (on that, see a book by Konrand & Szeleneyi "Intellectuals to the road of class power" - which studies the emergence of new class structure in socialist countries.) So a logical consequence of that view is that "classless society" is not possible in any society where a division of labor is a necessity. The Soviet economy proves that point quite persuasively, as they deliberately tried to abolish class divisions only to see a new one emerging.
This view has certain theoretical and practical consequences. Among the former is that studying social relations can be far more fruitful in explaining social organization of the economy than studying economic properties of transactions and commodities. Among the latter is that the struggle for social justice should focus not on a revolution but on continuous effort to keep the inevitable divisions of labor from turning into imbalances of class power (which we are now witnessing) - but that is a subject for a much longer discussion.
While we are at that, you may find it useful to check literature on the convergence theory popular in the 1970s which addresses structural similarities between socialist and capitalist economies at some length.
The second point is that methodological individualism, which is an unfortunate outcome of "physics envy" in social sciences is a dead end. It tries to explain something that needs no explanation - that humans are by nature social creatures and human collectivity is as natural as fish swimming in the water. Indeed, trying to "explain" how individuals "choose" to form a society - which is a defining trait of neo-classical social and economic theories - is as productive as trying to explain how fish learn to swim. Both are based on false assumptions about the subject they study and thus lead to obfuscations i.e. trying to explain something that is a natural order of things by convoluted theoretical constructs whose main purpose is saving the dubious assumptions from empirical refutations (on that see Imre Lakatos, "The methodology of scientific research programmes") The pseudo-science of economics (with the exception of macro economics and national accounting) is a prime example of such obfuscation.
So from that pov, any inquiry into the nature of economic transactions and behavior should start with the inquiry into social organization of production and consumption. That is, the right question to ask is not "What makes goods non-rival and non-excludable" but rather "How do societies make some goods non-rival and non-excludable." All so-called 'economic' properties of goods are social constructs that have little to do with the physical characteristics of these goods.
A good example is that today we witness unprecedented in human history abundance of resources - a true age of plenty and almost unlimited supply of many goods. Yet we are led to believe that there is profound scarcity of resources and forced to compete for these supposedly scarce resources - from schools and hospital beds to housing, food etc. We are forced to choose whether we should build a school or a train station, whether we should "bring" more jobs or provide social safety for retirees, whereas we can have both and much more. We were conditioned into rivalry by social organization of the economy that serves the plutocrats at the expense of everyone else, and pseudo-science manufactured by their intellectual whores in the departments of economics and business telling people that we have profound scarcities of resources in the era of plenty and we must make "rational choices" based on a "sound business model."
The bullshit nature of these claims become obvious if we consider an obvious historical fact that many societies build more with less without pseudo-rational "business models" "economic rationality" and similar nonsense. Entire cities, industries, railroads, canals, infrastructures etc were built in the times were we had far fewer resources than today. Yet today we are led to believe that there is not enough resources to fix crumbling roads, bridges and water mains, or even to maintain escalators in the DC metro system. Obviously, such beliefs have nothing to do with physical reality - they are in fact squarely contradicted by physical reality. They have everything to do with the social organization of economy in which the power of plutocrats is maintained by the divide and rule policies and unprecedented propaganda deluge creating and maintaining delusions that legitimate the status quo.
So studying mainstream economics is by and large not only useless but counterproductive and detrimental to creating universal prosperity. The main purpose of this pseudo science is to create a delusion that we have scarcity amidst plenty and we need to make "rational choices" (read: compete against one another to allocate these supposedly "scarce" resources) or better yet - delegate making these "rational choices" to the class of professional managers who "know better." The sooner we abandon this delusional thinking, and the sooner we realize that we have enough resources to create universal prosperity if we send those who currently control and restrain them against to reeducation camps where they can learn virtual of hard labor - the better we will be as society.
The emperor has no clothes - all that is just smoke and mirrors.
On Thu, Apr 7, 2011 at 12:52 PM, Julio Huato <juliohuato at gmail.com> wrote:
> The list should know that I've been addressing each of the issues
> Wojtek raised in his thoughtful comments to my blog post on socialist
> planning and scale. Here are the links to my replies: