[lbo-talk] Anarchy of production (was Hayek)

[c b]

Pricing is about effluence in the root sense of not wasting resources.
If stuff, including labor, is priced to high, people will use less of
it than they should get get the results they want, which means
hoarding, bottlenecks of resources, systematic lying about capacities
and needs, and overwork. If things are priced too low, people will use
too much that could be used for other things, hoarding will be
encouraged against times of higher prices, lies about needs and
capacities will proliferate, and people's time will be wasted having
more people than necessary working more on jobs that require less work
and less time. Getting the prices rightbisvthevrootbof economic
rationality.

^^^
CB: Marx and Engels critique of this would be that a main waste formed
by of capitalism results from anarchy of production, or lack of
coordination of the parts at the level of the whole  Anarchy of
production
is the result of the  each private enterprise producing not in
coordination with the other private enterprises. The pricing mechanism
cannot get around the lack of fit between supply and demand that
results because the lack of fit derives from the total number of
enterprises in society, their competitive relationship to each other
etc, which are not impacted by the pricing sufficiently to avoid the
resultant lack of fit between supply and  demand , and further
resultant waste in overproduction.

Capitalist crises of overproduction are the result of anarchy of production.

The fundamental contradiction of capitalism is :

"This contradiction, which gives to the new mode of production its
capitalistic character, contains the germ of the whole of the social
antagonisms of today. The greater the mastery obtained by the new mode
of production over all important fields of production and in all
manufacturing countries, the more it reduced individual production to
an insignificant residuum, the more clearly was brought out the
incompatibility of socialized production with capitalistic
appropriation.... "

"...Finally, modern industry and the opening of the world-market made
the struggle universal, and at the same time gave it an unheard-of
virulence. Advantages in natural or artificial conditions of
production now decide the existence or non-existence of individual
capitalists, as well as of whole industries and countries. He that
falls is remorselessly cast aside. It is the Darwinian struggle of the
individual for existence transferred from Nature to society with
intensified violence. The conditions of existence natural to the
animal appear as the final term of human development. The
contradiction between socialized production and capitalistic
appropriation now presents itself as an antagonism between the
organization of production in the individual workshop and the anarchy
of production in society generally.

http://www.marxists.org/archive/marx/works/1880/soc-utop/ch03.htm