From: Ian Wright (wrighti@ACM.ORG)
Date: Tue Apr 24 2007 - 13:02:01 EDT
> In Cottrell and Cockshott's model the central planner or a > cybernetic devise has to take the place of prices but always needs have to > be satisfied postfestum, labour always would be the handmaid of subjective > preferences. As market socialists we could ask: So, why we have to take the > roundabout of labour accounting? Lets prices be formed. In my view there are two red herrings in this discussion: (i) the issue of subjective vs. objective theories of economic value, and (ii) the calculation problem. Market prices are objectively a method of labour accounting. The "market algorithm" is itself taking the "roundabout" approach of labour accounting. This process is the law of value. The classical economists were well aware of the existence of subjective preferences for use-values. But they were interested in explaining the natural prices that markets gravitate towards in markets for reproducible goods; hence their interest in objective theories of economic value. They did not deny, Marx included, that consumer preferences can be the tail that wags the dog. But why would such considerations "vindicate" a subjective theory of value? The weakest part of analytical Marxism, in my view, is its attitude toward the theory of economic value. As a computer scientist I have lots of options if I want to solve a large system of simultaneous equations for prices and quantities given a technique, direct labour coefficients and final demand. A less well-known option is to numerically simulate a market, with flows and stocks of money and goods, expressed in terms of a set of non-linear differential equations, i.e. a dynamical system. Such a system rapidly converges to a stable state, which turns out to be the solution of the original system of simultaneous equations. So markets solve the calculation problem in a distributed manner. Or, one could "beat the market" and solve the calculation problem much faster in simulation. The information inputs in both cases include the level of final demand. In my view, the more important issue of whether markets encourage efficiency, or some new technology encourages it, is what the socialist firm will look like, how it is financed, how its revenue is distributed, and what democratic mechanisms exist for freeing parts of the economy from the "realm of necessity", including control over the length of the working day. Alejandro, why are you "liberal" about the kinds of institutional setups are allowed in market socialism, and why do you think, for example, that an economy of workers co-operatives is insufficient? Best, -Ian.
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