Re: [OPE] Socialist Calculation Debate / Bank of Sweden Prize in Economic Sciences

alejandro_agafonow@yahoo.es

Dear Gerald:

I am not claiming any merit based on the granting of the Nobel Prize. Not because I had something against it, but it is not totally true that there is a single doctrine that the Bank of Sweden privileges. For instance, there are laureates as different as Kantorovich, Hayek, Myrdal, Sen and Hurwicz. Of course, we could count how many laureates there are in each current of economics, and this could revel something.

What I am saying is that shielding in the old-fashioned Marxian hostility to utopians, after one hundred years of advancements in this direction, is not acceptable.

In relation to the article at Cepa.newschool about economic calculation, I read it some time ago and I was dissatisfied. For instance, is not true that Enrico Barone said that Socialist state could make the calculation. What he proved was that in theory it could, but to solve the system of equations indeed, it needs unavoidably rejects planning and trusts in the experimental solution of market.

«For the solution of the problem it is not enough that the Ministry of Production has arrived at tracing out for itself the system of equations of the equilibrium best adapted for obtaining the collective maximum in the well-known sense (to which we need not return). It is necessary to solve the equation afterwards. And that is the problem. […] The determination of the coefficients economically most advantageous can only be done in an experimental way: and not on a small scale, as could be done in a laboratory; but with experiments on a very large scale […] It is on this account that the equations of the equilibrium with the maximum collective welfare are not soluble a priori, on paper.» (Barone, 1908: 287-288. In Friedrich Hayek, [1933] 1975: Collectivist Economic Planning, Augustus M. Kelley, Publisher Clifton, USA.)

After all Barone and Pareto were Conservatives Anti-Socialists. On the other hand, this Cepa’s article has today inadmissible lack of precision, like the non-differentiation between static calculation upon which rests Lange’s solution and dynamic calculation that Austrians pointed to and that Dickinson and Lerner already had faced –Lange, Taylor and Durbin didn’t recognize this difference.

If you want a rigorous and fair exposition of the controversy, you have to wait for the translation of my: New Reading of the Controversy about the Impossibility of Economic Calculation in a Planned Economy. The Liberal-Socialist Perspective.

Unless you read Spanish.

Kind regards,
Alejandro Agafonow

----- Mensaje original ----
De: GERALD LEVY <gerald_a_levy@msn.com>
Para: Outline on Political Economy mailing list <ope@lists.csuchico.edu>
Enviado: domingo, 24 de febrero, 2008 16:21:51
Asunto: [OPE] Socialist Calculation Debate / Bank of Sweden Prize in Economic Sciences

Hi Alejandro A:

You seem to think that the "socialist calculation debate" was somehow 
decidedly settled in favor of the marginalists.  An independent
and fair evaluation of that debate will show, I believe, that is
_not_ the case. For example, for a kind of 'blow by blow' reconstruction
of that debate, see:
http://cepa.newschool.edu/het/essays/paretian/social.htm

Still less convincing is _any_ claim about the merits of a theory 
based on its advocates and/or originators receiving The Bank 
of Sweden Prize in Economic Sciences in Memory of Alfred Nobel!
For background of that prize, see:
http://archives.econ.utah.edu/archives/pen-l/2001m11.3/msg00108.htm
http://archives.econ.utah.edu/archives/pen-l/196m10.c/msg00022.htm

In solidarity, Jerry

[AA wrote:]
After one hundred years of Pareto & Barone’s thesis about the lack of computational capacity to manage a Socialist economy; after the development of the controversy about the impossibility of economic calculation developed by Austrian and Market Socialists economists; after the Nobel prize in economics granted on 2007 to Leonid Hurwicz, Eric S. Maskin y Roger B. Myerson because of the development of the “design mechanism theory”, that finds its forerunners in those debates; shielding with the handicaps of Marx’s work concerning guidelines for the management of a Socialist economy is not justifiable.

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