Re: [OPE] market socialism

glevy@pratt.edu

> The capital of the worker-controlled firm in Yugoslavia was social

> property. So there was no incentive for the members of the firm
to 
> invest in capital rather than wage payments (it might be ok
for young 
> workers, but the investment would penalize the older
workers). 

Hi Ian:

In actual fact, the
rate of re-investment by firms in Yugoslavia was rather
high and what
was feared  (worker-owned firms just increasing 
wages
rather than re-investing at an expanded rate) didn't really
materialize.
The role of the CP members working in these firms was
crucial in this regard.

>> According to David
Ellerman, the reason inflation increased was: (i) 
> high wages
and bonuses increased consumer demand beyond capacity, and 
> (ii)
the demand for loans to finance capital investment pushed up the 
> money supply. 

The small number of firms and
the relative lack of competition led
to oligopolistic markets in
Yugoslavia and profit-push inflation.

>  can
learn from the history of socialist market experiments. 

Well, sure. We should try to learn from all  historical
experiences, especially
revolutionary experiences and attempts to
build socialism (of course, these
are not necessarily the same).

In solidarity, Jerry

PS: please define 'natural rate of
interest' and also explain why the 'natural
rate of interest' is
'natural'. [ I am very suspicious of any economic or social 
claim about what is 'natural'.]

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