Re: [OPE] market socialism

From: Ian Wright (
Date: Wed Jul 02 2008 - 17:28:38 EDT

> How often does a real rate of interest correspond to this 'natural
> rate'.
> I would submit that the determinants of the real rate have no mechanism
> to bring it into line with the natural rate.

I am sure you are right. But a socialist economy might be able to
determine the natural rate and have macroeconomic mechanisms to ensure
that the actual rate of interest conforms to it. In which case,
cash-rich co-ops lending to cash-poor co-ops would not entail exploitation.

The concept of a "natural rate of interest" is Pasinetti's. It's based
on the labour theory of value. Here's a paper of his that defines and
explains it, in particular how it implements "commutative justice":

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