RE: [OPE] Socialism & Altruism

> Could you explain the problem of **internalities and Departmentalism**?
 
Hi Alejandro:
 
'Internalities' are third part effects caused by an indifference to the social and
aggregate effects of the decisions made by enterprises. They are similar
in a sense to externalities but arose within many former 'socialist' nations,
most notably, the former USSR. Chernobyl might, perhaps, be the most
famous and tragic instance of internalities. They are referred to widely in
the literature on socialist economics. See, for example, the writings of the
late Alec Nove.
 
"Departmentalism" was experienced in Hungary when the New Economic
Model (NEM) was policy. It refers to a self-serving policy of
enterprises in a socialist nation where managers of those firms lobby
the government for special privileges and benefits. So, it is related to
the issue of internalities: both arise because the particular interest of individual
enterprises may be at variance with social needs and have negative social
consequences. Janos Kornai - and Nove - wrote about this. The larger
concern for Kornai was that some of the policies of the NEM turned out to be
at variance with fundamental socialist principles (or, at least, goals) of solidarity
and equalit, etc.. The NEM - as you must know - was one of the most
important historical experiences with 'market socialism'. Anyone who is
interested in market socialism would be well served by examining the experiences
in Hungary, Yugoslavia, and other nations which attempted to implement
that perspective. These historical experiences are, imo, far more germaine
to the topic of market socialism than debates on economic calculation et al.
 
In solidarity, Jerry

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Received on Fri Jan 16 19:31:02 2009