RE: [OPE] labor tokens and efficiency

On Wed, 6 May 2009, GERALD LEVY wrote:

> Assume there is a 'labor token' economy where for each hour
> you work you get a token which allows you to buy a good
> produced with one hour of labor.
>
> Now, since the question of 'efficiency' has been raised in
> a recent thread, please tell me why more efficient methods of
> production would be developed? Other things being equal -
> since everyone knows that one hour of labor producing one
> good is equal in terms of purchasing power to one hour of
> labor producing any other good - why would workers in
> enterprises introduce any method which raises productivity?

You just have to think it through.

Suppose enterprise A is producing MP3 players with a total
expenditure of of 8 hours of labour while enterprise B is
producing players of the same quality with a total expenditure of
10 hours. You're the planner. How do you "price" these items in
labour-tokens?

If you're not very clever (or just after an easy life) you price
them both at the average labour content, say 9 tokens, and let it
go at that. If you're brutal, you price A's output at 8 tokens
per player and B's at 10 tokens, and leave it at that, with the
result that nobody buys B's players and enterprise B gets wound up
in short order. If you're conscientious, you price them at
somewhere around the average but send out messages:

To A: "Look, enterprise B is struggling; please give them a clue
as to how to produce more efficiently."

To B: "Comrades, you're doing a fine job, but the folks over at A
have figured out an even better way of doing this. Could you
please check with them and see if you can get the hours per player
down a bit?"

At the end of the day (after this sort of socialistic tatonnment
has worked itself out), it will be the A enterprises that get the
new investment resources, and the Bs (if they fail to improve, or
to offer a compelling justification for their above-minimal labour
input) that get closed down.

Allin.
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Received on Wed May 6 20:35:06 2009