Re: [OPE] socialist planning in capitalist firms

It obviously makes a big difference whether you evaluate managerial input in person hours or in money, given the rapid growth of managers pay. I can quite believe that in money terms there may be decreasing returns to management

--- original message ---
From: "Alejandro Agafonow" <alejandro_agafonow@yahoo.es>
Subject: Re: [OPE] socialist planning in capitalist firms
Date: 5th June 2010
Time: 10:44:37 am


Paul, I’m afraid that productivity, i.e., output in terms of goods per unit of labour, can not be arithmetically treated to determine if under conditions of productivity growing faster than logarithmically it would outmount decreasing returns to management.

To be arithmetically treatable, we would have to reduce managerial inputs and goods or services per unit of labour, to a common unit of account. Then, we would be able to compare them in order to determine if under conditions of productivity growing faster than logarithmically, it would outmount decreasing returns to management indeed.

The crucial point is whether we can find a unit of account for managerial inputs able to measure them according to the quality of their contribution to production? We can imagine a situation where though facing conditions of productivity growing faster than logarithmically, managerial inputs are reducing their effectiveness in running production and distorting the whole system.

A. Agafonow


________________________________
De: Paul Cockshott <wpc@dcs.gla.ac.uk>
Para: Outline on Political Economy mailing list <ope@lists.csuchico.edu>
Enviado: lun,5 abril, 2010 21:36
Asunto: Re: [OPE] socialist planning in capitalist firms

Ok but are the costs of management polynomial, logarithmic or log linear in scale of production. First approximation indicates managment to be log linear in number of people employed, but if productivity of labour rises faster than logarithmically with number employed ( not a steep demand ) then there would be no decreasing returns in your sense to managerial inputs.
________________________________________
From: ope-bounces@lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu> [ope-bounces@lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu>] On Behalf Of Alejandro Agafonow [alejandro_agafonow@yahoo.es<mailto:alejandro_agafonow@yahoo.es>]
Sent: Monday, April 05, 2010 12:25 PM
To: Outline on Political Economy mailing list
Subject: Re: [OPE] socialist planning in capitalist firms

Do you mean Paul backed by empirical research? The phenomenon of diminishing returns to scale in production is backed by empirical research, though diminishing returns to management may have motivated less empirical inquiry. However, to think the world as one where there are only constant or even increasing returns to scale and management is like thinking in a world without friction.

A. Agafonow

________________________________
De: Paul Cockshott <wpc@dcs.gla.ac.uk<mailto:wpc@dcs.gla.ac.uk>>
Para: Outline on Political Economy mailing list <ope@lists.csuchico.edu<mailto:ope@lists.csuchico.edu>>
Enviado: lun,29 marzo, 2010 20:52
Asunto: Re: [OPE] socialist planning in capitalist firms

how much of this is theory and how much is backed by quantitative research
________________________________________
From: ope-bounces@lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu><mailto:ope-bounces@lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu>> [ope-bounces@lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu><mailto:ope-bounces@lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu>>] On Behalf Of Alejandro Agafonow [alejandro_agafonow@yahoo.es<mailto:alejandro_agafonow@yahoo.es><mailto:alejandro_agafonow@yahoo.es<mailto:alejandro_agafonow@yahoo.es>>]
Sent: Monday, March 29, 2010 6:07 PM
To: Outline on Political Economy mailing list
Subject: Re: [OPE] socialist planning in capitalist firms

Diminishing returns to management are yield rates that after a certain point fail to increase proportionately and start to decrease to additional outlays of management. Should certain degree of centralization reached this bureaucratic inefficiencies start to increase disproportionately.

A. Agafonow

________________________________
De: Gerald Levy <jerry_levy@verizon.net<mailto:jerry_levy@verizon.net><mailto:jerry_levy@verizon.net<mailto:jerry_levy@verizon.net>>>
Para: Outline on Political Economy mailing list <ope@lists.csuchico.edu<mailto:ope@lists.csuchico.edu><mailto:ope@lists.csuchico.edu<mailto:ope@lists.csuchico.edu>>>
Enviado: jue,18 marzo, 2010 15:09
Asunto: Re: [OPE] socialist planning in capitalist firms

> So, what does make conflicting interests in capitalist economies more
> powerful than conflicting interests in socialist
> economies that prevent the former to go further in a centrally capitalist
> economy?


Hi Alejandro:

The profit system. Also, while there can be conflicting interests in a
socialist system, there can and should be
a certain level of coordination among different producers. For instance,
consider how the diffusion of new
technologies is often retarded by the system of proprietary rights, such as
the patent system, under
capitalism. This incredible inefficiency would (or, at least, should) be
overcome in a socialist system where
producers would share knowledge about technologies. In any event, there
wouldn't be the same people vs.
profit equation in which the requirements of the latter trump the former
under socialism.


> Nothing in my criterion. Therefore the issue of diminishing returns to
> management.

What do you mean by diminishing returns "to management"? There can be - and
are - bureaucratic
inefficiencies wherever there are bureaucracies. A capitalist corporation is
an inherently
bureaucratic and hierarchical organization and there are many inefficiencies
that arise from
this.

In solidarity, Jerry

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Received on Sat Jun 5 10:03:38 2010