Re: [OPE] socialist planning in capitalist firms

The mail had been intended for the group and the first attempt to send it to the group failed.

There may be some merit in the issue about quality of goods, but even this is not clear.
Soviet equipment was frequently cruder than western equipment, but was more rugged,
reliable and easier to repair -- this is true of things like Jeeps, Helicopters agricultural machines.
But my point is that disputes about quality are completely dwarfed by the huge
quantitative effect of the economic chaos that resulted from the removal of planning.
The collapse of production that occured was unprecedented in the peacetime history
of any industrial nation, and its consequence on living standards was terrible.

What demonstrated the economic efficiency of GOSPLAN was the effect of its absence.
The criticisms made prior to 1989 about how much was wasted due to central planning
had the implicit assumption that a market mechanism would have done better --
there is no point making a criticism unless it is on the basis of proposing a better alternative.
Well the alternative was tried and it was a disaster.

You say that this was not the consequence of market socialism, well yes and no.
Clearly the end point can not be described as market socialism, but the set of changes
that went through under Yeltsin were already being prepared under Gorbachev and
were being prepared under the rubric of market socialism. And the initial measures
undertaken by the Gorbachev government were already destabilising the economy
prior to the coup and counter coup that brought Yeltsin to power.
________________________________________
From: ope-bounces@lists.csuchico.edu [ope-bounces@lists.csuchico.edu] On Behalf Of Alejandro Agafonow [alejandro_agafonow@yahoo.es]
Sent: Friday, June 11, 2010 1:13 PM
To: OPE List
Subject: Re: [OPE] socialist planning in capitalist firms

Paul, you seem to be a victim of the grandiloquence of Soviet quantitative indices. Trotsky’s warnings came true in that the blueprints produced by the GOSPLAN didn’t demonstrate their economic efficacy. Commodities were as a general rule worse the nearer they stood to the mass consumer, despite their unquestionable capacity to provide calories and shelter. That’s my point in referring to a bridge and a can of beans.

Also, your reply seems to be directed to capitalist market. Have you forgotten that you are discussing with a market socialist?

A. Agafonow

________________________________
De: Paul Cockshott <wpc@dcs.gla.ac.uk>
Para: Alejandro Agafonow <alejandro_agafonow@yahoo.es>
Enviado: jue,10 junio, 2010 19:20
Asunto: Re: [OPE] socialist planning in capitalist firms

The remark about sleeping under bridges is totally tasteless, in the centrally planned economy that kind of abject deprivation had been eliminated. In market russia it became rife, if you read articles on death certificates in thtf4fe 90s and see the rising number of deaths ydue to indeterminate causes closer inspection reveals many of these
to be bodies found abandoned inthe streets in the Russian winter.
It was a matter of people loosing centrally heated flats to die in shop doorways and parks. No doubt a minority of the population could now enjoy high quality goods like Mercedes or private jets, but for the majority there was a big decline in what they got.

You still seem to be repeating western arguments from the 1980s. Experiance should have taught us better now.
--- original message ---
From: "Alejandro Agafonow" <alejandro_agafonow@yahoo.es>
Subject: Re: [OPE] socialist planning in capitalist firms
Date: 10th June 2010
Time: 2:32:50 pm

If lose the bridge which uses to provide shelter to me and the can of beans which uses to feed me, of course my living standards and life expectancy will tumble. This is a triviality.

The real point at stake is whether I could be sheltered and fed by other and better means. Lionel Robbins was very clear about this. Recognising the provision of useful effects on behalf of GOASPLAN, he stated that the fundamental question is not whether plants can be built and managed with certain technical efficiency, but if using the resources of the community to build and manage factories those resources are being used more profitably than they could be used in any other way.

So again, the qualitative inputs provided by returns to management are essential to asses the opportunity costs of centrally planned socialism.

A. Agafonow

________________________________
De: Paul Cockshott <wpc@dcs.gla.ac.uk>
Para: Outline on Political Economy mailing list <ope@lists.csuchico.edu>
Enviado: mié,9 junio, 2010 00:49
Asunto: Re: [OPE] socialist planning in capitalist firms

I think you are evading the point, remove GOSPLAN and output living standards and life expectancy tumbled. you can not cover up the deaths of millions of people due to poverty and then claim that there was not a massive decline in real production of use values.

________________________________________
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: Tuesday, June 08, 2010 4:46 PM
To: Outline on Political Economy mailing list
Subject: Re: [OPE] socialist planning in capitalist firms

Since the original problem was to work out the marginal return on an input, i.e., marginal returns to management, we have to face the fact that we don’t really have an homogeneous unit of account to measure this input. We are not concerned with measuring it for the sake of measurement itself. If we have to take into account the diminishing quality of marginal returns to management and this hampers measurement, that’s just too bad.

Concerning your reference to GOSPLAN, I’m not sure if it is right to consider returns to management from the point of view of a “group of people responsible for controlling and organizing a company”, but from the broader point of view of the work needed to the “control and organization of something”. In this last sense, productivity was not so good in GOSPLAN as you have to take into account the hole labour force, not to speak of the artificiality of the USSR production given increasing inventories that nobody wanted.

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: sáb,5 junio, 2010 22:29
Asunto: Re: [OPE] socialist planning in capitalist firms

You would not get a clear distinction between inependent and dependent variables if you want to adjust the input for quality. Your definition of quality then is related to output. But the original problem was to work out the marginal return on an input.

Note too that you claims about diminishing marginal returns to management in the ussr are empirically dubious. When the top layer of management, GOSPLAN was removed in the early 90s, national output fell by some 40percent or more. Given that only a couple of thousand worked in GOSPLAN, say less than 0.01 percent of the soviet labour force, the marginal returns to management seem to have been enormously positive in practice.

________________________________________
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: Saturday, June 05, 2010 5:54 PM
To: OPE List
Subject: Re: [OPE] socialist planning in capitalist firms

But my point is that evaluating managerial inputs in person hours is not a good answer because you are not measuring the falling in managerial quality as a larger degree of centralisation goes by.

Likewise, as far as managerial inputs are produced inside the enterprises rather than externalising the production of every input, evaluation in money doesn’t seem the answer either. Hiring managers in a job market is not necessarily the same as buying managerial inputs.

The reaction of actual capitalist enterprises is trying to stop nearby the point of constant returns opening new factories/enterprises when it is possible, whichever the way of measuring managerial inputs is.

A. Agafonow

________________________________
De: Paul Cockshott <wpc@dcs.gla.ac.uk<mailto:wpc@dcs.gla.ac.uk><mailto:wpc@dcs.gla.ac.uk<mailto:wpc@dcs.gla.ac.uk>>>
Para: Alejandro Agafonow <alejandro_agafonow@yahoo.es<mailto:alejandro_agafonow@yahoo.es><mailto:alejandro_agafonow@yahoo.es<mailto:alejandro_agafonow@yahoo.es>>>; Outline on Politic al Economy mailing list <ope@lists.csuchico.edu<mailto:ope@lists.csuchico.edu><mailto:ope@lists.csuchico.edu<mailto:ope@lists.csuchico.edu>>>
Enviado: sáb,5 junio, 2010 16:01
Asunto: 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<mailto:alejandro_agafonow@yahoo.es><mailto:alejandro_agafonow@yahoo.es<mailto: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<mailto:wpc@dcs.gla.ac.uk><mailto: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><mailto:ope@lists.csuchico.edu<mailto: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><mailto:ope-bounces@lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu>><mailto: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>><mailto: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>><mailto:alejandro_agafonow@yahoo.es<mailto:alejandro_agafonow@yahoo.es><mailto: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><mailto:wpc@dcs.gla.ac.uk<mailto:wpc@dcs.gla.ac.uk>><mailto:wpc@dcs.gla.ac.uk<mailto:wpc@dcs.gla.ac.uk><mailto: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><mailto:ope@lists.csuchico.edu<mailto:ope@lists.csuchico.edu>><mailto:ope@lists.csuchico.edu<mailto:ope@lists.csuchico.edu><mailto: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>><mailto:ope-bounces@lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu><mailto:ope-bounces@lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu>>><mailto:ope-bounces@lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu><mailto:ope-bounces@lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu>><mailto: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>><mailto:ope-bounces@lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu><mailto:ope-bounces@lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu>>><mailto:ope-bounces@lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu><mailto:ope-bounces@
lists.csuchico.edu<mailto:ope-bounces@lists.csuchico.edu>><mailto: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>><mailto:alejandro_agafonow@yahoo.es<mailto:alejandro_agafonow@yahoo.es><mailto:alejandro_agafonow@yahoo.es<mailto:alejandro_agafonow@yahoo.es>>><mailto:alejandro_agafonow@yahoo.es<mailto:alejandro_agafonow@yahoo.es><mailto:alejandro_agafonow@yahoo.es<mailto:alejandro_agafonow@yahoo.es>><mailto: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>><mailto:jerry_levy@verizon.net<mailto:jerry_levy@verizon.net><mailto:jerry_levy@verizon.net<mailto:jerry_levy@verizon.net>>><mailto:jerry_levy@verizon.net<mailto:jerry_levy@verizon.net><mailto:jerry_levy@verizon.net<mailto:jerry_levy@verizon.net>><mailto: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>><mailto:ope@lists.csuchico.edu<mailto:ope@lists.csuchico.edu><mailto:ope@lists.csuchico.edu<mailto:ope@lists.csuchico.edu>>><mailto:ope@lists.csuchico.edu<mailto:ope@lists.csuchico.edu><mailto:ope@lists.csuchico.edu<mailto:ope@lists.csuchico.edu>><mailto: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 Fri Jun 11 11:04:32 2010