[OPE-L:2466] Re: welfare functions

From: clyder (wpc@dcs.gla.ac.uk)
Date: Thu Mar 02 2000 - 05:11:12 EST

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----- Original Message -----
From: Duncan K. Foley <foleyd@cepa.newschool.edu>

> Why shouldn't a socialist economy establish by democratic political
> processes a social welfare function expressing its social priorities, and
> find and use the shadow prices that arise from maximizing this welfare
> function subject to resource availability constraints to allocate
> resources? In general these won't be proportional to embodied labor
> coefficients, especially if the social welfare function puts some weight
> the consumption of future generations (which I suppose a socialist society
> would do).

How do you turn this into an operational procedure. How do you define a
social welfare function?

Please clarify why you think the shadow prices would deviate significantly
from labour values. I think I can guess at your reasoning but please be

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