Re: [OPE-L] how can you calculate efficiency?

From: Gerald_A_Levy@MSN.COM
Date: Fri Apr 01 2005 - 08:44:50 EST

> I also gave a skeptical analysis of the possibility of market-based
> calculation of  efficiency in a recent book:
> The Perverse Economy: The Impact of Markets on People and Nature (NY:
> Palgrave,  2003).

Thanks for the reference, Michael P.

Rick Wolff's critique, though, was not directed at just a market-based
calculation of efficiency.  Rather, it was directed at the very concept of
believing that one can calculate efficiency on either the micro or macro
levels.  His critique is Althusserian -- he claims that the idea that one
can quantitatively calculate what is more or most efficient requires a
"rigidly and simplistically determinist view of the world."  From Wolff's
perspective ("an overdeterminist view of the world"),  the determinist
concept of efficiency is "absurd" because:

          "... any one act, event, or institution has an infinity of effects
          now and into the future.  There is no way to identify, let alone
          to measure, *all* these consequences. No efficiency measure
          -- in any comprehensive, total, or absolute sense -- is possible.
           (emphasis in original, JL).

If, then, there are "an infinity of causitive influences"  it is folly to
claim that the "effects" can be "conceived as resulting from *only* the
one act, or event, or institution chosen for the efficiency analysis."
Wolff  also challenges, then, the selectivity used in efficiency analyses:
it is not possible or legitimate to "*select*  a few among the many
effects they attach to any particular act, event, or institution whose
efficiency they choose to determine."   Wolff claims that efficiency
studies then assert a "hegemonic principle of selectivity."

* Do you and others on the list agree with this perspective? *

Thus, in contrast to Michael P's critique of market-based calculations
of efficiency,  Rick's critique is grounded in his "overdeterminist view
of the world"  and could be equally applied as a critique of calculating
efficiency in non-capitalist modes of production.  His critique, for
instance, could be extended to a critique of the quantitative planning
methods employed in the USSR and other 'socialist' nations. (I haven't
yet read _Class Theory and History: Capitalism and Communism in the
USSR_, the book that he co-wrote with Steve Resnick, so I don't know
whether he did in fact extend that critique as part of his analysis of that
historical subject.)   For instance, he might claim that the "planners"
(and the CPSU leadership) had a determinist and authoritarian
perspective and that this (hegemonic?) perspective was reflected
in the mathematical optimization models employed by Kantorovich,
et. al..   Indeed, the same critique in his paper might be extended
to a critique of a position that efficiency can be calculated with any
degree of precision within any current or *future* post-capitalist

*  Would this be a valid critique of planning in the (former) USSR
      and the COMECON nations?*

*  Should efficiency studies be used to help determine the 'best'
      policy options in a socialist society*

While most of Rick's paper and presentation was focused on the
context of efficiency studies used as part of cost-benefit analysis,
this same critique could also be used against the claims made in
just about all econometric studies about what those studies 'show'.
What exactly do econometric studies show?  Don't they also
employ the selectivity that Wolff was critical of?

* If the claims of econometric studies about what they show are
    overstated,  is there a legitimate reason for conducting those

Rick in his talk claimed that it would take "several lifetimes"
to be able to know what the (ex post) effects of a particular
action are.

* If that is the case, is that an argument for passivity?  For instance,
    if we can never know what the total social consequences of a
    political action such as attending a demonstration are then could
    that be made into an argument for not attending the demonstration
    to begin with?  Indeed, how do we know ex ante whether our activism
    might on balance worsen the condition of the working class ex post?
    If we can never know the total consequences of economic policy, is
    that an argument for policy agnosticism or apathy?*

Rick's talk was challenging, lively, and entertaining.  While agreeing with
his challenge to cost-benefit analysis, I  not convinced of his "view of the

* Even if we can't ex ante know all of the consequences of a
     action/policy, we should in many cases be able to determine 'enough'
     for us to take action/endorse a policy, shouldn't we?*

* Is the debate  about whether we can determine/quantify  all of the effects
    similar to the debate about how many angels can dance on the head
    of a pin?  I.e. is it trivial?; is it relevant? *

In solidarity, Jerry

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