Re: [OPE-L] Question

From: Allin Cottrell (cottrell@WFU.EDU)
Date: Thu Apr 12 2007 - 21:51:33 EDT

On Wed, 11 Apr 2007, Howard Engelskirchen wrote:

> Allin, I now understand the point of your comments from your
> other posts of 4/9 and I agree with the analysis -- there is
> waste that is necessary and goes into the calculation of what is
> socially necessary.  The value of each dinner served embodies,
> if you like, an appropriate portion of the dinners thrown out.

Yes, that's exactly what I had in mind -- well put.

> On the point about need..., I'm not convinced.  You cannot make
> a difficult problem go away by stipulation.  Yes it would be
> nice if we could calculate need based on current levels of
> technology...

We're not making that claim.

The view on this topic that Paul and I hold came from thinking
about such issues as planning problems.  (When you solve the
planning problem, you can work back and see whether a capitalist
economy will produce a similar solution, or -- as is generally the
case -- a systematically worse solution.)

Here, we're saying that you should not confuse (a) the question of
how much labour-time it takes to produce a particular good,
assessed purely on the production side, and (b) the question of
"how much this good is wanted".  Our view is that you have to
measure both (a) and (b) but that you shouldn't conflate the two
things.  And that you let the people themselves "measure" (b).

This can be expanded by thinking of Marx's "lower stage of
communism" (Critique of the Gotha Programme), where workers are
paid in labour-tokens (one per hour worked) and can spend these
tokens on the available personal consumer goods.

Imagine that products are marked with their labour content (again,
assessed purely on the production side).  But if people "don't
much want" a particular good in a given period, its price, in
labour tokens, is set at a discount relative to the actual labour
content.  (We'd rather sell these goods and not waste them.)  On
the other hand, if a good is unexpectedly popular, its price in
labour tokens is set at a premium relative to the actual labour

Now we have two independent pieces of information: the labour
content as such, and the price in labour tokens that (roughly)
"clears the market" for the good.  The key point is that we can
use the _divergence_ between these two magnitudes to guide a
reallocation of resources.

For goods where the labour-token price falls short of the labour
content, we can say: people are not willing to spend out of their
personal allowance an amount of labour equal to what went into the
goods.  So we should produce less of them.  The labour going into
these goods is of less than average "use-value effectiveness".

If the market-clearing labour-token price exceeds the labour
content, this means that people are willing to spend more of their
own labour time to acquire the good that it actually took to
produce, so we should produce more of these.  At the current scale
of production the labour going into these goods is of greater than
average use-value effectiveness.

Notice the structure of the general idea here: we need two
independent sources of information.  That's why we're opposed to
"mashing together" the two criteria (the technical necessities of
production and the degree of social demand).  If you do that, you
get a magnitude that's neither fish not fowl, and hence useless
for solving the practical problem.


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