Re: [OPE-L] market socialism

From: Alejandro Agafonow (alejandro_agafonow@YAHOO.ES)
Date: Wed Apr 18 2007 - 13:44:40 EDT

Dear Jerry:
I did mean that I’m a market socialist who admires C&C work.
Well, there are at least two types of market socialists (I don’t know how to classify David Schweickart). Those who adopt the neo-classical subjective theory of value (Willet Roper, Oskar Lange, Henry Dickinson, Abba Lerner, Fred Taylor); and those who sympathize with or at least their position does not conflict with some premises of Austrian subjective theory of value (Karl Polanyi, Edward Heimann, Alec Nove, Domenico Nuti).
As I recently expressed it in another mailing list: the touchtone of the last one type of market socialism is a phenomenon experienced under capitalism and paradoxically pointed out by an Austrian, Joseph Schumpeter. It is what he called the evaporation of the material substance of property or what Neoclassical economists term the principal-agent theory. It is the break of the property and management of capital, where stockholders are prompted to hire managements and make them act profitably. What would happen if the State takes the place of the stockholders?
Concerning your observation that: Paul and Allin have made the point in the past that this has expression has often been mis-used (e.g. as a 
description of Lange's system).
It is true that Lange’s system implies a high degree of centralization and sure because of this it loses the dynamic property of rivalry. What turned him a market socialist was his undoubted acceptance of consumers’ freedom to choose –an elusive issue in classical Marxism­– and his vindication of subjective theory of value. Consider the following quotation:
The labour theory of value, however, is not adequate to the task [of rational use of resources]. If used as a basis for socialist planning and management, it implies neglect to economize scarce resources other than labour […] discrepancy between social and private marginal product, concepts well known to our welfare economics, but without counter part in the Marxian theory […] As long, however, as such principles are lacking, there are no theoretical criteria to determine the prices, “plan profits”, and planned output of products. Present Soviet economic theory does not yet provide an adequate guide for the management of the Soviet economy. This can be done only by incorporation into Soviet economics of the methods and techniques of marginal analysis. Oskar Lange, “Marxian Economics in the Soviet Union”, The American Economic Review, Vol. 35, nº 1, (Mar. 1945).
What have impressed me about C&C theory is the smart and unprejudiced integration of Oskar Lange in their feasible use of labour theory of value. In their theory, the central planner has to allocate labour time following the primary data of aggregated demand, so labour –to use a literary figure of Wicksteed­– is the handmaid of subjective preference.
Best regards,
Alejandro Agafonow

----- Mensaje original ----
De: Jerry Levy <Gerald_A_Levy@MSN.COM>
Enviado: martes, 17 de abril, 2007 14:43:20
Asunto: [OPE-L] market socialism

> I define myself as a Market Socialist that sees in Cottrell & Cockshott
> model a feasible solution of the economic calculation problem and a
> beautiful intellectual achievement.

Hi Alejandro A:
Are you claiming that Paul C and Allin are market socialists or that you
are a market socialists who admires their work?  And,  how do _you_
understand market socialism?   
In solidarity, Jerry

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