RE: [OPE] market socialism

From: GERALD LEVY (gerald_a_levy@msn.com)
Date: Sun Jun 29 2008 - 16:16:54 EDT


> Is there any problem with consumer sovereignty as JERRY think- having 
> all the provisos we foresee and these mild inequalities? Of course there 
> is not.
 
 
Alejandro:
 
Even the leading  advocates of market socialism (such as Nove and Kornai) 
came to realize - though *experience* - that there were indeed problems.  
If you want to evaluate market socialism, you have to critically evaluate the
historical experiences where some variation of it was adopted. Kornai was
very clear about this: he argued that there was - especially in Hungary 
under the NEM - was a contradiction between the principles of efficiency 
and "socialist ethics".  For any system of material incentives to be
effective there must be income inequalities, he argued. Yet, this 
anti-egalitarian system conflicts with the principle of equal pay for
equal work and contradicts the socialist principles of solidarity, 
security, and full employment. In Hungary, there was also the problem
of "Departmentalism", e.g. where managers lobby the state for subsidies
and tax allowances. Kornai was very blunt in suggesting that there was 
no easy or general solution for these contradictions.
 
What you call "mild inequalities" was anything but "mild" in many
of the countries which adopted market socialist models. In the former
Yugoslavia, for instance, some firms paid skilled workers twenty times
the salary of unskilled workers! (By contrast, the ratio in the former
USSR was about 3.5 to 1). In 1981 the top 10% of income earners received
23% of all income. This compares to the top 10% earning 27% of all
income ... in the USA!  
 
The chickens of market socialism really came home to roost in Yugoslavia
in other ways.   
 
For example:
 
- increasing inflation rates (1.5% from 1956-1964; 10.4% from 1965-1970;
14-5% from 1976-1980). Note the trend!
 
- increasing unemployment rates (5.5%  in 1960-65; 7.5% in 65-76; 12% 
from 1977 to 1980). Note trend!
 
The question that was asked at the time by many socialists was "is this
socialism?". What kind of "socialism" has the business cycle, unemployment,
inflation, large income inequalities, etc.?  
 
In solidarity, Jerry


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