RE: [OPE] labor tokens and efficiency

From: Allin Cottrell <>
Date: Wed May 06 2009 - 20:33:12 EDT

On Wed, 6 May 2009, GERALD LEVY wrote:

> Assume there is a 'labor token' economy where for each hour
> you work you get a token which allows you to buy a good
> produced with one hour of labor.
> Now, since the question of 'efficiency' has been raised in
> a recent thread, please tell me why more efficient methods of
> production would be developed? Other things being equal -
> since everyone knows that one hour of labor producing one
> good is equal in terms of purchasing power to one hour of
> labor producing any other good - why would workers in
> enterprises introduce any method which raises productivity?

You just have to think it through.

Suppose enterprise A is producing MP3 players with a total
expenditure of of 8 hours of labour while enterprise B is
producing players of the same quality with a total expenditure of
10 hours. You're the planner. How do you "price" these items in

If you're not very clever (or just after an easy life) you price
them both at the average labour content, say 9 tokens, and let it
go at that. If you're brutal, you price A's output at 8 tokens
per player and B's at 10 tokens, and leave it at that, with the
result that nobody buys B's players and enterprise B gets wound up
in short order. If you're conscientious, you price them at
somewhere around the average but send out messages:

To A: "Look, enterprise B is struggling; please give them a clue
as to how to produce more efficiently."

To B: "Comrades, you're doing a fine job, but the folks over at A
have figured out an even better way of doing this. Could you
please check with them and see if you can get the hours per player
down a bit?"

At the end of the day (after this sort of socialistic tatonnment
has worked itself out), it will be the A enterprises that get the
new investment resources, and the Bs (if they fail to improve, or
to offer a compelling justification for their above-minimal labour
input) that get closed down.

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Received on Wed May 6 20:35:06 2009

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