[OPE-L] Market Socialism: Ian Wright & Ian Hunt

From: Alejandro Agafonow (alejandro_agafonow@YAHOO.ES)
Date: Wed Apr 25 2007 - 16:19:05 EDT

Kindly considering Ian Wright and indirectly Ian Hunt who seems to share some of my points of view.
Ian Wright on 04/24/07: The classical economists were well aware of the existence of subjective preferences for use-values. But they were interested in explaining the natural prices that markets gravitate towards in markets for reproducible goods; hence their interest in objective theories of economic value […] They did not deny, Marx included, that consumer preferences can be the tail that wags the dog.
Between Marxists seems to be at least two positions on this respect. Some defend that Marx’s theory only hoped to achieve the difficult task of explaining capitalism’s functioning. Others defend that additionally Marx’s theory hoped to establish the grounds for an alternative accounting and valuation mechanisms and Socialism can’t be achieved without them.
The issue is that if you read the later Marx (some times it seems to me that there are several Marx’s), that one who thought in a labour time accounting as a basis for day to day production and exchange in absence of markets, you find arguments that talk about the superiority of planning compared with market precisely because the direct satisfaction of needs. That Marx seems has thought in the overcoming of postfestum satisfaction of need. And it is logic because in absence of this supposed planning’s capability left very little to justify the market cancellation.
I’m primarily talking about Grundrisse and a short passage in Capital.
Ian Wright on 04/24/07: As a computer scientist I have lots of options if I want to solve a large system of simultaneous equations for prices and quantities given a technique, direct labour coefficients and final demand.
Yes, but you have to contextualize this statement since it is possible only from little years ago. As a market socialist I have no problem to recognize this feasibility, but as you know I sustain the superiority of markets without private property thanks to less effort and administrative costs.
Ian Wright on 04/24/07: A less well-known option is to numerically simulate a market, with flows and stocks of money and goods, expressed in terms of a set of non-linear differential equations, i.e. a dynamical system. Such a system rapidly converges to a stable state, which turns out to be the solution of the original system of simultaneous equations […] Or, one could "beat the market" and solve the calculation problem much faster in simulation.
Could you solve the calculation in absence of stable states? Market economies of course have relatively stable states. Without those, C&C has rightly stated that price channel loose its informational function. But you might note that what Austrians and a few market socialists (maybe Heimann, Nove and of course I) have in mind are the non-stable states that entrepreneurs are capable to lead thanks to (1) rivalry in an appropriate scale and (2) the goal of increase profit firms as an indicator of success in consumers’ satisfaction. Of course, it is dubious that capitalism defended by Austrians could achieve this.
Ian Wright on 04/24/07:  […] the more important issue […]is what the socialist firm will look like, how it is financed, how its revenue is distributed, and what democratic mechanisms exist for freeing parts of the economy from the "realm of necessity", including control over the length of the working day […] Alejandro, why are you "liberal" about the kinds of institutional setups are allowed in market socialism, and why do you think, for example, that an economy of workers co-operatives is insufficient?
My opinion concerning this point has intimately related with my last statement. Because the task of lead the non-stable states that expand our technological frontier, we shouldn’t compromise with a single form of firm organization. It doesn’t imply that we have to neglect the distribution of revenues: it depends on the rate of investment democratically chosen and the financing of an ambitious Welfare State. As you may suspect, we can be free from the “realm of necessity” thanks to the non-market devises the Socialist Welfare State would able to manage.
Ian Wright on 04/21/07: I have not read much Austrian economics. Can anyone recommend a modern account that explains the Austrian theory of value?
I send you here with three short papers written by the Austrian economist Israel Kirzner explaining in a very easy way the distinctive position of Austrian economics.
Ian Wright on 04/21/07: Entrepreneurship, however defined, is a kind of concrete labour. The more important point is: should this particular kind of labour get paid in wages, or should it enjoy profit income? The concept "entrepreneurship" is very much tied up with the attempt to justify the receipt of profit income by the capitalist class. Paul has a point when he mentions a "fixation with an early stage of capitalism". In the modern economy much of the activities that once would be categorized as "entrepreneurship" by pro-capitalist theorists are now performed under the form of wage labour […]This means that additional income, over and above that required to maintain the value of savings over time, can be received solely in virtue of property held, not work performed. Would you allow this kind of institutional setup under market socialism?
I think Paul has that position because he underestimates the non-stable states in market economies and its social function in freeing us from the “realm of necessity”, in the sense of the expansion of the possibility frontier. The rent derived from property held would not exist under market socialism because the state would be the stockholder. Of course, we shouldn’t prohibit small private property. Would you agree to imprison to anyone who start a business. And we should be cautious about running a beginning business because we can’t know ex-ante if consumers’ would be pleased. Of course we have to share some risk in arranging loans as do capitalist banks. 
Best regards,
Alejandro Agafonow

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