[OPE-L] Equilibrium and simultaneous vs. sequential determination

From: Alejandro Agafonow (alejandro_agafonow@YAHOO.ES)
Date: Thu Sep 13 2007 - 09:50:19 EDT

I apologize for my intervention in your discussion about equilibrium. I have not had time to follow it, so I don’t know if you have considered the above statement:
Leon Trotsky, The Revolution Betrayed. What is the Soviet Union and Where is it Going?, 1937. http://www.marxists.org/archive/trotsky/1936/revbet/index.htm
A unique law of Soviet industry may be formulated thus: commodities are as a general rule worse the nearer they stand to the mass consumer. […] To characterize industrial progress by quantitative indices alone, without considering quality, is almost like describing a man’s physique by his height and disregarding his chest measurements. […] From the standpoint of an ideal planning directive, which would guarantee not the maximum tempo in separate branches, but the optimum result in economy as a whole, the statistical coefficient of growth would be lower in the first period, but economy as a whole, and particularly the consumer, would be the gainer. In the long run the general industrial dynamic would also gain. (Chapter 1)
Labour value theory have put much effort in analyzing the socially necessary labour time, that is, how is reallocated the labour time to form its average quantity. Irrespective of my judgments about the allegedly tendency towards this kind of Marxian equilibrium, the average argument has left labour value theory without a devise to allocate labour time according to real preferences and necessities.
To maximize socially necessary labour time irrespective of marginal utilities considerations is, as Trotsky wrote, like “describing a man’s physique by his height and disregarding his chest measurements”. As I told Paul Cockshott once in this forum, the relevant issue is the allocation of capacity to lines of production according to the marginal subjective valuation of the output. In this case is inevitable to lose efficiency in case of maximum utilization of equipment, when there are other lines of production highly valued from consumers’ point of view.
Fortunately, planning theories like that of Cockshott & Cottrell are able to overcome this problem tanks to the integration of the market point of view of Oskar Lange.
So, I apologize again for my interruption. Maybe you already discussed this issue.
Kind regards,
Alejandro Agafonow

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