Re: [OPE] socialist planning in capitalist firms

From: Alejandro Agafonow <>
Date: Sat Jun 05 2010 - 09:38:32 EDT

Jerry, the presumption of optimality is given by the counterfactual picture built by general equilibrium approaches. They include neoclassical economics but also Marxist approaches to the so called natural price or production price, and we have good representatives of this former approach in OPE.   I am against these two counterfactual theories though not against counterfactual approaches per se. However, my considerations of diminishing returns to management have not anything to do with optimality. It would have should I postulate the possibility of reaching a point where returns to management are constant. Neither positive because we would have the possibility of centralising a little bit more to take advantage of the remaining positive returns, nor negative because we would have to decentralise to reduce diminishing returns.   I am completely aware that we, as general rule, will be on a suboptimal point of returns to management. Unfortunately, central planners go so far in a suboptimal course of returns to management to strike anyone who prices an effort to use resources rationally.  A. Agafonow ________________________________ De: Gerald Levy <> Para: Outline on Political Economy mailing list <> Enviado: sáb,5 junio, 2010 12:44 Asunto: Re: [OPE] socialist planning in capitalist firms  I suspect that the basis for Alejandro's claim is not empirical but is rather based on the presumption  of optimality, i.e. that there is an 'optimum' scale for labor, means of production, and managent inputs beyond which there are are diseconomies of scale.  It seems to me that there are better ways to envision bureaucratic inefficiencies associated with excessive management than through the assumption of optimality.   In solidarity, Jerry

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