[OPE] Question about books that are sound introductions to economics

From: Jurriaan Bendien <adsl675281@telfort.nl>
Date: Wed Sep 08 2010 - 05:16:35 EDT

Maybe so, but they're wellwritten and I assume that in a Venezuelan context
they would be highly relevant. Point is that if we get down to specifics,
there are all kinds of socialisms and all kinds of Marxisms, some
progressive and some highly undesirable. We cannot assume that because
somebody is a Marxist or a socialist, that therefore any positive or
negative assessment of the stance automatically follows, anymore than we can
automatically assume from the fact that somebody is a Christian or a liberal
that a particular behaviour is automatically entailed.

I assume that somebody who is trying to develop labour expenditure accounts
has the ability to read these books. I am not really sure what form these
labour accounts take yet in Venezuela. In principle, socialist economics
requires three kinds of balances (ledgers):

- the labour hours actually worked to produce outputs, distinguished by
categories of labour and number of workers
- the physical units of inputs and outputs, by type and quantity
- the acquisition and sale prices of inputs and outputs and their component

You have to be able to link these to each other, in order to economize
properly, which can be done with the aid of computers as Paul suggests. That
information is also available in capitalist economies, except that, for
reasons of private property and competition, they are not systematically
integrated - which is unfortunate, also from an ecological point of view.
You can make much better policy using these integrated accounts.

However, similar problems to conventional accounting arise in socialist
accounting, such as that the information may be politically sensitive and
that people can have a vested interest in not providing accurate
information. From a "technocratic" perspective, it is just a matter of
getting people to provide the numbers. That is not the case, however, and I
can vouch for that, having worked as a statistician in questionnaire design.
People have to be motivated to provide true information, on the ground that
it is in their interest to do so, that they believe that they are better off
for doing so. In the USSR, there were severe penalties for providing false
information, but even so a lot of the information supplied by enterprises
could not be trusted.

The main weakness of the book by Kornai I mentioned is that he manages to
discuss economics while largely ignoring political and social relations, and
all kinds of organizational questions. There is no serious analysis of
bureaucracy or decisionmaking/organizational processes.

The remarkable thing about socialist economies of the past is, how well they
worked, even despite everything, even despite the lack of popular democracy
and institutional recognition of individual initiative; it is remarkable how
they lasted so long, apparently defying the laws of economics. That is,
somehow people were often able to compensate creatively in their own lives
for arbitrary diktats from above by the ruling party, to "make the system
work" so to speak, and they did so, even if they didn't really agree with
the system anyway and without explicit incentives being offered. Partly they
needed to do that to survive, but partly it is an "intangible factor" which
happened to have a large economic effect.

What that shows you is, that whether or not human motivations exist to
cooperate for the greater good is crucial for the success of any socialist
economy. It explains exactly why you cannot simply focus only on the
economic side of things, in abstraction from institutional-organizational
and political dimensions. There was the "formal" economy and the "informal"
economy, and in reality they required each other in order to be able to
operate at all.


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Received on Wed Sep 8 05:18:27 2010

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