ECA Working Group

[JimN]

http://www.asianews.it/files/img/TOKYO_-_STOCK_EXCHANGE.jpg

A group from the non-market, non-state socialist/communist/anarchist sector to
explore responses to the Economic Calculation Argument posed by the Austrian
school of economics.

In his introduction to "Non-Market Socialism in the Nineteenth and Twentieth
Centuries" John Crump said:

"... if we use words accurately, it is unnecessary to qualify 'socialism' with
'non-market' because socialism is, by definition, a marketless society. The
market cannot coexist with socialism because socialism means that society owns
and controls both the means of production and the goods which result from
productive activity. For the market to exist, some sectional interest (an
individual, a joint-stock company, a nationalised concern, a workers'
cooperative and so on) has to be in control of part of the social product, which
it then disposes of by entering into exchange relations with others. Exchange
cannot take place when society, and none other, controls the means of production
and the social product. Far from socialism being compatible with exchange and
the market, the generalised production of goods for exchange on the market is
the hallmark of an entirely different type of society - capitalism."

But, in the absence of the market, how will a non-market socialist society make
decisions about how to allocate scarce resources?

Ludwig von Mises and his followers, who came to be known as the Austrian school
of economics, argued that it would be impossible for a non-market socialist
society without recourse to a price-mechanism to make rational resource
allocation decisions. This, they argued, would result in gross inefficiency with
disastrous consequences for society.

How would a non-market socialist society avoid being faced with an insolubly
complex puzzle when attempting to make resource allocation decisions?

What contribution can we in our sector today make towards a potential method of
economic calculation in a society of free association tomorrow?

All those interested in contributing to the work of the group are invited to
join us at:

http://tech.groups.yahoo.com/group/ecaworkinggroup/ (http://tech.groups.yahoo.com/group/ecaworkinggroup/)

[robbo203]

http://www.asianews.it/files/img/TOKYO_-_STOCK_EXCHANGE.jpg

A group from the non-market, non-state socialist/communist/anarchist sector to
explore responses to the Economic Calculation Argument posed by the Austrian
school of economics.

In his introduction to "Non-Market Socialism in the Nineteenth and Twentieth
Centuries" John Crump said:

"... if we use words accurately, it is unnecessary to qualify 'socialism' with
'non-market' because socialism is, by definition, a marketless society. The
market cannot coexist with socialism because socialism means that society owns
and controls both the means of production and the goods which result from
productive activity. For the market to exist, some sectional interest (an
individual, a joint-stock company, a nationalised concern, a workers'
cooperative and so on) has to be in control of part of the social product, which
it then disposes of by entering into exchange relations with others. Exchange
cannot take place when society, and none other, controls the means of production
and the social product. Far from socialism being compatible with exchange and
the market, the generalised production of goods for exchange on the market is
the hallmark of an entirely different type of society - capitalism."

But, in the absence of the market, how will a non-market socialist society make
decisions about how to allocate scarce resources?

Ludwig von Mises and his followers, who came to be known as the Austrian school
of economics, argued that it would be impossible for a non-market socialist
society without recourse to a price-mechanism to make rational resource
allocation decisions. This, they argued, would result in gross inefficiency with
disastrous consequences for society.

How would a non-market socialist society avoid being faced with an insolubly
complex puzzle when attempting to make resource allocation decisions?

What contribution can we in our sector today make towards a potential method of
economic calculation in a society of free association tomorrow?

All those interested in contributing to the work of the group are invited to
join us at:

http://tech.groups.yahoo.com/group/ecaworkinggroup/ (http://tech.groups.yahoo.com/group/ecaworkinggroup/)


This should be interesting. There has been some discussion on the ECA which Ive come across on this site

[cyu]

Mises was just a troll and apologist for the rich. Hardly a real "scientist".

Am I hurting anyone if I'm rich?

Actually, there is a problem with a small percentage of the people with a lot more spending power than everyone else. In a market economy, each dollar you spend is a like a vote for what is valuable, and what should be produced. This works fine if everyone has relatively equal amounts of dollars to spend - you get something like economic democracy. However, if some people have lots more votes than everyone else, then the things they want get lots more votes. This draws resources (raw materials, equipment, labor, etc) away from producing things for the average person, and results in more production of luxury goods.

The result is that things get more expensive for the average person, because resources have been drawn away to serve the wealthy. In addition, you traditionally assume people who are well paid are more valuable to the economy. This is not true when there is large spending inequality. Those serving the wealthy (limo drivers, personal assistants, etc) are paid more not because they are more valuable to the economy, but because the wealthy can spend more. Those serving the poor are paid less because the poor simply have less money to spend. The result is an economy that more and more rewards serving the few people that least need additional people catering to them.

You might say there is a "hierarchy of value" (extrapolated from Maslow)...

There are some things everyone must have so they can survive: food, oxygen, warmth, etc. Basic stuff.

Once they've paid for their most basic stuff, then they spend their money on other stuff.

The more money they have, the more "esoteric" their later spending becomes.

Pearl divers in general are probably not your richest people in the world - so what do they do if they have a pearl? Or instead of asking that question, let's ask what would they do if you gave them a Picasso or Rembrandt? Pretty much the same thing they would do with the pearls - sell it to rich people who would actually use it, and then spend the money on more basic necessities, like running water and electricity.

So why aren't there more of these poor cliff divers producing food, building homes, laying pipes, or building power plants for themselves to use? Why do they instead dive for pearls? The answer is that in the economy in which they live, wealth has been concentrated. When wealth is concentrated, it becomes more profitable to serve the rich than it is to serve people of your own class - thus poverty continues on in the lower classes, and on, and on, and on.

This is capitalism's own economic calculation problem.

How would resources be allocated in a post-capitalist society? One model would be democracy - instead of the "one dollar, one vote" system of determining where resources would go, every person would get an equal number of votes for how economic resources would be allocated.

However, there is much more to human motivation than merely monetary / consumerist motivation. I would much prefer the system described here: Equal pay for unequal work (http://everything2.com/user/gate/writeups/equal+pay+for+unequal+work)