Re: [Marxism] Hayek and Trotsky
== Rule #1: YOU MUST clip all extraneous text when replying to a message. == Below is a selection of comments that wee posted to my Facebook wall on Hayek and Trotsky Jim Farmelant http://independent.academia.edu/JimFarmelant http://www.foxymath.com Learn or Review Basic Math - Wojtek Sokolowski: I am pretty much with Lange on this. As far as business decision making is concerned, it can be done based on prices in both capitalist and socialist societies, because it is the same kind of people - business managers - who make those decisions in each system. The main difference between socialism and 'capitalism is the accumulation of surplus. In socialism it is broadly distributed, in capitalism it is concentrated in a few hands. According to Lange, the latter is less efficient in achieving optimum distribution - the main purported goal of the market system - because it prioritizes the preferences of a few wealthy individuals over those of many less wealthy consumers. Lange was pretty much opposed to command economy as were most EEuropean economists. AFAIK, command economy never existed - it was invented by Western propagandists to discredit socialism. What did exist was policies of import substitution and prioritizing investments over consumption (aka austerity measures) to accelerate industrial development combined with price controls to avoid negative impact of industrialization on the prices of food (i.e. an anti-poverty measure). This brings me to the main point that socialism was far more successful economically than capitalism, because it managed to achieve two contradicting economic objectives at the same time: (i) rapid economic development and industrialization and (ii) prevent pauperization of large segments of society that such development brings (at least initially). Capitalism could only achieve the first objective, but miserably fails on the second. Néstor Gorojovsky: You should have added Lenin, and so should have done Hayek. Jim Farmelant: I agree with all that Wotjek. The question in my mind is that Trotsky in his 1932 article. The Soviet Economy in Danger presented an argument that was strikingly similar to Hayek's ideas concerning economic calculation under socialism. Was Trotsky familiar with Hayek in 1932? Possibly, although I kind of think that Hayek was probably too obscure a figure back then. Trotsky might have known about Ludwig von Mises, since Bukharin had cited him in articles that he wrote in the 1920s in defense of the NEP. I'm wondering if the direction of causality might have been in the opposite direction. That is Hayek might have been influenced here by Trotsky. Stranger things have been known to happen Wojtek Sokolowski: Jim Farmelant Possible, but really a non-issue for me. I do not believe in ownership of ideas. ideas circulate in society in response to events and historical developments, and many people entertain and embellish them. Attributing them to one person makes no sense at all. It is an ideological statement of the primacy of private property over socialized property. It is my understanding that there was a lot of cross-border influencing going during industrialization - Gerschenkron has a nice piece on that titled economic backwardness in a historical perspective.' There is also more recent research on organizational isomorphism showing high levels of mimicry in organizational behavior. It thus does not surprise me that many people could arrive at similar conclusions or solutions of emerging problems - but only few managed to patent their ownership of these conclusions or solutions. Creativity is grossly overrated because it legitimates private property relations. As Corey Robin recently argued, the purported scarcity of creativity and innovation is the basis of the defenses of the capitalist social order by hayek Co. In reality, creativity is far more common than Mr. Hayek Co I would say 3 in every five people are innovative and creative as opposed to 1 in a 100 as the neoliberal gang wants us to believe. What makes difference is official recognition of that creativity in the forms of patents and other types of intellectual property rights - only a few get that recognition, which creates an illusion that it is rare. In fact it as common as water - it is much harder to find people who are NOT innovative and creative in one way or another than those who are. Marv Gandall: Jim quoted Trotsky: If a universal mind existed, of the kind that projected itself into the scientific fancy of Laplace a mind that could register simultaneously all the processes of nature and society, that could measure the dynamics of their motion, that could forecast the results of their inter-reactions
[Marxism] Hayek and Trotsky
== Rule #1: YOU MUST clip all extraneous text when replying to a message. == I was looking at two famous pieces on economics: one by Hayek and one by Trotsky. The Hayek piece that I was looking at, The Use of Knowledge in Society is best remembered not only as an exposition of Hayek's arguments concerning the socialist calculation debate but also because there he presented his notion of markets and the price system as functioning as information processing systems, whereby information that is dispersed among many different individuals and organizations is coordinated to make possible a rational allocation of resources. In that article, Hayek makes a reference to Trotsky, writing: It is in many ways fortunate that the dispute about the indispensability of the price system for any rational calculation in a complex society is now no longer conducted entirely between camps holding different political views. The thesis that without the price system we could not preserve a society based on such extensive division of labor as ours was greeted with a howl of derision when it was first advanced by von Mises twenty-five years ago. Today the difficulties which some still find in accepting it are no longer mainly political, and this makes for an atmosphere much more conducive to reasonable discussion. When we find Leon Trotsky arguing that economic accounting is unthinkable without market relations; when Professor Oscar Lange promises Professor von Mises a statue in the marble halls of the future Central Planning Board; and when Professor Abba P. Lerner rediscovers Adam Smith and emphasizes that the essential utility of the price system consists in inducing the individual, while seeking his own interest, to do what is in the general interest, the differences can indeed no longer be ascribed to political prejudice. The remaining dissent seems clearly to be due to purely intellectual, and more particularly methodological, differences. (http://www.econlib.org/library/Essays/hykKnw1.html) Hayek was presumably referring to the Trotsky piece that I was referring too: The Soviet Economy in Danger. There, as Hayek correctly noted, Trotsky argued for the indispensability of market relations under socialism, at least for the transition phase. Trotsky presented one argument that has always struck me as being rather Hayekian in tone. In this connection three systems must be subjected to a brief analysis: (1) special state departments, that is, the hierarchical system of plan commissions, in the centre and locally; (2) trade, as a system of market regulation; (3) Soviet democracy, as a system for the living regulation by the masses of the structure of the economy. If a universal mind existed, of the kind that projected itself into the scientific fancy of Laplace a mind that could register simultaneously all the processes of nature and society, that could measure the dynamics of their motion, that could forecast the results of their inter-reactions such a mind, of course, could a priori draw up a faultless and exhaustive economic plan, beginning with the number of acres of wheat down to the last button for a vest. The bureaucracy often imagines that just such a mind is at its disposal; that is why it so easily frees itself from the control of the market and of Soviet democracy. But, in reality, the bureaucracy errs frightfully in its estimate of its spiritual resources. In its projections it is necessarily obliged, in actual performance, to depend upon the proportions (and with equal justice one may say the disproportions) it has inherited from capitalist Russia, upon the data of the economic structure of contemporary capitalist nations, and finally upon the experience of successes and mistakes of the Soviet economy itself. But even the most correct combination of all these elements will allow only a most imperfect framework of a plan, not more. (http://www.marxists.org/archive/trotsky/1932/10/sovecon.htm) This has led me to wonder what influence each guy may have had on the other. I'm not sure if Trotsky was ever aware of Hayek, but was certainly aware of Trotsky. I wonder if some of his own thinking on the workings of the price system and market relations may have been influenced, even if only to a small extent, by Trotsky. Jim Farmelant http://independent.academia.edu/JimFarmelant http://www.foxymath.com Learn or Review Basic Math The End of the #34;Made-In-China#34; Era The impossible #40;but real#41; technology that could make you impossibly rich. http://thirdpartyoffers.juno.com/TGL3141/541b89eedf41a9ee68f9st02vuc Send list submissions to: Marxism@lists.csbs.utah.edu Set your options at:
