raghu wrote:
On Sun, Mar 8, 2009 at 8:57 PM, John Vertegaal <[email protected]> wrote:
Like union representatives holding veto power, on boards of directors of
those "corporations that run the economic world"? If so I'd fully agree, but
I would call that social democracy in action, rather than applied Marxism.
I'm by no means convinced that a command economy, whether planned centrally
or not, is more efficient than what we presently have in OECD countries;
given of course the fair wage and financial control policies of a social
democracy.
Interesting discussion. A natural question is why did central planning
fail so disastrously in communist USSR and China, while WalMart and
UPS are doing it so successfully? Is it because of market discipline?
-raghu.
To my mind there is a sociological reason underlying the economic one.
I believe that although people are born with an innate drive to be ever
more productive, this tends to get killed off when results in the form
of betterment fail to materialize. While central planners may for a time
succeed in suppressing this natural state of being, especially if their
country is still undeveloped and by calling on patriotism for support,
they cannot change human nature. Most people will slack off, when they
see no difference in a resulting reward, while knowing they have become
more productive.
Although the central planning of a command economy does fix supply and
prices, its defining feature lies in fixating demand, from which supply
and pricing are derived. It is impossible for WalMart and UPS to fix
demand, as that comes about from all those other and generally less
successful firms and their employees. Central planning encompasses both
sides and thus is fundamentally different from planning in the private
sector. WalMart and UPS are "successful" not thanks to their own
planning savvy, but by exploiting a pay differential between those
others who determine the demand for their output and their own operating
cost.
The best that central planners in developed nations could ever hope to
accomplish, is distributing the final output of accruing efficiencies to
those responsible for it. But why take on this nearly impossible task
when a cost+ pricing system will do it all automagically? Given of
course a universal profit sharing program, stimulated by taxation
(dis)incentives.
John V
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