Jim, Sorry that the phrasing was irritating. I'll try to give you much better and more specific technical reply as I get time. If the distinction between "public" and "private" resource allocation is in practice often rather vague, there may be few situations in which we can say definitely, that market allocation is per definition superior to state allocation, or vice versa. Who owns what may have very little consequence for "more efficient" or "less efficient" allocations, or greater or lesser justice. This would imply, that if we wanted to evaluate the optimality of an allocation, we need additional criteria beyond "state" and "market".
It is obvious to me that Keynes did have some notion of optimal resource allocation: the maximum amount of factors of production is productively applied, as efficiently as possible; stable prices, price inflation near-zero; low interest rates; very little speculation; balanced budgets and trade accounts, etc. His economics does not make sense, unless you assume some such model. You have to have a yardstick to establish whether the economy is improving or getting worse. In fact, Keynes believed (GT ch. 24) that "an aggregate volume of output corresponding to full employment as nearly as is practicable" was the best political insurance against a socialist property system. The US govt for example officially has the economic objective of ensure "full employment and stable prices" though at the moment the polity are not very concerned with full employment (possibly that is, because focusing on unemployment would be focusing on a problem they cannot show any significant positive policy result for, and because unemployment is a "social disciplining" factor forcing people to do what the market requires). The fact that the objective exists, means that at least you can evaluate how far we've come in achieving the objective. I sense that one difficulty in modern economic thinking is, that people cannot even agree on the definition of economic progress, which has the effect, that they cannot agree on how to evaluate economic experience either. In other words, the lack of shared criteria and its consequences are projected into the past and the future as well. J. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
