Jurriaan Bendien wrote: > 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".
I wasn't talking about "optimality." Rather, the point is that pure public goods can't be provided by the private sector (unless the public sector subsidizes it). Less-than-pure public goods live up to this rule to a lesser extent. The issue of whether it's >"public" and "private" resource allocation< depends first on whether the public sector (i.e., the state) decides to provide public goods or not, mostly based on their ability to do so. (The Somali state, for example, does not provide much in the way of the public good called "law and order," because it cannot do so at this point.) Second, it depends on how it decides to organize that provision. Nowadays -- in this neoliberal era, if I may use that word -- we see governments trying to provide public goods using privatized means. Usually that's because they're allied with the beneficiaries of privatizing, receiving campaign contributions, bribes, and the like. > 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. His concern was with attaining full employment, while avoiding fascism and Stalinism. That's not the standard "allocation of resources among competing ends." Instead, that's idea of allowing currently-unemployed resources to be "allocated" in the first place (abolishing involuntary unemployment of labor-power and capital goods & putting these "factors of production" to work). I don't want to have a séance to figure out what Keynes really thought about these matters, but my impression is that it wasn't a matter of optimality at all. Rather, he thought that it would be much better to have low unemployment than high unemployment and that the style of economics that was dominant at the time (NC econ, Hayekism, etc.) wasn't giving us any insights into what the problem was or how to solve it. In any event, I'm not talking about optimality here. (I never have been.) That's a technocratic notion (or a _laissez faire_ notion for those who Believe that the Invisible Hand will create optimal results). I don't know how "optimality" got into this discussion, which instead was about aggregate demand, which Jurriaan was saying was a bogus concept. The concept of aggregate demand has nothing to do with optimality. > 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. The US govt -- i.e., its leadership -- responds to political pressure. It doesn't have any pre-set goals such as full employment and stable prices except as slogans. To the extent that it has pre-set goals, they involve protecting capitalist property rights, maintaining "law and order," keeping the current crop of politicians in gravy, and the like. > 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. I don't understand how the "definition of economic progress" got into a discussion of the concept of aggregate demand. as they say, the first is "normative," while the latter is a "positive" concept. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
