I will not reply point by point as the layout is becoming hard to read. The role of labour --------------------- Smiths remark about labour being the original currency is of course poetic language, the same metaphor that we use when we say that we have to expend effort to get something and like all poetic metaphor it uses allusions that are current within a particular historical culture, but it expresses a deeper truth, that it is through work that we transform the natural environment to satisfy our wants. There are of course natural preconditions for us to be able to do this : we need a planet with an atmosphere containing the right amount of oxygen, sunlight, a temperature on the planet suitable for life, a climate that allows plants to grow etc, but without the expenditure of labour we perish.
When Smith says labour is the original currency he is talking about labour in general not specific concrete labours. ( I do not for a moment believe Marx's conceited claim to have been the first to be aware of labour in general as opposed to concrete labour.) Why is it that labour time provides the basis of exchange value in commodity producing society? Why does the law of value operate? I would like you, and also any supporters of the Neue Marx Lekture to try to give an answer to that. My answer is tha it is because human labour is the universal economic resource, universal in the sense that anything that is produced is produced via the application of labour, and by the division of labour in society between different concrete activities. In this sense it constitutes the most fundamental resource we have in all but the short run. At a given moment we only have finite stocks of different means of production, but these means of production are themselves products of labour, and in all but the short run, can be altered by the allocation of labour. This is why it is labour not coal, corn, or cows that provides the substance of value. Cows are essential to produce dairy products, beef and shoe leather, but of no use in the production of railtrack, or newsprint, but human labour can flow into any productive activity. On Handivote ---------------- You criticise the paper because it addresses making vector decisions, some context is useful here, earlier papers had addressed how to construct a secure e-voting mechanism for making the kind of standard plebiscitory choices you mention : should be have nuclear power or not, should smoking be banned or not. Our attempt in this later paper was to address the problem of how can democratic decisions be made over vector spaces : the examples we gave were vectors of expenditure and taxation and as far as I know there are no other proposals for mass democratic decision making over vector spaces. The problem here is that the vector spaces over which decisions have to be made have interdependencies - in this simple case interdependencies between the sum of expenditure and of taxes, what is new is that we argue that this is soluble by finding the closest point on the sub manifold of feasible choices to the mean position in vector space chose by the population. On Budgets under socialism ----------------------------------- My point is that if you have a democratically composed committee for healthcare, another for transport and another for education etc, then you need some mechanism to allocate resources between these ends. The community can delegate detailed decisions to such committees but the committee can only function if it has some constraint on the total amount of resources upon which it can call to achieve its aims. One could in principle adopt the feudal practice of specifying tithes or rents in kind which were to be delivered to a hospice or a college, but these would be both inordinately difficult to decide upon by means of a democratic vote, and excessively constraining on the committees responsible for health, education etc. If you are not going to give budgets to health, education etc, how on earth is the population, or the regional council to exercise control over these subordinate committees? My contention is that the appropriate mechanism is to allocate such committees overall budgets in terms of direct and indirect labour hours. ________________________________________ From: [email protected] [[email protected]] On Behalf Of Joseph Green [[email protected]] Sent: Tuesday, July 26, 2011 7:01 PM To: Progressive Economics Subject: Re: [Pen-l] Ingo Elbe: Between Marx, Marxism, and Marxisms, Part I.3 > Paul Cockshott wrote: > > 1. When allocating budgets to different social priorities it would be > >proceduraly impossible to organise a democratic vote that would allow > >meaningful in kind votes on the allocation of resources for health care, > >education, transport etc. > Joseph: > No, this is a circular argument. You assume implicitly that the only > meaningful way to judge things is via a single scalar measure, and then you > prove that there has to be a single scalar measure, because we need to judge > things. > ------------------ > Paul: > The point about decisions necessarily involving a scale follows directly from > information theory. =========================================================== Joseph: Obviously, one has to count the votes, and in that sense, voting produces a scale. And preference ballots allow the voter to rank the candidates. But the question was how what one is voting for is described, and how one decides who to vote for. These things do not nucessarily involve a numerical scale. For centuries elections have been held between different candidates. One votes for a name, and perhaps a party affiliation. Or one may vote for or against a proposition. With regard to economic decisions, it is most likely that major decisions will be made between competing general programs, which aren't and can't be ranked by a number. For example, one might decide between: a) continuing with dirty energy, b) replacing fossil fuels with nuclear energy, on the pretext that nuclear energy is supposedly clean c) replacing fossil fuels and nuclear energy with renewables. One would generally expect that the costs and benefits of these plans would be part of the controversy. One wouldn't expecct that everyone would agree on the costs and benefits as a precondition for preparing the election. It would be quite unusual that all these numbers would be universally agreed on ahead of time. =========================================================== > To make a decision between two alternatives requires one bit of information ( > Shannon), this > then implies that the simplest decision possible involves a one bit number. > If having made the first > categorical decision we then try and make a second we generate a second less > significant digit. > The finer grows our capacity for decision making then the number of digits > will grow as the log > of this fineness. ======================================================= Joseph: This is irrelevant. You indicate how information is described by Shannon. But you don't show how it applies to the situation at hand. Perhaps the implication is that a general plan can be broken down into a series of partial projects each adequately represented by a yes-no decisions. So tjat. instead of voting on a), b) and c) above, one votes on this particular energy plant, thats particular section of the power grid, etc. One has thus changed from a decision between several general plans, to a simple series of yes-no bits. This has several problems: * first of all, various projects make no sense except as part of a whole. Therefore voting on them individually might well result in an economically nonsensical plan. * the cost of various projects may well depend on which other projects are done, * and the actual needs for an individual project may not adequately be represented by a single number. (Note: The fact that one can't break down a plan into simple yes-no decisions doesn't contradict information theory. The "bits" into which information theory breaks down all information do not necessarily correspond in any practically usable fashion to ordinary bits of economic information.) ===================================================== > > This is not a circular argument at all, it draws instead on the most > fundamental theorems of modern information > theory and thermodynamics. ======================================================= Joseph: Yes, it is circular. Just because you use some terminology from information theory doesn't meant that you aren't giving a circular argument. The names "information theory" and "thermodynamics" themselves are not an argument. Didn't various postmodernists also appeal to thermodynamics? ============================================================= > ---------------------------------- > Joseph: > > The issue isn't whether a scalar measure is useful for some purposes. The > issue is whether it's the fundamental or natural unit of economic > calculation. > ------------------- > Paul: > The question here is whether Labour is the natural unit of economic calculation, was Smith right in saying that it was the original currency with which we purchase our wants and necessities from nature. I think that in a very deep sense Smith was right here. ========================================================= Joseph: Adam Smith made progress for his time in showing how capitalism works. Whatever his understanding of it was, in fact his theory is not a description of how economy works in general, but of how capitalist economy works. And I am astonished you rely on general phrases like labor being "the original currency with which we purchase our wants and necessities from nature". Geez. Here Adam Smith rhetorically imagines us purchasing things from nature -- so that buying and selling are eternal. How can socialists rely on these phrases and analogies, unless in some very deep sense their image of socialism is market socialism? In the real world, a) early humanity used labor, but it used concrete labor, and there is no reason to assume that early humanity reduced all concrete labors to abstract labor.The terms "currency" and "purchase" tend to imply valuing things with a single number, their worth. Do we really have any reason to believe that early humanity equated things like procreation, giving birth, hunting, making camp, etc. on the basis of abstract labor? b) some crucial wants of humanity, such as air to breathe, were simply present in nature, and c) the methods used by early humanity aren't necessarily the methods suitable for us today. ========================================================= > --------------------- > > On the other hand it is feasible, albeit complicated, to arrange such > >votes in scalar units such as money or labour. > > What you seem to be suggesting is that, for example,a figure for a certain > maximum amount of money that can be spent (or labor-hours expended) could be > set. Every option should be given a dollar (or labor-hour figure). And people > are told they can vote for so many options so long as they add up to less > than or equal the total amount of money. > ---------------------------------------- > paul: > No you are right Joseph that that would not be a practical measure, the > proposed > mechanism is here > :http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.154.8769 > I believe that a number of other practical mechanisms could be invented. ================================================= Joseph: I'm astonished that you think that the method described there is practical. It's complicated, and so it might be hard for people to figure it out and thus critique it. But it is a Rube Goldberg scheme if I have ever seen one. Let's see. The mechanism assumes that numbers can be assigned to every alternative. This means that it is implicitly assuming that there are no major decisions to be made, and that one is only concerned with minor tinkering with an already existing system.. Thus in the article you give the following example: "Suppose people can vote on 2 taxes: VAT, income tax. Support that in fact VAT raises 25% of govt revenue and income tax 75%. If the electorate votes for a 4% rise in expenditure and a 1% rise in VAT and a 3% rise in income tax, then the compromise position by equation 5 should be: VAT 1.23% Income tax 3.69% Expenditure 3.08%." So this voting system is devised for tinkering with a system whose major outlines are already accepted by everyone. Continuing. The vote was for a 4% rise in revenue, but the vote was also for insufficient tax to obtain this 4% increase in revenue. So the 4% rise in revenue isn't going to take place. So the result of this election is an impossible economic situation. Ooops. But wait! You have a solution. An *equation* extrapolates the result to a 3.08% rise in expenditure. It doesn't matter whether anyone voted for that (and probably precisely 3.08% was not on the ballot). Instead, the voting procedure assumes that people are willing to trade off so much expenditure for so much VAT and so much Income tax. This is an absurd assumption. For example, cutting down the expenditure might mean eliminating an important project. And people might well regard that project as more important than the details of the tax. There's no reason to assume that extrapolation by equation gives a reasonable result. There's no reason to assume that people agree with it. But moreover, this system of voting depends on the government giving perfectly accurate figures. Ooops. So it's no good if there's any controversy over these figures. No, the figures must be exact, or this way of reconciling results is wrong. I'm not making this up. Your articles goes on and says: "But suppose that the chancellor dishonestly states that VAT raises 50% of revenue, and the voters make the same choice, then the compromise position will be worked out at: VAT 1.67% Income tax 3.67% Expenditure 2.67%. "In other words the increase in expenditure will be smaller because he has overstated the share of revenue raised by an unpopular tax. Thus manipulation of data on tax returns could enable the government to tailor the result of a vote. This sort of manipulation shades off into the general question of the reliability and honesty of official statistics and whether these are subject to politicl manipulation." So this is a complicated system of elections. It gives rise to results that no one at all might have voted for. The very process of deciding what the electorate has voted for is subject to manipulation by the government. And, although the article doesn't mention it, it is also assumes that perfect statistics could be calculated, provided everyone is honest. On top of this, this method of election is only useful for very specific, almost market-like decisions. It has nothing to do with major decisions, like the one on energy system that I referred to above. Indeed, the title of the article was "Extneding Handivote to Handle Digital Economic Decisions". Thus the assumption is that elections will be on things that could be handled by "digital economic decisions". The very reference to this article thus implicitly assumes that all decisions are to decide certain numerical details, and moreover that these details can be handled by a single numerical scale. And even for that, the system is a mess. =================================================== > > > There is a bandwidth problem here, the bandwidth of a democratic decision > >making process is comparatively low and can thus only make broad decisions > >whose details have to be delegated to subordinate bodies. > > Your implicit assumption here is that broad decisions are decisions that set > the amount of dollars (or labor-hours) to be expended. Then, from the need > for broad decisions, you justify your initial assumption. > ----------------------- > Paul > This is just from a hypothesis of how things have to be administered. > Consider health care > and education for a region, my assumption is that the citizens of the region > can not individually > concern themselves with all the details of organising these services. There > need to be committees > or other bodies responsible for the administration of the services. These > committees can not > individually have a call on unlimited resources for the services they provide > : a person can not > at the same instant be working as a teacher and a nurse, though they may do > these in succession. > Thus the committees will need a budget in some sort of units. > ======================================================= Joseph: You assume that the resources can be adequatedly represented by a number. Suppose only two workers are available. It makes a difference whether these two workers are teachers or nurses. If the plans needs two teachers, then two nurses won't suffice. If the plan needs two nurses, then two teachers won't suffice. But your method assumes that we only need to know that two people are available. You write: "a person can not at the same instant be working as a teacher and a nurse, though they may do these in succession." Actually, in your system of calculation, you have to assume that they can change jobs at will. Without that, the system breaks down. And that isn't obvious. And that isn't generally going to be true. But besides labor, there is also the issue of raw materials. And one also has to assume that interchangeability applies not just to people's jobs, but to the physical form of goods. I.e., say, "a unit worth of something can not at the same instant be steel or be wood, but it may be these in succession." ============================================== > How else do you think such public services can be administered. ================================================ Joseph: The actual conclusion from the fact that people wouldn't either want to or be able to concern themselves with the details, is that they will, say, vote for the committee that handles the details, or for a general plan, or both. When they vote for the committee, they will not be voting for some numerical unit, but for people. When they vote on a plan, they won't be voting on all the details, but on a general orientation, such as changing to green energy or establishing proper welfare or setting aside supplies to accept enviromental refugees. ===================================================== > > So, suppose we know that the product requires 10 million units to be > produced. This doesn't allow us to know either how much steel or how much > wood is used or how much direct labor is used. The one number, 10 million > units, is very convenient, more so than having to keep track of three > numbers, such as 5 million units of steel and 3 million units of wood and 2 > million units of direct labor. Or rather, this 10 million unit figure would > be convenient, except that it tells us very little. It is a measurement of > something "unnatural", as Marx would say. Indeed, as Marx did say, about such > figures. > --------------------------------- > Paul: > You are right that it innvolves information loss, that is why it has to be >combined with calculation in kind using detailed planning. > Kantorovich type planning can take the in kind considerations into >account, given broad labour budgets and current labour prices one sets the >plan ray and optimises using linear programming. ======================================================= Joseph: Once you admit that additional considerations are needed, that shows that the labor-content is not the natural unit of economic calculation. That's the long and short of it. As for Kantorovich, he believed that prices were fundamental, so he set out a system which was run by shadow prices. It doesn't matter how he calculated the shadow prices, it was the shadow prices that were fundamental in his system. And they have all the problems of the price-system. Of course, there is a certain sense in which one can merge prices and material (in kind) considerations. That's the sense in which it is done in capitalism, in both simple form and sometimes through complicated input/output analysis carried out by government agencies. Let's take a simple example. Enterprises need not only a certain amount of capital to run, but they have to be sure that the raw materials they need and the workers they need are available on the market. In that sense, the run-of-the-mill capitalist combines financial calculations with "calculation in kind using detailed planning". But profit, financial calculation is the bottom line. And financial calculation being the bottom line, it results in one contradiction after another. ======================================================== -- Joseph Green _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l The University of Glasgow, charity number SC004401 _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
