Jim Devine wrote:
As economists and political economists generally use the term "efficiency," it's not the same as historical viability.
I had written:
if we contrast markets (not necessarily capitalism) to communism in general and in the abstract, as the tragedy of the commons argument does, then the question of which social structure is more efficient, becomes a question of historical viability.
You replied:
I agree with much of what Julio says below, but I think he should avoid the word "efficiency," which is usually seen as a normative goal. Perhaps "productivity" is a better word.
You objected to other paragraphs, not to this one in particular. So I thought you were okay with it. Obviously, I don't say that efficiency is always in in every instance equivalent to historical viability. Efficiency is used in diverse contexts, micro, etc. Historical viability is a term usually reserved to the robustness of social structures, modes of production, and the like.
if a mode of production -- such as the one that used to prevail in the old Soviet Union -- cannot get the job done of producing and distributing goods and services with a reasonable degree of efficiency compared to other existing modes of production, it's bound to fail eventually if it doesn't solve the problem.
And also defend itself against its enemies. If there's a prototype of the successful defense of a social revolution, I'd think of Cuba. Here I recommend Ramonet's biography of Fidel Castro (a series of extremely interesting long interviews).
If I had my druthers, the notion of "historical viability" would be linked with the ability of a mode of production to produce a surplus beyond labor costs rather than with the ability of a mode of production to simply produce (as measured by labor productivity).
I don't understand what you mean. Productivity is not level of output. Productivity is a ratio: output per unit of resource (ultimately, per unit of labor time).
individuals don't choose modes of production as individuals. Instead, their "preferences" are aggregated, often in a way that doesn't make any sense, so that it's the entire society that makes the "decision," with some being more important than others.
In capitalist societies, there's usually a smallish quota of consumption "preferences" entering directly as inputs in a political process of allocation. The rest remain as individual preferences and it is the choices instead (quantities purchased/sold) that are aggregated via markets. Under communism, I'd expect the bulk of consumption "preferences" to be aggregated directly, presumably through some process of direct democracy, at different levels.
one problem with our "conscious political and legal choices" is that our consciousness reflects our biographies within a specific social system and its actual historical process during the period of our lives. Thus, what we "choose" reflects what's existed in the past -- perhaps in contradictory ways.
A conscious choice doesn't mean an unconstrained choice. Human choices are never made in a vacuum. The productive force of labor is not infinite. To paraphrase Hegel, Freedom is only the consciousness of necessity, not the absence of necessity. It is often true that, "Everyone takes the limits of his own vision for the limits of the world" (Schopenhauer). That's why (note to Carrol Cox) political pessimism can become a reactionary material force -- if it grips the masses. And what grips the masses usually starts by gripping individuals.
I don't think it's legitimate to talk about "a representative agent." Even general equilibrium theory agrees with me on this. It's called the fallacy of composition.
Please explain.
The fact that P and K-H efficiency requires two or more agents is not a criticism, since last time I looked, there _were_ two or more agents.
Of course not. What I tried to say is that Pareto and Kaldor-Hicks efficiency are applications of the general concept of economic efficiency.
One thing I object to among orthodox economists is the tendency to think totally in terms of deductive logic, trying to minimize the number of assumptions and the number of deviations from the simplest and most idealized models. Instead of using an abstract model as the baseline for understanding the world, we should start with perceived empirical reality as our baseline. Marx's stuff in the introduction to the GRUNDRISSE is good here.
This is a misunderstanding of the role of deductive logic in today's economics. There's already much in the PEN-L archives covering this very point. This thread may already be past its point of negative returns. So, if nothing new pops, this will be my last post. Thanks, Jim. Forgive my telegraphic style, which (I know) can be pretty irksome. (I have to type under the relentless pressure of a 27-month old.)
