[OPE-L:2205] Re: Re: Re: Re: Markets and Information

["Duncan K. Foley" <foleyd@xxxxxxxxxxxxxxxxxx>]

Steve is right to put a lot of emphasis on the Fel'dman episode. There are
some interesting points about this.

1. The construction of a heavy industrial base given the technology of
capitalist production in the 1920s, and given a large labor surplus, was a
project much more dependent on engineering than on the aggregation of
idiosyncratic information that Hayek invokes. Which model is more relevant
to the future of social production?

2. The Fel'dman methods actually worked OK in the Soviet Union until it
began to exhaust its surplus labor pool in the 1970s. It always seemed to
me that the difficulty the Soviet system had in adapting investment policy
to labor shortage conditions was its most important economic failing. Even
so, as a number of books, including Kotz and Weir, show, it is doubtful
that economic failures contributed much directly and in the short term to
the crisis of the Soviet system in the 1980s.

Duncan
Duncan K. Foley
Department of Economics
Graduate Faculty
New School University
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