Re: Re: Re: Re: summary of calculationdebate

[Ken Hanly <khanly@xxxxxxxxxxxxxxx>]

Markets do not encourage innovation either. The risks are too high. Because of this
every market system has patent laws and the like that ensure that entrpreneurs are able
to recover money invested in innovations. Although the whole society can benefit from
the knowledge, under a capitalist market system the miracle of markets is suddenly
forgotten and the entrepreneur is given monopoly power.
    Surely planning should include monies for research and development at universities
and elsewhere. Why can't the state give awards and public recognition to innovators
etc. Usually it is not the entrepreneur who is the innovator. The innovator sells
patents etc. to entrepreneurs who then market it. But as Carroll has pointed out
innovations are not necessarily good or useful or necessary when there ar more pressing
problems in the economy that can be met with exisiting technology.
   Cheers, Ken Hanly

Michael Perelman wrote:

> Bill, you are perfectly correct to turn our attention to the practicality of
> planning instead of the theological calculation debate.  Planning as such,
> especially if it is too centralized, is not naturally suited to innovation.  Robert
> McIntyre described how E. German industries would "spin-off" small innovative firms
> to experiment with new products.
>
> Bill Rosenberg wrote:
>
> > Two things strike me: changes in the economy, and practicalities.
> >
> > Changes in the economy: how does a centrally planned system introduce/allow to
> > be introduced innovative industries? Innovation tends to be high risk - can't be
> > sure about inputs until some experience is accumulated; and can't be sure of
> > people buying the product. It would seem likely that a planned economy would
> > find it difficult to not only accomodate but encourage such behaviour.
> >
> > Practicalities: with literally hundreds of thousands (millions?) of different
> > products, how are all those prices conveyed to those who need them, in good
> > time; how are they negotiated with those affected (I am sure in practice it is
> > not a simply technical exercise: if reductions are indicated, the producer will
> > argue; if increases are indicated the buyer will argue); how are they enforced?
> >
> > At times of crisis (such as war, dire poverty, revolution), such things will be
> > more easily accepted. What about in good times?
> >
> > Rob seems to be suggesting we should focus planning on a subset of critical
> > products: i.e. a mixed planned and market economy? That reduces the size of the
> > problem, but probably intensifies some of the problems above, doesn't it?
> >
> > Bill
> >
> > Michael Perelman wrote:
> > >
> > > Excellent, Rob.
> > >
> > > Rob Schaap wrote:
> > >
> > > > G'day Michael,
> > > >
> > > > You write:
> > > >
> > > > >The only advantage that the entrepeneur has over the planner
> > > > >is that there are a lot of them rather than a single planner.
> > > >
> > > > Well, that, according to the price-mechanism theorists is one of two
> > > > decisive differences.  The other being to do with the nature of motivation
> > > > for entrepreneurial activity.
> > >
> > > You are correct.
> > >
> > > > The former could be addressed via some sort
> > > > of decentralisation of economic power (the 'infantile' left communists had
> > > > suggestions to make about this - if memory serves, Labour Commissar
> > > > Shliapnikov wanted sectorally based economic management, based on the
> > > > relevant trades unions - and Trotsky's wistful observation that the system
> > > > of soviets was too underdeveloped at the time of the revolution includes
> > > > some reference to such a system's potential for sectorally diversified
> > > > management - incidentally,
> > >
> > > Again, correct.
> > >
> > > >
> > > > What we have to remember, as many of you have, is that we're not pursuing
> > > > the optimality Mises and Hayek saw immanent in their precious
> > > > price-mechanism.  We don't see any evidence at all that it is anything like
> > > > optimality in it, and shouldn't allow ourselves to be bullied into trying to
> > > > concoct a system to match the system they claim exists.
> > >
> > > Exactly.  I tried to make this point in a new book, Transcending the Economy.
> > >
> > > > The bar is not set
> > > > that high at all, in our benighted reality (to which Pen-pals are making too
> > > > few references, for mine), and we shouldn't be afraid of a few Campari
> > > > shortages if we can convincingly show ways of getting more grain to more
> > > > Sierra Leoniam stomachs, more AZT to more Zambian bloodstreams, and more
> > > > useful employment to more of Flint's unemployed.  I mean, when you take a
> > > > five-second peek at the world, the priorities have a way of disclosing
> > > > themselves rather starkly, no?  As for the danger of dictatorial
> > > > nomenklatura; there too our current system does not offer any real
> > > > alternative - they're just hidden behind tendentious definitions of freedom
> > > > and democracy, is all.
> > > >
> > > > Let's change our point of view to thinkable structures and mechanisms to fix
> > > > a few things that press today, rather than (as perhaps we're inclined to do
> > > > as our particular and enviable beings mess around with our consciousnesses)
> > > > build these castles in the air.
> > > >
> > > > Cheers,
> > > > Rob.
> > >
> > > --
> > > Michael Perelman
> > > Economics Department
> > > California State University
> > > Chico, CA 95929
> > >
> > > Tel. 530-898-5321
> > > E-Mail michael@xxxxxxxxxxxxxxxxx
>
> --
> Michael Perelman
> Economics Department
> California State University
> Chico, CA 95929
>
> Tel. 530-898-5321
> E-Mail michael@xxxxxxxxxxxxxxxxx