Re: Participatory Planning

[S8800034@xxxxxxxxxxxxxxxxxxxxxx]

The comment that "Keen is probably mistaken in expecting any cost
minimising calculus to be environmentally friendly" illustrates one
difference in perspectives on what is innovation. Your focus was on
innovation as a means to reduce costs. I was also--and perhaps primarily--
interested in innovation as a a way of producing entirely new products.

On this, Yoshikawa (Tokyo Uni, I believe) gave a very interesting seminar
at UNSW last year on a demand-constrained model of growth. As part of it
he tendered a MITI document which classificed consumption expenditure
according to the decade in which the product had been invented. Irt
argued that in the Japanese case, less than 1/3rd of expenditure was
on products invented prior to 1950 (and that includes the car!).

My concern with a central planning approach is that it is potentially
limited by the n-dimensional matrix methods behind it to treating
production as an n-dimensional process, when in fact new products
can always be added to the currently existing n. The more "dynamic"
an economy, the more additional products are likely to be added, thus
alteriung the production relations underlying a "fixed-n" view
of the world.

So the question is not only how to encourage cost cutting. it is also
how to encourage new products, and how to motivate that towards
socially beneficial ones, rather than, say, improved MIRVs. My point
about the environment was that, other critiques of capitalism v socialism
aside, the environment turned out to fare a lot worse under the latter
than it has under the former.
Cheers,
Steve keen