Re: Conference on Saving and Investment

["Anthony D'Costa" <dcosta@xxxxxxxxxxxxxxxx>]

If economic performance is the guage by which we measure the merits or
demerits of "entrepreneurial" capitalism and state planning then I am not
sure the answer is all that straight forward.  We have well-known cases
of state failure, but we also have numerous cases of (capitalist) market
failure.  May be these failed cases are not "entrepreneurial" in which we
are essentially saying that there is only one kind of capitalism.  But
for a PK this would be blasphemy:).  Besides can we really compare mature
capitalist countries with bureaucratic socialism and measure their
performance (outcomes) without getting into the processes?  Furthermore,
recent experience of economic performance certainly informs us that both
state and market can work together in interesting ways.  Cases in point:
Japan and the east Asian tigers, ok dragons.  This means that the
dichotomy between the state and market (and capitalism and socialism) is
really in the imagination of the observer and hence Paul Davidson may be
correct that capitalists and workers are both needed.  After all it does
take two to tango.  But then Davidson's implied treatment of the state and
market as distinct and unconnected institutions is misleading of
the workings of contemporary capitalism.  The issue is really a
question of weights attached to states and markets and these
weights vary according to specific social contexts.  The magnitude of
these weights (more state than market) then implies socialistic type
economies and conversely more market implies capitalist.  WE do indeed
live in a convoluted and not a dichotomotized world!

Anthony D'Costa

On Wed, 27 Apr 1994, Paul Davidson wrote:

> FROM:  Paul Davidson
> "      Economics Department
> "      523 Stokely Management Center  (615) 974-4221
> Dear Doug: If "the working class gets too uppity" as you suggest then they
> are likely to try an gain additional real income not only at the expense
> of the "hated"-capitalists but also they will try to get real income at the
> expense of other workers (who are less uppity, less truculent, or more
> civilized) or retired workers (pensioners who were, in their earlier life
> life "exploited" by capitalists, and hence won't notice the difference).
>      In fact if we get rid of the capitalists, why won't there be
> competition between groups of workers to see who can be the most uppity and
> gain the biggest piece of the GDP pie. And how about workers in this forth-
> coming workers's paradise trying to get uppity relative to workers in
> other nation's socialist paradise? Or, is possible that when we get rid
> of the capitalists, then suddenly uppity workers will be civilized. (I think th
> e Spanish Inquisition and the Holocaust was based on a similar philosophy -- as
> is the concept of ethnic cleansing today. If only we get rid of the other
> group who are the trouble makers, those that remain will live in economic and
> social bliss.)
>      Sorry to be so facetious, but really, if some people are going to act
> "uppity" (your word) or uncivilized (my word), then the question is how
> do we modify people's behavior so that they act in a more civilized manner.
> I think in ECONOMICS FOR A CIVILIZED SOCIETY we have suggested how to use
> market plus civil values-incentives to produce a more civilized entreprenurial
> system. I think it is fair to say that despite its outstanding faults, modern
> entrepreneurial systems tend to be more civilized than State Planning
> systems that were devoid of capitalists.  This is not to say that entre-
> preneurial systems are perfect and completely civilized -- merely to suggest
> that since Marx (and even Polish State Planner Kalecki)- entreprenurial systems
> have been able to modify their worst warts. Even if there has been
> some slippage in the years since Bretton Woods, the State Planning systems have
>  done much worse during the same period.  (See Keynes's GT ch. 24)
>
> Have a good day!____Paul Davidson
> ))))_ fax # (615) 974-1686
>