Re: Occam's Razor

[Herbert Gintis <gintis@xxxxxxxxxxxxxxx>]

>Herb, here is what you said to about the things you want to explain, just to
>refresh the list and which elicited my reaction.
>
>>relevant to this. The things I want to 'explain' are (a) what
>>determines the organization of production; (b) to what extent to
>>>issues of efficiency as opposed to distribution come into play in this
>>>determination? (c) are there market failure that lead to the
>>>suppression of forms of firms that are efficient but not compatible
>>>with the current rules of the game in market economies? (d) are there
>>>new rules of the game that would allow other forms of association in
>>>production to emerge without thereby reducing productivity or
>>>efficiency? Etc. Reciprocal altruism is all I believe is necessary to
>>>address these questions fruitfully.
>
>Now i do not want to trip up on a semantic issue but i read the words like
>"issues of efficiency _as opposed_ [my emphasis] to distribution....."
>to mean that you see some sort of trade-off or separability b/tw eff. and
>distn. so you just cannot say you do not believe in an eff./distn. distinction
>as an answer to my claim that capitalism is a specific type of production
>system. the pursuit of efficiency is not a black box matter of technical
>coefficients and cost functions. rather it is first and foremost a matter of
>class power and is inextricably tied in with the distributional issue.

	The quote you read does not imply that I believe there is an
efficiency-equity trade-off. It is clear that both issues of
productivity and distribution affect which institutional forms prevail
in the economy, but it is not clear exactly where, how, and to what
extent. It is also true that SOME egalitarian measures severely hurt
productivity and SOME productivity advances are inegalitarian. None of
the implies that there is an inherent efficiency-equity trade-off.

	BTW, I didn't say that the employer-worker relationship
vativrequires reciprocal altruism to explain. I don't think this is true.
The models Bowles and I use are principal-agent models in which the
worker has no power and no reciprocity is involved. This is probably a
weakness of the model, however, if anything.

>Now you are advocating markets as a system of allocation. But Herb you have
>lost the authority of P-O and all that goes with it.

	The P-O justification of markets is really pretty weak, as you
suggest. But markets are really an excellent governance form, if
supplemented by other governance forms (state, community). I have a
justification in the form of the disciplinary effect of markets. See
Bowles and my paper in the J. Econ. Perspectives (1993), or our papers
in Epstein and my forthcoming edited volume (_Macroeconomic Policy
after the Conservative era_).

Herb gintis@xxxxxxxxxxxxxxx