I always thought that in 'strategic planning' an overall plan of the
economy is undertaken, but then is not implemented in its
entirety--instead, key variables are selected that are intended to
influence the direction of the remainder of the economy, including
markets: strategic prices, strageic investment within a regulated
market frameowork. Is this just another name for 'indicative planning'
or is there some difference?
When I started at the New School (1987), Economic Planning was still an
M.A. and Ph.D. field option. I sat in on the two-course sequence with
Tom Vietorisz, one of the best teachers I ever had. He was an M.I.T.
Ph.D, "weaned at the knees of Samuelson and Solow," as he always said,
and then radicalized at the NS during the sixties, by Steven Hymer et
al. Economic Planning at the NS didn't survive Perestroika or Glasnost,
it may have to some extent been incorporated into Development. The
whole issue of the relation of neoclassical economics and planning has
never been fully fleshed out, has it?
Mat
-----Original Message-----
From: rosserjb@xxxxxxx [mailto:rosserjb@xxxxxxx]
Sent: Thursday, October 23, 2003 12:39 PM
To: Forstater, Mathew
Cc: pkt@xxxxxxxxxxxxxxxx
Subject: RE: Keynes and socialism
Mat,
"Widely"? Well, maybe not all
that widely, but certainly at crucial
points Keynes's priority was recognized.
Thus the key theoretical papers supporting
French indicative planning both mentioned it,
Pierre Masse, "French Methods of Planning,"
Journal of Industrial Economics, 1962, vol. 11,
pp. 265-76
____________, "French Planning and Economic
Theory," Econometrica, 1965, vol. 36, pp. 31-58.
Furthermore there is the more general
book by the British Keynesian Nobel Prize Winner,
James E. Meade, The Theory of Indicative Planning,
1970, Manchester: University of Manchester Press.
Finally, I think it is also noted in
Jeff Frank and Peter Holmes, "A Multiple
Equilibrium Model of Indicative Planning,"
Journal of Comparative Economics, 1990, vol.
14, pp. 791-806. If it is not in there, I
know it is mentioned in at least some of the
other papers that appeared in that issue of
the JCE, which was full of papers that were
only about indicative planning, providing
overviews of it several other countries,
including also South Korea and India.
Today, it no longer formally operates
in France, except for regional planning, and
is much weakened in Japan and South Korea,
it being the strongest of all in the latter,
approaching nearly a command force during the
Park Chung Hee period in the 1970s. It remains
more influential and formal in India.
Barkley Rosser
---- Original message ----
Date: Thu, 23 Oct 2003 11:49:01 -0500
From: "Forstater, Mathew" <ForstaterM@xxxxxxxx>
Subject: RE: Keynes and socialism
To: "Barkley Rosser" <rosserjb@xxxxxxx>
Cc: <pkt@xxxxxxxxxxxxxxxx>
Exactly Barkley (not the 'widely argued' part--I am not
familiar with
these, provide some cites please), but the idea of
indicative (or
strategic) planning being consistent with Keynes. The
problem, of
course, as Christine Rider wrote around the time the Soviet-
style
nations were collapsing, is that support for such a social
democratic
mixed economy often presumes "that there is a continuum of
economic
mechanisms running between the extremes of central planning
to
laissez-faire markets" (1988, p. 139). Kornai's
distinction between
capitalism and socialism as, in their ideal-types, 'demand-
constrained'
and 'resource-constrained' systems, respectively, is useful
here
(although Mark Knell showed in a 1988 paper that Kornai's
formulations
relied unnecessarily on microfoundations, the same
conclusions can be
derived based on Lowe's distinction between structure and
behavior).
Nell wrote a few papers around that same time (late 80s),
including one
called "Where is the Keynes of Eastern Europe?", showing
the debt Kornai
owes to Kalecki and Kaldor, as well as Keynes himself of
course. But
Nell strongly discourages any hope that a theoretical basis
for a
synthesis of the two systems can be derived from the
analysis:
"The planned area of capitalism is not
resource-constrained...Nor is the market area of socialism
demand-constrained. The virtues of each system, technical
innovativeness and full use of economic resources,
respectively, depend
on the mode of operation of the system as a whole.
These can
therefore not be developed in a mixed system. Not so
the vices and
defects appropriate to each--alienation and corruption on
the one
hand, and baroque technical development and bureaucratic
abuse on the
other. A mixed system could easily end up with the
worst of
both worlds, but it cannot have the best." (Nell, 1987)
This is obviously stated strongly and very pessimistic, but
the point is
important. Some of the supporters of a social democratic
mixed system
suffer from the view that the 'efficiency' of capitalist
firms vis-a-vis
Soviet ones is somehow separable from "the mode of
operation of the
system as a whole" (iow, they see it as a micro efficiency--
see Sherman,
1990). Nell's macrofoundations of micro approach views the
relative
'efficiency' as due to capitalist markets being 'buyers'
markets' due to
insufficient aggregate demand.
We certainly could be doing a lot better than we are now,
but whether we
can have a 'hitchless' SD mixed market socialism is another
question
entirely.
Mat
The Rider and Knell articles are both from RRPE, Vol. 20,
No. 2-3.
A version of Nell's 1987 New School working paper is in
Nell and
Semmler, eds., NICHOLAS KALDOR AND MAINSTREAM ECONOMICS. Sherman's
essay is from Monthly Review, Vol. 41.
-----Original Message-----
From: Barkley Rosser [mailto:rosserjb@xxxxxxx]
It is widely argued that in _The End of Laissez Faire_
Keynes was
the first to suggest what we now label "indicative
planning," although
he did not pursue this topic very much later, and it was
not implemented
particularly in the UK, especially compared with France, Japan, and
some other countries. Barkley Rosser