Re: Keynes and socialism

["Barkley Rosser" <rosserjb@xxxxxxx>]

Henry,
      Today, what Mat Forstater referred to as "strategic
planning" is the label put on what corporations or some
in the military do in the U.S.  BTW, I think the original
model for central planning was what the Germans did
during World War I,  not what the Italian fascists did,
who were a bit later.  Lenin in particular was very much
influenced by the Germans, as were many in the U.S.
Barkley Rosser
----- Original Message -----
From: "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Sent: Thursday, October 23, 2003 6:54 PM
Subject: Re: Keynes and socialism


> National planning and the American myth
> By Henry C K Liu
>
> The first New Deal promoted economic planning in industry and
> agriculture in the Soviet style (some say the Italian Fascist style),
> and ran up against a reactionary Supreme Court. The second New Dealers,
> including Justice Brandeis, whose fear of the stifling of free
> competition by big business was greater than his embrace of laissez
> faire, needed a respectable economic theory to support their spending
> program in an era of declining government revenue. They found him in
> John Maynard Keynes, through Felix Frankfurter, who introduced Keynes to
> FDR.
>
> World War II planning was well recognized as the most important
> contribution to victory. The Cold War gave planning a bad name, as it
> did anything else that had the slightest leftist association. Grants in
> support of planning stopped abruptly in academia. But corporate planning
> that strengthened the corporate system institutionally and theoretically
> flourished as management science. Just as the church commandeered all
> talents in the Middle Ages in the name of God, and the monarchies
> established royal academies to capture all talents in the service of the
> king, postwar America monopolized all talents, including the whole
> discipline of planning, in the service of corporate market capitalism,
> leaving statism starved for talent. Corporate planning flowered in shiny
> computerized corporate headquarters, while national central planning
> withered in a neglected garden. But it does not follow that the latter
> is genetically inferior.
> http://www.atimes.com/global-econ/DF13Dj01.html
>
> Forstater, Mathew wrote:
>
> > 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
> >
> >
> >
>
>