Is maximum economic efficiency always desirable?

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Any system, democracy, plutocracy, monarchy, socialism, totalitarianism etc could work beautifully if the people with power acted properly. Problem is, they never have.

So far.

Totalitarianism and tyranny cannot be made to work better except by their elimination. The exercise of brute force except in self defense cannot be justified.

ruveyn

Any police force exercises brute force quite regularly under any system. It's just a matter of doing it properly.

For the purpose of defending life and property. That is the only justification for police forces and guard services. In the ideal case they do not initiate force, they respond to wrongful force or fraud. I said ideal case. Too often the police are as nasty and corrupt as the criminals they oppose.

ruveyn

Irrelevant, as the socialist claim is that we have not had a true socialist nation, while the claim that most people accept is that a capitalist nation has successfully emerged.

There are some relatively good theories on the workings of capitalism, in any case, socialism is likely to have higher technical demands than capitalism, in as much as the fact that certain mechanisms will have to be developed.

Well, capitalism also created the levels of wealth above the poverty line, so I don't see how that is a harsh condemnation of the system that it has not advanced people as much as desirable.

Well, the reason why these people have capital is because either they, or someone in their family history accumulated this capital, and they then become the possessors. I cannot see attacking them if I think that they money could have been earned and passed on legitimately.

I wouldn't say "actively creates", but rather I would say that the system involves a level of change that tends to cause the rate of unemployment to remain around a certain level in good economic times.


Well, not knowing how to get somewhere isn't the same as it being impossible to get there, but the two states often overlap. As for the Marxian solution, well, I don't have faith in the worldwide Marxian revolution ever happening in the first place, so I don't see that as a legitimate way to get there.


Umm.... I wasn't aware that I was making a strawman at all. I may have been making a rather crude statement, and perhaps one that could be viewed as unkind, but still, I don't see a strawman. I mean, the average person views the entire discipline of economics in a similar manner.

I also know that Marxists have at many times just created pointless predictions. In fact, that's why economist Robert Fogel is not a Marxist, as he was a Marxist for a period of time, and when he found that all of the predictions were wrong, he decided to study the discipline of economics.

No, I am not crying about anything really. For one, I don't usually use the term "socialism" when dealing with economic policy, but rather usually use the term to describe nations that are state-run(not to say that other forms of socialist theories do not exist, they are just rarely implemented). In any case, I don't think that this is likely to have happened at all.


Good thing that there is no intellectual homogeneity.


It is actually somewhat irrelevant to his point, which is the question of whether there is a trade-off between variation in income and total income that desirably exists. The term "socialist" was just invoked because socialism is much more focused upon egalitarianism.

I actually will throw that in your face as totalitarian, as capitalism does not "coerce" as capitalism is not one being that holds a monopoly over society. Technically nobody is compelled to labor under capitalism, but most people just aren't liked enough to get help living without working. This is a major difference, as capitalism is just functioning off of freedom to associate.


Ok.


Well, sometimes considered by neoclassical economists, who interepret these arguments to be matters of mathematical calculation. For instance, it is claimed by a few of them that the computing ability to do all of the calculations in a market economy cannot be done by supercomputers.

In any case, I don't really see much greatness in that link. I mean, I don't think it was done by an academic for that matter(not saying that only academics can do good work, but a more exploratory stance seems better), and the formatting is off.

Actions speak louder than words. Lenin professed anti-market sentiments, but when push came to shove he saw that the Soviet Union had no chance in hell of surviving if they actually followed Socialism and so he implemented pseudo-capitalist reforms. You are delusional if you think Lenin was opposed to the NEP, as he freaking *created* it.


I wasn't defending the Iraq war, I was mocking you. Saying that Lenin was opposed to the NEP is akin to saying Bush was opposed to the war in Iraq- in either case, basic historical fact runs completely counter to such a claim.


Hm. The purpose of the thread was partially to bring up the idea that socialism could be seen as a worthwhile possibility even if it didn't work perfectly, indeed even if it significantly underperformed capitalism. I don't think I've been that unfair in being too hard on socialism.


Because there is no such thing as unqualified success. In any system some people get screwed over.


Oh, pretty much any period of history, certainly anything before the twentieth century.


America has enough well-educated people to still dominate many fields. Anyways, education as a sole metric is questionable. In terms of standard of living (which most people care about much more than education) the US is certainly far better than most places in the world. I have read studies finding that in many ways America's poor have a higher standard of living than Europe's middle class.


Some people are temporarily in between jobs, some are fresh out of school looking for their first job, some have been laid off because times are tough or because their job skills are no longer relevant. Most economists agree that there is a "natural" rate of unemployment, and it's not the end of the world because it's not a permanent unemployed class- people are jobless for a while, and then they find jobs.


In the latter case, wages rise. In the former, not all that much really happens. Full employment isn't realistic because there are always at the very least people in between jobs or people just starting out in the job market. Full employment would mean no one was ever looking for a job.


Which one? There's only been a couple hundred thousand peasant revolts. The first that springs to mind would be the 1524 Bauerkrieg in the Holy Roman Empire.


From what I've read, the peasants who survived the black death came out pretty well with higher wages and more favorable conditions. Of course, those were later eroded.


Oh right, the evil capitalist pig-dogs are all in a massive conspiracy to deliberately employ fewer workers so that they won't have to spend as much on wages. You are assuming a degree of class consciousness in wealthy investors that simply does not exist. You're projecting your class-warfare delusions onto people who mostly just don't give a damn about Marxist thought.


Well, that's what I regarded as oversimplified and a piece of class-warfare rhetoric. You haven't demonstrated that the "capital possessing class" are parasitic. Without them, the economy wouldn't run.


It's a true assertion, and has already been amply demonstrated in theory, and we have some hints that the practice would reinforce that claim. I'm using a basic dictionary definition of efficiency. Applied to the economy, that would be producing the most wealth with the fewest resources.


Probably one of the biggest socialist pet fallacies. It's called the No True Scotsman fallacy. Sure, you can just disavow every self-professed socialist ever who made an actual impact anywhere.


Do you have a counter to it? There is simply no way of taking into account every factor that goes into the economy without using the market, certainly not from a centralized level.

Last edited by Orwell on 24 May 2009, 11:00 am, edited 1 time in total.

And Titus: I just spent two semesters studying Russian and Soviet history. You've made a lot of outright incorrect claims, and I have let most of them slide. Be more careful citing historical facts or I'll start calling you out on your mistakes. If nothing else, at least take a moment to check Wikipedia and be sure you aren't saying something completely idiotic.

Right. Good criticism. Actually, the closest thing I can think of to this end would probably be efficiency wages, which are wages higher than an equilibrium wage, designed to avoid shirking. Thus, they necessitate unemployment.


Obviously there must be capital. The issue is that the people holding onto the store of capital can be taken to be parasitic compared to the ideal "capital holding bin". The additional issue though, is that if the initial acquisition of money and saving of money is accepted as good, then it is hard to consider what is done with it to be bad at all, and it is hard to just claim that holders of capital are just parasites.

@ruyven

As opposed to someone being illiterate and being robbed at the same time in the US? I think that may also be called taxation but I have no specific knowledge of how that has been justified, if at all, by the Castro regime.

While we're making fairly banal statements did you know that in the UK and US you can be held by police and security forces without any evidence?

I'll take it you agree that universal literacy is a pretty damn good thing. That said it also seems that you think I'm going to start defending the Cuban regime, which I'm not. I'm very aware of how bad things are in Cuba. That said you appear to be trying to equate Cuba with being a specifically socialist state and economy, which it's not. Castro was not a communist until it suited him, to demonstrate this heres an anecdote (anecdotal evidence only i know but): having gained control of the Cuban state the former guerillas (sp?) had to form a government, during a meeting someone asked "Is anyone here an economist?", Guevara, not paying attention, looked up and said yes. He was made minister of the economy. Guevara had trained as a doctor, but had no formal training as an economist. It turns out later that Guevara had thought the question was "Is anyone here a Communist?", hence why he answered yes. My point being that if you thought yourself to be in a room of communists and socialists, who you had spent months fighting alongs side, already would you not think it odd that such a question would be asked? Or is it possible that Guevara joined Castro on a basis of their sharing views on south american independence from the US, as opposed to specific economic views. It's also worth pointing out that Castro wanted to model a new Cuban government after the US system. This might be him being ironic. Or it might in part be a response to having an aggressive superpower a few miles away which has held you under blockade for decades, invaded you once by proxy, and is making it difficult if not impossible to get hold of basic goods thus leaving your new government open to immense social tensions caused by general want. Castro had to abandon plans for a US style system after the Bay of Pigs to get close to the Soviet buereaucrats, in no small part contributing to his slide toward Stalinism, something which, again, i neitehr condone nor support



yep, that's often called a heavily progressive income tax system. I'm not sure I see the point your trying to make, please be a little more explicit.



"The primary role of government is to protect property from the majority. And so it remains." Noam Chomsky

If, as the saying goes, nine tenths of the law is possession, and the police enforce the law, what is the purpose of the police?



In what way is Socialism a stew? and before answering please read over the previouse posts made in this thread. I absolutely welcome the day more and more US Americans turn of the TV and engage with the world around them, so long as our voice is not suppressed by the crude louder shouting of others I think a few may not only begin to see the point behind Marxist thought, they may begin to agree. The critical thought you suggest would be light years ahead of the regular regurgitation of what is said and shown by the US media.

Marxists absolutely support a peaceful transfer of power. Unfortunately many capitalists insist on continuing with an ideology and economy which exploits and oppresses their fellow human beings and as has been proven at every opportunity will resort to the most brutal violence to prevent any encroachment on the wealth and power they loot every day, here's a list of counter-revolutionary conflicts and interventions (not all necessarily socialist or communist but generally aimed at any considerable advancement of workers rights)
The Paris Commune of 1871, The German Revolution of 1919, The Hungarian Soviet of 1919, the Russian Civil war of 1917-1921 in which 21 foreign powers fought against the Bolsheviks, The US and Australia in the Vietnam War, The CIA backed Pinochet regime in Chile in the 1970's **don't read this if you're easily offended, continue to beyond end of paragraph*** (did you know that one of the favourite torture techniques of the CIA and the Pinochet regime was to use dogs to rape women?)

It's fair to say a few people died in all of these, putting aside the horror of it all.

Do not lecture me on violence.

That's not the question that was asked. I attend school in Miami, I know plenty of Cubans who fled from Castro. There are good reasons why everyone who could get out of the country did so whenever they had the opportunity. I also know someone whose father was held in a forced-labor camp and starved because he wanted to emigrate from Cuba. So no, a Cuban generally can not pick up and leave the country to come to Florida.


The Bay of Pigs incident occurred after Castro was already in bed with the Soviets, it was not a cause pushing the Cubans to socialism. And the Soviet Union itself was no longer Stalinist by 1961- Stalin died in 1953, and his loss was not exactly mourned by the new leadership.

Careful on your history.


BS. Complete and utter BS. The centerpiece of Marxist thought is a bloody revolution, and Marxist theorists openly discussed how certain groups are "class enemies" of the proletariat and have to be oppressed.

@ Orwell

Well, I'm not convinced i've said anything 'idiotic'. I took you advice and can you guess what I found on wikipedia? Read carefully:

"Lenin was vehemently opposed to the NEP stating that it was a repudiation of communist principles. However, he justified the NEP by insisting that it was a different type of capitalism. He insisted that this form of “state capitalism” was the last stage of capitalism before socialism evolved."

If you do not feel ready to concede the point can we at least agree that continuing this particular line of thought be left to a later date?
I'm assuming you're intelligent enough not to get too cocky about your two semesters of study.



I'm aware that you weren't defending the Iraq war, I was making the point that your reply was both flippant about a very serious, nay absolutley fatal for some, issue and would be a completely inaccurate analogy if it was not only intended simply to mock me. You're reading into my post that which isn't there, and I refer you to the quote from your beloved wikipedia^^



My point being that you examine (if it all) socialism according to standards that you don't ask capitalism to meet. This is clearly an exercise of bias, which takes me back to my earlier post about your being white, male, lower middle class, college educated. I did not need to look at your profile page nor your previous posts in other threads, I was able to infer that information from you posts in this thread. My point being in observing that is that you have something of an emotional and psychological investment in defending an economy which has priviliged you, and this is beginning to show in the crude methods you are resorting to replying to me, as opposed to the fairly intelligent and rational initial posts. How would it affect you psychologically if you were to be told that your achievements to date are mitigated by your superior position socio-economically, though this is not to say it is the only reason.

In so far as underperforming capitalism goes I'll refer you to the following page http://www.chomsky.info/interviews/20090401.htm
wherein you will see the following:

"Two years after establishing workers' control in the factory the working week was cut from 44 to 40 hours, maintaining the same level of wages and productivity. This way, the workers won Saturday as a day off to rest or enjoy with family and friends. Now, five years after the occupation began the working week has been reduced for production workers from 40 to 30 hours. The workers in the processing areas have now working days of barely 6 hours a day. But they committed themselves to keep the productive levels of the factory as before. At the moment, this measure is of an experimental character, taking into account the difficult situation of the factory and the need to cut electricity consumption to survive. "

This article was taken from the In Defence of Marxism website, (the link is at the top of the page .url or whatever) and if you read more of the article you will see the measures taken to disrupt as much as possible the work done. It is also a step toward countering your assertion that without a capitalist class/group whatever the economy wouldn't run, they've been doing pretty well all by themselves.



If this is the case perhaps we should aim to screw as few people as is absolutely possible, you also don't question that capitalism well and truly screws quite a few people, and what is more you dismiss all of those concerns with deeply disturbing ease.



Questionable on what grounds? First of all in what way are standard of education and standard of living two mutually exclusive things? and can you cite the studies that find this preference amongst most people, especially seeing as many Americans spend thousands of dollars to get an education justified on the grounds of getting a better job to improve their living conditions? Or to make contacts and network with the same aim? This is not an efficient expenditure of capital if that is not the aim, unless they're are doing it because they see education and the pursuit of knowledge on any level to have an inherent value in itself, which is to contradict your claim. Also does this world leading research in a nation with a comparatively poor standard of overall education not point toward the conclusion that there are signifcant inequalities in both access to and provision of education?

In what ways are the american poor better off? Please be explicit and try and cite sources if you can, though I know this is not always possible.



'Times are tough' being a euphemistic phrase for job cuts in the face of decreasing profits etc.? 'When job skills are no longer relevant' also meaning laying someone off when it is more cost effective than retraining, which of course does not take into account the subsequent costs in unemployment benefits and retraining which will have to be done to avoid being forced to take a lower paid job, all of which is cost is met by public expenditure, which is possibly another example of state intervention in the market.
According to the bureau of labour statistics around 10% of the working population were unemployed for 52 weeks or more (ftp://ftp.bls.gov/pub/special.requests/lf/aat30.txt) oscillating between 600,000 and not quite one million, which is certainly not an efficient use of their time. And i didn't say it constituted a class, you're reading 'delusions' into my posts.

You also do not address the social and personal impact of job loss (across socio-economic groups) and long term unemployment, that being one of the primary indicators for the possibility of poor health, especially mental health (which may point toward an explanation for the delusions you accuse me of, no?), which creates a further burden on the taxpayer, that is in a country with a national health service, as opposed to the US insurance system where they are left, if you'll overlook my class war rhetoric, to rot (literally in some cases as it turns out). Heres one source - http://www.ncbi.nlm.nih.gov/sites/entre ... 00m,isrctn
heres another - http://www.sph.umich.edu/news_events/fi ... re/one.htm
heres another - http://www.steadyhealth.com/articles/Jo ... 3_f49.html



so if you follow my analogy with the peasants revolt you will work out the following - employers will only tolerate wage raises in so far as they do not impact on profitability, which is the absolute lynchpin of any market enterprise, no? Pardon me if I now patronise you at all, I'd simply like to get some points explicitly made. So, if wages increase, cost of production increases and consequently so must the cost of the product or service, which in certain sectors which provide necessities (food, utilities etc.) this increase constitutes what is effectively a real terms wage decrease for some and eventually becomes a choice between heating your home or putting a meal on the table for the poorest. If your company was the only one this increase happened to you would go bust because you simply could not compete with your rivals, no? When this occurs across many areas of the market measures have to be taken to restrict wages, which include legislation (will probably be unpopular) which would need to be enforced (will definitely be unpopular,and is also inefficient as people have to be taken out of the work place and put into a uniform which does not add anything to the economy but must be paid for), reducing the workforce (unemployment), or increasing hours while restricting wages (again unpopular, another pay cut). You could invest in better techniques of production to increase output but due to the law of diminishing returns this has strict limits and will eventually not be an option. Thus as the necessary precondition of a functioning market it must actively create and support a certain level of unemployment. To crudely apply chaos theory this is a 'magic number' at which the market functions at optimum levels (It seems around a 10% rate of long term unemployment) but due to the many factors involved will approach but not reach before spiralling out a way then returning again, this can only go on for so long when you factor in the exhaustion of natural resources.

I didn't even have to suggest class-consciousness! I'd like a response or a concession of the point please (and for you to read my post in full before responding, if you're so good with history why not google 'peasant revolt' and 'wat tyler' to find out which one i'm referring to). I'd also ask you to retract your accusation of my being both deluded and a conspiracy theorist, cheap slander is below the dignity of someone who is clearly capable of putting a well-reasoned argument.



The making of thousands of pokemon toys, dildos (though demand for these will need to be met, ), companies making cars with different bodywork buying the engine from a larger supplier (why not have the one car rather than designing, developing and advertising a variation in body work?), refrigerators which break within a short period of their warranty expiring going on to pollute in massive piles is efficient?????? You cite the very problem of capitalism, resources are used to make wealth as opposed to making enough for all to enjoy a humane and dignified standard of living.

You will (and have done) argue yourself that there are very strict limits on the applicability of theory, I'm assuming that by 'hints' you are either referring to the very limited data available on a socialist economy or, (far,far less likely) you are actually saying that there is little empirical evidence to support the theory behind market economics being efficient. On this allow me to put a slightly crude hypothetical: an eighteen year old woman is going to pay $200 to a photographer for a photoshoot to put together a portfolio as she intends to go into modelling. As does happen the photgrapher takes the money, the shoot takes place but he does not provide the photos. According to the small print of the contract the photographer only had to conduct the photoshoot. According to your theory this an efficient allocation of resources, but this does not address the essentially exploitative nature of the exchange; and also raises the question of an imbalance of knowledge (and offers a retort to your assertion that education standards are not a problem), would the woman have paid $200 or anything at all if she had a) known to read the small print or b) had any indication or reason to think that our enterprising photographer had no intention of providing the photos at that price?



I haven't denied that he is some form of socialist, i'm opposed to the kind of socialist he is, namely Stalinist; which seems to be particular to socialist regimes rising in regions with generally low levels of indutrial development, largely agricultural economies and the sabotage and acts of terror carried out by the US I'm not entirely surprised the Castro regime has taken the route it has. and note I don't cite the US activity as the only factor, but having a superpower which has a track record of aggression is still definitely a factor. Compared to a market economy in similar conditions? well, I have reason to doubt you could achieve as much in such a short space of time.



I meant in response to the article I posted. Though seeing as you dismiss all things socialist out of hand i'm not surprised if you haven't read it.



I know that, I wasn't talking to you in that post.



I cite the bay of pigs primarily as the culmination of two years of heavily increasing hostility on the part of the US toward Castro between 1959 and 1961, though I do accept you criticism to be a little more accurate. That said there is no need to refrain from citing my mistakes on history, these are probably to be expected given the deficient education provided me by a free market nation where education is not as important as living standards. Though this is considered efficient as my socio-economic background would suggest I am incapable of anything more than operating machinery or doing fairly menial tasks in an office, don't need history for that so why pay for it? Like I said, go right ahead, hopefully you can make up for the gaps created by the attitude to education you espouse yourself.

Nor do I mourn Stalins death. And he does not need to be alive for anyone to be Stalinist, your superior education would surely tell you that. What's more (if the prole-ed programme hasn't failed me entirely) Krushcev et al made a few efforts to get beyond the Stalin era while trying to retain as much of the power he accumulated as they could. Crudely put Stalinism-lite perhaps? Still fairly Stalinist. As is Castro following in many respects the Soviet model.



I shall return to this point, as this is already a long post and i need to walk the dog, though I absolutely intend to respond. (I also intend to answer yourself, Awesomelyglorious)

Surprising that Wiki would say something like that, while the article starts off with the fact that Lenin proposed and promoted the NEP. I stand by my claim that actions speak louder than words. Lenin had rather a habit of BS'ing socialist theory when it suited him. *cough Bolshevik Revolution cough*


The analogy is accurate. You claim that someone was opposed to their own plan.


You mean like whether it would result in societal collapse? I started out the thread suggesting that socialism should be judged on looser standards than capitalism because of its egalitarian nature. That seems pretty generous to me.


I'm not *that* privileged in relation to US standards. I am interested in defending a system that has produced the high standards of living I enjoy, and that allows a huge amount of class mobility so that I am not tied down to my parent's social class.


I'm quite aware that I am, like all others, a victim/beneficiary of circumstance.


There were successes during some periods of Soviet rule, but you seem to be ignoring the methods used to achieve them.


I seem to recall the Bolsheviks bringing back a bunch of the old Bourgeois class to help run the economy after the revolution.


That was actually the point of the thread, if you check the OP I wondered if socialism could be justified by lifting people out of extreme poverty.


As a sole measure of a country's success, I would think other factors than educational level should be taken into account.


They aren't, and I never claimed they were.


People get an education (usually) in order to get a better job- the motive is not education but having a higher standard of living. But if people can get the same standard of living without having to spend as much time in school, they do it. Living standards are laregly the priority.


Some of our public schools need to be improved, but at least at the university level our education system is very egalitarian.


Well, on things like automobile ownership, home ownership, possession of consumer goods such as microwaves. http://www.heritage.org/research/politicalphilosophy/bg791.cfm This isn't the one I had seen, but I can't find the other one right now. It talked about things like access to running water and indoor plumbing. Air conditioning is also mentioned- in France, many old people die every year in the hot summers.


...that's not really how wages are determined. I'm sure AG could chime in with some labor market economics, but wages are, from what I've understood, determined just like all other prices- just based on supply and demand.



I just find claims that one group of people is actively trying to screw over everyone else to be rather suspect.


You don't like what people spend their money on, so they shouldn't be permitted to buy those things? If there's demand for a product, it will be produced.


The former. Every attempt at socialism has failed badly.


Achieve so much? You are ignoring the human toll of Castro's regime, and the loss of individual rights. If you ever visit Miami, for your own sake, refrain from praising Castro's results. I know too many people whose families had to flee their homeland to escape that butcher.

That about says it all.

If you go from 1 to 2 with no change in production per person, then several get a pay raise for doing nothing new while two work as hard as ever only to make less. The second situation is sustainable only in a society where everyone makes equally valued contributions to the society. Someone who does harder work might work less hours than someone with an easy job who works longer hours.

In reality, the imposition of socialist rules punishes the people who create the wealth being redistributed in society. If the entrepreneur cannot gain the fruit of his labor, why should he bother? Socialism always collapses after all the entrepreneurs close shop and put the burden of wealth generation on the state...who is incompetent in such matters.

The failure of the USSR in economics is probably unassailable but their science was rather good. They beat the USA into space and their space work is still more durable than that of the USA. I doubt it is impossible for a system using the goals of efficient production and good innovation to be incorporated into a more equatable socialistic system. It just never has been done. The high standard of living in capitalistic countries is riding on the backs of the poorer countries of Africa and Asia.

Hm. They rather sucked at genetics and biology, thanks to a certain Trofim Lysenko.

That is true, but most of the credit goes to one word....PRIORITIES.

People were starving in the "worker's paradise" but their space program was ambitious because they wanted to show off to the world. If you were in a task the USSR needed done, you got the best of everything. Otherwise, you went without.

The USSR also had second-to-none NBC warfare capability because they always figured that in a war they would employ nuclear, biological and/or chemical weapons. All their kit was designed with that reality in mind. The USA took a different approach, and we knew if a NBC environment (even today) we are woefully under prepared.

It's not about resources, it's about how a nation chooses to employ them.