Did I ruffle a few feathers? :)

Chris M. Sciabarra sciabrrc at is2.NYU.EDU
Fri Sep 22 13:28:53 MDT 1995

On Fri, 22 Sep 1995, Louis N Proyect wrote:

> Louis:
> Chris, you overuse the word planner. It is just too general a category.
> In the text above, you could just as easily substitute the word
> government. But then you would have to do some class analysis, which
> Marxism excels in. Words like bureaucracy, planning, state, market, etc.
> when used without situating them in some kind of historical, material and
> social setting become rather useless.

Fully agreed that class analysis is essential.  My only point was that
markets have had a better record in delivering the goods than non-market
systems.  I know Doug, for instance, is unhappy to hear about prices as a
signalling mechanism.  He points to "financial markets" as the freest
imaginable, and wonders why such markets have persistent mispricing.  I'm
not an expert in financial markets, but they certainly are not the freest
imaginable.  They are fully regulated and controlled.

The fact is that prices are enormously complex mechanisms for the
transmission of information.  It is difficult to discern WHAT is being
transmitted simply because one cannot remove the signal from the context
within which it is transmitted.  Secondly, prices are not static, they
are fluid and dynamic.  Markets respond to this fluidity much quicker
than do planning boards which may base their recommendations on
yesterday's "prices" that are today, completely invalid.  And prices mean
different things to different people, and they respond to different
circumstances.  Regulations may have incidious effects on the fluidity or
"stickiness" of price response.  De-regulation has another effect-- in
the Soviet Union for instance, when markets were deregulated, there was
enormous inflation.  Prior to this price inflation, shortage was
signalled not by lower, controlled prices, but by long lines and the
simple unavailability of goods.  The relative scarcity of goods is now
being reflected in higher prices, which prompt potential entrepreneurs
into the production of such goods to secure higher profits.  I simply
don't know what else to say in this regard -- I am not an investor or an
entrepreneur, but I see investors and entrepreneurs taking advantage of
price differentials everyday, responding in more dynamic ways and
innovative ways than any commissar.
					- Chris
Dr. Chris M. Sciabarra
Visiting Scholar, NYU Department of Politics
INTERNET:  sciabrrc at is2.nyu.edu

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