Applied Socialism 101: A beer and pizza problem
Mon, 2005-07-18 14:07
#1
Applied Socialism 101: A beer and pizza problem
Mon, 2005-07-18 14:07
#2
Every now and again, someone will start a thread to the effect that there’s a need to build an alternative to capitalism. These threads never go anywhere - they invariably end up rehashing existing criticisms of capitalism. So as a public service, I’ve constructed a toy economy (economists call them models) that people can use to try and figure out how a socialist (or communist, or whatever) economy would work.
In this economy,
- There are 100 people in the economy, each of whom supply one unit of labour.
- There are 100 units of capital available. For the purposes of this model, it doesn’t matter where they came from.
- There are only 2 goods: beer and pizza.
- Beer production is labour-intensive, and pizza production is capital-intensive. Both technologies have diminishing returns in their inputs, and both have constant returns to scale.
- Individuals like both beer and pizza. If she has more beer than pizza, then she’d prefer another pizza over another beer (and vice-versa).
The questions are:
- How should we allocate capital and labour to the beer and pizza sectors?
- How should we distribute the beer and pizza that gets produced?
To give you an idea of what is involved in answering these questions, I’ve worked out four scenarios. These are just summaries; [url=http://www.ecn.ulaval.ca/~sgor/babble/beer-pizza.htm]the gory details are available here.[/url]
[b]1: The social optimum.[/b] 75 people work in the (labour-intensive) beer sector; 25 workers make pizza. 75 units of capital go to the (capital-intensive) pizza sector; 25 are used to make beer. 100 pizzas and 100 beers are produced in all; everyone gets one of each.
[b]2: The capitalist solution.[/b] Capital is allocated (not necessarily equally) across households, and property rights are enforced. Households supply capital and labour to firms, receive wages and interest income, and they purchase beer and pizza at market prices. Firms use labour and capital inputs to produce their goods, they pay wages and interest to households, and they sell their goods. Wages are the same in both sectors, as are the rates of return on capital. This scenario reproduces the optimal allocation of capital and labour, even if capital is distributed unequally. If the allocation of capital is equal across individuals (each gets one unit of capital), then we also get the socially optimal distribution of beer and pizza.
[b]3: An inegalitarian socialist solution.[/b] Suppose we take the capitalist solution and transfer control of the capital in the pizza and beer sectors to the workers. Since workers own the means of production, they keep all of what they produce. Total production will be the same as the capitalist case and the social optimum: 100 beers and 100 pizzas. Beer and pizza producers will exchange their wares in a free market. This solution allocates 25 workers to the pizza sector and 75 workers to the beer sector, produces 100 beers and 100 pizzas, gives 2 beers and 2 pizzas to each of the 25 pizza sector workers, and gives 2/3 beers and 2/3 pizza to each of the 75 beer workers. (Clearly, the most important problem here will be: who gets to make pizza, and who gets stuck making beer?)
[b]4: An egalitarian socialist solution.[/b] Suppose that each worker is allocated one unit of capital, with the proviso that it must be used in the same sector in which she works. If beer and pizza are sold in competitive markets, then 50 workers will choose to work in the pizza sector, and the other 50 will make beer. Total production will be 88 beers and 88 pizzas, so everyone receives 0.88 beers and 0.88 pizzas. Note that individuals in this economy consume 12% less than what the social optimum. (The 1:1 capital:labour ratio in both sectors isn't efficient.)
If you have a suggestion for an alternate allocation mechanism, but you're unwilling/unable/afraid to work through the math, I'll be happy to do it for you and add it to the list.
Mon, 2005-07-18 14:27
#3
Re: the inegalitarian socialist solution.
If we assume that workers own their own factories, then presumably they get to set the wages paid. If the wage is equal within a factory, but not within an economy, then if you allow for the free movement of labor it would seem to me that this would solve the problem of who gets stuck making the beer, since if the wage is higher in the beer place and lower in the pizza place, then you can draw more workers in. [img]smile.gif" border="0[/img] Of course they would not like having to only get 2/3 of each! [img]smile.gif" border="0[/img]
Also, I know this is beyond the scope of your current example, but at some point, how would you build in changes to the capital-labor ratio over time? Just a thought. Not necessary to tackle this now. [img]smile.gif" border="0[/img]
[ 18 July 2005: Message edited by: DrConway ]
Mon, 2005-07-18 16:16
#4
quote:
Originally posted by Stephen Gordon:
[b][b]2: The capitalist solution.[/b] Capital is allocated (not necessarily equally) across households, and property rights are enforced. Households supply capital and labour to firms, receive wages and interest income, and they purchase beer and pizza at market prices. Firms use labour and capital inputs to produce their goods, they pay wages and interest to households, and they sell their goods. Wages are the same in both sectors, as are the rates of return on capital. This scenario reproduces the optimal allocation of capital and labour, even if capital is distributed unequally. If the allocation of capital is equal across individuals (each gets one unit of capital), then we also get the socially optimal distribution of beer and pizza.[/b]
Stephen,
Thanks, as always, for your thoughtful posts.
Personally, I think a big portion of people's misgivings re: capitalism lies not in the initial condition, but rather the conditions that could 'efficiently' prevail over time when left unregulated. Even if capital is equally allocated initially, it certainly doesn't mean that certain injustices will not come to pass at some point in the future. Even in the absence of economies of scale, other gains could be made (via co-production, bundling, price discrimination, etc.) by one industrious person convincing another and still another to give up their control of capital. On top of that, the 'socially optimal' outcome that you describe is particularly prone to problems on an individual level. For example, the economy might be producing 100 beers and 100 pizzas, but 80 people could easily end up sharing 10 pizzas and 10 beers, while the fortunate 20 share 90 of each. These 20 binge drink and puke a lot of it down the drain and leave their pizzas sitting around, or just eat the toppings and throw the rest in the garbage.
Which was a pretty convoluted scenario, but I guess my criticism would be the following: the socially optimal constraint-- although simple and pragmatic-- also ignores the problems that arise as a result of inequities that develop over time. Why not make the single optimal outcome be: every person gets at least 1/2 pizza and 1/2 beer? What you've given is arguably an economically optimal and is not necessarily a socially optimal outcome. Note: I do understand what you meant by 'socially optimal', but I'm trying to point out the problem with using mean or aggregate output as the only measure of a typical citizen's well-being.
Mon, 2005-07-18 17:46
#5
On the capitalism option--I'd have to say the final "if" ("If the allocation of capital is equal across individuals (each gets one unit of capital), then we also get the socially optimal distribution of beer and pizza.") is a very big one. And the probable consequences of a more typical distribution of capital would be a fairly problematic distribution of beer and pizza.
But, on the initial topic. Other options would include the "centrally planned/nationalized socialism solution". That is, the government owns the capital, allocates the appropriate 75 units to pizza and 25 to beer, decides that 25 people will work in the pizza sector and 75 in the beer sector, and gives everyone 1 unit of pizza and 1 unit of beer. Theoretically, it doesn't matter whether the owner/planner is a benevolent dictatorship, a representative democracy, or a council of every citizen--which I think points to a limitation of the whole exercise. In reality, who gets to decide is at least as important as the theoretical allocation method.
Hmmm . . . how about a system where each citizen owns, or controls the allocation of, one unit of capital, and can allocate it to whichever type of production they want irrespective of their employment, but gets no return on it (and they're non-transferrable)? Each citizen also gets a vote at their workplace irrespective of whether they have capital allocated there. These rather idiosyncratic property rules are enforced. So, workers control their workplaces and seek additional workers and additional capital separately. Allocation of capital is based on citizens' perception of who needs the capital, and whether adequate amounts of the goods they're interested in are being produced. However, no markets, goods are just allocated equally--or at least, equally to everyone with a job. Seems to me that, while capital allocation might slosh around for a bit, the equilibrium point would be at the optimum. If the beer- and pizza- producing co-operatives don't hire workers that they don't have the capital to put to use, the labour should do the same. The system might be open to a capitalist critique on incentive-related grounds, but that stuff doesn't figure in this model either--and most capitalist wage labour has similar incentive problems.
Incidentally, this latter system might be considered a retarded, naive cousin of Participatory Economics' allocation system.
[ 18 July 2005: Message edited by: Rufus Polson ]
Mon, 2005-07-18 21:15
#6
I've been thinking about that second option. A clarification: how would labour be allocated? The same way that capital is? That is, if one sector says that it can make better use of labour than the other, the worker will move there?
Tue, 2005-07-19 16:28
#7
I was thinking pretty much as per capitalism or whatever--they advertise jobs and people decide where to apply. The assumption that might be a sticking point is that I assumed they'd be advertising jobs based on having the capital infrastructure to support them, and so ultimately how many jobs were offered would depend on how people were deciding to allocate their capital. If that's not a workable assumption, might need to build something else in.
Tue, 2005-07-19 20:04
#8
Okay. Still thinking - several scenarios/models suggest themselves, and I'm working through them. For now, I'll just say that if we add the assumption that 'no-one knows everything', then the benevolent-omnipotent-omniscient dictator scenario would be excluded.
Tue, 2005-07-19 20:50
#9
Hmm. I need more clarification. What incentive would firms use to attract workers? I'm guessing that the idea would be that for a given allocation of capital to a given sector (and given what other workers have already decided), a worker would be offered an equal share of what would be produced if she chose to work there. In such a model, the worker's decision would take the form of 'do I take one-tenth of 10 pizzas, or one-fifth of 5 beers?'
Is that what you had in mind?
Tue, 2005-07-19 21:50
#10
The hours of labor could also be adjusted as an incentive. If you want to work 8 hours instead of 6, nobody's stopping you. [img]smile.gif" border="0[/img] But some people might prefer 6 hours a day, even if the work might be harder.
Tue, 2005-07-19 22:13
#11
You [i]are[/i] one for adding complications, aren't you? [img]wink.gif" border="0[/img]
We could extend the model to incorporate leisure, so that an individual can choose how much labour to offer as well. But that question is probably best dealt with in a model of it's own...
Wed, 2005-07-20 11:49
#12
Well, some socialist writers have said that one way to solve the problem of paying [i]everyone[/i] the same wage is to alter the hours of labor worked as the incentive.
Wed, 2005-07-20 15:24
#13
In 1994, this person, J.W. Smith, advocated sharing the most productive, wealth creating work among as many workers as possible. It sounds like German's are closer to his two day work week than anyone else.
[url=http://www.globalissues.org/TradeRelated/Consumption/Articles/WastedLabo... of wasted labour[/url]
Wed, 2005-07-20 15:30
#14
quote:
Originally posted by Stephen Gordon:
[b]Okay. Still thinking - several scenarios/models suggest themselves, and I'm working through them. For now, I'll just say that if we add the assumption that 'no-one knows everything', then the benevolent-omnipotent-omniscient dictator scenario would be excluded.[/b]
How much do you need to know to run the production of beer and pizza? [img]wink.gif" border="0[/img]
More seriously, while I'm not a fan of central command, especially in the absence of democracy, what happens if we add the assumption that the market doesn't know everything, isn't efficient, doesn't clear or some such, or that it requires spending money on advertising, or . . . yadda yadda. Then the capitalist scenario would be excluded. Tweak the model and it'll give you the answer you want. Leave it unrealistically simple for the sake of easy speculation and evenhandedness and it'll give you answers that are unrealistic and simple. The whole process, while interesting, has some distinct limitations.
The "nobody knows everything" limitation is, in the real world, very cogent if control is top-down by an elite (hrm, such as billionaires). But say you have national *ownership*, but fairly democratic *control*. That could work, but it would require hashing out a plausible set of details for widespread input. The objection from a capitalist perspective tends to be that the same signals you could get from highly expensive and longwinded canvassing of opinions and wrangling is furnished by the market pretty much cost-free. I have my doubts about how effective that mechanism really is, but it's probably true that on a large scale democratic input has tended to be prohibitively expensive and cumbersome. Similarly, in medieval times large scale democracy would have been prohibitively expensive and cumbersome. Imagine a national campaign travelling about on horseback, relying on town criers to convey political claims because hardly anyone can read, casting votes using pebbles and twigs and potshards to represent different candidates because people can't read their names on a ballot and anyway there's no printing press for mass ballots, yadda yadda. Mass democracy required the printing press, trains, and ideally fairly widespread literacy and the telegraph or equivalent. Similarly, I think modern communications technology may be bringing us now to the point where an extension of democracy to more economic issues and deeper levels may be practical where it was not before.
. . . drifting way off. I'm not really fond of the command-economy model, I'm just signalling that I'm not convinced of the standard orthodoxies about it. Frankly, I'm not even convinced it did such a horrible job in Russia all things considered. Given that Russia came into the command economy starting from Czarist Russia, which wasn't what you'd call an economic utopia, and that it was devastated by WW II, and that it then entered an arms race and devoted a proportion of its production to the military which dwarfed what the US is doing (although the total output was still probably smaller), and that it was a nasty, brutal oligarchy, it's surprising that their economy managed to hold together and provide decent services and jobs as long as it did. I've seen a persuasive analysis that suggests what really nobbled them economically was more the arms race than the command nature of the economy, although the extreme centralization certainly didn't help. And as I mentioned, the beer and pizza model we have here really has no mechanism for making distinctions between a dictatorial "centrally planned" economy and a democracy with crown corporations.
Wed, 2005-07-20 15:54
#15
quote:
Originally posted by Stephen Gordon:
[b]Hmm. I need more clarification. What incentive would firms use to attract workers?[/b]
No real direct, payment incentive at all. The only qualification I made was that distribution was equal to everyone *that is working*, so if you chose not to work at all, you wouldn't get anything. In a more nuanced real-worldish scenario, you'd presumably get some kind of welfare and so forth, but you'd still be better off working than not working. But as to working one place rather than another, doesn't matter except in so far as you find one more congenial or there's jobs available in one but not the other.
quote:
[b] I'm guessing that the idea would be that for a given allocation of capital to a given sector (and given what other workers have already decided), a worker would be offered an equal share of what would be produced if she chose to work there.[/b]
We could float a model like that, but that isn't what I said. I said everyone gets an equal share of what's actually produced, irrespective of where they work. The worker's decision would take the form "do I feel like making beer or pizza?"--unless there weren't any jobs on offer in the beer sector.
The real decision would get made by the people already working at a beer firm, and it would be basically "Do we have the equipment we need for another worker to be useful? If so, let's put up a job notice."
And what determined that would be how many citizens had allocated their capital to beer. And what determined *that* would be whether people were noticing a shortage of beer in their equal allotment.
quote:
[b]In such a model, the worker's decision would take the form of 'do I take one-tenth of 10 pizzas, or one-fifth of 5 beers?'Is that what you had in mind?[/b]
Nope. And it occurs to me that, since the labour intensiveness of the two types of firm is different, the shares from something like that would be of quite different sizes, which is presumably something you were quite ready to point out.
And indeed, it's an interesting point which has something to say about the egalitarian or otherwise nature of decentralized co-ops as an economic form. People in worker-run co-ops in capital-intensive industries are presumably going to make more, *if* they can scrape together the capital to make the thing run at all, than people in worker-run co-ops in labour-intensive industries. Worth pondering. I'd still consider it a step up from the current situation. And I wonder if the need to reinvest profits in ongoing improvement of plant and equipment and whatnot would reduce that differential. But still, it seems likely that even in an economy dominated by co-ops, autoworkers will generally make more than garment sewers. But none of this has a direct application to the model I floated, which doesn't work like that.
Wed, 2005-07-20 16:01
#16
further to Rufus Polson;
many Hayekians would say the problem starts with the question:
"we" don't decide production or distribution,
these are decided by the innumerable actors in the market, with no one knowing any final outcomes, and frankly, no one caring
Wed, 2005-07-20 17:12
#17
Hayekians have a flawed theory of knowledge.
Wed, 2005-07-20 17:18
#18
well, we cannot know everything ...
neither how many beer or how many pizzas
[ 20 July 2005: Message edited by: Geneva ]
Wed, 2005-07-20 18:56
#19
quote:
well, we cannot know everything ...
neither how many beer or how many pizzas
I believe this is a principle of the discipline known as "quantum food-zics".
Wed, 2005-07-20 19:40
#20
quote:
Originally posted by Geneva:
[b]well, we cannot know everything ...
neither how many beer or how many pizzas
[/b]
No wonder rightwingers drink too much. They don't think they can know how many beer . . .
Come to think of it, that would be one of those self-fulfilling prophecies. Once they've had too many beer, their belief becomes true!
[ 20 July 2005: Message edited by: Rufus Polson ]
Wed, 2005-07-20 22:11
#21
Hmm. Rufus, I'm having trouble getting a handle on your proposal. Is this a valid representation?
- Everyone gets an equal share of everything; no markets for consumer goods.
- To avoid free-riding, you have to actually work to claim your share. It doesn't matter where. (A possible variation would be that if a worker knew that the beer sector was short of labour, then she might prefer to work there, since she shares in the increased total production. OTOH, if the population is sufficiently large, then her share of that gain is essentially zero, so she may decide to do whatever she feels with, and not worry about how her choice affects what she receives.)
- Workers allocate their capital according to how their perceptions of where it would be more effective. (A possible scenario: require firms to announce their estimates of what would happen to production if their capital increased or decreased, so that everyone knows which sector would make best use of capital.)
Thu, 2005-07-21 15:16
#22
That's about the size of it.
Thu, 2005-07-21 22:10
#23
Okay, then. At a first pass, it seems hard to predict just what would happen.
- If workers get paid the same regardless of where they work, then they’ll do so randomly. There’s little reason to believe that a worker will choose the sector where she’d be most productive.
- And to pretty much the same thing would appear to go for capital allocation. Although it’s possible that people could be made aware of which sectors would make better use of their capital, if the population is sufficiently large, then the gains from making a good choice (or losses from making a bad choice) would be vanishingly small.
I’d guess that this allocation mechanism would yield – to a rough approximation - purely random outcomes.
[ 21 July 2005: Message edited by: Stephen Gordon ]
Fri, 2005-07-22 14:32
#24
I can see the intent of this exercise, .. I just can't see that it's useful.
Certainly I'd appreciate having a trained economist around to figure out relative opportunity costs between different investment decisions.
But to decide on an entire system of political-economy on a static, two-product economic model?
For what it's worth:
quote:
2: The capitalist solution. Capital is allocated (not necessarily equally) across households, and property rights are enforced. Households supply capital and labour to firms, receive wages and interest income, and they purchase beer and pizza at market prices. Firms use labour and capital inputs to produce their goods, they pay wages and interest to households, and they sell their goods. Wages are the same in both sectors, as are the rates of return on capital. This scenario reproduces the optimal allocation of capital and labour, even if capital is distributed unequally. If the allocation of capital is equal across individuals (each gets one unit of capital), then we also get the socially optimal distribution of beer and pizza.
This needs to be spruced up a bit. We need politicians, the unemployed, and "order-keepers."
Then it goes something like this: Capital was distributed incredibly unevenly as a result of zillions of historical accidents, granting some people enormous pools of wealth, while others had absolutely nothing. With the development of large breweries, and high-powered pizza ovens, some capital-less individuals were able to establish themselves as "capitalists" but the distribution of wealth has stayed surprisingly inflexible over the years.
Nobody has a perfect grasp of the production possibility frontier, so beer and pizza was made at full capacity within the bounds of the majority of the society's low purchasing power, and the inefficiencies of the many small producers.
Gradually, through competition, unproductive small producers were replaced by a few large pizzarias and breweries, but they are prevented from final monopolization of their industries by "anti-trust" laws created by the politicians who reflect their society's touching nostalgia for the time of the small producers. The politicians are also around to regulate the workers.
The workers are paid below their productivity, allowing their employers to approriate productivity gains, allowing these employers to more pizza and beer than they can humanly consume, while others go hungry.
The hungry are the unemployed, who can't work because productivity is below full capacity, and who are required as the reserve army of the unemployed.
The long hours and stagnant, low wages of the workers and the desperation of the unemployed have necessitated the creation of "order-keepers" who bust heads whenever the pizzaria owners or the brewery owners feel threatened. Thus, purchasing power remains too low and the system cannot reach full capacity.
It is the lack of knowledge, mostly brought about by the lack of democracy under capitalism that is the problem here, ... just as it was the even greater lack of knowledge among the central planners (brought about by the even greater lack of democracy) that hindered the USSR et al.
Fri, 2005-07-22 14:34
#25
btw: I liked Rufus's simplified "participatory economics" model.
Fri, 2005-07-22 15:39
#26
I'm trying to keep this thread from turning into yet another denunciation of capitalism; the only reason I mentioned it was as a kind of warm-up for the sort of intellectual exercise that has to be done in creating an alternative.
The model is deliberately highly simplified, so that we can work out exactly what happens under a given allocation regime. Once you've figured it out, you can then start to wonder what would happen as you make more realistic assumptions.
Fri, 2005-07-22 16:08
#27
I'm familiar with the concept of simplifying reality to conduct an experiment. But the assumptions that get built in at the primary levels carry into the later stages of the model.
For the life of me, I can't begin to fathom how many steps it will take before this becomes relevant to anything at all.
I chose the "capitalist" example because i thought it was the one nearest to your heart. I can see why you don't want another exercise in negativity, ... you are calling for proposals.
Give everyone working knowledge of the PPF, for 2 products it should be obvious what allocation of labour and capital is needed for each product, since you haven't included preferences for beer or pizza, or preferences for pizza baking or beer brewing, people will elect to send themselves and their capital to where it's needed. Freedom and equality. That's why i liked the Participatory Economics option.
And allow people to share the economic "pie" equally. Since it's assumed that everyone contributed equally.
Fri, 2005-07-22 16:30
#28
To be fair, a parecon person might be rightly annoyed at my characterization of that model as being much related to parecon. I see some basic concepts in common.
Meanwhile, it's true that the direct impact on a given person of their capital-allocation decision would be very small in any normal population size. So, it's pretty much impossible to predict their actions based solely on their status as "homo (micro) economicus"--direct, predictable-short-term personal gain will not push them in any particular direction. Not real fast, anyhow. But then, real people also have other bases for action. Of vague relevance might be the paper "Economists free ride, does anyone else?" by Gerald Marwell and Ruth Ames.
All in all, I suspect the outcome of something like this model would not, in fact, be random--but there's no real way of calculating what the outcome would be using economics. It effectively makes the *economic* outcome into a *political* decision. Which in turn means that how things worked out might depend on horribly un-economic issues like culture, for instance.
Fri, 2005-07-22 16:37
#29
That's not an answer that inspires much confidence. If you can't predict what will happen using a given allocation rule, how can you conclude that it would generate a good outcome?
[About Parecon: I think it deserves a thread of its own. I've done the reading - if someone wants to start thread with a brief summary of how it works, I'll be happy to join in.]
Fri, 2005-07-22 21:32
#30
Techno quibble: The capital/labour ratios of the products are backwards. Pizza is labour intensive. Beer is not.
Fri, 2005-07-22 21:39
#31
D'oh!
Thu, 2006-05-25 09:24
#32
The problem is that the capital is not equally distributed. And further this inequity becomes greater over time is market power is allowed to persist. If we were, for example, to assume that twenty households had, between them 50% of the capital, (A fairly conservative estimate) one could see the distortions evident in the capital intensive sector as technology advanced and returns diminished. Wages would not advance with productivity, but again this assumes that all workers are equally skilled... Man labour economics... so many memories...
Anyway. Fordism... yeah.
Thu, 2008-03-20 10:55
#33
Bumping this. For those of you who missed this (almost three years ago), do spend some time on the OP.
Thu, 2008-03-20 11:01
#34
Cueball
Didn't miss it all thanks. Can put it back now, yes?
Thu, 2008-03-20 11:02
#35
Economy is the modern-day cargo cult, but in reverse - a desperate hope that there is rationality to a system that kills and otherwise destroys people for the benefit of the hyper-rich and changes the "rules" whenever it suits its purposes.
Thu, 2008-03-20 11:12
#36
N.Beltov
OK, it's interesting and all, though I prefer the problem as it is posed in [i]The Great Money Trick[/i] chapter from [i]The Ragged Trousered Philanthropists[/i] myself, but here's a question that comes to mind rather quickly: [i]How do you get the authority/power to be in the position of choosing between these alternatives anyway?[/i] I mean, as a socialist, I'm rather keenly interested in the answer to that question. I know this will sound revoltingly Marxist and all, but there's too much metaphysics and not enough dialectics in the general setting of the problem.
Thu, 2008-03-20 11:18
#37
If you don't have a better alternative in mind, then why bother?
Thu, 2008-03-20 11:26
#38
quote:
Originally posted by Stephen Gordon:
[b]If you don't have a better alternative in mind, then why bother?[/b]
I think the "capitalist solution" is dishonest. An honest description would say that the capital is given to a few and therefore the firms belong to them and that everyone else has to work for them and that the profits are given to them. And that the same few get to decide everything.
Thu, 2008-03-20 11:39
#39
N.Beltov
quote:
Stephen Gordon:If you don't have a better alternative in mind, then why bother?
You can't seriously content that a beer and pizza problem is going to exhaust likely social scenarios? Or claim that a lack of immediate interest in such a problem betrays a disinterest in a better society? I thought my question was a good one.
Good points for rhetorical style, though. Give yourself a gold star, or maybe a piсata?
Thu, 2008-03-20 11:46
#40
Why isn't this an interesting problem? Of course it's simplified; that's the whole point. But why can't you apply whatever principle you have in mind to see how it compares?
The optimal allocation of resources is what it's all about. Power is just an instrument to achieve that goal.
Thu, 2008-03-20 11:57
#41
quote:
Originally posted by Stephen Gordon:
[b]Bumping this. For those of you who missed this (almost three years ago), do spend some time on the OP.[/b]
How many of those 100 people are physically or mentally/emotionally disabled and unable to work?
How many of those 100 people are retired?
How many of them have children that need childcare while they're out making beer and pizza?
Just curious.
Thu, 2008-03-20 12:04
#42
N.Beltov
Look, I don't have an objection to having a look at some time or another. I'm imagining some time in the future, OK?
quote:
Prof. Gordon: The optimal allocation of resources is what it's all about. Power is just an instrument to achieve that goal.
Thanks for that remark. Perhaps the key question for [i]this socialist[/i] revolves around working class "power" (one of the best definitions of socialism, incidently) and how to achieve it. Thought experiments about how [i]that[/i] society will allocate resources are just less interesting.
Thu, 2008-03-20 12:06
#43
quote:
Originally posted by Michelle:
How many of those 100 people are physically or mentally/emotionally disabled and unable to work?How many of those 100 people are retired?
How many of them have children that need childcare while they're out making beer and pizza?
Just curious.
In this model, none. But we could extend it to take into account those cases and add a public sector that taxes income and redistributes it.
But the model then gets complicated: you have to add leisure to the model, and it's not clear how that would affect the question I'm trying to focus on here.
FWIW, I blogged on the economics of a GAI a few weeks ago, and set up another toy model on how that would work.
Thu, 2008-03-20 12:10
#44
quote:
Originally posted by N.Beltov:
Perhaps the key question for [i]this socialist[/i] revolves around working class "power" (one of the best definitions of socialism, incidently) and how to achieve it. Thought experiments about how [i]that[/i] society will allocate resources are just less interesting.
Fair enough. [url=http://www.youtube.com/watch?v=Rp6-wG5LLqE]My priorities are the reverse.[/url]
Thu, 2008-03-20 12:21
#45
N.Beltov
Heh. An anthem from my boyhood. How appropriate.
The same band also penned this song ...
[url=http://www.youtube.com/watch?v=XwEypnf1bIg&feature=related]Goin' Mobile[/url]
and the key words (today) are ...
"I don't care about pollution
I'm an air-conditioned gypsy
That's my solution
Watch the police and the tax man miss
me
I'm mobile
Oooooh, yeah, hee!"
Be seeing you. [img]biggrin.gif" border="0[/img]
Thu, 2008-03-20 12:37
#46
I think comparison with a couple medieval thought experiments might put this one in perspective. I recommend Anselm's [url=http://www.fordham.edu/halsall/basis/anselm-monologium.html]ontological argument[/url] and [url=http://www.fordham.edu/halsall/basis/anselm-curdeus.html]Cur Deus Homo[/url] as a starting point.
I don't find this (i.e., the pizza and beer thought experiment) one any more persuasive than I do Cur Deus Homo or the ontological argument and for essentially the same reason: I don't share the world views they presuppose.
[corrected some typos]
[ 20 March 2008: Message edited by: RosaL ]
Thu, 2008-03-20 12:48
#47
Um, there was no argument in the OP. There [i]was[/i] a question, though:
By what principle should productive resources and output be allocated?
eta: And you you don't accept the assumptions I made in order to answer that question for the four scenarios I considered, what assumptions [i]would[/i] you make?
[ 20 March 2008: Message edited by: Stephen Gordon ]
Thu, 2008-03-20 14:02
#48
quote:
Originally posted by Stephen Gordon:
[b]Um, there was no argument in the OP. There [i]was[/i] a question, though:
[/b]
There's an implied argument. Anyway, I don't care what you call it: it's meant to persuade us of something.
[b]One[/b] of my assumptions is that any system that compels one person to sell her labour(power or her life) to another is flawed from the foundations.
[ 20 March 2008: Message edited by: RosaL ]
Thu, 2008-03-20 14:13
#49
quote:
Originally posted by Stephen Gordon:
And you you don't accept the assumptions I made in order to answer that question for the four scenarios I considered, what assumptions [i]would[/i] you make?
And if you object to the notion of workers' selling their labour, how would you propose to persuade them to work in the sector where you think they should?
[ 20 March 2008: Message edited by: Stephen Gordon ]
Thu, 2008-03-20 14:16
#50
quote:
One of my assumptions is that any system that compels one person to sell her labour(power or her life) to another is flawed from the foundations.
ETA: we seem to have cross-posted while I was editing.
[ 20 March 2008: Message edited by: RosaL ]
Thu, 2008-03-20 14:18
#51
And while I was editing as well...