Pure Economic Theory - Revision history

Santiago Pinault: /* Rationality and Exactitude */

2018-08-22T09:53:05Z

Rationality and Exactitude

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	==== Rationality and Exactitude ====		==== Rationality and Exactitude ====
	<u>In a market economy equilibrium and balance refer to exact measurements based on prices</u>. Although planning is a conscious process and market economy is not, yet planning lacks exactitude while the market mechanism is exact by its nature. Not only is the appreciation of wants in a planned economy imperfect, but, moreover, their recognition is arbitrary. In a market economy appreciation is perfect as well as rational and cogent. But what do cogency and rationality mean here? Do they mean that the result of the economic process is less arbitrary than is the case in a planned society? <u>On the contrary</u>. If the principles determining the recognition or non recognition of wants are more or less arbitrary in a planned economy, in a market economy they are utterly meaningless or, rather, < they are entirely lacking of meaningful ><ref>This part is handwritten at the margin.</ref>, there are no such principles at all. That market prices are not arbitrary does not mean that they make part of a humanly system, but that the system they are part of allows of no meaning. From the moral point of view the market system is <u>more</u> arbitrary in the appreciation of wants than a planned economy, prices in a market economy depending on the original allocation of income yealding resources – a fact wholly accidental to the principles governing the recognition or non recognition of wants.		[[File:KPA 02-22, 10.jpg\|500px\|right]]<u>In a market economy equilibrium and balance refer to exact measurements based on prices</u>. Although planning is a conscious process and market economy is not, yet planning lacks exactitude while the market mechanism is exact by its nature. Not only is the appreciation of wants in a planned economy imperfect, but, moreover, their recognition is arbitrary. In a market economy appreciation is perfect as well as rational and cogent. But what do cogency and rationality mean here? Do they mean that the result of the economic process is less arbitrary than is the case in a planned society? <u>On the contrary</u>. If the principles determining the recognition or non recognition of wants are more or less arbitrary in a planned economy, in a market economy they are utterly meaningless or, rather, < they are entirely lacking of meaningful ><ref>This part is handwritten at the margin.</ref>, there are no such principles at all. That market prices are not arbitrary does not mean that they make part of a humanly system, but that the system they are part of allows of no meaning. From the moral point of view the market system is <u>more</u> arbitrary in the appreciation of wants than a planned economy, prices in a market economy depending on the original allocation of income yealding resources – a fact wholly accidental to the principles governing the recognition or non recognition of wants.

	A market economy is non-arbitrary only in so far as it conform exactly to the rules of the game. But these rules themselves are arbitrary. Planned economies conform only imperfectly to the rules but theses rules themselves are not arbitrary, they have a meaning and a moral significance.		A market economy is non-arbitrary only in so far as it conform exactly to the rules of the game. But these rules themselves are arbitrary. Planned economies conform only imperfectly to the rules but theses rules themselves are not arbitrary, they have a meaning and a moral significance.

Santiago Pinault at 09:36, 22 August 2018

2018-08-22T09:36:39Z

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	~~{{Anglais vers français}}~~

	__TOC__		__TOC__

Santiago Pinault: /* Text Informations */

2018-08-22T09:36:11Z

Text Informations

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 '''Reference''':<br />
 '''Date''': 1927?<br />
-'''KPA''': [[02/22]] (11 pages)
+'''KPA''': [[02/22]] (11 pages)<br />

Santiago Pinault: /* Text Informations */

2017-12-23T21:01:43Z

Text Informations

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	== Text Informations ==		== Text Informations ==
	'''Reference''':<br />		'''Reference''':<br />
	'''Date''': 1927?		'''Date''': 1927?<br />
	'''KPA''': [[02/22]] (11 pages)~~<br />~~		'''KPA''': [[02/22]] (11 pages)

Santiago Pinault: /* Text Informations */

2017-12-23T21:01:24Z

Text Informations

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 == Text Informations ==
 '''Reference''':<br />
 '''KPA''': [[02/22]] (11 pages)<br />

Santiago Pinault: /* Text Informations */

2017-08-08T15:34:39Z

Text Informations

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	{\| class="wikitable"		{\| class="wikitable"
	\| Title		\| Title
	\| Notes: Pure Economic Theory, 1924-1927<ref>I believe it's 1927 since this text, strangely in English, ~~make a mix between~~ question of oversight (See [[Übersichtsproblem]], that, I think, Polanyi ~~developed~~ between 1924 and 1925) and Marginalism I believed Karl Polanyi read since 1926. </ref>.		\| Notes: Pure Economic Theory, 1924-1927<ref>I believe it's 1927 since this text, strangely in English, mixes question of oversight (See „[[Das Übersichtsproblem]], „[[Das Übersichtsproblem, ein Hauptproblem des Sozialismus]]“ and the [[Notebook VII]], that, I think, Polanyi wrote between 1924 and 1925) and Marginalism I believed Karl Polanyi read since 1926. </ref>.
	\|-		\|-
	\| Author		\| Author

Santiago Pinault: /* Text Informations */

2017-08-08T15:01:19Z

Text Informations

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	{\| class="wikitable"		{\| class="wikitable"
	\| Title		\| Title
	\| Notes: Pure Economic Theory		\| Notes: Pure Economic Theory, 1924-1927<ref>I believe it's 1927 since this text, strangely in English, make a mix between question of oversight (See [[Übersichtsproblem]], that, I think, Polanyi developed between 1924 and 1925) and Marginalism I believed Karl Polanyi read since 1926. </ref>.
	\|-		\|-
	\| Author		\| Author
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	\|-		\|-
	\| Description		\| Description
	\| ~~Karl Polanyi: Notes - "Pure Economic Theory”, 1924-1927.<br />~~File consists of Karl Polanyi’s annotated typed notes on "Pure Economic Theory”. 12p.		\| File consists of Karl Polanyi’s annotated typed notes on "Pure Economic Theory”. 12p.
	\|-		\|-
	\| URI		\| URI

Santiago Pinault: /* 3. The theory of Wants */

2017-08-08T14:56:29Z

3. The theory of Wants

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	The <u>substitutable character</u> of commodities is what is name implies. Thus there are as a rule alternative ways of satisfying the same wants.		The <u>substitutable character</u> of commodities is what is name implies. Thus there are as a rule alternative ways of satisfying the same wants.

	=== 3. The ~~theory~~ of Wants ===		=== 3. The Theory of Wants ===
	(Saturation. Moral needs)		(Saturation. Moral needs)

Santiago Pinault: /* I. A. Planned Economy */

2017-08-08T14:55:48Z

I. A. Planned Economy

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	Pure economic theory applies to both. The difference between them lies in organisation. Their members are confronted by the problem of scarcity in a different way.		Pure economic theory applies to both. The difference between them lies in organisation. Their members are confronted by the problem of scarcity in a different way.

	=== I. A. Planned Economy ===		=== I. A Planned Economy ===
	From the point of view of pure theory the plans intended to deal with the economic life of a society, do not differ from the economic plans of a Robinson Crusoe. Whether the pans have to deal with one or two persons or with as many millions or hundreds of millions makes no difference from the point of view of pure economics. The planned economy which we are dealing with here, is indeed only an enlargement of Crusoe’s island economy. No money, no prices, no market obtains. It is merely an administration of resources, direct and immediate, like a family household.		From the point of view of pure theory the plans intended to deal with the economic life of a society, do not differ from the economic plans of a Robinson Crusoe. Whether the pans have to deal with one or two persons or with as many millions or hundreds of millions makes no difference from the point of view of pure economics. The planned economy which we are dealing with here, is indeed only an enlargement of Crusoe’s island economy. No money, no prices, no market obtains. It is merely an administration of resources, direct and immediate, like a family household.

Santiago Pinault: /* “Oversight” and balance */

2017-08-08T14:55:17Z

“Oversight” and balance

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	As soon as this level is reached, planning must take account of the wants of different groups, special faculties of craftsmanship, etc., if wholesale waste is to be averted.		As soon as this level is reached, planning must take account of the wants of different groups, special faculties of craftsmanship, etc., if wholesale waste is to be averted.

	==== “Oversight” and ~~balance~~ ====		==== “Oversight” and Balance ====

	The lack of oversight makes it difficult to achieve the three balances required:		The lack of oversight makes it difficult to achieve the three balances required:
	# To direct the production of consumers’ goods in such a way as to equalise the marginal degree of utility of different commodities (belt of marginal utilities). – This is in a planned economy a task of the central authority, which deals with it according to its appreciation of the relative importance of the wants ministered to. No exact measure of the urgency of wants is available here. In judging the importance of wants the central authority must rely on intuition, based on sympathy and insight qualified by the conscious will to acknowledge some and to leave unconsidered other wants. Both elements entering into the final judgement – the intuitive appreciation of the wants of other people as well as the amount of recognition accorded to them – lack precision. The first is a necessarily incomplete, the second is essentially arbitrary. In so far, as the authority entrusted with the decision is constituted on democratic lines, the principles applied to the recognition of wants may lose their arbitrary character.		# To direct the production of consumers’ goods in such a way as to equalise the marginal degree of utility of different commodities (belt of marginal utilities). – This is in a planned economy a task of the central authority, which deals with it according to its appreciation of the relative importance of the wants ministered to. No exact measure of the urgency of wants is available here. In judging the importance of wants the central authority must rely on intuition, based on sympathy and insight qualified by the conscious will to acknowledge some and to leave unconsidered other wants. Both elements entering into the final judgement – the intuitive appreciation of the wants of other people as well as the amount of recognition accorded to them – lack precision. The first is a necessarily incomplete, the second is essentially arbitrary. In so far, as the authority entrusted with the decision is constituted on democratic lines, the principles applied to the recognition of wants may lose their arbitrary character.
	# To direct the use of producers’ goods, i.e. investments, so that the <u>marginal productivity</u> of labour and capital in different employments be equalised. – No exact measure of the marginal productivity of investments is available here. Correct planning depends upon the degree, to which knowledge is possible concerning the factors or agents of production. In so far as productivity depends on technical facts, precision of technical measurements is essential. In so far as productivity depends on the urgency of the wants ministered to by the consumers’ goods in course of production, the question is the same as the appreciation of the urgency of wants discussed above.		# To direct the use of producers’ goods, i.e. investments, so that the <u>marginal productivity</u> of labour and capital in different employments be equalised. – No exact measure of the marginal productivity of investments is available here. Correct planning depends upon the degree, to which knowledge is possible concerning the factors or agents of production. In so far as productivity depends on technical facts, precision of technical measurements is essential. In so far as productivity depends on the urgency of the wants ministered to by the consumers’ goods in course of production, the question is the same as the appreciation of the urgency of wants discussed above.
	# To administer both consumers’ and producers’ goods so as to equalise the pressure of present toil and privation, and the prospect of greater plenty and less toil in the future. – This is done in fixing <u>the rate at which the accumulation of capital-goods shall proceed</u>. No exact measure (comparable to the interest-rate in a market economy) is available here to fix this rate. There is here nothing to show, that the relative pressure of present and future wants of individuals is on accordance with the rate of accumulation of capital. On the other hand, if authorities decide so, capital can be accumulated here either more slowly or, which is of greater importance, more rapidly than individual wants would warrant. If the authority is democratically constituted, its decision may even move correctly interpret the will of the individuals as citizens for a higher rate of accumulation than their behaviour as isolated consumers would want. <u>Man as a citizen may realise the needs of the future more vividly than man as a consumer</u>.		# To administer both consumers’ and producers’ goods so as to equalise the pressure of present toil and privation, and the prospect of greater plenty and less toil in the future. – This is done in fixing <u>the rate at which the accumulation of capital-goods shall proceed</u>. No exact measure (comparable to the interest-rate in a market economy) is available here to fix this rate. There is here nothing to show, that the relative pressure of present and future wants of individuals is on accordance with the rate of accumulation of capital. On the other hand, if authorities decide so, capital can be accumulated here either more slowly or, which is of greater importance, more rapidly than individual wants would warrant. If the authority is democratically constituted, its decision may even move correctly interpret the will of the individuals as citizens for a higher rate of accumulation than their behaviour as isolated consumers would want. <u>Man as a citizen may realise the needs of the future more vividly than man as a consumer</u>.

	==== Oversight and Democracy ====		==== Oversight and Democracy ====