Chapter 67 Chapter 9 Calculation of Social Justice (3) The "Solution" of Competition -4

Four All of these considerations appear to be relevant regardless of the specific organizational form chosen.Before going any further, it is worth discussing in more detail the specific institutional aspects of industrial management proposed by these two authors.The scheme they drafted was very similar, although Lange went into more detail in this regard.Dickinson, on the other hand, refers us to the work of the Webers and Cole on most issues of economic organization. Both authors detail a socialist system in which career choice is free and regulated primarily through the price mechanism (i.e., the wage system) and consumers are free to dispose of their income.Apparently both authors also require that the prices of consumer goods be determined by ordinary market processes (though Dickinson seems uncertain on this point), and that wages be determined by negotiation between the parties involved.They also agree that, for various reasons, not all industry should be socialized.In addition to socialist chemical industry, a private industrial sector consisting of small enterprises, which are essentially run on a capitalist basis, must be preserved.I think it is difficult for me to agree with them that the existence of such a private sector parallel to socialist industry does not create special difficulties.However, due to space constraints, it is difficult to discuss this in detail in this paper. Therefore, for the convenience of discussion here, I will not consider the existence of the private sector, but assume that the entire industry has been socialized.

The main task of the central economic authority is to determine all prices except the prices of consumer goods and wages.In Lange's description, this economic authority is the Central Planning Board; in Dickinson's, the Supreme Economic Council, which, according to Dickinson, was simply called "the S.E.C".We can learn much more about the technicalities of how specific prices are issued and adjusted from Lange's work, although these are by no means sufficient details.Dickinson, on the other hand, made a more in-depth study of the reference factors that S·E·c should be guided by when setting prices.Both questions are of special importance and must be discussed separately.

From time to time, according to Lange, the S.E.C. promulgated what Professor Taylor called a "factor valuation table," a list of prices for all means of production (except labour).During the validity period of this price list, these prices must be the sole basis for all calculations of all transactions between different enterprises and of all industries and factories, and the managers must regard these prices as constant.But neither Langer nor Dickinson tell us how long these prices were to be fixed, and this is one of the more ambiguous places in the authors' account, which makes it almost doubtful that they are really trying to make Their system works.Are prices set a certain time in advance or are they adjusted when it seems appropriate? F. M. Taylor seems to be inclined to the former.He writes that the justification for the specific price will be shown at the end of the "production period"; Lange gives the same impression at least once when he says that "any price different from the dry equilibrium price will be shown at the end of the settlement period." signal a surplus or shortage of commodities".But in another place he says: "The adjustments of these prices are to be made frequently and continually"; In the case of major technological innovations and dramatic changes in consumption tastes, small adjustments may be sufficient to keep the price system in equilibrium." Aren't these arguments just how this modern fascination with static equilibrium theory keeps them from understanding the real role of the price mechanism? ?

Although Dickinson said little usefully about the mechanisms by which price changes come into effect, he went deeper than Lange into the factors on which S.E.C. decisions must be based.Unlike Lange, Dickinson was not content with S.E.C. simply observing the market and trying to find a new level of equilibrium through experimentation when there was excess demand or supply.He would have liked S.E.C. to use the statistically established tables of supply and demand as a guide to determine the equilibrium price.This clearly carries a remnant of his earlier views that it was possible to solve the whole problem by the method of simultaneous equations.Although he has now abandoned this view (not because he thinks it is impossible, he still believes that things can be done "by just two or three simultaneous equations", but because he realizes that "these must be entered into the equation The data of computing machines themselves are constantly changing"), but he still believed that the determination of the demand schedule by statistical methods could at least facilitate, if not replace, the trial-and-error method, and he thought it was entirely worthwhile to try to establish a Walrasian equilibrium The value of the constant in the system (sic).