carnes@gargoyle.UChicago.UUCP (Richard Carnes) (02/19/85)
The Perfesser writes: > Mr Torek requests empirical evidence to back up my claim that the >existing 'concentrations of economic power are maintained by exercising >political power', and 'could not persist in a Free Economy' 'Because of >diseconomies of scale -- especially informational diseconomies.' Empirical >evidence can be found in the fact that all such concentrations were >obtained with political privilege, that such concentrations have generally >become more stable as government meddling in the economy has grown, and >that X-inefficiencies eventually eat up the profits of most licensed >monopolies. In the absence of a definition of a "Free Economy" it is difficult to discuss this issue, but to judge from Daniel's references to a Free Economy, I would say that it would require a strong state to exist and persist, as does the current form of capitalism in the US. So I don't see any reason to believe that there would be less potential for economic concentration in a Free Economy due to the exercise of political power than in the existing American economy. Furthermore, I don't see how people can be divested of political motives merely by being placed in a Free Economy; thus I would expect government "meddling" in the economy to continue. Would Daniel please clarify his understanding of this issue. > Torek claims that my claim that 'Socialist economics were completely >blown out of the water several decades ago by Ludwig Edler von Mises' is >'based on a blatantly false definition of "Socialist" as implying the >absence of markets.' Actually, von Mises blew Market Socialism out of the >water as well (Torek needs to do more research on the Calculation Debate). In case anyone is interested, Piero Sraffa blew all varieties of free-market economics, including von Mises', completely out of the water with the 1960 publication of *Production of Commodities by Means of Commodities*. The basic idea of this book is that prices, far from efficiently allocating scarce resources, are themselves determined by, not determinants of, the distribution of income between social classes. Thus all forms of economics based on the paradigm of the marketplace's efficient allocation of scarce resources have now bit the dust (Mc Kiernan needs to do more research on the theory of effective demand). Richard Carnes, ihnp4!gargoyle!carnes