carnes@gargoyle.UUCP (Richard Carnes) (09/26/85)
JoSH recently proposed discussion of some topics including Arrow's Theorem proving the impossibility of an ideally rational aggregative device for individual preferences. I would welcome such a discussion, but JoSH has perhaps overlooked the fact that Kenneth Arrow, the 1972 Nobel laureate in economics, bears a heavy burden of responsibility for his part in the deaths of ten million Kulaks. For evidence, I present the following brief extract from a recent article by Arrow: ______________ Let me spend the remaining time in reexamining briefly the case for socialism from the viewpoint of the five values mentioned earlier: efficiency, separating political decisions from selfish economic interests, freedom, equality of income and power, and the stress on cooperative as against individualistic motives. These are not balanced remarks; only the favorable side will be presented. Perhaps on another occasion I will present the contrary case. The case for socialism from each value viewpoint is much more refined and complex than I originally thought, and there are many qualifications that must be made. But I still consider that the case can be made. For reasons of time I will deal only briefly with the last two points. With regard to equality of income, let me first remark that I am taking it to be a good, other things being equal. It can be objected that the drive for equality may dull incentives, and the net result will be a reduction in everyone's real income. This is a legitimate instrumental objection but not an objection to the value presumption in favor of equality as such. Many current thinkers object to distributive equality on principle, on the grounds that it contradicts freedom of property. This is a large subject; I simply state my conviction that property is itself a social contrivance and cannot be taken as an ultimate value, indeed that institutions that lead to gross inequalities are affronts to the equal dignity of humans and can only be accepted as necessary evils. ... The model *laissez-faire* world of total self-interest would not survive for ten minutes; its actual working depends on an intricate network of reciprocal obligations, even among competing firms and individuals. But the capitalist system is structured so as to minimize cooperative endeavor. ... ...The existence of idle resources is a prime example of coordination failure. The experience of the Communist countries bears on this point. With all their difficulties and inefficiencies, and they are not few, recurrent or prolonged unemployment is not one. ... The sophisticated antisocialist reply to this argument is not to deny it but to emphasize that a socialist system is not an ideal resource-allocating mechanism either.... All that can be said is that socialism is clearly a viable economic system, contrary to what many would have asserted in the not-too-distant past, and it does not release energies and productivity far beyond the capitalist norm. ... It is today a widespread doctrine, held by conservatives as well as socialists, that concentrated economic interests are more than proportionally powerful in the political process.... [T]here are economies of scale in the political process, so that a small economic interest for each of a large number of individuals is less likely to get represented than a large interest by a small number. So long as the state power can be democratically run, much of this distortion of the democratic process should be minimized under socialism. ... The example of Nazi Germany shows that no amount of private enterprise prevents the rise of totalitarianism. Indeed it is hard to see that capitalism formed a significant impediment. Nor is Nazi Germany unique; Fascist Italy, Franco's Spain, and the recurrent Latin American dictatorships are illustrative counterexamples to the proposition that capitalism implies democracy. ... The evidence, it seems to me, points to the view that the viability of freedom and democracy may be quite independent of the economic system. There can be no complete conviction on this score until we can observe a viable democratic socialist society. But we certainly need not fear that gradual moves toward increasing government intervention or other forms of social experimentation will lead to an irreversible slide to "serfdom." _______________ Arrow's article, "A Cautious Case for Socialism," appears in *Beyond the Welfare State*, ed. Irving Howe (1982). -- Richard Carnes, ihnp4!gargoyle!carnes