UnlearningEconomics
r/UnlearningEconomics•3.5K subscribers
other than some left leaning post-keynesians, are there any communist/socialist economists who actually presented mathematical models of their economy? or are there any mathematical model of anarchist economics :3 ? even hypothetical ones would be fine
I heard him say it was wrong in his video about labor theory of value? How could it be wrong? I think of it as a truth of accounting, that if you spend some money on something you must be expecting it to increase profits more than you spent. Otherwise why would you? And to the extent you can measure this difference, that is the "value" of the item to you.
Even if you can not measure this difference, you must have an expectation of this value to have performed the purchase. And your expectation of these values accumulating over your buisnesses lifetime will influence its success or failure. Thus it has an objective existence even if it can't always be directly measured.
And its not "prices determining prices", it's extremely materialist, you can use marginal utility theory to completely eliminate money, just measure it in units of output. Having machine X I produce Y0 units of output, not having machine X I produce Y1 units of output. `Y0-Y1 = Utility(X)`. Utility X is measured in the same units as each Y. If Utility(X) - Cost(X) > 0, you will buy X. And Cost(X) can be in units of your output as well, the quantity exchangeable for the machine before including the machine in production.
You can measure it in labor too if you are a marxist, speaking of the machine "saving labor" for production vs how much it costs in terms of labor value on the market converted to prices, or how much embodied labor it contains vs how much SNLT it reduces.
It all works, so I'm unsure where the fault is, other than the simple difficulty of measuring counterfactuals, especially one unit at a time.
Edit: I may have unknowingly conflated marginal utility theory and marginal product, if this is the case and they are in fact distinct feel free to correct me.
Edit2: I have conflated the two, thanks for the help
Some economics professors at George Mason do the public intellectual rounds on podcasts, and they love markets. Maybe a debate with Bryan Caplan or Robin Hanson would be interesting? Not that those libertarian types are super mainstream, but they are probably at odds with UE on lots of ideas about economics.
I remember seeing an UE video where he mentions taking a supplement for ADHD. Today I looked through the uploads on the channel but couldn’t find it. Which one is it? Am I confusing him with someone else?
Thanks
Introduction
This is a proposal about the use of sealed-bid second price auctions in a market socialist economy to preserve the investment incentives for small and medium sized private firms.
The traditional problem for a market socialist economy is that if it allows for a private sector of small firms, then their owners won't have an incentive to invest, knowing that in case of success, their businesses will eventually become socialised once they reach a certain size. Instead of setting arbitrary thresholds, an incentive compatible mechanism of mandatory auctions can be used instead.
Description
Assume that once a year, every private firm would have to name an amount of money it is prepared to pay to the government. This may be thought of as a voluntary contribution that replaces all other taxes on the private firm. This voluntary contribution would be used to calculate the price floor of an auction in which the private firm may be sold to a market socialist one. In this auction, all market socialist firms would be entitled to bid.
The price floor would be a multiple of the voluntary contribution, this multiplier m would be fixed by law and would be democratically determined by each society (It is to be expected that in a multiparty democracy, liberal parties representing the interests of private owners would seek to push this multiplier to be set as high as possible.) Thus, if a private firm announces a voluntary sum of b, then the price floor for the auction would have to be higher than m • b.
After the announcement of the auction, every market socialist firm would be given a period of time (a few weeks perhaps) to evaluate whether they want to bid and if so then how much. Each firm would then inform the corresponding auctioning authority of the offer the are willing to pay. If there are no offers that exceed m • b, then the private firm would pay its announced voluntary contribution b to the state and remain in private ownership.
If however there was a higher bid than the price floor, then the firm that offered the highest bid would be chosen, however it would receive the private firm for the price offered by the second highest bidder, and if there was none, then for the m • b price floor. Notice that in such a second price bid auction, the dominant strategy for each bidder is to offer the highest price they themselves are willing to pay. Thus if the enterprise is sold, it would be efficiently allocated.
The private owner would thus receive a sum of at least m • b, as a compensation for the takeover of the firm. The owner could always chose their voluntary contribution b in such a way that they at least receive a sum corresponding to the value of the enterprise to them, should there be a takeover. This mechanism would preserve an investment incentive for private owners and would ensure that the auctioning off to the market socialist sector would be efficient in terms of timing and selection of the buyer.
Crucially, the investment incentives for the private sector are preserved because a private owner reaps the benefits of their investments even if they are forced to sell. If the owner invested well, there are also good prospects to profits.
References
Corneo, G. (2019). Some Institutional Design for Shareholder Socialism. Review of Social Economy, 77(1), 42-49
Further reading
Vickrey, W. (1961). Counterspeculation, Auctions, and Competitive Sealed Tenders. The Journal of Finance, 16(1), 8-37
Posner, E. A. & Weyl, E. G. (2017). Property is Only Another Name for Monopoly. Journal of Legal Analysis, 9(1), 51-123
So I’m a fan of unlearning economics, but sometimes I get the feeling that, while his analyses of socialist political economy (non-economist) are valuable, it does a disservice to the political movement.
The political goal of socialism is revolution, in the civil, intellectual, and real sense. All theory in political economy can be critiqued and declared as fallacy to some extent. When revolutionary institutions are formulated there is never a perfect theoretical blue print, it is on our socialist principles and values of egalitarianism that drive the possibility of change. If we wait for perfect economic theory to save us, socialism will never happen. Pointing out Marx’s labor theory of value as inherently flawed does not take the teeth out of socialism. It does not mean our vision is doomed.
While watching UE I feel that socialist political principles of egalitarianism and the value of worker ownership of production are undervalued for economism. This has it’s place obviously, and I know that the channel name is ‘unlearning economics’ but economics is not absent of politics.
I hope my concerns make sense.
Hello everyone,
I would like to synchronize UEs Videos to German. So that I can send them to my Parents. I think, generally speaking the older generation in Germany is not fluent enough in English to understand the videos.
FYI: I hold a Bechelor Degree in Economics.
