Error correction

A few blog posts ago, when I was in the throes of unemployment, I wrote about the problem of employment as a the economist sees it, or as the central  planner sees it, and found it to be easily solvable.  Just divide the amount of labour required by the number of people who can work, and voila, you’ve solved the employment problem.

But recently reading an old economics textbook it dawned on me that I was in error.  Or at least partial error.  It is last year’s requirement of labour that is a known datum today.  How much is to be produced this year is an unknown quantity.  The economy, the population has increased since last year, and what was produced last year when distributed over a larger base of population will result in less for some.  Less than what they got last year.

So this led me to think of what a Russian colleague of mine, who I was lucky to meet this year, had said to me while comparing Russia and America.  Russia, he had said, is like a zoo.  Everyone gets an assured portion, even if it is not so big or glamorous.  America, in contrast, is like a jungle, with everyone trying to seize as much as possible for himself, regardless of the cost to others.  So here we have again the question posited in the early chapters of Samuelson-what to produce and for whom.  Russia tried solving this problem, and today it looks like their methods failed.  What old Prof. Leontief had said in class was that the USSR tried to solve the problem without imagination.  Today when I reflect on that, I think what he meant was that the Russian Gosplan does not take into account the psychology of the human participants in the economic drama.  People, with their dreams and aspirations, their varied motives.

Yet, having said this, I haven’t said enough.  Because the choice between consuming more than your stomach can hold, and consuming rather less, but using the freed up time in productive pursuits such as art, music, or poetry; in self development, not just putting on weight, remains.  And it is this choice that is at the heart of the debate between Left and Right.

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2 Responses to “Error correction”

  1. nray Says:

    Lovely post! Thank you for sharing!

  2. Ramki Says:

    The fiction “Watership Down” about rabbits warrens idolizes the American model and implicitly condemns the “authoritarian” socialist model where every rabbit is well fed but without “freedom”! I wonder whether the poor wouldn’t trade a place in a prison ( where other atrocities associated with prisons do not happen) with a ‘free’ place on the pavement to sleep!

    Ramki

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