In the present work, the social conditions underlying the competition and the collectivistic systems are examined, showing that the differences between the two systems relate to the distinction between the conjunct and the disjunct interrelation of interests. The mixed system is also examined; it can be defined by assuming the existence of a set of interests conjunctly interrelated involving all individuals and other interests that can be either disjunctly or conjunctly interrelated but never involve all individuals. The analysis of the economic and sociological presuppositions of the different systems makes it possible to clarify the differences between public administration activities and state production (public enterprise), examine the planning concept, and formulate some considerations on the accumulation problem.
«The theoretical reflection on the planning problem originates from Pareto’s and Barone’s analysis of the principles governing the collectivist-state economy. In these scholars’ thinking, economic theory defines, in abstract terms, the efficiency conditions for the production organization, both in the competition system and in the collectivist system. […] Pareto’s and Barone’s thesis needs to be specified because differences between the two systems exist, concerning both the consumption and the production problems.» (Concorrenza, collettivismo e pianificazione [Competition, collectivism and planning], pp. 3, 5) IT
Concorrenza, collettivismo e pianificazione
[Competition, collectivism and planning]
[Competition, collectivism and planning]
- Il massimo di ofelimità collettivo secondo Pareto e Barone.
[The maximum collective ophelimity in Pareto and Barone]
- Il problema della produzione nel sistema della concorrenza e nel sistema collettivistico.
[The production problem within the competition system and the collectivist system]
- Il problema del consumo nel sistema della concorrenza e nel sistema collettivistico
[The consumption problem within the competition system and the collectivist system]
- Un errore di Pareto: nel sistema collettivistico le decisioni dell’ufficio della pianificazione coincidono con le preferenze dei soggetti.
[Pareto’s mistake: planning office decisions in the collectivist system coincide with subjects’ preferences]
- I fondamenti sociali della concorrenza e del collettivismo.
[Social foundations of competition and collectivism]
- Il concetto di interrelazione congiunta.
[The concept of conjunct interrelation]
- Il concetto di interrelazione disgiunta.
[The concept of disjunct interrelation]
- Analisi strutturale e analisi operativa del comportamento con riferimento all’interrelazione congiunta e all’interrelazione disgiunta.
[Structural and operational analysis of the conjunct interrelation and the disjunct interrelation]
- Il concetto di forza sociale e la relazione di potere.
[The concept of social strength and the relation of power]
- La relazione di scambio.
[The relation of exchange]
- L’esplicazione della competizione in termini di interrelazione disgiunta degli interessi.
[The explication of competition in terms of disjunct interrelation between interests]
- I sistemi misti.
- Il concetto di pianificazione.
[The concept of planning]
- Schemi teorici funzionali e schemi teorici cumulativi.
[Theoretical functional schemata and theoretical cumulative schemata]
- Il modello di Leontief come schema interpretativo dell’economia del soggetto isolato e dell’economia collettivistica.
[Leontief’s model as an interpretive schema for the isolated-subject economy and collectivist economy]
- Il problema della accumulazione.
[The accumulation problem]
Barone E., Il ministro della produzione nello stato collettivista, in: “Le Opere economiche”, Bologna, Zanichelli, 1963, vol. I
Born M., Filosofia naturale della causalità e del caso, Torino, Boringhieri, 1962
Lange O., Sulla teoria economica del socialismo, in: “La Rivista Trimestrale”, 1962, vol. I
Pareto V., Manuale di economia politica, Roma, Bizzarri, 1965
1/20«The principle of maximum collective ophelimity does not refer to a hypothetical resource distribution as an optimum compared to all possible distributions. Instead, it establishes the conditions under which individuals can maximize their ophelimities, given a particular resource distribution (whatever it may be). Hence, the form of the resource distribution could reflect either a marked inequality or equality of conditions among individuals. That is not relevant from the perspective of economic theory, as the latter assumes the distribution problem as settled. As a matter of fact, the resource distribution is determined by the social structures, which establish the limits and methods of appropriation of the production factors and capital on the part of individuals.» IT
2/20«In the collectivist system, neither a demand nor a supply exists because all individuals jointly establish how much shall be consumed and, thereby, how much shall be produced for consumption; therefore, it makes no sense to speak of reciprocal adjustments in supply and demand. The fact that the demand quantity (consumption) is equal to the supply quantity (production) results from the fact that one choice (made by the community) determines both quantities.
In the competition system, the equivalence between demand and supply quantity is an equation whose solution identifies the equilibrium price; in the collectivist system, instead, this equivalence is a mere identity.» IT
3/20«Pareto and Barone posit, in formal terms within the economic theory, an identification between the competition and the collectivist systems, but this identification is imprecise.
In the competition system, individuals maximize their ophelimity functions by modifying their subjective distribution of consumer goods through the exchange. In the collectivist system, instead, the needs to be satisfied are common to all individuals, and the extent to which these needs are satisfied (compatibly with the resources available) is established by unanimous agreement among all subjects. In the collectivist system, the quantities to be produced and to be consumed are determined a priori and, hence, are a datum. Therefore, the problem of consumer equilibrium does not exist for single individuals in a collectivist system. This problem only becomes meaningful when referred to one individual in relation to a set of other individuals with different ophelimity functions who maximize these functions through exchange transactions.» IT
4/20«From the sociological perspective, referring to an isolated individual is meaningless even if, as shown, the isolated individual and the pure collectivist system are equivalent from an economic perspective. The analysis of the differences between the two systems from a sociological perspective brings us back to the distinction between conjunct interrelation and disjunct interrelation between interests.» IT
5/20«From the sociological perspective, we can characterize the competition and the collectivist systems by considering two different types of relations between the individuals’ interests. The first type is the conjunct interrelation, such that each individual has not only an interest in satisfying its scale of needs but also an interest in all other individuals satisfying their scales of needs (which implies identity in the scales of needs). The second type is the disjunct interrelation, such that individuals have scales of needs different from each other, and each individual tries to satisfy its needs regardless of whether the other individuals can satisfy theirs.» IT
6/20«In investigating the social bases of the exchange system, we considered the type of relation between the interests of two individuals engaged in exchanging goods or services. A second facet should be analyzed, which is equally important to provide a sociological characterization of the exchange system. This second facet is the competition. Exchange refers to the activity carried out by the individuals who give goods (services) and receive other goods (services), so that the individual ophelimities are maximized. Competition refers instead to the activity carried out by producers, each of whom considers the other producers’ behavior. [...] The analysis of the latter relation will show the second social foundation of the exchange system.» IT
7/20«We have seen that in the collectivist system, the activity of the producer state rests on a set of conjunctly interrelated interests. It means that in such a system, every possible interaction between individuals always implies a conjunct interrelation of interests. We have seen that, on the contrary, in the exchange system, all possible interactions always entail interests disjunctly interrelated. The collectivist system and the exchange system, so defined, are two extreme cases.» IT
8/20«It is possible to define a third type of system by assuming the existence of a set of conjunctly interrelated interests (identical for all subjects) and the existence of further interests, identical or different among subjects, which may be disjunctly or conjunctly interrelated but do never involve all subjects (if this were the case, then these interests would belong to the first set). We call this third type a mixed system.» IT
9/20«In the mixed system, the public administration performs the same function, limited to the sphere of conjunctly interrelated interests, as the central planning office in the collectivist system with reference to all the individuals’ interests (which are the same for all individuals and are all conjunctly interrelated). Some examples of activities by the public administration are so-called public services production and the organization of justice.
The activity by the public administration should not be confused with the activity by the producer state, oriented towards exchanging goods or services.» IT
10/20«The existence of a common and interrelated interest in the state producing a given good or service does not imply the existence of a conjunct interrelation as to the need satisfiable through that good. Conversely, if the latter interrelation exists, the former interrelation must also exist.
When both interrelations exist, the state activity takes the form of public-administration activity aimed at producing goods and services which are not subject to exchange. Here, all individuals have a particular need, and a conjunct interrelation related to that need takes place, such that the need is satisfied directly by all individuals through the state activity, with no exchange between the single individuals and the state.» IT
11/20«In summary, we can distinguish:
(a) a private sector, characterized by the production of goods and services object of exchange, carried out by individuals; (b) a public sector, characterized by the production of goods and services object of exchange, carried out by the state (be it monopolist or not); (c) a public administration sector, characterized by the production of goods and services carried out by the state, which is not an object of exchange, as it satisfies those needs common to all individuals and in relation to which a conjunct interrelation exists.» IT
12/20«Once the economic and sociological differences between the exchange and the collectivist systems have been clarified, it is necessary to analyze the concept of planning, the meaning of which is commonly identified with the collectivist system. This identification originates many pseudo-problems, which led some economists to think that economic theory, in Walras's formulation, has insurmountable contradictions which (according to those economists) could only be eliminated by reformulating the whole theory in completely new terms.
The difficulties of the Walrasian theory can all be related to the impossibility of coherently explaining capital accumulation.» IT
13/20«Let us consider a collectivist system. The individuals can, by mutual agreement, either delay the satisfaction of their needs and allocate part of the resources to the manufacture of new means of production or allocate all the resources to satisfy their needs. In the first case, the collectivist system does planning; in the second, it reintegrates (replenishes) itself sine die. It follows that planning is not an inherent feature of the collectivist system (even if planning occurs historically in collectivist systems). The fundamental feature of the collectivist system is not the planning activity but, as we have highlighted, the complete conjunct interrelation between the individuals’ interests.» IT
14/20«Walras-Pareto’s theory cannot provide any planning schema applicable in practice, as it only defines efficiency for the production activity, regardless of whether or not there is accumulation. When Pareto and Barone maintain that, in the collectivist system, the production is organized according to efficiency principles identical to those valid for private enterprises in the exchange system, they prescind from the fact that there is accumulation in the collectivist system or not. They do not explain accumulation because the accumulation problem is not relevant to economics, given that it pertains to cumulative dynamics.» IT
15/20«Based on these elucidations, the failure of classical theory to provide a satisfactory explanation of economic phenomena is understandable. This failure is due to the fact that the classical theory is an attempt to explicate cumulative dynamics; therefore, the real scientific problem of economics, which is the explication of economic action, is a problem unknown to classical economists. Economics as a science was born only when the problem of cumulative dynamics of capital was abandoned and the problem of defining economic behavior was approached.» IT
16/20«What economics cares about is establishing the laws that guide human action when, given certain resources, an individual tries to satisfy a given set of needs. Only by posing the problem in these terms, and regardless of the fact that the content and the number of those needs change continuously, is it possible to attain “scientific” economic laws, even if not operational ones. [...]
The choice criterion for shifting from an indefinite development process of needs to a determined structure of needs is given by an individual action, which postulates a structure of needs. It means that the scientific explication of the economic action must always assume a structure of needs as a datum and a set of limited resources through which it is possible to satisfy these needs.» IT
17/20«As previously noted, apart from the differences in the way consumption and production are determined in the collectivist system versus the exchange system, the efficiency conditions for production are the same in both systems. It is the first concept of efficiency, which can be summed up in the principle of minimum cost. It is worth clarifying that the definition of efficiency in the first sense can only be given within the Walrasian theory and not the Leontief model.» IT
18/20«The construction of models like the Leontief’s relates to the need, which emerged historically, to give an interpretation of the collectivist system. Hence, the Leontief model does not leave behind the Walrasian theory, but it is simply a schema that interprets a reality other than the competition one. The common element between the two schemata is the efficiency principle for production, which takes the same form in both. However, the different approach to consumption expresses the difference in the social structures to which the two systems can be referred. Only seemingly, the Leontief model contains no hypotheses about social structures. In point of fact, if one wants to use it as an explanatory schema, then the assumption that consumption is given shows, from the sociological perspective, the existence of a complete conjunct interrelation between the individuals’ interests.» IT
19/20«In the exchange system (given the disjunct interrelation), consumption is a function of prices (the demand is distinct from the supply). In the collectivist system (given the conjunct interrelation), consumption is an a priori datum determined by a unanimous decision of all individuals. In the latter case, it is also possible to consider a deferral of consumption and, therefore, an accumulation pertaining to the system. [...]
However, it should be understood that the Leontief model in no way explains capital accumulation. It takes into consideration a time distribution for accumulation and formulates compatibility conditions for the whole system, but it does not explain why and how capital accumulates.» IT
20/20«In conclusion, the Walrasian system and the Leontief model have in common an efficiency principle, but they differ in the assumptions about consumption. The Walrasian theory implicitly assumes a disjunct interrelation and, hence, a separation between the consumption and production aspects. The Leontief model implicitly refers to a system characterized by a conjunct interrelation, where consumption is determined a priori, and no separation exists between the consumption and the production aspects. Thus, within the Leontief model is possible to take into account capital formation, that is, an accumulation pertaining to the system.
Therefore, the two models presuppose a precise reference to the institutional framework, as each implicitly contains a hypothesis about the interrelation between interests.» IT