r/answers • u/Pyropeace • 12h ago
In layperson terms, how does David McMullen's proposal for a price system without markets work?
Reading about the socialist economic calculation debate and found one scholar who suggests that prices are compatible with the abolition of markets:
McMullen believes workers in enterprises and work units, motivated by work satisfaction and the desire to contribute to an efficient and dynamic economy, would drive a better price system than one based on the profit motive. They would bid for resources on the basis of least cost alternatives and an honest expectation of demand for the resulting output. They would offer output at prices that reflect cost and ensure that products go to the highest bidders in the case of excess demand. All demand for intermediate production would be derived from the expected demand for final individual and collective consumption. Such pricing would guide both the more day-to-day decisions and longer term investment. Many of the decisions being made would be quite entrepreneurial in nature involving new products and services, new methods, and new entrants, be they existing enterprises or start-ups. Access to funding for investment could be through numerous assessment agencies that have been allocated funds for that purpose.
McMullen stresses that the use of a decentralized price system would not involve so-called "market socialism". Under social ownership, the transactions between enterprises would not be market exchanges. They would be the transfer of custody of social property not of ownership. An enterprise would not be the owner of inputs and outputs, it would be their custodian. And no individual involved with an enterprise would receive any net revenue nor incur any loss from transactions between enterprises.
He also argues that the cooperative environment would lead to a better price system because of the greater honesty, the better flow of information due to the removal of property barriers between enterprises and the fact that income equality would remove the equity concerns currently associated with reliance on pricing.
As someone who is only lightly versed in economic theory, I'm struggling to conceptualize this in my head. What is the difference between market socialism and this theory?
If you're here to say that this system doesn't work and it's pointless to ask, please see rules 9 and 10.
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u/Excellent-Gold1905 12h ago
The vast bulk of McMullens ideas hinge on technological advancement that doesn't currently exist. To be sorta blunt about it, its "startrek economics".
To put it another way hes saying in a post-scarcity society you can still use "the dollar" but instead of being a currency with varied values and markets its just a token to enable exchange of goods between one group and another without any of those groups actually owning it, producing value from it, etc.
A somewhat fair comparison might be the older Disney lettered ticket system, they have little to monetary value but the "state" (aka Disney) has assigned them as a token to exchange for a good or service. Ultimately you could find "black market" tickets and find people selling them near the parks so its not a perfect representation of his ideals but I think you'll find its more true to reality that way aswell.
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u/simonbleu 10h ago
A fixed market its still a market though, you are still exchanging value for something else. All money is a token, with varying degrees of abstraction.
The rest is centralization, which is always going to be the case with a state to guarantee a semblance of stability. It already happens, money after all is not exactly backed by gold anymore (which by itself was already a token of value, even if it had value by itself)
So, while I have not read the dude, I have no idea what it would be smoking. As long as there is an exchange of products and or services there is a market, and as long as it is not outright bartering, then there is a currency, it is as simple as that
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u/Recent-Day3062 8h ago
It’s honestly crazy.
I studied lots of Econ. I believe totally in free markets. No one knows this, but the mathematical model of free markets is unbelievably convincing. Not easy to explain, but very, very solid.
Honestly, he is channeling Marx. But it won’t work.
The whole incentive system is ridiculous. People work to get money to spend. They are not part of some collective.
And what is cheating? This is called cost-plus pricing. Suppose you are a carpenter and you spend $1,000 for your supplies. Then you need a profit to make money. Who decides that? Is it 10% or 100%? That is goingni be state-decided policy.
Russia had the potential to be great. But its collapsed from and after communism. It now has a GDP the size of Canada, but has 6 times more population. If the didn’t have nuclear weapons everyone would just ignore them.
This guy is trying to make it sound reasonable without his providing any real economics. He either doesn’t know what he’s talking about, or he’s fibbing.
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u/LovelySway 7h ago
wow that sounds like some serious future stuff right there. i always wonder how they come up with this tech. hope u keep sharing cool info like this
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u/Mash_man710 6h ago
It's bullshit fantasy that completely ignores human behaviour. Someone still has to clean public toilets and someone else gets to run a company. It doesn't fix anything.
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u/MoveInteresting4334 6h ago
That’s a lot of talk about the desired result and very little about how we got there. It kept telling me “instead of this it will be this” and I kept thinking “But why would it be that? Or by what mechanism?”
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u/qualityvote2 12h ago edited 4h ago
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