From Marx to Mises by Steele David Ramsay

Author:Steele, David Ramsay [Steele, David Ramsay]
Language: eng
Format: epub
ISBN: 9780812698626
Publisher: Open Court

f. Knowing What To Do in the ESM

Carens claims to show “that social-duty satisfactions would perform the same functions with respect to resource allocation [in the ESM] as income-consumption satisfactions perform in the PPM system” (38). But if “perform the same functions” means ‘lead to the same outcome’, he doesn’t show this.

Carens’s example is that of a worker, Jane, choosing among three jobs with different rates of pay and different degrees of work satisfaction. (In considering this example above, we were looking at the feasibility of individuals calculating their ‘earning capacities’. Having discarded the earning capacity feature of the ESM, and thus made it more closely parallel to the PPM, we now consider the pure question of whether people could make the same decisions in both systems.) Jane chooses the one with intermediate pay, because it has greater work satisfaction than the one with highest pay, and she values the difference in work satisfaction more than the difference in pay. Carens claims that Jane “places the same relative value on social-duty satisfactions in the egalitarian system that she placed on income-consumption satisfactions” in the PPM (39). If these are the same, the outcome will be the same. The question is how plausible it is to suppose that they could be the same. The only way for the ESM to simulate the PPM is for individuals in the ESM to try to act as they would in the PPM. This is because the estimation of the social benefit must correspond to the valuation placed on consumer goods in the PPM, or the simulation is lost. Would it be possible for individuals to accurately determine what they would have done in the PPM? Picture the individual, in a society without individual variations in personal-consumption income, without anyone’s being able to increase his personal-consumption income above a fixed level. Faced with the possibility of an increased pre-tax income in exchange for decreased work-enjoyment, the individual has to decide how he would decide if the increased pre-tax income could be spent in any way he pleased—on increased personal consumption and on giving away to others.

Would it be possible for people in the Carens system to accurately imagine how they would behave in the PPM, and then behave that way? There are several reasons for thinking this would be impossible.

There is the limitation of imagination. People sometimes play poker for real money, and sometimes for matchsticks. Their behavior is different in each case. Someone could try hard to play poker for matchsticks exactly as he would if he were playing for money, but he would be unlikely to have complete success. However, if he has never played for real money, has never had any experience of winning or losing real money at any time, and cannot look around at any examples of people playing for real money, it is even more difficult for him to imagine how he would play for real money.

Some of the choices made by factor-owners involve their own subjective preferences. Laborers

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