By MN Gordon
Seeing the Light
It has been said that “the definition of insanity is doing the same thing over and over again and expecting different results.” No one quite knows who first uttered this remark; it has been attributed to Albert Einstein, Mark Twain, Benjamin Franklin, and has even been said to be an Ancient Chinese Proverb. What is known is that this cliché has been repeated over and over again so often that its mere mention substantiates its own definition.
Several of the ladies and gentlemen above wanted to let us know that they’re merely eccentric, and if they want to do things all over again and again and again, we should let them…
Nonetheless, we repeat it again because it’s particularly fitting to today’s deliberations. Here we begin with a look back to the past in search of edification. For the miscalculations of the past continue to dictate the insanity of the present.
Many years ago, a bright minded and well intentioned Italian pursued a devious undertaking. His efforts aimed to conceive a pure theory of a socialist economy. His objective was to take the sordid teachings of Marx and pencil out the mechanics of how a centrally planned economy could bring a life of security and abundance for all. What follows is an approximation of how the dirty deed went down.
In 1908, Italian economist Enrico Barone suffered an abstraction. One late night he skipped a bite of his meatballs and marinara, and gazed into the outer frontiers of deep space. Looking around, he couldn’t believe his eyes. For in this far corner of absolute darkness, he saw something truly amazing. Out in the distant reaches of nothingness, peering into a black hole, he saw not the dark. Rather, he thought he saw the light.
Barone’s light was a socialist utopia achieved through “scientific management” of the economy, lorded over by the Ministry of Production. Through this endeavor, he imagined, an economy could attain something called “maximum collective welfare.”
Enrico Barone in the only photo of him we could find. Both Vilfredo Pareto (in 1897) and Barone (in 1908, in the monograph “The Ministry of Production” discussed above) used a system of simultaneous equations based on Walrasian general equilibrium theory in order to investigate whether there was some sort of theoretical/ mathematical solution available to central planners facing the problem of what to produce, how much of it to produce, how, when, and where to produce it, etc., what resources in what quantities to allocate to capital goods production, how much consumption to permit, etc., etc. – all the stuff socialist planners ultimately turned out to be really bad at. Anyway, we have to defend Barone and Pareto a bit, as neither of them seemed to really believe that the approach was actually viable in the real world. After presenting all his nifty equations, Barone pointed out that the planners would ultimately still need all the things they thought they could abolish (prices, rent, profits, interest, savings, etc., which he …read more
Source:: Acting Man
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