Cooking the Books: A Nobel Prize for Non-Economics

I have heard many members of the SPGB using one of the textbook definition of economics along the lines of "The study of how societies use scarce resources to produce and distribute goods and services". By this definition Al Roth's work is clearly economics. The work of Roth which deals with unpriced goods and services (which is not all of his work, nor is it all of market design) is certainly within the remit of economics even if the nomenclature of market-design may seem to be inappropriate in such context.The use of the term market-design is because his work fits into the area of economics called market-design. A large part of market design is how one allows price to be determined within a market: one answer, the SPGB answer, might be "not at all". In which case there is a new question to answer: "How do we allocate goods and services without the price mechanism?". Roth attempts to deal with this problem. On his blog ( http://www.marketdesigner.blogspot.se/2013/01/market-design-for-everyone-from.html ) he discusses how his work is useful for socialists, citing this very article on which I am commenting.I think it is promising that a nobel prize went to work on how to allocate resources using non-market mechanisms. This is the very problem that the SPGB has to deal with if it is to persuade more than a fraction of a per cent of the world population that a world revolution is a good idea.   I find it a shame that this opportunity was used largely for an uninformed attack on the subject of economics;  it should be used to focus on how this research relates to the central problem of creating a functioning world socialism.I think that the author here, and socialists in general, underestimate what economics has to offer us in building a post-market society. 20th century economics is in large part an investigation into when markets fail to allocate some set of goods and services as "efficiently" as a (hypothetical) perfectly informed, computationally unbounded, social planner. The answer to this question is, roughly speaking, "Most of the Time!". A simlarly large part of economics is examining when non-market organisations– like governments, collective decision makers, uncoordinated groups — fail to allocate goods and services as "efficiently" as a hypothetical social planner. The answer to this question is also "Most of the Time!".In answering these two questions economists provide a critique of both free-market fundamentalists and pro-regulation economists. Indeed the battle ground in economics is generally over which "Most of the Time!" is more. Of course (proper) socialists can use both sets of arguments to critique reformists and free-market fundamentalists. However, the results of economics research is useful for more than being a critique of right and (reformist) left wing politics. 20th century economics defines very clearly many of the problems that socialists need to solve (assuming a lack of true superabundance, which the author accepts with his nod to Shaw). Moreover, economic research often offers solutions to these problems. Roth is an example of someone who has provided such a solution. On the other hand, I have heard little (nothing) about serious attempts by the party (an organisation which I have been in contact with for most of my life)  to deal with the substantive economic problems that face a post-market society. Given this would it be unreasonable to suggest that Roth through his work has done more towards creating a socialist society than has the SPGB. 

But your claim that he "deserved a Nobel Prize (if for non-economics)" is inaccurate. By the definition of economics it is clearly an economics problem to which he has contributed.Why does the party not engage with the fundamental problems of running a post-market society? If we can't show people, convincingly, that there is a way to solve such problems why should they even desire socialism, never mind put effort into making it happen. The lack of (real and scientific) answers to these problems is why the party stagnated in the early twentieth century. Solving these problems is necessary for making socialism possible. Part of solving these problems lies in the last 100 years of economic theory and research.p.s. I am the someone else who takes up your point.

That's one definition of economics and, clearly, on it, "economics" will have existed since the Stone Age and before and will still exist in socialism. But that's not how Marxian socialists have traditionally defined it. We have seen it as the study, essentially of the production and distribution of goods and services in societies where exchange (trade, buying and selling) is widespread. In these societies forces come into operation which act like natural laws imposing themselves on people and which some economics textbooks teach actually are natural laws. When we criticise "economics" it is its claim to be studying eternal facts of human existence, instead of just what happens at the present, capitalist stage of human social development. On this definition where there are no markets there is nothing to study.But it's silly to argue over definitions. To have a meaningful discussion all those taking part need to agree on definitions. So, let's go with yours. Obviously, then, we can't be against this, as the study of the allocating resources to meet human wants. That will happen in socialism and we are interested in ways of doing this in a non-market way. That is why the article commented favourably on Alvin Roth's work. Others who have won the Nobel Prize for Economics and who have made useful contributions to this are Wassily Leontief (1973, for his work on input-output tables) and Leonid Kantorovich (1975, for his work on linear programming).Actually, in answer to the followers of Ludwig Von Mises who argue that it is impossible to organise production and distribution rationally without prices, markets and money (so that socialism would be impossible) we have done some thinking on how a socialist society would be able to work without these. See:Chapters 4 and 5 of our pamphlet Socialism As A Practical Alternative.The “Economic Calculation” controversy: unravelling of a mythThe Alternative to CapitalismYou are knocking at an open door.

Where is the demonstration that "it is technically feasible to organise on a non-monetary/democratic basis"? This demonstration needs to be applicable at a global level. And be feasible in the sense that it makes the world a better place (for some non-absurd definition of "better").

The all important caveat:"This demonstration needs to be applicable at a global level. And be feasible in the sense that it makes the world a better place (for some non-absurd definition of "better")"1) The Incan empire* was tiny relative to the size of the current economy/global population. They were able to implement a non-monetary political economy that none of us would want to live in due to both the material and social conditions. The Incan Empire demonstrates the feasibility of running a command economy when the state carries, and uses, a huge whip. When I said Feasible I also said it needed to be better in some sense than the current system.2) It is a fair point that non-monetary calculations are used consistently used to run organisations. Indeed this was the focus of Herbert Simon's economic research (Nobel Prize 1978). However, the fact that large parts of society do not require market transactions to operate does not show the feasibility of creating a better society by having no market transactions. Let me try a couple of analogous, and absurd, arguments. a) The nucleus of an atom takes up a tiny fraction of the space filled by the atom. Indeed human beings are mostly space. Therefore, it is feasible to have human beings without any nuclei to their atoms. b) Humans do not need automated vehicles to travel. In fact, we see that humans spend most of their travelling time on foot. Therefore, we do not need to have automated transport in our society.I don't suspect those analogies will convince you. I seem to have failed to get across the level of evidence that I believe is required. To persuade someone (and this should include yourself) to back a socialist revolution then the evidence that it will be a better society needs to be very strong given the risks inherent in trying to set up a new and untried system of (hopefully self) governance. Why should anyone be willing to take the gamble of revolution? Should they be convinced that this is a good idea by examples of past societies that no-one would want to live in? Should they be convinced that because they don't need the market for everything that they don't need it for anything? The examples you give are, at best, prima-facie evidence for the feasiblity of a socialist society that is better than the current. The party has been saying that we will solve the practical issues as the movement grows. But the movement hasn't grown in over a hundred years! As a proportion of the population I suspect it has shrunk. Party members put this down to ignorance, false-consciousness or bad marketing. It seems plausible that the real reason is that the evidence for socialism being better than capitalism is thin on the ground; sorting out this shortfall ought to be a priority. * Here is a recent article by economists Acemoglu and Robinsion that mentions the Incans along with some other, what they call, state-capitalist societies in its discussion of  contemporary state capitalism. Not entirely relevant to this discussion but it may be of interest.

The prima-facie evidence clearly hasn't been sufficient to persuade more than a handful of people over to the socialist cause. It is hopeless to expect anyone to throw themselves behind a cause when it is so unclear as to whether its aims are desirable/feasible. By using the term "if we're right" you might as well be saying "we're not going to check if we're right". This attitude verges on milennialism.

 Change "could work" for "almost certainly would work" and I would agree with you. Life would have to get pretty bad before "could work" started to look appealing. But, even then I would be happy for decent evidence that it "could work".Do you think that you have evidence that it could work? Do you think the evidence that you gave is evidence that a socialist world could improve the lot of the working class?