The present column shows, that the intertwined balance in kind can be transformed into a value balance. It is obvious, that this first requires a price formation. The presented theories are copied from the books Ökonomisch-mathematische Methoden und Modelle by V.S. Nemchinov, Verflechtungs-bilanzierung by V.V. Kossov, and Volkswirtschafts-planung by an East-German collective of authors. The last two mentioned books originate from the second-hand bookshop Helle Panke in Berlin. An important aspect is the aggregation of .... Read more
08-10-2018: Rationality in planned prices
Author: E.A. Bakkum
An often heard criticism of the planned economy, and of state enterprises, is that the absence of a private market makes the price formation irrational. Yet the Polish economist Oskar Lange has already in 1937 refuted this criticism. The present column sketches this controversy. Besides, it is explained how the price formation is organized in the former Leninist planned economies. The Leninist price formula uses a fascinating value modification. The plan encompasses both the material streams and the money streams .... Read more
02-10-2018: A model of the labour market
Author: E.A. Bakkum
In the book Economic policy: principles and design the well-known Dutch economist Jan Tinbergen describes an interesting micro-economic model of the labour market. The model excels thanks to two hallmarks. First, both the properties of the unemployed and those of the offered positions are modelled in detail by means of the method of Quetelet. And second, the preference of the unemployed is expressed in a cardinal utility function. The model allows to calculate the distribution of the labour incomes .... Read more
02-10-2018: The socialization report of the SDAP
Author: E.A. Bakkum
The present column discusses the SDAP-report Het socialisatie-vraagstuk, which was published in 1920. The aim is to re-evaluate the made proposals. For this purpose other sources of that era have also been consulted, such as Problemen der socialisatie by J. van den Tempel. Criticism can be found in Het socialisatie-rapport der SDAP by Joh.J. Belinfante and in Socialisatie by A. Zeegers. F.M. Wibaut, one of the authors of the report, replies in Over de kritiek op het socialisatie-rapport .... Read more
02-09-2018: Socialism in the clutch of evolution
Author: E.A. Bakkum
In a previous column it is stated, that there are sound technical arguments in favour of the socialist system of production. Yet the practical experiences are rather disappointing, or at least not durable. Why is that so? The present column tries to answer that question, and consults several sociological sources. It concerns notably Économie et sociologie by François Cusin and Daniel Benamouzig. Besides Why nations fail by Daron Acemoglu and James Robinson analyzes completely in the tradition of the Historical School .... Read more