Marxist efficiency

NOTE HXA7241 2012-06-24T11:24Z

Marx's famous slogan of communism, considered purely in itself, seems wholly consistent with the core of (neo-)classical economics, but leads to a much more general perspective.

“From each according to their ability, to each according to their need.”

This is actually an elegant statement of economic efficiency. It is just centered on the key fundamentals rather than some contingent approach.

Economic efficiency is about the best allocation of resources. And that is a function of both supply and demand: the value of something is not only how easy it is to get, but also how much we want it. And surely the primary, or most interesting, resource is what people do.

‘From each ...’ is saying: where resources are abundant we should use more of them. And ‘to each ...’ is saying: where resources are wanted we should use more of them. That is, we should use resources according to their supply and demand. This expresses the basic quasi-proportional relation of each component, and their optimal combination as being the overall aim.

There is no implication that the giving is done by some and the receiving by others. ‘Each’ features on both sides: each has both ability and need, and both aspects are treated duly. Hence the real implication is more like one of trade: a fair exchange that is also positive-sum overall.

Neither is there any implication of other particular structures. It is just interaction between individuals, with no mention of any state or external hierarchy or control.

This is all exactly what a free-market is claimed, ideally, to be directed to. A normal conception of the free-market, though, is based on particular measures and mechanisms, and so rather prejudices the core intention. Money, property, etc. are just one particular way to implement the organisation of resources and value, and not the ends in themselves.

The value in the quote now is not that it leads to Marx, but that it leads away from any specific ideas at all, and instead toward thinking more freely about possibilities of economic systems.