Editors note: Discussion includes using choice of production technique in central planning, opportunity cost, labour cost, calculating environmental costs (such as GHG emissions), agent-based modelling, consumer modelling, simulation results, computational complexity, research to be done.
Philipp Dapprich is a political economist and philosopher working at the Free University Berlin. His PhD was entitled Rationality and Distribution in the Socialist Economy (2020), , and he is also co-author of a forthcoming (2022) book entitled Economic Planning in an Age of Environmental Crisis. Today we’ll be discussing his work on refining the model of economic planning first proposed by Cockshott and Cottrell in Towards a New Socialism (1993).
Today’s conversation is in association with meta: the Centre for Post-capitalist Civilization if you’re not familiar with Towards a New Socialism you can buy the book or find a free PDF online you can also find interviews with Paul Cockshott on this channel and I’ll put links in the description to Philipp Dapprich’s doctoral thesis as well as a relevant paper.
Philipp Dapprich, thank you very much for joining me.
[Philipp Dapprich] Thank you for having me again.
[ATO] The first thing I’m going to say is I really recommend the viewers watch the previous interview, because they’re not standalone interviews. We covered a lot of important stuff last time about opportunity costs, the motivations for your work, and really if viewers want to understand what we’re talking about now they should watch that. So, I’m just going to say that once.
Today there are two main things that we want to talk about. The first is we want to get into the details of the simulations that you ran to investigate your new techniques of opportunity cost valuations in the Towards a New Socialism model.
The other thing is we want to talk about a fundamental question, a fundamental problem, in economic planning and central planning about choice of production technologies. Can you introduce the problem and how you approached it?
[PD] One approach to planning has long been to use so-called input-output tables. And input-output tables – they are commonly published even by western capitalist countries – show you which industries use inputs from which other industries, and which output, how much output, they produce with this.
And the problem with that is that these tables are generally very aggregated. So, you have entire industries, you might have something like Forestry and Agriculture, all bunched together into one column of the table. And it doesn’t differentiate between various different kinds of products within those industries. It won’t differentiate between different kinds of agricultural products, lumber, and so on. That’s the first problem: they’re way too aggregated. And what you’d have to do is to have a much more disaggregated table which differentiates between different kinds of products.