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A Reply to Perino on the Absurdity of “Efficiency”
Richard Wolff (University of Massachusetts, Amherst, USA)
© Copyright 2003 Richard
Wolff
I am pleased that Grischa Perino found so much that was agreeable in my critique of
efficiency.1 On the other hand, I believe Perino
missed one of its central points. Just as beauty lies in the eyes of the
beholder, so efficiency lies in the minds of economists and others who use
that concept. Proponents of different economic decisions, policies, and class
structures typically deploy their different efficiency calculations in
theoretical and practical battles. Moreover, they do so on an absolutist
terrain. That is, each contesting efficiency calculus promotes itself as the
efficiency calculus whose results must trump all others. The form of this
debating ploy is often to denounce the opposing position and its efficiency
calculus as based on “arbitrariness” while one’s own rests on the
foundational certainty of rigorously measured costs and benefits. Perino is concerned about this charge of arbitrariness,
yet it is subject to a critique identical to the one he found persuasive
regarding efficiency. Arbitrariness, like beauty and efficiency, lies in the
eye of the beholder.
Every efficiency concept depends, my article argued, on a very particular
presumption about causes and effects (that one can reduce a list of costs and
benefits to a singular causative economic act, policy, or conditions whose
efficiency is to be measured). Likewise, each efficiency concept can only
select and measure a small subset of the infinite present and future costs
and benefits ramifying from any economic act, policy, or condition.
Efficiency measures are thus inescapably as variable, idiosyncratic, and
incommensurable as the different presumptions and selections underlying them
(to which they are relative). Yet they persist as ideological
bludgeons used by adversaries attempting to suppress their opponents by
claims that one economic process is more or most efficient absolutely.
Thus, to mention a few examples, socialist economies are less efficient than
capitalist economies, deregulated markets are more efficient than regulated
ones, minimum wage laws diminish efficiency, and so on.
Across the ages, individuals and groups made economic decisions and evaluated
economic policies and systems by considering – in particular ways - some
selected aspects of them. These considerations differed across groups, time,
and place. Nothing was “arbitrary” in the decisions and evaluations nor in
the considerations leading to them. Their social contexts overdetermined
which issues arose for decisions and how different social groups responded
(i.e., which particular aspects they selected to consider and in which
particular ways).
Economists debating the great issues of our time often use absolutist
efficiency arguments against one another, charging each other with the
“arbitrariness” that concerns Perino. My critique
of efficiency attacks the terrain of such debates. It also advocates an
alternative terrain where the debate would center
on the specific values that contest to shape history. On that terrain,
efficiency claims, like arbitrariness claims, would be recognized for what
they are: very questionable derivatives of contesting values. Rather than being disguised and manipulated
as issues of efficiency and arbitrariness, the struggles among alternative
values (political, economic, and cultural) would emerge as such. Behind the
mask of “experts” who do “efficiency measurements” to “reach optimum
decisions,” both democratic participation in decision making and critical
alternatives to the status quo are usually repressed. The critique of
efficiency (like that of the accusation of arbitrariness) is aimed at undoing
such repressions in the service of basic social change.
Note
1. See Grischa
Perino, “Need Efficiency - and Much More! A
Response to Richard Wolff”, post-autistic economics review,
issue no. 17, December 4, 2002, article 7.
http://www.btinternet.com/~pae
news/review/issue17.htm and Richard Wolff, “Efficiency: Whose
Efficiency,” post-autistic economics review, issue no. 16,
September 16, 2002, article 3. http://btinternet.com/~pae
news/review/issue16htm.
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SUGGESTED CITATION:
Richard Wolff, “A Reply to Perino on the Absurdity of ‘Efficiency’”, post-autistic
economics review, issue no. 18, February 4, 2003, article 6. http://www.paecon.net/PAEReview/issue18/Wolff18.htm
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