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Routes To Economic Vision: Efficiency


When you hear the word “efficiency” do you get aggressive, expecting a conservative onslaught that you will have to battle against? I do. By this time it is a reflex, even if not always warranted. The reason isn’t because efficiency is a bad thing per se. It is because what people mean when they use the word is often a bad thing.

Efficiency means accomplishing ends we seek without incurring costs or side effects that overly offset the benefits. It means seeking and attaining goals without wasting assets. What could be bad about that? To be against efficiency means being for waste, it means being for negative costs and side effects that offset the benefits of our aims. What idiot would favor that? No one, which is why calling one’s efforts efficient works as an effective bludgeon against critics.

But, when I say that something is efficient and you then say it is inefficient, can we both be right? Of course we can. Efficient is not an absolute term. In fact, it isn’t even that it is subjective – rather it is that the word has completely different meaning for different people, even talking about the same situation.

Suppose we ask if the operations of the Ford Motor Company are efficient. To answer requires that we know (a) the goal, and (b) what we count as attendant side effects, or costs, or waste that could make the operation inefficient.

For the owners of General Motors the goal is Profits. The only thing valued is – well, profits and also reproducing the conditions that allow profits to be accrued by owners. If side operations hurt workers by harming their long term health or impose costs on neighbors of a workplace by spewing pollution, or manage to slough off costs onto consumers in the form of skimping on safety, or do anything else that hurts anything other than profits – it is no matter. The owners don’t care about all that…unless it rebounds to hurt profits because they don’t value anything other than profits.

Now if I look at General Motors the goals I set are quite different – let’s say providing effective means of transport for consumers. Likewise, the things I value are also different including the dignity and health and safety of the workers, the beauty and healthfulness of the environment, the safety and comfort of riders, and so on. I don’t in fact care about profits at all, but rather I care about the human well being and development of everyone involved with the Ford Motor Company, whether directly as workers and consumers, or peripherally, regarding the ancillary effects of GM production and consumption.

So when the owner says GM is efficient (for making profits) he is correct. But when I say it is horribly inefficient (for providing good transport) because it violates the needs and potentials of people involved, I am also correct.

What does it mean to say we want an efficient economy, then? Clearly, it means absolutely nothing until we qualify our aims and what we value. If we aim for profits and value nothing but profits and the conditions of their continued accrual – capitalism will do nicely, being very efficient for attaining those ends consistent with those valuations. If we reject profits as even a concept, much less a goal, however – and we instead value people’s lives, then capitalism is of course by its orientation and logic inefficient and we need something entirely different.

Any economy, in other words, is likely to be efficient for some ends and with some valuations – and not others. Parecon seeks to meet needs and develop potentials consistent with self management, equity, diversity, and self management. With those aims and values, it is efficient.

So the real issue vis a vis efficiency and economics is never do we like waste or not – of course we don’t like waste. It is what constitutes waste – what do we care about – and what are our aims.

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