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This section presents abstracts of research and articles on economic systems, economic planning, economic reform and cooperation. The paper, The Soviet Collective Farm as a Producer Cooperative by E. D. Domar, presents a theoretical study of the behavior of a co-operative in the context of Soviet agriculture. G. C. Harcourt investigates the implications of the bonus scheme for Soviet managers which arise from the measure of the rate of profit used in the Soviet Union in the paper, The Measurement of the Rate of Profit and the Bonus Scheme for Managers in the Soviet Union. Here, it is shown that managers in charge of enterprises which use particular types of machines are favorably treated and that if the size of expected bonuses affects the choice of technique, the measure of the rate of profit has an arbitrary impact on it. In the article Planners' Preferences, Priorities and Reforms, A. Nove explores the concept of planners' preferences and the use and limitations of programming techniques in planning. J. Wilczynski considers the problem of dumping across the Iron and Bamboo Curtains and some reported cases of dumping by the Communist Bloc countries in various parts of the world in the paper, Dumping and Central Planning.

The article focuses on the seventy fourth annual meeting of the American Economic Association to be held in New York from 27 to 29, 1961. Executive Committee dinner meeting will be held on December 26, 1961 at 6:00 p.m. On December 27, 1961 there would be a seminar on systems of economic accounts and analysis for urban region. Edgar D. Hoover of Pittsburgh Regional Planning Association would be the chairperson of the seminar. Discussants would include — Meredith B. Givens of Institute of Public Administration and Frederick T. Moore of The Rand Corp. Seminar on rural poverty and national policy would be held at 2:30 P.M. on December 29, 1961. Professor William H. Nichols of Vanderblit University would be the chairperson for the seminar. Papers to be discussed in the seminar include — "Economic Security for Agricultural Labor," by Louis Levine, "Relation of the Low Income Farm Problem to Major National Economic Problems," by Leonard P. Hendrix. Discussants include — professor Leonard P. Adams of Cornell University and John G. McNeely of Agricultural and Mechanical College of Texas.

The objective of this paper is to provide a model to deal with multi-dimensional social goals on a regionalized (as well as national) basis and to relate these to each other in the context of a national economic system. Input-Output (Interindustry) Analysis is therefore regionalized and reformulated in a way that connects it to national economic policy variables in a Keyneian framework. Possible multiple objectives and controls are examined and their possible further developments are also sketched in a context of regionalized and social goals that differ from region to region and also from time to time. Various proposals for revenue sharing are exhibited and interpreted in the light of the possibilities this model admits. Special attention is given to the Nixon (President Nixon) and ACIR (Advisory Commission on Intergovernmental Relations) plans in contrast to a multi-goal dynamic and adaptive control-incentive scheme with "saturating" indices of goal attainment. The latter, suggested at the end of this paper, is designed so that it can permit variation between regions while maintaining minimum levels of comparable attainment on goals that are common to more than one region. [ABSTRACT FROM AUTHOR]

This paper presents a concept of operational gaming with important new features and describes its implementation. One of these new features is the incorporation in the model of computer generated play whose character is determined by the action of the players as well as computer programmed stochastic characteristics. The paper 1. Presents the concept of operational gaming simulation and its potential usefulness. 2. Describes what has been done to implement this concept in one area of application for economic research and instruction. 3. Pictures this application to a stock market in sufficient detail so that persons who might be interested in using this model for research and/or instructional purposes are aware of its nature and availability. The development of the model into a usable instrument is described and the procedures being used to give it realism and validity are discussed during the course of this presentation. [ABSTRACT FROM AUTHOR]

The main thesis of this paper is that industrialization of non-western societies will eventually lead to the development of new societal patterns. The view that only very limited aspects of western culture can be imported into the non-machine societies while certain other "less desirable" aspects can be excluded is naive, unless it is based on an understanding of those aspects of culture which are independent of the industrial economic institution, and those which are inextricably tied up with it. One important change which will occur in a society with the introduction of industrialization will be the creation of new roles. These new roles are predominantly economic in nature thus introducing an entirely new pattern of behavior into a society. The separation of the economic functions from a totally integrated system would throw the entire system into a state of disequilibrium. Another factor which further disrupts the old system is the decline of certain old roles, such as skilled craftsmen and magicians. Man needs to make various adjustments to machinery and its effects on social organization.

Within the past decade there has been a steadily increasing use by operations researchers of computer simulation techniques in studying complex industrial and military systems. Economists are now beginning to recognize that similar techniques may be helpful in analyzing complex economic systems. The purpose of this paper is to consider some reasons why simulation may be a useful addition to the professional economists bag of tools, especially in research on the theory of the firm. Since relatively little substantive work in simulating microeconomic models has been published to date, the assessment of the role that this new methodology may play in developing the theory of the firm must be based on programmatic considerations rather than on achieved results. The term computer model is used to denote a special kind of formal mathematical model, namely, a model which is not intended to be solved analytically but rather to be simulated on an electronic computer. Simulating a computer model consists in using a digital or analog computer to trace numerically or graphically the time paths of all endogenous variables generated by the model.

This article presents a discussion on the research paper "Economics by Admonition," by Ben W. Lewis, a professor at Oberlin College, Ohio, published in the May 1959 issue of the journal "American Public Review." Lewis maintains that bigness which now characterizes U.S. industry, together with corresponding changes which have taken place in other economic institutions, represents a fundamental change in the character of the American economic system. It is difficult to survey the process of industry-wide wage and price determination in the steel industry, for example, during the last couple of decades and find any close approximation to the old-style competitive model. At the same time, the older forms of competition have persisted with the emergence of new forms of competition. The term competition is, however, so broad that quite opposite elements and developments can be brought under it. Some of the manifestations of competition are precisely those which reflect bigness and a change in the character of the system.

This paper proposes a method for measuring the cost of communication in alternative economic systems allocating scarce resources. The cost of communication is one element of transaction or organizational costs, as distinct from real or substantive costs. The need for a theory of transaction costs arises from the fact that the overall efficiency and viability of the economic system depends not only on its performance but also on the amount of resources devoted to its operation. An important subclass of transaction costs is informal costs of decision making. In this paper, the authors limit their attention to the cost of communication because they can compute it by using communication theory, while no such theory is yet available for computing other informational costs.

The article discusses issues related to a large economic organization or system which in some cases is best thought of as the entire economy. Within this large economic organization resources are allocated by some combination of commands and prices or even by some other unspecified mechanism. That a person not versed in economics should think primarily in terms of direct controls is probably due to the fact that he does not comprehend the full subtlety and strength of the invisible hand argument. The economist's attitude is somewhat more puzzling. Understanding that prices can be used as a powerful and flexible instrument for rationally allocating resources and that in fact a market economy automatically regulates itself in this manner is very different from being under the impression that such indirect controls are generally preferable for the kind of problem considered in this paper. Certainly a careful reading of economic theory yields little to support such a universal proposition.

The general program of which this paper constitutes a part is concerned with the changing character of the American economy, with particular reference at this session to the subject of investment outlets. Preoccupation of economists with opportunities for investment is socially intelligible only in relation to the bearing of investment on industrial trends, i.e., on the question of the progressive evolution of the economic system on which it relies for the production and distribution of the goods and services required in the maintenance and upbuilding of our standard of life. It is clear, then, that the essential question before us relates to the workability of the American economic system under present-day conditions. The first evidence of maturity probably lies in the decrease in the rate of growth of heavy industries and of building activity, especially of factory construction. Maturity also involves the slowing down of the rate of growth of the total quantity of production, of employment and usually of population.

Medical practice in a city may be viewed as a system resulting from competition between physicians for the more desirable practices and the efforts of patients to obtain the best physicians available. If physicians were guided solely by the financial position of patients and if patients could select their physicians on the basis of their relative technical competence, then a simple economic system would result. Since patients are generally unable to judge practitioners in terms of technical competence, extraneous factors actually determine their choice. Accordingly, the competitive position of a doctor is greatly influenced by his ability to fulfill expectations which are not medically relevant. This implies that the performance of the physician role despite its high status, relatively specific function, and limitation to persons properly trained and legally sanctioned is greatly affected by the doctor's other status positions. In effect, this means that other statuses are factors which affect preferences. This paper considers the effect of ethnic origins of physicians on the practice of medicine.

It has frequently been pointed out that the structure and functions of the family are significantly affected by the economic system of the larger society in which the family exists. The major objective of this article is to show that distinction between mass and bureaucratic integration settings is of further value in dealing with the power structure and ideology of the husband-wife relationship. A second important feature of the literature on the family is an emphasis on so- called "family types" clusters of attributes which supposedly bear a high degree of correlation. A second objective of this paper is to suggest some limitations in the usefulness of these concepts. Just as the economic system, insofar as it affects the social structure, imposes certain demands and limitations on the organization of the internal personality system of the individual participant, it also sets conditions for other social units. The family may be considered such a unit in the status hierarchy of the society which is shared by all the family members.

The history of rural society in America can be described as the change from relatively homogeneous, self-sufficient communities to communities with differentiated societies and economic systems dependent upon the urban market. A transitional society is one which has experienced modifications in its folk-sacred structure as a result of direct influence from an urban-secular society, or through sui generis internal differentiation, or both. The society from which the data in this paper has been drawn seems to display what might be called an equilibrium between urban-secular. The society analyzed in this paper is located in a broad bottomland area along the Ohio River and extending along two counties. The general culture of early settlement period will not be discussed in detail. In brief, it conformed to the typical self-sufficient early nineteenth century American rural community, small subsistence farms, closely-knit extended family structure, well-developed patterns of mutual aid, communal gatherings such as picnics, barn-raisings, and the like, personal status differences but only vague socioeconomic class distinctions.

Students of the American working-class movement have often contended that the absence of a feudal background in the U.S. retarded the development of the working-class movement. The basis of this contention is that America is not only the one highly industrialized country without a powerful working-class movement but that it is also the one highly industrialized country without a feudal background. As early as 1886, Engels offered as one of the reasons for the weakness of the American working-class movement the fact that we "developed in a purely bourgeois fashion without any feudal past." Nevertheless, neither Engels nor any other writer has gone very far beyond mere assertion. There are of course many factors that account for the retarded development of the American working class. This paper attempts to explain the manner in which the absence of a feudal background contributed to the creation and intensified the operation of those factors. The proximate determinants of the strength of a movement for the emancipation of an oppressed class in a highly industrialized society are: (1) degree of actual oppression; (2) extent to which existing conditions are conducive to arousing resentment against and organizing or position to the given degree of oppression.

A critical analysis of the social and economic consequences of nuclear development demands some understanding of fields which are professionally far removed from the areas of competence of the social scientist. Terms, concepts, and problems closely related to mathematics, physics, chemistry, engineering, and metallurgy must be comprehended and their interrelations seen. Perhaps this is why atomic energy has received relatively little attention from sociologists and economists. Certainly it is not because the area is inappropriate for social science research as becomes clear when, for example, atomic power is viewed as a case of technological innovation with consequences for the entire social and economic system. Atomic power is one of three principal areas of present nuclear development. The other two, which are not of concern in this paper, are the atomic and hydrogen bomb and the use of radioisotopes in medical, scientific, industrial, and agricultural research and practice. The basic technical problem of atomic power is that of the production of heat through nuclear fission and the transfer of that heat to power by mechanical means.

This article discusses various papers on income distributions, which were published in the May 1, 1953 issue of the journal "American Economic Review." Economist Richard A. Musgrave introduced an idea that the incidence of a tax may depend on the value relationship between consumer goods and capital goods is ingenious and promising. Failure of a tax to reach certain consumption such as personal services, a common falling of sales taxes, would presumably cause a similar unneutrality. Of course the economic system compensates for these unneutralities as it does for a partial excise, to a degree and at a price. It may well be that unequal treatment of equals is as important an argument against sales taxes as their alleged regressively. Another economist Rufus S. Tucker has focused upon the fact that low bracket incomes are a miscellaneous class about which one should have a great deal more quantitative data. Some low incomes represent cases of families that are chronically and desperately poor whereas, others represent cases of families that are at least not so poor as they seem because they are largely self-sufficing and still others represent persons who are temporarily in low brackets or who have small responsibilities and perhaps offer themselves to the labor market only for part-time work.

This article discusses the theory of economic distribution. The classical economists devoted a good deal of attention to the problem of what happened to the various magnitudes of an economic system in the progress of society, especially the structure of relative prices and the distributional shares. Moreover, the demise of the wage-fund theory left the classical dynamics in ruins and no adequate macroeconomic theory of distribution has ever filled the gap. The main focus of this paper is the problem of distribution according to functional shares. The classification of technical improvements into labor saving, land saving and capital saving is of considerable importance. An increase in output of food per acre, for instance, may be of more immediate importance to India than an increase in output per man: one will give immediately better nutrition; the other might merely create more rural underemployment. The capital-saving nature of an improvement is also of importance for the low-level areas, which need improvements, which increase output per man and per acre without involving much accumulation of capital and land reorganization rather than dams and tractors.

An intertemporal optimization condition follows from any model of optimal growth. Such an equation usually contains two parameters which cannot be directly observed, the discount rate of future utility and the elasticity of marginal utility. These two parameters can be empirically estimated if they remain constant over time and if the assumed criterion function is maximized in the real economic system. In this paper, a method of estimating these two parameters is presented and it is applied to the U.S., Japan, and Canada. Although the results are not conclusive, in view of the assumptions involved, they tend to confirm the hypothesis that they are fairly stable over time, at least during a sociologically well-defined short period. The analysis in this paper, although heavily constrained by the shortage of data on capital stocks, has shown that the elasticity of marginal utility and the discount rate of future utility are fairly stable over time in normal years, particularly for a short period in which the society as a whole remains essentially unchanged.

The article presents abstracts of studies pertaining to economic system and planning. In the Dynamic Programming for Decentralized Planning by D.K. Bose, it presented a method for evolving an optimal policy for decentralized decision-making, employing the technique of dynamic programming due to Bellman. The paper The Impact of Regional Planning on the Economic Future of Small Rural Areas--A Case-Study by F.N. Burton examines the major economic forces which operate in a small rural area, which, in terms of its employment structure and heavy dependence on agriculture and service trades, thinly spread population, and high rate of net outward immigration, is, in a general sense, a representative of many rural areas. The purpose of the case study is to determine the future prospects for such areas within the framework of a negative regional policy towards them. In the paper Capitalism, Private Property and Freedom, R. Cirillo contends that economists who favor the capitalist economic system do not seem to advance solid grounds to justify its existence in preference to collectivist systems. Their arguments, which are basically of an economic nature, are insufficient for the purpose. The only satisfactory defense of the capitalist system can be found in ethics.

This article presents abstracts of research and articles on economic systems, published in the December 1966 issue of the Journal of Economic Abstracts. In Shadow Prices and Planning in Underdeveloped Countries, author R. Agararwala suggests a method of calculating the relative shadow prices of labor and capital and utilizes them for choice of techniques and investment allocation in planning for under developed countries. The paper Planning in an Open Economy by B. Balassa deals with some problems of long-term planning in developed countries, and suggests that planning on the industry level can best be applied in national economies that are more or less closed to foreign influences. Meanwhile, the paper Some Antecedents of Development Planning in Tanganyika by C. Erhlich examines economic policies during the colonial period in Tanganyika, and attempts to assess the aims, methods and intrinsic limitations of economic planning during the closing fifteen years of colonial rule. Authors K. B. Griffin and B. Glassburner presents An Evaluation of Pakistan's Third Five Year Plan. It reveals that the Plain failed to offer the fiscal measures necessary to raise government saving to the extent required, and excessively relies on the belief that Pakistani industry has been saving and investing 75% of profits.

This paper is concerned with the analysis of qualitatively specified systems in which Walras' Law holds, with attention centred upon the possibility of proving Hicksian stability for such systems. The results of the paper represent extensions and generalizations of results obtained in "purely qualitative" models by Quirk and Ruppert [12] and Bassett, Maybee and Quirk, and are related to theorems concerning the gross substitute case in Arrow and Hurwicz and McKenzie. Earlier work on this problem appears in Habibagahi and Quirk. Generally speaking, the results in this paper emphasize the limitations that must be imposed on the presence of complementarity in qualitatively specified models if Hicksian (or dynamic) stability is to be proved, a feature of such models first noted by Hicks and recently formalized for the "sign symmetric" case by Quirk. Finally, in the last section of the paper, a conjecture concerning dynamic stability is stated, listing conditions necessary for qualitative (dynamic) stability under Walras' Law, but as yet not shown sufficient (except for small dimension cases) for qualitative stability. While there is inherent interest in results concerning models in which Walras' Law holds (for example, if preferences are characterized by money illusion), we feel that the major usefulness of the results of this paper derives from applications to classical competitive models in which both Walras' Law and homogeneity holds. Because, for qualitatively specified models, proving stability when Walras' Law holds also implies stability when both Walras' Law and homogeneity characterize the system, the conditions derived in this paper are sufficient for Hicksian stability in the competitive case, but are not necessary for qualitatively specified competitive models. [ABSTRACT FROM AUTHOR]

The present paper has two objectives. The first is to apply these techniques to the stabilization of the deterministic multiplier-accelerator model. This problem has been recently studied by Sengupta [14], although he appears to have incorrectly applied the basic theorem which yields the feedback law. The solution is given for the general multiplieraccelerator model where the investment function is generated by the flexible accelerator. While the general nature of the optimum solution can be readily determined, it is extremely difficult to investigate any particulars and to perform any comparative dynamics in the general case. However, the solution can be explicitly obtained for the instantaneous accelerator and accordingly this case is studied in some detail. The second aim of this paper is to introduce stochastic elements into the model. Recently, considerable progress has been made in stochastic control theory (see Wonham). It has been shown that the quadratic utility functional approach can be readily extended to cover various kinds of stochastic elements and turns out to give similar linear feedback laws to those for the deterministic case. Some work has already been devoted to introducing stochastic elements into stabilization theory. Brainard introduces them into a static model; Holt includes additive disturbances in his dynamic model; Henderson and Turnovsky introduce stochastic parameters in a somewhat specialized dynamic context. The recent advances in stochastic control theory enable us to introduce uncertainty in a more general way. In particular, we consider the effects of uncertainty in various parameters, as well as additive stochastic disturbances. [ABSTRACT FROM AUTHOR]

This article provides information about the falsity of the nonswitching theorem. The falsity of nonswitching theorem in no way affects the validity of the nonsubstitution theorem. The false theorem tool for granted the possibility of a decomposable system's reswitching back at a low interest rate to the technique that had been competitively viable at a much higher interest rate. Once a theorem is recognized to be false, there is not much point in hashing over errors in its proof. Still, to avoid confusion in the literature, it is important to emphasize that the fundamental lemma, used in the proof of the false theorem, is itself definitely false.

The article presents several abstracts of research papers related to economic systems, planning and reform, and cooperation. The first article "Planning in a Market Economy," by I. Svennilson, defines the concept of planning in a market economy and discusses the possibilities of the Government economic policy in such an economic system. The second article "Comprehensive Model-Building in the Planning Process: The Case of the Less-Developed Economies," by R. Vernon, used comprehensive models to ensure that national plans are consistent and comprehensive; occasionally, too, they are being used to provide indications of the optimal use of some scarce resource. But their use is running into many difficulties. One set of such difficulties derives from the fact that the national plan and the comprehensive model may have somewhat different objectives. The content of national plans may be influenced by many useful purposes to which the typical comprehensive model may be unresponsive or in downright conflict, such as generating a case for foreign aid or rallying popular support for unpalatable action.

This article presents a response to comments on the proposed a model of transfer pricing in a socialist economy setting. Over the years an enormous body of literature has accumulated on the limitations of market determined prices as an instrument for the administration of an economic system. There are problems when perfect competition and/or government intervention are present in addition to the problems that arise when these conditions do not exist. Considering the brevity of Kenneth Most's comment, it is remarkable for its coverage of the literature on the subject. Furthermore, it may be useful to be reminded of the fact that these problems do not disappear when a socialist government employs transfer prices to facilitate the administration of its economy. How such a system would deal with these problems and whether these solutions would be more or less effective than the solutions available to a regulated capitalist economy is a subject for further research. A. Rashad Abdel-khalik argues that under the conditions specified, it appears that the proposed transfer price system will augment the employees' bonus for any period as compared to the preceding period by a function of the unfavorable deviation in fixed costs in period. If this statement were correct, the transfer price system would be less than useless, since a firm's management could maximize its income by maximizing costs. Abdel-khalik's argument is incorrect, but his concern with the control of organization costs is well placed.

The article presents information about the paper "Sources of Russian Economic Information," by G. Russell Barker, that appeared in the August 1954 issue of the journal "Aslib Proceedings." The author discusses briefly the publications that carry translated information, Soviet sources and the availability of Soviet material, reliability of the data, and reference works. The availability of data on the workings of the Soviet economic system at the present time is such that very careful and scrupulous analytical work is essential on the part of every individual student of current material, within the framework of a sound methodological approach.

Ceylon has a relatively well staffed and organized extension service, and improvement of crop yields is a major national objective. However, the concepts of extension as a two-way street, of felt needs, and of a cultural approach are absent. The absence of these approaches limits effective extension. Certain features of Ceylonese culture inhibit the acceptance of such principles; among these features are the hierarchical organization of society and the absence of a capitalistic type of economic motivation. Examples of the lack of cultural perspective and the "top-down" approach are presented. [ABSTRACT FROM AUTHOR]

Drawing up a medium term economic plan usually involves a complicated interaction between the planning ministry and representatives of the various industries, firms, or departments. Each economic agent works in his own environment with at best incomplete information about the other agents. Yet somehow the economic system as a whole is typically able to move toward an operational plan which is satisfactory even when judged by the criterion of complete information. This paper examines the properties of one particular theoretical mode! of economic planning in which the center transmits information via a system of quotas. [ABSTRACT FROM AUTHOR]