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Capitalism and Efficiency: A Review and Appraisal of the Recent Discussion

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  • Robert Drago

    (Economics, University of Wisconsin-Milwaukee, Milwaukee, WI.)

Abstract

The paper reviews recent theoretical and empirical work by neo-Marxists suggesting that capitalist firms are inefficient, either technically or by Pareto criteria. The paper examines potential inefficiencies due to the division of labor, unemployment, labor segmentation/fragmentation, and bureaucracy/supervision. It is argued that technical inefficiency claims are incapable of being validated. While Pareto efficiency arguments may be warranted, presently existing socialist societies and experiments offer little persuasive evidence. Further empirical and theoretical work will be required to sustain efficiency arguments.

Suggested Citation

  • Robert Drago, 1986. "Capitalism and Efficiency: A Review and Appraisal of the Recent Discussion," Review of Radical Political Economics, Union for Radical Political Economics, vol. 18(4), pages 71-92, December.
    • Handle: RePEc:sae:reorpe:v:18:y:1986:i:4:p:71-92
    DOI: 10.1177/048661348601800404
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    References listed on IDEAS

    as
    1. Robert Drago, 1984. "New use of an Old Technology: The Growth of Worker Participation," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 7(2), pages 153-167, December.
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    3. Derek C. Jones, 1982. "The United States of America: a Survey of Producer Co-operative Performance," Palgrave Macmillan Books, in: Frank H. Stephen (ed.), The Performance of Labour-Managed Firms, chapter 3, pages 53-73, Palgrave Macmillan.
    4. Zimbalist, Andrew & Sherman, Howard J., 1984. "Comparing Economic Systems," Elsevier Monographs, Elsevier, edition 1, number 9780127810508.
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    6. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    7. Graham L. Staines, 1979. "Is Worker Dissatisfaction Rising?," Challenge, Taylor & Francis Journals, vol. 22(2), pages 38-45, May.
    8. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    9. Robert Oakeshott, 1982. "Spain: the Mondragon Enterprises," Palgrave Macmillan Books, in: Frank H. Stephen (ed.), The Performance of Labour-Managed Firms, chapter 6, pages 122-140, Palgrave Macmillan.
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