Professor Salerno mentions this in one of his lectures on the socialist calculation debate but he never goes in to detail.
I have been unable to find another source that does go into detail on how and why a primitive economy could possibly allocate the factors of production rationally under socialism.
Could someone please explain this to me.
In small tribal or family units the chief or head of the family can take into account the value scales of his compatriots.
So it’s really about the size of the population and not about how complex the structure of production is?
I can’t imagine a small tribe having a complex capital structure. By small I mean less than a dozen members.
Also, in a very primitive economy, the spectrum of available consumer goods is very narrow, and the structure of production is very simple. There just isn’t enough stuff around to create the problems that market prices come about to solve.
With so few real choices to be made, and few alternative uses of capital goods, you can do informal calculations without market prices and such.
As soon as you try to improve the lot of you and your tribe however…
I don’t think having a smaller number allows one to make objective interpersonal utility comparisons, anything greater than one is sufficient for that, it’s just the issues that affect economic coordination of a complex economy with a developed capital structure whereby the pricing of higher order factors of production are absolutely necessary, don’t come into play, as one is mostly just balancing priorities between e.g. hunting food and building shelter. That and I would suspect such a society would be necessarily authoritarian given the conditions given the limitations of such an organisational framework.
This still isn’t calculation proper, however (assessing marginal relative scarcity against effective demand, which is itself marginal relative scarcity). It is simply the case that in extremely simple situations economic calculation may not be necessary to carry out certain sustainable processes of production and distribution; and in certain situations engaging in economic calculation may even be disadvantageous due to the transaction costs involved (thus, vertical integration in corporate structures).