Originally published at: » Worker Councils, Labour Cost, Automation – Part 3
In this interview, Prof. Hahnel talks to After the Oligarchy about the accounting of social benefits and social costs in worker councils, the incentives of worker councils, the cost of labour, automation, unemployment. After the Oligarchy YouTube Channel.
Paraphrasing from the video (for my own understanding, and to increase searchability):
Indicative prices are used to allocate labor during the annual planning procedure. Are workers getting paid indicative prices? What are worker councils provided with after annual planning has finished?
No! The indicative prices are used purely to find a satisfying annual plan. Workers are still paid according to their effort ratings. Some labor might be scarce, for example chemical engineering, and therefore will have a high indicative price. This will lead to worker councils asking for chemical engineers only if they can “afford” the high (indicative!) cost of the labor. That is, only worker councils with a high social benefit will be able to use chemical engineer-hours as “input”, and chemical engineers will be employed where their work has the most value for society.
Still, the work of a chemical engineer itself might not be very hard, even if the people doing it are scarce. Therefore, after the annual planning procedure has converged, the chemical engineers receive a wage (according to their effort and sacrifice) comparable to any other worker.