The issue of information asymmetry has always been an important subject of consideration by economists. According to some of them, it is responsible for the market failure and justifies state intervention. Zieliński’s approach to this issue deserves a special attention due to its originality. Zieliński referred to the problem of information asymmetry, referring to the famous dispute between Ludwig von Mises and Oskar Lange (Friedrich Hayek also contributed to the discussion with regard to incomplete information) concerning the possibility of a rational economic calculation in socialism. The conclusions drawn from Zieliński’s deliberations differ from both F. Hayek’s and O. Lange’s views.
Zieliński began his deliberations by quoting L. von Mises’s arguments that the nationalisation of means of productions causes the lack of market for manufacturing factors, which leads to the lack of prices, which prevents the completion of economic calculation, making it impossible to allocate resources rationally (Zieliński, 1989, p. 34). Zieliński stated that the central planner could apply the rules of a market-type calculation when laying down the plan, aiming to equalise the marginal productivity of all factors of production. At the same time, he stated that there was a possibility in this calculation that the accepted price and wage arrangement would not ensure the maximisation of profitability. The implementation of the plan may be accompanied by the lack of subjective equilibrium of economic agents (on the part of the producers, on the part of the buyers, or on the part of producers and buyers at the same time), which is reflected in the divergence of the supply and demand calculation curves with the quantities produced and consumed (Zieliński, 1989, p. 41).The author noted that even an excellent implementation of the plan does not indicate that it is an economically optimal plan, since the central planner did not have a perfect knowledge of reality at the moment the plan was being drawn up or excellent anticipation skills, hence the need for continuous improvement of knowledge.
In this context, Zieliński referred to F. Hayek’s conviction of the superiority of decision-making by individuals on the basis of dispersed knowledge over central planning. Although F. Hayek believed that free market was a better regulator than the state, due to the lack of integrated, full knowledge which would be known to all people, he was aware of the importance of its proper use. According to F. Hayek, the probability that the market or socialist economy will be more efficient depends primarily on which of the systems will make a greater use of the existing knowledge (Zieliński, 1989, p. 45). Zieliński criticised him for underestimating the possibility of integrating dispersed knowledge by a central planner for whom many experts work, and for idealising the ability of individual entities with a modest volume of information to operate properly. According to J.G. Zieliński, the main advantage of the socialist economy was that the central planner knew what each of the participants in the calculation had at their disposal (first of all, he knew the resources of companies), although there was no guarantee that he would not make mistakes. Eventually, however, the equilibrium is difficult to achieve in both the socialist and market economies (Zieliński, 1989, p. 44). This is due to the fact that no one has a full knowledge, and the equilibrium remains only a theoretical construct whose implementation may only be pursued.
In this connection, Zieliński thought that there was a need to analyse the possibilities and defects of the market mechanism, since without it, it was easy to fall into two extremes: an indiscriminately pro-market approach or universal planning (Zieliński, 1961, p. 190). Such concerns were justified in the light of the economic transformation in Poland in the 1990s, when the negative effects of the marketisation of many sectors of the economy were ignored.
Criticising F. Hayek’s approach, Zieliński was also convinced of the need to obtain data for the economic calculation from the market: “All elements of the market economy calculation are essential elements for making correct economic decisions. This necessity also extends to the socialist economy” (Zieliński, 1989, p. 18). On the one hand, Zieliński saw the market as a source of valuable information allowing for the correct calculation. On the other hand, he emphasised that economic decisions are affected by non-economic factors, which is related to the uncertainty resulting from the existence of imperfect competition (Zieliński, 1989, p. 19).Uncertainty favours an inefficient allocation of resources – investors do not invest capital in the most profitable industries. Moreover, although capitalist entrepreneurs take into account uncertainty in the economic calculation; nevertheless, theyhave too short periods of investment from the point of view of the stability of economic growth (Zieliński, 1989, p. 19).This phenomenon favours fluctuations of production and unemployment, as well as the failure to undertake socially useful projects.
Zieliński’s opinion on the market mechanism was ambiguous, which could have caused controversy. As already mentioned, he pointed to the impact of uncertainty as a source of market failure. At the same time, he believed that the market was characterised by considerable stability and that the probability of mistake in predicting future market data could be the subject of calculation, since it is subject to the law of large numbers (Zieliński, 1989, p. 20). In this regard, he saw the advantage of the market over central planning, which he expressed explicitly, suggesting that, in the latter case, the figures used in the economic calculation might be irrational: “It is better to be uncertain about the figures for the economic calculation only for the future than the situation in which the current figures for this calculation are considered random and irrational” (Zieliński, 1989, p. 20).
Zieliński analysed the weaknesses of the centrally planned economy. He believed that the lack of belief in the rationality, feasibility or usefulness of the objectives set out in the plan, the existing regulations, the applicable standards, etc. are in themselves obstacles to the effective behaviour of individuals (Zieliński, 1973, p. XXI). Man, when taking action, must be convinced that his effort makes sense. Therefore, the plan was criticised by individuals who were supposed to implement it, even if the criticism was not official.
Zieliński also stressed the shortcomings of central planning, such as the lack of product diversity and the reluctance of the central planner to acknowledge the existence of losses, which contributes to selling to consumers inferior quality necessities which should be utilised. He stated that good quality cannot be achieved in the conditions of the seller market, i.e. where producers, due to shortages (demand permanently exceeds supply), have an advantage over consumers.
While there was a problem of shortages in the socialist economy, in the capitalist economy, Zieliński saw a problem of the harmful effects of advertising on the quality and structure of production, as it deepens the asymmetry of information. In addition, differentiating products through advertising hinders free entry to the sector. It increases prices, displaces producers who cannot afford to advertise their products and reduces the need to compete by improving the quality of goods (Zieliński, 1962, pp. 152-154). In extreme cases, companies producing inferior products can displace those that produce better products, only through a high efficiency in the field of advertising.
Zieliński also said that in capitalist economies there is a problem of psychological ageing of products in order to encourage people to acquire the new ones. It is a very important issue from the point of view of ecology. Even if a thing could serve consumers for a relatively long time, it is exchanged for a new one, because advertising creates fashion.
Moreover, advertising allows for distracting consumers’ attention from a low quality of the materials from which the goods are produced on a mass scale, emphasising the role of the brand in creating their value. Brand creation is technologically less troublesome than developing a production method that would allow for the production of ever better quality goods. Zieliński claimed that advertising, in addition to stimulating waste, generates additional social costs in the form of impact on children and the use of sexual sensitivity through ambiguous formulation of slogans (Zieliński, 1962, p. 220). The marketing practices observed by Zieliński in the United States in the 1960s have been a problem in Poland since the early 1990s.