Dual ‘prices’ in plan and market

(JEL classification: 020) The solution to the dual programming problem is traditionally conceived as a vector of unit values for the constraints of the primal problem, which in much economic-theoretic exposition employs dollar-denominated output (revenue; gross output) as the maximand, and in some applied literature, contribution to profit. This interpretation of the dual is unreasonable and we argue that the dual values either are the unit Premiums over market prices, for those inputs whose acquisition costs are deducted from selling price (and only for those units which are incremental to the amounts represented by the current constraints) or, for ‘common’ or ‘overhead’ capacity constraints whose costs are not deducted to calculate the maximand, the potential profit contribution per unit activity/per unit time. The latter application requires estimation of facility life and consumption rates in the first place, which is abjured in the standard microeconomic cost model. The paper reviews other uses of duality, including that of the planned/semiplanned economy and the evolution of Kantorovich's treatment.     

Argumentative Representation and Democracy: A Critique of Alexy's Defense of Judicial Review of Legislation

Robert Alexy has argued that the democratic objection to judicial review of legislation can be successfully addressed by assuming that judges exercise a special form of argumentative representation. In this article we argue that Alexy does not explain (as he should) under what circumstances judicial review tends to produce better decisions than parliamentary procedure, nor does he explain how judicial review can have a greater intrinsic value than parliamentary procedure. Subsequently, we argue that the intrinsic value of argumentative representation depends on the promotion of citizen deliberation, whereas its instrumental value depends on judges being committed to the rights of discrete and insular minorities in the face of hostile majorities.