These comments were left in response to comments I made describing the economic calculation problem, interest rates, and the Austrian Theory of the Trade Cycle. The only reference that the author made to my original comments simply disqualified what I wrote by saying he didn’t think much of Mises or Hayek. I know these comments are riddled with economic fallacies but I’m not sure how to respond in a clear concise manner.
“Like I said I don’t place much weight on Mises and his ilk, Hayek included. Democracy is a natural survival mechanism in social species. It’s not a human invention. If by “socialism” you mean the Soviet model, then i would completely agree that it cannot calculate properly consumer demand. Of course, markets can’t calculate it either, look at a grocery store trash can if you don’t believe me. That’s why markets rely on a $5.3 TRILLION advertising budget out of a total US economy of $14 trillion.”
“Markets also have the nasty habit of producing not what people want or need, but what they can sell. A book seller cares less if the book he sells is used as a door stop. It treats the world like there are infinite resources and at the same time an infinite trashcan. An individualist capitalist society would lead to a society ruled by those with the most capital. It would turn this nation into a third world hell hole, like Somalia is.”
“As for calculating consumer demand, I suggest you look at Michael Albert and American University Economics professor Robin Hahnel’s PARECON model. I think David Schweickart’s Economic Democracy model is worth taking a look at as well.”
"Don’t believe me? What my video “What Does the Media Teach Us About Economics?” The historical economic data might shock you.
It’s been a while since I looked at the Parecon model, but my impression of it was that it could only work if people had extremely narrow and predictable desires (both for leisure and work environment) and either very little shirking or a great willingness to actively monitor those around you for such behavior.
In other words, a rather typical communist utopia, but with ‘prices’ figured in.
The Parecon model relies on participatory economics to produce and then allocate resources. My understanding of how this would work is through the formation of local, city, county, state, and nationwide councils that would democraticly decide what should be produced, how to produce it, and in what quanities to produce it, If this is the case it doesn’t even begin to address the economic caculation problem because the only difference between it and the traditional socialist model is the addition of democracy.
“Markets also have the nasty habit of producing not what people want or need, but what they can sell. A book seller cares less if the book he sells is used as a door stop.”
Markets sell what people need or desire. Reading this individual’s “arguments,” it’s quite possible to tell that he is just some ranter who can’t type coherently.
Bingo. We had a poster here a few months ago that was into parecon. Agree on the fundamental anarchist morality, but when it came to economics, its the same problem socialists have.
The last thing I want to be involved in, is a democracy. Which means worker councils are out for me.
Wrong. It is a human invention. If it was innate, all societies would be democratic.
This is a non-sequitor.
If people prefer advertised products to non-advertised ones, then that is money well spent. There are other fallicies: he needs to back up his 5.3 trillion statistic, he uses GDP too.
If someone can’t sell something, that means that people don’t want or need it as much as what they are giving up.
Red herring.
It doesn’t do either. Trash space is a scarce good. Space thats used as a landfill can’t be used for anything else. In addition, while it may seem that resources are in abundance, it does not treat them as infinite.
Nope. Back your assertion.
Actually, it will only help.
I look at this model. Several flaws:
If everyone does not agree with it, you will have to use coercion to implement it.
Exactly. It fails from the very beginning. Long before economics even come into play.
I have been debating this guy via youtube for serveral days and in each and every round of debate his claims get more outlandish then the claims he made in the previous round. The debate seems to have turned from actual debate to a quiz he is giving me regarding Henry Hazlitt’s Economics in One Lesson. I guess I asked for it responding to commets made to a video titled Libertarians are Clueless.
Just the beginning of the absurdity. Here are some highlights of the conversation:
“In a market “efficiency” means making others pay for the havoc you create. When you calculate that into the equation, markets are not very efficient at all.”
“Sure, but the reason why there’s waste in Washington is because we have a severe democracy deficit. Market don’t evaluate the waste they create. They just force consumers to pay for it.”
"I’m all in favor of making that illegal, better yet, I’m all in favor of making companies themselves illegal. There are owners of streams, and that is the public, it’s just that there are people who block the public from asserting their property rights.
The down side of people owning everything is that it will lead to a world where people are without even the basic resources. Google the Cochabamba water wars."
For the conversation in it’s entirety click here and scroll to the bottom.
This reminded me of Tom Woods Mises Daily that’s still up from Friday (due to the weekend) in which he’s commenting on this internet “Che” person:
Che: If government regulations are allowed to control an economy, those who installed the regulations can be held accountable if the regulations are too intrusive.
Woods: Consider the 73,000 pages of the Federal Register, which lists all federal regulations. If even one of these pages were to be eliminated, we would all die instantly. They were put there to keep us safe! According to Che, not one of the regulations in those 73,000 pages could possibly be “too intrusive” — we would surely have repealed it if it were!
This guy’s pointing out badness everywhere. Here’s these 73,000 pages, but he can simply say, “severe democracy deficit” and that’s why they haven’t been repealed. Yet he’s already stated the markets “don’t evaluate the waste they create”. So thereby the 73,000 pages have to stay. Which one is it? These regulations go or they stay? It’s the government or the market. He hasn’t shown his position and what’s really on his mind, at least in this little commenting that I quoted here.
edit: oh, and who are “they” forcing consumers to pay for it? Is this person, as usual, mistaking fascism/mercantilism to be capitalism/free market? it seems so.
Absolutely brilliant article by Dr. Woods. I had just finished reading it when I started this debate so it was fresh on my mind.
His belief is that in a free market people must eat to survive and because of this they are “forced” to work for a wage (wage slavery). He is criticizing laissez-faire capitalism but doing so from a fancy land.
He’s deciding to use a definition of socialism that’s entirely his own; Soviet style socialism is real socialism, while “Nordic models” are just mixed economic systems leaning somewhat more towards actual socialism (debatable, since the U.S economic system is practically the same as France’s or Sweden’s). His second point, namely that “markets can’t calculate either” is just more confusion. Markets don’t calculate, entrepreneurs do, and sometimes they’re wrong. This is expected, and, in fact, is absolutely necessary. The miscalculations of some entrepreneurs send vital signals or information to other market actors, who must then absorb that information and adapt. No one says that capitalism is perfect, in fact, it acknowledges that people aren’t omniscient, and thus will fail.
Again, those who produce what’s not wanted will fail, and will send those pesky market signals to other actors who, in turn, won’t produce that product. His comments about infinite resources and Somalia makes no sense. Somalia has very little capital, and capitalism tries to allocate scarce resources; unlike Marx, who thought scarcity would soon be eliminated.
His vision of the socialist economy differs only from the soviet style socialism in that is relies on direct democracy to determine what to produce. For the details click this → Parecon (Participatory Economics)
Parecon advocates aren’t ignorant enough to claim that their system would eliminate scarcity like other varieties of modern day communism. Instead they claim that their system allocates resources more efficiently because providers of goods and services know exactly what and how much to produce prior to production. They claim this avoids the large surpluses of unneeded items as well as resources devoted to packaging, advertising, and misleading consumers.
Not to mention if something goes wrong and must be accounted for quickly. For example crops getting destroyed or a miscalculation leading to a shortage of resources.
hhhmmmmm… Let’s see… I need 3 tubes of toothpaste, 1 new shirt, 3 new pairs of pants, a 50 loafs of bread, a fruitcake, a flu-shot x3, at least 2 trips to the doctors office, 15 packs of peanut butter cookies, and 12 packs of chocolate chip, new tires for my car, an oil change, new wind shield wipers, 5 packs of 45 rolls of toilet paper, a plumber to fix a leak, a roofer to fix a leak, a tube of glue, colored pencils, regular pencils, MadTV, Cribs, and Pimp my Ride, rims for the car, a carton of cigars, and a puppy. Now to seek approval from every other person the production of these products will effect and they should be on my doorstep by my birthday after next.
I’d imagine property could only remain property until >50% of the population decided it was better suited for someone or something else.
Lol, ownership does not make it so that people are without basic resources. Rather, it allows people to control these basic resources without confict. I also find this contradictiory to his own position, since his system implies a system of ownership.
Entreprenuers evaluate the waste they create. Otherwise, they go out of business.
No it does not, if you force others to pay, that is a crime.
Lets look at YouTube:
“And when everyone is up to their necks in debt, you want that debt to be made as cheap as possible. Inflation = good.”
If you try to solve this problem with inflation, hello Business Cycles, Waste, and Wealth Destruction.
" When everyone has a high savings rate then you want those savings to increase in value. Deflation = good."
Ok, what happens when people have a high savings rate and are up to their necks in debt?
“Keynes did have a say in things and he turned a vast farmland in the middle of a depression into the strongest economy the world had ever seen.”
Thanks Keynes, for giving Big Brother the support he needed to harm us more!
Seriously, this guy posits unsustainable assertions.
This was early on in the conversaiton. But it seems like the only reason only government can restrain business is because government gives business the powers that only government can combat. It’s a pretty smart tactic.
Also, you can vote and leave, so you are not opressed, can’t you see? If you don’t like taxes, just move to the moon!
