economic calculation in the socialist commonwealth SOLVED ?

[Jon_Irenicus]

That’s what I thought too. It seems to be little more than a management theory.

[gocrew]

@Jon Irenicus

It seems to be little more than a management theory.

I think that’s a good way to put it. And as far as it goes, there might be something to it. A computer might be able to assist in finding the right price, hell if I know. But the socialist calculation problem is insoluble without magic.

[mattgeb84]

im coming around a bit however still have some ideas that need t be debunked in order to feel satisfied that my system won’t work.

earlier i conceded that my system would lead to nationalism since products coming in from one area would mess up the computers calculations, after doing some more thinking on the subject I concluded I was wrong earlier to concede so easily. I now contend my arrangement won’t lead to nationalism because products coming in from another locality can simply be scanned into the computer database before entering store shelves, so as the computers will know they exist and will not impede there calculations, trade between nations therefor can continue

can anybody debunk this ?

also one big possibility remains we are all aware of the inefficiencies of central economic planning, so is it possible to attain government ownership over the means of production while ousting the economic planners

i just got home from work and have some errands to run so I whipped this post up quickly so the arguments i made will have to be posted in more detail later

anyway have at these arguments for now

[gocrew]

As I pointed out earlier, upon reflection it seems to me that you are not detailing a socialist system, so I don’t know that there is anything to debunk. The system you describe, if I understand correctly, is capitalist with a computer system to help determine prices. This is not solving the insoluble problem of calculation in a socialist system.

[filc]

We already do this today. I don’t know of any business who doesn’t keep track of their sales, inventory, and product movement via some type of database. So how is this any different?

[EmperorNero]

@EmperorNero

I thought of another possible way to solve economic calculation in a socialist economy. The state could calculate prices by having virtual owners in a computer simulation. So certain resources get virtual owners assigned to them and they do all the same things that real capitalists do to calculate prices, bidding resources according to supply and demand etc. Each of these virtual capitalists has the economic incentive to maximize his profit, just that it all happens in a computer and all resources are really owned by the state. Once the state calculated prices this way, it can efficiently coordinate a centrally planned economy.

I wondered if anyone has a response to this.

[vaduka]

I think that suggestions like this are an intellectual insult to Mises’ theory. Did you even take the time to think it through? And what is more interesting is that you wrote “I thought of another way to solve economic calculation in a socialist economy”. Well let me correct you - you have only thought of an alleged way to solve the calculation problem.

[EmperorNero]

Yeah, sorry for that first sentence. I edited the post when quoting it and it got somewhat mangled. That’s really not what I meant to say, I edited that to make it clearer. Believe me, I’m the last person who wants a socialist economy, even if it were possible. I meant that I came up with another calculation scheme that I can’t find the technical flaw in. With virtual owners the state could calculate prices, I think. It couldn’t benefit from the tacit knowledge that’s dispersed amongst the population and it would suffer from all the downsides of government being evil, but the basic problem of having no clue what stuff is worth could be evaded.

[mattgeb84]

your way of solving the problem sounds the same as my way only stated differently, in my system the computers would make the calculations with the same goal of maximizing profit as idividual business owners do

[filc]

@EmperorNero

The state could calculate prices by having virtual owners in a computer simulation. So certain resources get virtual owners assigned to them and they do all the same things that real capitalists do to calculate prices, bidding resources according to supply and demand etc. Each of these virtual capitalists has the economic incentive to maximize his profit, just that it all happens in a computer and all resources are really owned by the state. Once the state calculated prices this way, it can efficiently coordinate a centrally planned economy.

They would be solving calculation in a hypothetical world. Not in the real world. Unless your computer predicts the actions of real people(Omniscient machine) it won’t be solving the calculation problem of the economy in it’s current state of affairs. it would only be solving calculation problems for a hypothetical economy stored in computer memory. One that does not represent the real state of affairs at all.

Honestly this is extremely elementary. No matter how smart you make your computers> No matter how much manpower you throw at it. If you want to solve economic calculation you need to predict human action acurately. The market does this via entrepreneurs and capitalists and punise’s those who fail to satisify consumers in a position of demand.

[filc]

No offense EmporerNero but vaduka is right my friend. Your response really shows a severe lack of understanding of what the calculation problem is.

[EmperorNero]

edit