Economic Calculation Problem Debunked!??

Economics Economics Questions
181

ladyattis,

That is very deep stuff, and makes sense. But I have a q or two about it.

  1. I seem to remember Mises writing that consumer goods are not the problem, it’s the factors of production.

  2. In a segment I quoted earlier from Human Action, he defines the q as how to build the house, as opposed to whether to build a house or a swimming pool.

  3. In HA he goes on and on about the constant decisions needed at every step of the way in the production process. Why does he not cut to the chase and say the ultimate problem is that we cannot say whether a marginal apple is better than a marginal orange?

182

Smile Dave, I have no clue why Mises didn’t connect the dots that way, but that is where his argument leads once you read it. Especially, when you consider it from the situation of a feasbility problem (Computer Science).

183

Your only strategy is dodging. Instead of explaining how your system would match supply and demand an uncountable amount of times every day,

  • you attack the price system by showing an wiki article about artificial scarcity through IP and copyright. That’s not the issue here!
  • you ridicule the brick example instead of accepting it for what it is: An example that has the purpose of illustrating a situation which you have to solve in your society countless times, namly: Too high demand for available supply! The only answers you come up are nothing but jokes (see above).
  • also your medical doctor will give it to the one with the best backroom deal
  • then you throw some nice sounding planning methods into the room, again without explaining anything! Just in Time/Kanban has nothing to do with rationing! It’s a way of reducing inventory costs and disposing parts for manufacturing!

As I already said before your argument can be reduced to: “Oh no worries, we will manage that in an appropriate way. We have a systemic approach you must know like Kanban. We don’t only have one answer but countless, although I am not able to explain even one. And they all work and are great! Trust us :smiley:”

184

ladyattis,

“This is erroneous due to the fact that not everyone has exactly the same means to sense/perceive the world.”

“Whether something is valued by a person is furthermore determined by their beliefs in regards to the object of their desire.”

Does not compute. O’Neill clearly allows for people to perceive the world differently, in fact he relies on it.

“What is of value to us can’t be separated from our capacities or the kind of beings we are.”

Thus, what a low order autistic person values cannot be separated from them being a low order autistic person. What you explain there is correct, except it is not subjective but objective valuation. By knowing someone is a low order autistic, I can objectively deduce that they will not value art; it follows from the kind of being they are and their capacities.

Understand that this does not necessary lead to someone else deciding for you; it merely explains how people can be wrong in what they desires, while still allowing for individual differences.

Smiling Dave,

  1. That is what I keep saying.

  2. Broadly speaking, both would constitute an economic problem and require compatibility. Once again, the question is about whether comparability requires commensurability.

185

"What you explain there is correct, except it is not subjective but objective valuation. By knowing someone is a low order autistic, I can objectively deduce that they will not value art; it follows from the kind of being they are and their capacities."

Show me where this is an object of observation. And also show me the ‘math’ of autism. This is important because in Computer Science, the only way something is computable is that we can show it in an algorithmic fashion. The discovery of differences among humans aren’t objective for the fact that I can’t look at you and know you are an autistic or not. Nor can I compute what conditions will produce an autistic. The results are not determined by the background/environment.

186

Ultimately, my thesis is that the nature of the human animal is not one that can be reduced or computed from the parts/components that make up one. In fact, I’m not even an monist, I’m a pluralist (not a dualist).

187

Bearchu.,

“[C]omplete crap” is not a valid response to something economists and mathematicians have suggested, including a Nobel laureate. You’re gonna have to argue a bit more there, I fear…

But you are correct in the statement that the main issue of the ECP is the ability to calculate without a common denominator (once we accept that centralisation is epistemologically impossible, that is).

Easy there, Obama won the Nobel. ANd PS. A large portion of what economics offers, is complete crap. ie, they dont work. From what I gather from this post, is that it is possible to allocate with out a price system…but even with the law of the minimum, it would still lead to waste and unsatisfied people.

BTW ROBBO was booted for his poor civility, it is ironic that someone preaching such a peaceful lifestyle would get so aggressive and agitated by childish comments…i thought anarcho-communist were supposed to be “mature” and adult".

188

I always thought that if the problem was do we make apples or oranges there is a simple way out. Create a huge online catalogue of all possible consumer goods, tell people to choose whatever they want, and make sure to list them in order of priority. The computer then arranges all the number one priorities first etc., keeps tabs of how much of each thing is wanted altogether, and voila. We know what people want to wind up with on the store shelves.

The problem will be how to set up the factories to make all that stuff. Even if we figure out a way to make everything on all lists, we still are left with a huge slice of ignorance, mainly “There were thousands of ways to set it up differently that used different resources. Which should we have chosen?”

189

skylien

Dismissing =! dodging

Like I said in the beginning of my post, the links are just food for thought. Could as well have linked to a funny Cracked article.

“you ridicule the brick example”

Not at all. I am sure that for those involved it is very serious. But it is none of my business; there are no ethical ramifications (at least none implied in the manner the problem was given) and none one except those directly involved are affected. How the issue is solved is their problem and it would be immoral of me to interfere. If you want my 2c, ask what I would do if I was one of the ten. Explain in greater detail the situation, or allow me to make assumptions.

Understand, however, that it would be my 2c only, and not a method that could be applied to every situation of scarcity.

Anarchism does not solve problems like this with a formula, but through deliberation. The answer depends on the situation. Why is that so hard to understand? This algorithmic account of practical reason has far more in common with the Communist, social engineer and technocrat than the complex, organic and decentralised view of capitalism that Hayek supported.

your medical doctor will give it to the one with the best backroom deal

A “backroom deal” makes no sense in the context of an ancom society. What can that patient give him that he cannot get for free? What is the incentive of the patient to cause the death of another to get a medicine that a professional has judged he goes not even need? Why did the doctor become a doctor in the first place in a society without money if not in order to help others; why this sudden change of heart in which he ignores his consciousness, goals and dreams, and oaths for some “backroom deal”?

Also, this is why there isn’t one, but a group, that furthermore back their decision up with data. No one person must be allowed to wield the power of another’s life, to the extent that this can be avoided.

nice sounding planning methods into the room

It’s not just nice, pretty rigeours as well. I am well aware of the purpose it is used for today, as I learned it in business school. But as the original intent Kantovich 's linear programming shows, the formulas themselves can be employed. At least read the following:

http://mpra.ub.uni-muenchen.de/6063/1/MPRA_paper_6063.pdf

http://www.dcs.gla.ac.uk/~wpc/reports/standalonearticle.pdf

(please do not hold the author’s unfortunate socialist tendencies against him, and anyone who wants the algorithm can PM me)

Bearchu,

I think Obama winning the Nobel was crap. Al Gore too. But that does, I admit, give them some credentials. I cannot just handwave them aside, I need a good argument. And if you want to refute a winner of the prize in Economics (and not Peace, an award so crappy that Stockholm refuses to hand it out; and it is instead given in Oslo!), you’ll need an even better one.

Regarding Robbo, we are not the Borg here. We’re individuals. If someone has a hot temper and can’t just have spliff or a glass of wine before getting into arguments, than that is a personal matter of theirs. I will not judge him, but his behaviour has nothing to do with me. And it does not reflect the ancom philosophy more than the constant ad hominems and mocking reflect yours.

190

Why ask us to PM you for the algorithm? Why not merely release the proof and algorithm and get yourself some WINNING going on.

191

Ok the math paper.

Correct me if i am wrong, but im pretty sure that is just a linear optimization problem, introducing slack viarables to account for the next best. which we all agree works in math, or for production. It solves the problem of how to produce, not what to produce. And obviously ideologically we all diagree on what we want produced.

192

Someone who should provide a solution to a problem, can either dismiss the whole problem as not existing, which you didn’t do or he dodges. So ?

Both papers are about ECP not about rationing! It is not about what to produce. It is about who gets what!

I am sorry I cannot go on… I really tried to get an answer of how ancom would do rationing. Either it would lead to chaos like your “first one gets it” and your “draw straws” or to arbitrary despotic acts and chaos.

You don’t have a way to ration. Period. Therefore you are not even qualified for the ECP.

193

ladyattis,

'Cause I got a version of the paper that includes the algorithm as an appendix on my laptop. But now the only copy of that version I find using google costs $ :frowning:
… so for those who know enough computer science to want it, I can send you the version I have to your email.

Bearchu,

You are correct. And you say exactly what I have been trying to say. Theoretically, practically, mathematically it is possible. The real issue is philosophical and ethical; what do we produce? And how do we decide it?

We both at least seem to agree that is the will of the people that ought to decide. We differ in what system we believe we allow that the best.
Anarchists argue that this ought to be decided democratically by those affected. You may disagree, but you cannot prove it wrong; you can only argue against it on ethical grounds. And seeing as your system clearly ignores the voice of the poor (for what reason I do not care at his point, this is a matter of ethics), the non-human and future generations, and is clearly elitist, your ethical position is clearly weaker. And I don’t even have to bring up the defense of “voluntary” slavery (and voluntary “slavery-in-everything-but-name”) by many libertarian and ancap thinkers or Rothbard’s “free market in children” to make that case.

skylien,

See above. Smiling Dave also brings up a good point: “I always thought that if the problem was do we make apples or oranges there is a simple way out… The problem will be how to set up the factories to make all that stuff.”

Rationing is not based on single principle, but that does not mean it doesn’t exist. It is done on a case-by-case basis, relying on democratic deliberation using a systemic (“big picture”, or collective) viewpoint, aiming for the most possible good and taking all available information into account. That is a general principle. You want more detail, pose a more detailed query.

194

“Both papers are about ECP not about rationing! It is not about what to produce. It is about who gets what!”

How do we even decide who gets what, if we dont even know what “what” is?

195

Well, if you got it on the laptop, put it up on mediafire. It’s a free service, bro.

196

ladyattis,

You needed only ask, so that I know someone is interested. See, no need for a market to gauge demand :slight_smile:

http://www.mediafire.com/?fgsyk70z84r3ckz

197

The market is not an ‘entity’ somewhere.

198

“We both at least seem to agree that is the will of the people that ought to decide. We differ in what system we believe we allow that the best.
Anarchists argue that this ought to be decided democratically by those affected. You may disagree, but you cannot prove it wrong; you can only argue against it on ethical grounds. And seeing as your system clearly ignores the voice of the poor (for what reason I do not care at his point, this is a matter of ethics), the non-human and future generations, and is clearly elitist, your ethical position is clearly weaker. And I don’t even have to bring up the defense of “voluntary” slavery (and voluntary “slavery-in-everything-but-name”) by many libertarian and ancap thinkers or Rothbard’s “free market in children” to make that case.”

Ah the “holier than thou” arguement. Love it.

BTW - capitalism is not alone responsible for mansions overlooking the slums. While it provided the means for it be constructed, those who built it live in the slums and look up and seek praise. Trust me, they dont sit and wallow about what they dont have. In fact i have read much (mainly using the worthless subjective U-index) that states that people in the lower classes acutally enjoy their lives more than the rich. Just because you fail to realize this and you think that they hate their lives. But that is only because you look at the situation and say “wow, that is so unfair.” Ask slum dwellers, in 3rd world countries, or even the lower class of the USA.

199

Felipe,

You mean how the brought up TVP from nowhere or accused me of mysticism for no particular reason?

No, I meant how Esuric completely destroyed your non sensical “my logic is beyond this world” speech with impeccable logic.

Why don’t you get an account on some anarchist forum, pick whichever you want, and make an argument for comparability requiring commensurability. I will then accuse you of witchcraft and Republicanism, and a 15-year-old punk will cheer me on with an “lol”. You will then be able to yourself judge if that constitutes an “intelligent conversation”.

Sorry but my time is too valuable to loose it on something like that.

200

Apfelstrudel, thanks for the pdf. I am skimming it right now to get the gist of the argument. One objection I’m going to raise is the author in question seems to be constructing equations without first figuring out feasibility in relation of producers to consumers. It’s vaccuously true that one can compute production schedules for any given firm or even many firms across many industries. But it’s not vaccously true to compute the same in relation to consumers since the article in question has not shown a proof of the feasibility of such (in this case, where’s the flow network constructed?).

Imagine a network where you have source (s) and sink (t) and between source and sink you have nodes for producers connected to source (s) assigned as i and consumers connected to sink (t) as j. So we get something like this: s → i → j → t (for one possible connection in the graph). So what you would get is something that could then be constructed to produce a cost function (for connections between i to j from s to t). You need to show that some connection between s → t can be made through ith and jth connected edges, and that it doesn’t violate a maximum flow condition (I leave it to you construct this proof as I have little if any background in industrial engineering). If you can’t construct as such from producer-to-consumer in a consistent manner, then it will be proven false that such an algorithm can even be constructed.