Economic Calculation Problem Debunked!??

Economics Economics Questions
221

filc,

Is praxeology another way of saying “human nature”? For I find few instances of it being used by others that Mises and those following his tradition.
And how is the way people act not dependent on the context and environment?

z1235,

I usually do not respond to insults, but this time I will, if only to point out that I have given answers to everything that has been asked (apart from the CS bits; that I cannot do).

I enjoy peeing on your carpet. I ought to be able to influence your decision to kick me out of your house, as it would affect me profoundly.

Yes, this strage desire to harm another person for no reason is certainly a problem. I can always get a new carpet, so it’s OK, I forgive you. Now lets make sure you get some help. Don’t worry, no one will coerce you into anything; just remember that the whole community is on your side here, and all we want is for you to feel better.

[A systemic approach takes all the available possibilities into account. That, coupled with an ethical commitment to liberty and well-being for all insures that the my answer is the only proper response to the scenario above.]

VVVVV

In addition, a mentally ill person is mentally ill regardless of the economic system in place. The existence of whack-jobs who want to piss on people’s heads does not disprove economic theories.
You accuse me of “just typing words”. What is exactly do you call this talk about pissing, a constructive critique? I’d hate to see you mock someone…

222

Thanks for letting me pee on your carpet. I think I’d also like to pee on your head on Sunday mornings. Ought I not be able to influence decisions affecting all of my peeing habits?

223

no.

224

This is the main part that we all seem to disagree. Apfel feels like in his society people arent subject to praxeology? And that we inherently believe this because its what we see in front of us and what is tought to us.

To him, the whole idea of a mechanized ordinal rank of values, doesnt sufficienly translate in to prices that he thinks are morally accpetable.

I am wondering what exactly you think poverty is. And why you think a sweatshop is slavery, and how that is not the fault of the state. I am interested to hear.

And just because poor people are happy, doesnt mean I hold the position “since they are happy fuck em.”

I dont understand who you are defending, do you know alot of poor people who hate their lives? Where are you from BTW?

PS No school for me till UNIVERSITY.

225

“Though I know no cs, I can tell that your reasoning is deeply within the context of a capitalist economy.”

Actually, it’s from the perspective of pure exchange. So, we could be talking about tribal societies using skins, foods, and jewelry to trade or talking about a market index, but the nature of the exchange is a given regardless of formal theory/narrative. When you drop the assumptions of Marxism or any other school of thought, you get to see the nature of how a person may or may not consider an exchange (should I exchange? is this valuable to me? Do I want to give up X for Y?). When trying to figure out when to make a good available to trade for that of another (be it money or another good as commodity), these aren’t computable for the very reason I’ve been pointing out in every post (these valuations are based on whether or not one is willing to consume it or not [marginal utility]). No where have you come to the argument with a coherent refutation or replacement for marginal utility, so I have no reason to accept your position sans marginal utility.

226

filc,

That was very informative.

Bearchu,

Apfel feels like in his society people arent subject to praxeology?

Don’t be absurd. What I mean is that, surely, people act differently in different context and situations? Is then not praxeology, the study of human action, dependent on the environment and context?

To him, the whole idea of a mechanized ordinal rank of values, doesnt sufficienly translate in to prices that he thinks are morally accpetable.

Actually I, and I believe ancom in general, rejects an ordinal rank of value. At least rank singular.

I am wondering what exactly you think poverty is. And why you think a sweatshop is slavery, and how that is not the fault of the state. I am interested to hear.

What I think is irrelevant. What matters is a person’s practical opportunities, what they have access to. One could argue that it is a matter of how well their needs are satisfied.
A sweatshop is slavery because, ignoring the abuse and coercion clearly present for a moment, the person who works in one has no real choice. “Work or die of starvation” is not a valid option. They are forced into it by circumstances; circumstances that would not need to exist if we decided to change society.
Why would it be the fault of the state? What do they have to do with it, apart from perhaps perpetuating the system in some cases? Those places are created by corporations in order to exploit cheap labour and make more profit. It is the direct result of a system that values monetary gain over ethical concerns and human well-being.

I am Bosnian, grew up in Sweden. Why?

227

Praxeology is talking about the basic understanding of logic as applied to action. In this context, it has components which are apriori true (like what we have in naturalistic logic). This means regardless of environment, or accidents of history, is it true (and consistent) or it is not.

228

So if it weren’t for the shops in which people are sweating, they’d all be dead? Was there anyone alive before “sweat” shops came to be?

229

Actually, it’s from the perspective of pure exchange.

I know. Exchange however does not occur in an ancom society in that manner. Saying that you where stuck in a capitalist mode of thinking was wrong of me; I should have said “a market oriented way” or “an exchange oriented way”.

http://nefac.net/node/157

No where have you come to the argument with a coherent refutation or replacement for marginal utility…

Nor have the proponents of MU ever debunked the older account of human well-being, that the classics used. It just… stopped being used.My point that not everyone can get at this marginal utility still stands. More points are made in Ch. 3 and partially 4 of the Market, as I have said before.

230

z1235,

Absurd. If it weren’t for capitalist exploitation, they wouldn’t be facing the “choice” to begin with.

How you can defend such clear exploitation and inflicting of pain on others, and paint it up as something good, boggles the mind…

231

apfel-

Thats where I am not convinced, because the theory behind human action make the most sense. Im just not sure that people are capable of what you suggest.

“Why would it be the fault of the state? What do they have to do with it, apart from perhaps perpetuating the system in some cases? Those places are created by corporations in order to exploit cheap labour and make more profit. It is the direct result of a system that values monetary gain over ethical concerns and human well-being.”

Thats just it, the state could easily set command and control minimum wage laws. A shorter work week, whatever. Its not so much the fault of the state for letting the free trade happen, rather, that their inaction produces these results what results in this.

I am Bosnian, grew up in Sweden. Why?

Just wondering. I am lebanese, grew up in Abidjan, CI and live in San DIego. In Abidjan, you can get a first hand view of what capitalism+corrupt quasi-statism produces, which is more opportunity than there otherwise would be. You say there is no choice, but living a subsistance lifestyle is perfectly possible in ABidjan.

Likewise, “most either work in sweatshops or become prostitutes.” Although this is a false dichotomy, prostitution is perfectly legal in someplaces.

I know we arent talking about the ECP anymore, but eh.

232

What choices would they be facing without the “exploitative sweat” shop? In what way does the sweatshop’s existence limit anyone’s choices?

233

Marginal Utility solves the Diamond-Bread(Water, depending on the textbook) paradox. LTV and other theories, even John Law’s scarcity theory of value, don’t come close to solving it. And if you think other theories can, I’m all ears on it, but don’t expect me to agree with you automatically.

234

The articles provided do not address interpersonal exchange or human action. Yet your statement insinuates that they do. I have a feeling that you don’t know what praxeology is and you know little about interpersonal exchange. When you say “Exchange in that waY” you seem to imply that exchange functions differently somehow. Exchanging one object for another mutually with another individual. Does this somehow magically change in communism? Nope. The only argument you provided was that labor exchange would’t be feasible but such an assertion is impossible to prove. Especially given both logical and modern empirical evidence suggestion otherwise.

What little you do know about exchange comes from rhetorical antagonists from texts that you cited. Their arguments are 80% semantic and rhetorical. Very little if any of it could be classified as scientific.

BTW, people really should read this. This is a great example of someone who’s deeply confused about economics.

Here are some juicy parts.

How can you become a slave if you consent? Also, the irony of a communist passing judgement on someone else’s happyness…

I abolish alcohol in favour of beer. Did that make sense? Neither does the statement above.

235

Bearchu,

I oppose the state too, remember:)
Also, one could argue that the reason that the state does not do this, is because it is influenced by corporations, or itself profits on it.

Just because it is possible to make it, does not mean it is morally acceptable to refrain from changing the system that gives rise to the problems in question.

Say you see a man drowning, struggling to make it ashore. Would you help him? Technically, he could make it on his own, maybe. You didn’t push him in, his situation is not your fault. You don’t really have any obligation to help him. But would it really be ethical to do nothing?
Now say you decide to save him, but before you toss him something to grab hold of you shout “$1000 for rescue services! Do you accept?” and wait for confirmation.
Technically you saved his life, and had he not accepted your deal he may very well have died. Again, technically you are not an evil person here; you didn’t push him in after all. What situation he was in is not your fault. You did not force him, just made him an offer that he was perfectly free to refuse. Buuutt… do you really think that was ethical of you, taking advantage of his desperate situation like that?

ladyattis,

Common misunderstanding. Marx’s LTV deals with commodities only, to begin with (so water would not count, bread would), and only claims that labour is a vital part of value (a part that Marx then focuses on, mostly because no one else did). It does not state that labour alone is the source of all value, that would be absurd. It allows for subjective valuation, market forces, etc. to play their part.

Please elaborate on why you find Law’s response inadequate.

236

Umm, I’m going to call bullshit on Marx being the creator of LTV. Smith and Ricardo were the forebearers of LTV, nothing personal, but you need to bone up on economic history before making such bold claims.

As for Law’s scarcity theory of value, it’s flawed because many things are scarce, but have little value. Uranium is quite scarce, more scarce than gold, but pound for pound gold out paces it in terms of price and general economic (perceived) value.

237

filc,

I know very little about praxeology, but will read up more on it. I did not understand that it was such an important concept for ancap.

You, however, know equally little about ancom. Concepts such as wage slavery and possession seem foreign to you, and you grossly misunderstand them.

“Exchanging one object for another mutually with another individual” would not be outlawed or anything, it being anarchism, but it would not be the basis of the economy. Exchange only makes sense if there is property; I must own something in order to exchange it for something you own. When property is abolished, the role of exchange either disapears or is marginalised.

ladyattis,

I did not imply he was it’s creator, sorry for the misunderstanding. He did modify it from Smith and Ricardo, this is not some big secret, anyone who’s reached Marx is aware of this. But it is important to point out that I am talking about Marx’s LTV, seeing as it is different, thus me saying “Marx’s LTV”. Should’ve said “Marx’s version of the LTV”.

I thought Law used supply and demand analys, not just supply. Haven’t read anything of his though, just found this:

Although Galiani vaguely accounted for the cost of production in his utility value theory, he failed to develop it into a fully-fledged supply and demand analysis. This monumental project was taken up by the Scotsman John Law (1671-1729). In his Essay on a Land Bank, Law outlined the old water / diamond paradox of value, in which comparatively ‘useless’ diamonds are more highly valued than the more ‘useful’ water and reconciled the mystery by using a supply and demand analysis. Unlike his predecessors and his immediate successors (until Walras and Marshall), Law used both demand and supply factors in determining the value of a good which has a use in society. Henceforth any changes in the value of goods were due to a change in the quantity supplied or demanded.

Although John Locke (1632-1704) in, Some Considerations on the Consequences of Lowering of Interest and the Raising the Value of Money, had developed a theory of price determination earlier, it lacked the clarity, precision and understanding of Law. In Money and Trade Considered, Law corrects Locke’s unpolished value by stating that “The prices of goods are not according to the quantity in proportion to the vent, but in proportion to the demand” <<

238

apfel- i really like apple struddles. btw

“Also, one could argue that the reason that the state does not do this, is because it is influenced by corporations, or itself profits on it.”

Right, which is perfectly logical, but one of the main reasons these corporations are the way they are and do what do they do is is because of the tax structure,monopoly privledges, subsidies and other things that the state allowed. Thats why we hate the state.

However, one can only theorize if the situation would be the same with out the state.

Why is the man drowning? not that it matters but honestly, i wouldn’t hesitate to jump in and save him, free of charge. as a matter of fact just because i believe in capitalism doesnt mean that i constantly go around trying to queeze money out of people. I mean come on, we already agree that you dont know the ethical basis of our existence is transformable.

In addition, how could you assume that someone in a ancom society would jump in and save him?

Not every one is ethical or competent and i understand your frustration, but like we agreed how can you change that

Consider a child/wife who was given a teddy bear/earings by his father/husband before his father/husband was killed by a volunteer manning the trolley. And now there seems to be a synthetic fiber/gem that scoiety is running out of, which this teddy/earings happens to be made out of. And society really needs this fiber/gem.

So they ask, and they ask, and they ask the child/wife to give up with teddy/earings for “society.” but heshe cant let go; his/her father/husband gave it to him!

>>>At this point, would the child/wife be ok with letting it go?

So everyone deliberates on every level of the polycentric decision machine, and they decide, that they need this teddy/earings.

Does someone show up to collect? No way right? because we couldnt coerced into doing anything, right?

239

Not sure why, but this seems relevant. From fmylife.com:

Today, I once again told my son he needed a job and a girlfriend because I simply could not keep him in my house anymore. He yelled, “No, I can do whatever I want!” Then went back to playing video games. He’s 38. FML

240

I know very little about praxeology, but will read up more on it. I did not understand that it was such an important concept for ancap.

http://mises.org/journals/rae/pdf/Rae2_1_2.pdf

for the rest

http://mises.org/misesuniv.asp