Economic Calculation Problem Debunked!??

@EIRMOS

Filc: No if they employed the Scientific method to social sciences you’d probably get the same outcome

Oh my ass. I don’t think that statement makes much logical sense.

You’re treating the scientific method as if it were not already rooted in assumptions. Using the scientific method is a way to be objective about results but it says nothing to the fact that there are already results, opinions, biases, assumptions, etc rooted before you begin the scientific method.

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How can you have a meaningful debate if you cannot accept terms? Only in a world of polylogism can you think that makes any kind of sense. lolol

So you agree that you are not, nor have been using the dictionary definitions for many of these things, and if we want to debate you we have to accept your terms, rather than the dictionary definitions?

If you go back to the discussion your referring to you will see how it was explained by many that the definition used both on Wiki and in webster is entirely consistent/compatable/ and equivilent to the terms accepted by the Autsrian School.

It was you you who was trying to argue that State Capitalism(Fascism) and anything related to propertarianism was inherently exploitive. It was your implied exploitation of property which lead you to come to conclusions that were different from ours. When asked to explain why you couldn’t go beyond petty argumentation.

Thanks for bringing it back up again though.

If we go back, and I am fine doing that, you will see that your definitions are only consistent with the dictionary definitions if you conflate terms and engage in other linguistic gymnastics; ie, conflating voluntary exchange with capitalism, etc.

I don’t want to derail the thread. You’re free to open another. So I’ll just leave it at that. I merely wanted to step in and correct the charge that the OP is the only one here engaging in semantics.

No that wont’e be necessary. If anyone needs to make a post arguing that property is exploitive it’s you. I don’t need to make such a post here on this forum.

In your new post you can explain what terms were conflated. (Nice try). Dishonesty fails. :slight_smile:

The irony of a communist attacking a capitalist for his alleged use of rhetoric and semantics. lolol

^ Uses rhetoric and semantics to prove that capitalists don’t, and socialists do use rhetoric and semantics.

Now that is irony.

"EIRMOS

http://www.cato.org/pubs/journal/cj16n2-7.html

You give the impression of being unessecarily eltisit. You need money to plan?? Are you certain? Maybe Communism failed in the USSR b/c they probably weren’t using the scientific method to arrive at decisions. Perhaps, it was b/c it was an elitist, totalitarian, and militant regime where an elite created a false representation of reality? That’s why, seemingly, information from the outside world collapsed the regime. Unlikely it was b/c of using a scientific economics which didn’t use monetary prices. I have never seen ANY EVIDENCE directly showing the monetary market systems are actually necessary. I need some causative evidence, not just anecdotal evidence."

EIRMOS,

What was the point of posting me that link from Cato?

Maybe, probably, perhaps you should read it.

Let me quote it for you.:

"Chapter 3, “What Price Socialism? An Economy without Information,” could have been written by Ludwig von Mises or F. A. Hayek. Although Shane nowhere mentions the pioneering work of the two Austrian economists, who long ago predicted the impossibility of efficiently allocating resources without competitively determined market prices and private property rights, his findings show that they were right and Marx was wrong. This chapter can be profitably read by both economists and noneconomists–it gets to the heart of the information failure in the Soviet system of central planning without getting mired in technical jargon.

Shane shows the difficulty of trying to ration scarce goods without the price mechanism and the loss of freedom that occurs when economic life is strictly controlled by the state. By keeping the prices of consumer goods artificially low, the Soviet planners created the ubiquitous “waiting line.” Around that institution grew “an elaborate subculture…with its own habits and rules.” The odd thing is that shortages appeared in product lines of which the Soviet Union was the largest producer in the world. In the late 1980s, the USSR produced more than three pairs of shoes for each citizen, but people had to wait to buy shoes. The problem was that the available shoes did not reflect consumers’ tastes: the shoes were made to fulfil a government plan, not to satisfy market demand. Thus, consumers had to wait in line for hours to find shoes that fit and were stylish–and most of those shoes were imported.

That “malfunction,” argues Shane, was due to information control:

Prices are information–the information producers need in order to know what and how much to produce. In a market for a product as varied in material and design as footwear, shifting prices are like sensors taped to the skin of a patient in a medical experiment; they provide a constant flow of information about consumer needs and preferences. When the state controlled prices, it deprived producers of information about demand [p. 77].

The politicization of economic life in the Soviet Union meant that “prices functioned as propaganda and therefore malfunctioned as economic indicators.” Keeping the prices of food and housing artificially low helped support the myth of a Soviet socialist utopia or, as Shane puts it, “Controlled prices were an indispensable prop for the Soviet illusion” (p. 79).

Without the feedback of prices based on demand and supply, planners had to make production decisions on the basis of past data rather than on current consumer preferences. As a result, production targets could change dramatically, as could prices. In the case of laundry soap, for instance, an acute shortage turned into a giant surplus in less than two years. Without the guidance of prices, “the soap industry was like a hugh truck with no steering wheel, careening from one curb to the other” (p. 84).

Because the state empowered bureaucrats to set prices and made illegal what was natural–the inclination to make one’s self and one’s family better off by private production and market exchange–people had a strong incentive to break the law. The “shadow economy” became a way of life and helped people survive. Those who operated in the parallel market economy were “economic dissidents,” argues Shane. “By exercising economic freedom, they were challenging the state’s monopoly on the economy, just as a political dissident who asserted freedom of speech or of the press challenged the state’s monopoly on ideology” (p. 92).

The Soviet system was totally corrupt. Those in power readily accepted bribes from those who found market activity more lucrative than following orders from party bureaucrats. Shane provides numerous examples of such corruption: from the illegal use of Xerox machines by workers at the Communist party’s headquarters to “the Uzbec affair,” in which party members enriched themselves by underreporting cotton production, selling the residual on the black market and accepting large bribes. “What became increasingly clear after 1988,” writes Shane, “was that the Stalinist economy, still essentially intact, could not be reformed. It could only be dismantled, and a market economy grown in the ruins” (p. 98)."

Some relevant and prophetic words of Gibbon. Find and replace Christian with Socialist:

But the most perfect equality of freedom requires the directing
hand of a superior magistrate: and the order of public
deliberations soon introduces the office of a president,
invested at least with the authority of collecting the
sentiments, and of executing the resolutions, of the assembly.
A regard for the public tranquillity, which would so frequently
have been interrupted by annual or by occasional elections,
induced the primitive Christians to constitute an honorable
and perpetual magistracy, and to choose one of the wisest and
most holy among their presbyterians to execute, during his
life, the duties of their ecclesiastical governor… The
advantages of this episcopal form of government, which
appears to have been introduced before the end of the first
century, were so obvious, and so important for the future
greatness, as well as the present peace, of Christianity, that it
was adopted without delay by all the societies which were
already scattered over the empire, had acquired in a very early

period the sanction of antiquity, and is still revered by the
most powerful churches, both of the East and of the West, as a
primitive and even as a divine establishment. It is needless to
observe, that the pious and humble presbyters, who were first
dignified with the episcopal title, could not possess, and would
probably have rejected, the power and pomp which now
encircles the tiara of the Roman pontiff, or the mitre of a
German prelate.

Nice personal attacks filc. Please don’t respond to me w/ assumptions about my actual education: . The information I’ve shared does not tell you that. You may not have seen the information I’ve seen, and I may not even be expressing that information fully enough.

Economics is the social science that analyzes the production, distribution, and consumption of goods and services.

Economics inherently involves the calculations of these things in order to solve those problems. . Also where ecology is not destroyed in the practical application of this process. We are headed towards a better economics, one that actually can produce the best products at the lowest costs to the environment and individual as is possible. Also one that is falsifiable, but is validated through/application of the scientific method. So–>

http://en.wikipedia.org/wiki/Economic_efficiency

  • No one can be made better off without making someone else worse off.
  • No additional output can be obtained without increasing the amount of inputs.
  • Production proceeds at the lowest possible per-unit cost…

Determing if this is even possible in the Monetary Market System. The end user does not have the actual information that went into making it. Like the price of gasoline. It appears that the money sequence of value would make this impossible to scale.

And what about artificial demand costs? Organic is just as productive and sometimes moreso than conventional, and environmentally cost even less than convential, yet it still costs more money, and not just b/c of demand.

http://agroeco.org/doc/organic_feed_world.pdf

Federal commodity programs and subsidies are geared towards large-scale chemically intensive agriculture and artificially inflate figures for industrial agriculture

The Economics of Life and Death by John McMurtry

Justin I was well aware of the contents of the CATO article: Dismantling Utopia. I knew it supported an aspect of what many of the members on this thread promote. I’m not here to belittle any of you. It failed to explain the actual mechanics of the decisions, like the conditions upon which they were made.

We need stonger induction to minimize potential bias.

http://en.wikipedia.org/wiki/Inductive_reasoning#Strong_induction

http://en.wikipedia.org/wiki/Falsifiability

You are embarassing yourself imo.

For example, I don’t go to a physics forum and lecture it’s members about physics while using the wiki as my primary source of information.

http://mises.org/rothbard/praxeology.pdf

first 6 sections of

http://mises.org/Books/humanaction.pdf

and if you must use wiki at least spend 5 minutes here

http://en.wikipedia.org/wiki/Praxeology

Here we go for the 57th time. I call a Venus Zeitgeister.

Also your other rants aren’t talking about THE economic calculation problem as raised by Mises in the 1920’s. Any well read socialist/communist is already fully aware of the issue. So much that they’ve gone out of their way to admit the problem and tried to construct socialism as a copy of the market. That whole tidbit about economic effeciency has nothing to do with the conversation.

Which leads me to beleive your not aware of the issue, which is shocking for someone who is allegedly well read on socialist/communist literature.

Notice the spike in the 1920’s. That should give you a hint.

It’s like a daily occurence, I feel like a broken record. Whats more entertaining is the VP ZGM folk act like this is the first any of this has been explored. When in reality their beleifs have been exploded around 100 years ago.

Yes, but people didn’t have calculators 100 years ago, you see?. The young’uns today barge in strapped with calculators on their belts: “Word is you guys had a calculation problem here?”

lol!

@ Apfelstrudel

We are not finished yet :wink:

I don’t understand why such a background story does anything to help you to answer that. To show you why I want to make my point more clear. I hope you will reconsider and answer to this again. It really is not the right way of how Z is stating his opinion.

I think you understand the law of supply and demand. But to get sure and to state my argument completely I will give you a small example. A company which produces 1000 pcs/year of a good X is able to sell all at exact $100 each year. Now if the price was lowered to lets say $90 it could sell 1050 pcs. But if only 1000 pcs are produced you have a shortage. People who would want to buy this good can’t although they are ready to express their demand with the needed purchasing power. If lowered further and the amount produced kept at the same level, it will increase the amount of people who want and could technically buy it but can’t practically. They need to go home with empty hands. This is a shortage. The price is the factor that restrains demand until it matches supply.
→ If you don’t agree about this please comment clearly on it or confirm.

Now imagine the current situation of production on earth how it actually is. But we artificially assume that the production process and the income of people is fixed. Nothing has an effect on it inclusive the price system. All people like zombies go to work and produce as they do today, no matter what happens or changes. So there is no feedback what so ever on the production process.
Now we think of what would happen if all prices would be lowered until they vanished completely of all goods every day, and people could finally get everything free of charge. Please note that their needs/behaviour of consumption are normal, not zombie like. So they react on changing matters like prices. Lower prices will cause higher effective demand → which means we get a growing shortage with ever lower prices, since supply doesn’t change. It should be clear that storage racks in shops would become empty in ever shorter periods of time along with ever decreased prices every day. This counts for all goods and services! The pressure to hurry to the shop after work and get what you want and need increases also, since the time window becomes shorter and shorter. If prices are vanished completely people would already storm shops after work like wild animals, because if you are not there in time nothing is left for you! Finally there is nothing that restrains/ration consumption of anyone!
→ Again please tell me if you agree/understand my scenario or if something is not clear. Basically it is only applied law of supply and demand on a hypothetical situation with fixed production and income but normal consumption behavior of people in capitalism.

This scenario is technically already very close to ancom since people can take whatever they want without having to give anything in return. Also production and distribution are split up, they don’t have an effect on each other anymore. But we can alter the situation further and say that production runs exactly how you think it would. Your system also overcomes the ECP and makes perfect use of the given supply of resources. All your “planners” do perfect work and do not make grave mistakes.
Yet production is still restraint by resources and the current available technology of production, which is given by nature.
→ I hope up to this point you don’t have anything to disagree with if yes explain exactly what.

Now there are 3 ways for you to argue of why people would not storm the shops and empty shops in near zero time:
1: You argue that the perfect anarcho communist way of production would get out of the same resources and state of technology an extreme multiplication of goods/services produced so that all needs/demands by all people are fully saturated, and therefore no fear for not getting what you want can even arise.

2: The amount of produced goods/services will be about the same of what the capitalistic mode can produce. At least there is no way of complete saturation of all needs of all people. But people will exercise self-restraint to match the optimal but still finite supply and no “storming the shops” would occur.

3: The same as 2, but you have any other way of generally ration the given supply. If you do not ration people will take as much as they need (which is more as you think if they do not exercise self-restraint)! This means people who are too slow will get nothing at all!

Number 1 is clearly a lala land point. Number 2 involves a change of human nature and omniscience, also lala land. Leaves number 3 for you to explain.

Considered my above given scenario nearly all your questions you asked me are not making any sense, since your system already produces perfectly as the given resources and current technology allow it. Any shift in production would decrease a shortage in one area only to incease a bigger shortage in another area.

The only questions that remain to answer are:
How much do we have?: Bricks for 1 house
How much is needed?: 9 times the amount of bricks for houses demanded who are not available currently.
For what do they need it?: For houses

→ This kind of shortage will persist for nearly every good/service all the time with the results described above (and more if you take feebacks on the production process into account), except you believe in 1 or/and 2. So how do you ration?

I’m surprised this hasn’t gotten mentioned yet…

Art Carden recently said:

If you haven’t read Salerno’s postscript to “Economic Calculation in the Socialist Commonwealth,” it’s phenomenal. Casting him as Mises was a stroke of genius that raised the new video to a whole new level of awesome.

Just out of curiosity, do you so much as know what that means? How do you falsify truth?

I think Mises’ advocation of private ownership could be retranslated to “decentralization” of ownership. If it’s not fact, then at least, I would favor decentralization. Anyway, that’s kinda’ of a tangent, I admit.

I definitely don’t want to make a fool of myself, I read through the entirety of Praxeology and Economic Calculation in Socialist Commenwealth. There seems to be admittance of money’s imperfection.. He seems to blame all economic blunder on what he knew as Socialism at the time. 1920s, was undoubtedly, a different time. However, in society today, there are many countries w/socialized health care, w/statistics superior to the US’s. And even less money is spent per person than in the US’s private, capitalist health care system, yet health is worse here, on average. It’s that single payer (socialization) of healthcare, costs money, but it’s quite less money. Socio-economic inequality has many observable and negative side-effects. I didn’t see much mention of that, in my reading of Mises.

http://www.pnhp.org/facts/single-payer-resources

http://www.slideshare.net/equalitytrust/the-spirit-level-slides-from-the-equality-trust

I only agree that information must be exchanged between bodies in order to reliably meet the needs of people. Money only represents debt information. And it’s not largely distributed in accordance to physical, neurological, or natural understanding. Prazeology claims to be something along those lines, but I haven’t seen any studies actually proving so. I never said Mises was an idiot, but clearly there is somethings he couldn’t accomplish in his lifetime, just like Aristotle.

Aristotle was wrong about gravity..

Just out of curiosity, do you so much as know what that means? How do you falsify truth?

If theory or truth can’t be observed, or empirically tested (at least in theory) by others then it’s not falsifiable. Economics is falisifiable, otherwise it wouldn’t be science.It appears that Mises’ praxeology (science of human action) is quite questionable, as was alchemy. It’s how there was alchemy, before there was chemistry. Many of the same tools (literally the equipment) used in alchemy were used by the first empirical chemists.

http://en.wikipedia.org/wiki/History_of_chemistry

http://en.wikipedia.org/wiki/Invisible_College

“The society’s common theme was to acquire knowledge through experimental investigation

If we had a reliable tool for guaging the resources needed to meet the needs of production, consumption, distribution, and efficiency, and on a day to day basis.. Like money does, but much less esoterical than alchemy, and much more sound and testable science, like chemistry. I only seek to reform economics where it fails. The damage is widespread and has permeated so much, if not all of us, even the rich could be considered victims..