Economic Calculation Problem Debunked!??

Economics Economics Questions
281

European health care isn’t that great, they mostly have better health statistics because they have less obesity and drug use, which has nothing to do with health care. In fact, if you control for these factors the US has better health statistics. Their systems don’t really cost less, that’s partially due to accounting tricks, but also because they get all their medical technology for free from the US. Without the US around they would probably still have 1950’s technology and thus way worse health statistics. Also US health care is far from private, in fact half of health care in the US is provided by the government and the other half is heavily distorted by regulation.

Capitalism does not actually lead to “socio-economic inequality” and socialism does not alleviate it. The numbers I found show that the amount of wealth in the hands of the richest 1% is higher in Sweden than in the US. The shtick on “inequality” is just another excuse to oppose markets. When socialists lost the intellectual battle over which economic system is more efficient, they simply switched their rhetoric to inequality and the environment. But capitalism is superior to in these aspects as well.

282

“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.”

How is health measured? Are there different metrics being used? I know there are different metrics being used when it comes to infant mortality, so my guess is that there are. Also, European countries have been fudging their economic data for decades not to mention that in a socialized industry you don’t have real prices so it’s impossible to tell if it’s really cheaper or not.

283

I’ve continued replying to the OP’s critique of the calculation problem in this thread: https://forum.freecapitalists.org/t/some-critiques-of-austrian-economics-for-those-in-the-mood-to-dissect-them/252

Only going to talk there about the section “3. PRELIMINARY CRITICISMS OF THE MISESIAN MODEL”, where he proves that Mises had it all wrong in the first place, and that on the contrary it’s the free market that is the disaster.

284

What health measurement are you talking about, and from which source? Here’s the equalitytrust/Wilkinson, Pickett’s sources.

http://www.equalitytrust.org.uk/why/evidence/methods

http://www.equalitytrust.org.uk/docs/responses-to-all-critics.pdf

Chapter 6:

Life expectancy and infant mortality Relationships between income inequality and life expectancy have been repeatedly demonstrated since 1979 13. There are over 200 tests of this link, internationally and in the US states, and the vast majority of studies confirm the adverse impact of inequality 14. At times, the cross sectional associations have seemed to disappear 15, and reappear 16. This variability is probably caused by the long lag periods between sudden changes in income distribution and their effects on health – given that health is affected by circumstances throughout life. We do accept that this is one of the weaker associations demonstrated in The Spirit Level, although the association is clearly much stronger among US states. If the 128 studies of the relation between income inequality and health which use data for large areas (whole nations, regions, states or cities) are classified before the use of what are often inappropriate control variables, only 6% fail to show some significant associations. Two important new pieces of evidence have appeared recently. One is a study published in the British Medical Journal – a meta-analysis of multi-level studies of income inequality and health. 17 This shows unequivocally that, even after controlling for individual income or education, inequality is related to significantly higher mortality rates. (This study is almost certainly ‘over controlled’ and so underestimates the magnitude of the effect of inequality on mortality because individual income and education are related to health principally because they are markers of status.) The second is a study showing that US states with bigger increases in inequality between 1970 and 2000 had less improvement in life expectancy than those with smaller increases. 18

Saunders accepts our evidence on links between income inequality and infant mortality

Conclusion: physical health is better in more equal societies and increases in inequality in US states are associated with lower improvements in life expectancy

285

Also, European countries have been fudging their economic data for decades not to mention that in a socialized industry you don’t have real prices so it’s impossible to tell if it’s really cheaper or not.

http://www.equalitytrust.org.uk/docs/responses-to-all-critics.pdf

We selected our countries according to a strict set of rules – with no departures or exceptions. We took the richest 50 countries ranked by wealth according to the Atlas method, which the World Bank uses to classify countries into Low, Medium and High Income categories. Our source was the World Development Indicators Database, World Bank, April 2004. From the richest 50 countries we excluded those with populations of less than 3 million to exclude tax havens, and then used all the remaining countries for which a comparable income distribution measure was available in the United Nations Human Development Reports.

286

Eirmos,

There is a logical fallacy there, one that actually caused this recession.

The bigwigs noticed that people who own their own homes have better family lives, treat their children better, are more educated and educate their children to higher levels of success, work harder, and are in many ways better and more succesful citizens than people who do not own their own home. In fact, they pay their mortgages, while those who rent tend to be deadbeats.

So they came up with a brilliant idea: Put every last man woman and child in their own home, and they will be model citizens.

Name of the fallacy: putting the cart before the horse. People have to be of good character, first model citizens etc, which will lead them to getting rich enough and responsible enough to buy a home and pay the mortgage. Just shoving a deadbeat alchohic retard into his own home will not change him. it will cause the current recession when he and millions like him do not meet their payments.

You get the idea. Poor people are often poor for a reason [=stupid, careless, irresponsible, undisciplined, etc.], and that same reason makes them live unhealthy lives. Just giving them money won’t fix anything.

Now you may say I have not proven that to be the case. I don’t have to. Those reports have to prove it is not the case. That’s what research is about, proving stuff.

287

Suppose I wanted to try to falsify observation (“empirical testing”). How would I do this?

288

Eirmos,

There is a logical fallacy there, one that actually caused this recession.

The bigwigs noticed that people who own their own homes have better family lives, treat their children better, are more educated and educate their children to higher levels of success, work harder, and are in many ways better and more succesful citizens than people who do not own their own home. In fact, they pay their mortgages, while those who rent tend to be deadbeats.

So they came up with a brilliant idea: Put every last man woman and child in their own home, and they will be model citizens.

Name of the fallacy: putting the cart before the horse. People have to be of good character, first model citizens etc, which will lead them to getting rich enough and responsible enough to buy a home and pay the mortgage. Just shoving a deadbeat alchohic retard into his own home will not change him. it will cause the current recession when he and millions like him do not meet their payments.

You get the idea. Poor people are often poor for a reason [=stupid, careless, irresponsible, undisciplined, etc.], and that same reason makes them live unhealthy lives. Just giving them money won’t fix anything.

Now you may say I have not proven that to be the case. I don’t have to. Those reports have to prove it is not the case. That’s what research is about, proving stuff.

So I guess my response would be that : I can (I do) volunteer at the place I get food from, I can(I do this) grow a portion or even (eventually) the majority of my produce at some point. All voluntarily intrinsic, extrinsic, and image motivated, but I need some resources to do so. Like food, water, electricity, seeds, medicine, shelter. Just b/c someone has either or both, money or a home, doesn’t mean that they’ll do anything about helping lighten anyone else’s load, or be productively prosocial, more self sufficient, etc. . In my mind, large scale volunteering requires free access to most resources. No labor for money. Otherwise, the system may be provably inefficient and an impedement and maybe reversal of productive motivation. It’s provably the promotion of false-scarcity, and anti-social behavior, not merely meant to guide the masses, but to enslave the masses. There is provably a power elite that thinks debt-control (control via debt) is the best course of action, b/c they think it has to be done, but it doesn’t. *Maybe I’m jumping to too many conclusions at this point?

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

Here’s another interesting study though. This helps pinpoint where the type of motivation and how environment determines it’s effectiveness.

http://opimweb.wharton.upenn.edu/documents/seminars/Meier_Paper.pdf

Poor people are not necessarily any of those things b/c of monetary anything, unless society says so. Disadvantaged people are more susceptible to mental and physical problems, b/c of their life experiences, but it’s usually not pre-genetically determined, it’s also environmentally triggered. Somewhat related to this:

http://www.youtube.com/watch?v=36HquPzdxf4

Name of the fallacy: putting the cart before the horse. People have to be of good character, first model citizens etc, which will lead them to getting rich enough and responsible enough to buy a home and pay the mortgage. Just shoving a deadbeat alchohic retard into his own home will not change him. it will cause the current recession when he and millions like him do not meet their payments.

Another thing, which may seem obvious, but there was never a modern moneyless civilization. They never actually did that part of it. I’m actually not familiar w/why they never actually tried. I would like to know more facts about why Communist societies like China or former-Soviet Union didn’t take it that far. In a moneyless society, the need for money would have to of been surpassed by scientific testing, collaboration, evaluation of natural resources, population, caloric needs, and so forth..

Do I have any points that seem valid?

289

Suppose I wanted to try to falsify observation (“empirical testing”). How would I do this?

If you wanted to falsify observation through empirical testing, you would have to of done enough research on the the topic, *constuct a hypothesis, then experiment w/a test, followed by analysis of the results. The hypothesis would be something like, “Money is necessary for an economy to function most efficiently *in that situation”. . Or even “Single Payer is necessary for economic efficiency *in this situation” Then you would have to basically determine how accurate your hypothesis was in light of the experiment’s results. The next test is usually based upon a revision of the origninal hypothesis..

There are studies that can draw from many statistically distinct scientific fields of inquiry..

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

290

“Another thing, which may seem obvious, but there was never a modern moneyless civilization. They never actually did that part of it. I’m actually not familiar w/why they never actually tried. I would like to know more facts about why Communist societies like China or former-Soviet Union didn’t take it that far. In a moneyless society, the need for money would have to of been surpassed by scientific testing, collaboration, evaluation of natural resources, population, caloric needs, and so forth..”

Because there are only two alternatives. Barter (which sometimes happens, but it is near-impossible to apply to a modern civilization. Also, people will want something that can easily be exchanged, which becomes money), or complete control of society (which comes with calculation problems, and breaks down into barter or money once people start trading). In the complete control, choosing it voluntarily is a trade.

And, if you are serious about saying that a moneyless society would work I would like to hear a proposal for how society would function without money or barter, if you want to show how a moneyless civilization may be viable, and adaptable to changing conditions. Unless you are willing to bring in the issue of coercion, you also need to answer why people would choose to join your civilization over a monetary civilization.

Also, doesn’t charity imply barter or money?

291

Eirmos.

There have been at least two huge threads about this, the current one being one of them.

  1. If you have a look at the first two or three of this thread, it summarizes my position.

I don’t think scarcity is false [where will the goodies come from if no one is making them], I don’t think volunteers will produce enough for everyone [why should they?], and I think Adam Smith’s Invisible Hand means this:

The only way to get something in a free market is to give people what they want. Thus the very greediest become the greatest benefactors. The only way they could feed their greed was to be as generous as possible, working like dogs to benefit mankind.

I’m in the midst of this long philoshopical piece now, and am worn out for the nonce discussing socialism. My apologies.

  1. Lenin and his buddies tried a no money system right after they took over. The starvation they caused has so wide spread that they gave up.
292

I wonder what the OP thinks should happen if the democratic concensus is to have capitlaism and individual rights?

I’ve always thought the term democratic socialsim was a bunch of non sense. Its only democratic for those that want socialism.

293

You misunderstood the problem of the task. You are merely saying that you try to falsify observation (“empirical testing”) with empirical testing.That is not possible. It contradicts itself.

294

delete this post

295

not writing this post :wink:

296

It is not a contradiction all the time. For example, whatever was tested before might not have been sufficient to really examine whats going.

In other words, if the hypothesis were derived from faulty thoery, or the test wasn’t complete, someone else can construct a better hypothesis or test. And if the test results are the opposite then you have empircally falisfied an empircal observation.

297

Lenin did try to abolish money. He changed his mind later.

Let me clarify what I meant earlier. How do you use observation to falsify the idea that observation is a reliable source of knowledge? What I’m trying to demonstrate is that at the bottom of all knowledge there is an ultimate self-evident assumption. There is no magic trick around that.

298

In a couple of words, “Incompleteness theorem”.

299

Lenin did try to abolish money. He changed his mind later.

Well that’s not the same as doing. And Communism is not the Venus Project’s RBE model (which actually is serious about a moneyless society, but whom also seek to test out their ideas, before implementing them.

Again, I seriously think that Communism is not a Resource Based Economy, b/c most of the people in TZM , and TVP including it’s founders, will always deny you that … There may be some similarities, but they could not possibly be the same. But feel free to keep asking questions. I’m not mad or anything. As far as ECP is concerned, it’s not about RBE, which is b/c it never existed, nor was it mentioned and only in theory does it exist.

Of course Mises doesn’t have a real argument against an RBE, b/c Mises critiques about “Socialism”.. An RBE is not really what we know as Socialism or Communism. Jacque Fresco did not get the idea for the Venus Project from the Communist Manifesto, based on all the times I’ve heard him speak, when the subject of Communism gets brought up.

http://www.youtube.com/watch?v=sHiy4EuUD2U

A guy who steals a watch goes to prison. Economically speaking,

Let me clarify what I meant earlier. How do you use observation to falsify idea that observation is a reliable source of knowledge? What I’m trying to demonstrate is that at the bottom of all knowledge there is an ultimate self-evident assumption. There is no magic trick around that.

That’s b/c it is replicable, and your method and all the variables are accounted for.. Say someone perfectly does the exact same experiment, based on your information, and does not observe the same results, then something isn’t right, an error was made in the original record, mistranslation, fraud, and so forth. The results of the original experimenter’s experiment would no longer be conclusively valid..

300

When you try to replicate (falsify) social science or economics experiments involving, say, 300 million people over a certain territory, do you use a time-machine, tele-portation devices or some other methods of making sure that “all the variables are accounted for”? Just curious.