or this summary if you can’t be bothered to read 3 chapters:
-Are you seeding? cause nobody else is.
I don’t even know how to respond to this. This is the type of vague and mystical garbage that makes intelligent conversation entirely impossible with the TVP crowd. I don’t mean to offend you, but this sort of crap doesn’t clear up anything.
Profit is something that cannot be eliminated. It is not a social construct; it exists because individuals, if they value anything at all, must necessarily prefer it sooner rather than later, all other things equal. Additionally, ignoring this variable (time preference) makes the rational allocation of scarce resources and efficient production of final consumer goods impossible. Here’s Bohm-Bawerk:
What you’re essentially saying here is that the anarchist society does not value, and in fact entirely ignores, the subjective preferences of those that make up that society. You will override their subjective preferences with “other considerations.”
It may or may not be cheaper per unit. Profit doesn’t simply mean employing the cheapest inputs available, though that is obviously an important element. Traditional sources of energy are more profitable because they yield a relatively higher degree of output per each individual unit of input, and the opportunity cost of employing such inputs is relatively smaller. In other words, it satisfies the highest degree of subjective desires, which are only revealed ex post by the market process.
The reason why it is unprofitable to employ solar panels, for example, is due to the fact that the resources required for the production and operation of such solar panels can be used in a myriad of different employments. For example, the silicon required to produce solar panels can also be used for the production of car parts, cast iron, semi-conductors, etc, all of which are highly valued by society. This means that in order to produce solar panels, one must bid away this vital resource from all other employments, of which there are many. At the same time, the amount of energy that solar panels actually produce is less, again per each individual unit of input, relative to other, more traditional forms of energy (also, it takes a long time to harvest the silicon crystals, which is another cost that cannot be ignored).
In short, producing and operating solar panels entails that you must take more from society in order to produce less.
What do you mean when you say “fuel is freely available?” It’s relatively abundant but it’s not “freely available.” I don’t have any in my backyard, for example.
Yes but solar panels can be owned; wind turbines can be owned, etc. Are you suggesting that the market doesn’t produce reusable commodities? My father’s watch is 30 years old, and my cousins in Albania drive 30+ year old Mercedes.
All this means is that you satisfy the highest degree of subjective valuations (maximize revenue) while simultaneously abstaining from overusing scarce resources with a myriad of potential heterogeneous employments (minimize costs). The customers directly and entirely determine what gets produced and, in an indirect way, they determine how things are produced.
The problem here is that you’re attempting to resolve a very complicated economic problem (economic calculation problem) without first familiarizing yourself with basic economic theory. You don’t try to refute economics; you simply dismiss it by claiming that your world is “entirely different.”
I really don’t give a shit about nature and animals. I will voluntarily preserve nature insofar as it doesn’t impede on other, more highly valued preferences. Thus, I’m not willing to destroy economic productivity and jeopardize the welfare of potentially billions of people in order to satisfy your nature fetish. Some people do value nature, and they express this preference in the market, which is why so many “green” gimmicks are popping up everywhere. But It seems that your major problem with capitalism is that people value things that you don’t necessarily value and vice versa (or people don’t value things that you value by a “sufficient degree”).
So I have to summarize: First you do dodge the point of my question two times, and when I push further you now just say that you do not care and it doesn’t matter how this is solved. Anything is better than bidding. And you ignore that for these 10 people it is very important who gets what. They are not some emotionless all obeying figures from the computer game the settlers. So let’s see your alternatives:
First one gets it: Yes for sure this would not cause any troubles of who really was the first! Besides prepare for advance orders for the next 1000 years. Hello queue we are in line… Ask people from former USSR of how it feels like to wait endlessly for “free” things. With the exception of course people learned magically how to exercise self-restraint to match the available supply.
“Guy who contributed the most..”: Yes, who and how decide that. Are you capable of this? Or do you set up a popularity contest in which all 10 have to participate? This possibility is a joke!
“Draw straws”: Also a complete joke. I would really like to find out how people would react if they lost 30 years in a row, which is quite easy to achieve for one out of 10. In reality you can prepare for much lower odds 100, 1000, 10000 to 1. But you believe of course that this occurs maybe only once in a lifetime per person, since they exercise self-restraint automatically…
I tell you what would happen: The guy who works on the orders would ship the bricks to the one who offered him the best backroom deal.
Wow, this begs some questions now:
- Who decides at which point that a grave mistake happened, and the person must go? Those 9 who didn’t get the bricks, or those in his working area, living area or who?
- Is there a trail? Can he appeal the decision?
- Where does the person “have to” work in the future. Is he then not free any more to decide what he wants to work?
- What if he “makes” grave errors in any job? Is he removed from society or is he still fully provided, or as punishment only partly?
You also seem to believe if this person had done his job right there would be of course at least nearly as much bricks available as demanded. Which means you believe the capital structure can be changed easily by minor amendments. Do you know the complete production process of a pencil? If not, why do you think this is so?
This is the answer.
Apfel - I read the 3 page article. Really?
After implying that Mises uses flawed rationale to come to his decisions and claims, it dicusses an example of the ECP, with making can out of either aluminum or iron… fair enough…the article continues
"And the solution
Economist and market abolitionist John O’Neill summarized it best: “Use your judgement after the best possible deliberation”.
This is that democratic community decision stuff. Im still not clear on exactly how the decisions are made.
“How we go about applying practical reason to achieve the best possible solution depends on the
given scenario. We cannot give an answer that is always applicable (like “maximize profit”) because
our position is that there is none. Every scenario must be considered on it’s own; we consider the
various possibilities and use the scientific method to assist us.
Value becomes dynamic, and based on information so as to realistically and rationally find the best
solution for whatever problem is faced.”
Once again, a suggestion that we radically change not only the anarcho-cap mentality, but the rest of the populace. A key condition to permit comprehension of the system.
This
include computers sometimes “making the decisions on their own”. There is no need to reinvent the
wheel every time. If we’ve arrived at a decision it would be a waste of time and resources to repeat
it over and over. There is no reason that this cannot be handed over to computers, using something
like MCDA: en.wikipedia.org/wiki/Multi-criteria_decision_analysis
We thus free up our time so that we can focus on deliberating where it is really necessary.
Hopefully, they dont use windows 7.The point is, I highly doubt this kind of system would work. I mean i dare not even talk about incentives to innovate, specialize and all that other cap crap. ..Theres not a way to test your hyposthesis, and that would be the only way to know.
However, what would have to preceed your test, would have to be the fundumental change in human nature.
So even if you had solved the ECP [which you and the articles haven’t], my question to you would be:
How are you planning on convince people rather, what is the catalyst for this transformation in human nature? Arguing On a Mises blog?
- About that link slavery link. It claims that every slave produced, on average and in 2006 dollars, over half a million dollars of profit for its owner. He does not mention the expenses of buying and maintaining a slave, in 2006 or any other dollars. Adding it all up, the slaves produced $7.86 quadrillion dollars, in 2006 money. The author is a partially black man making the case that American blacks are therefore owed $7.86 quadrilion dollars by whoever has that kind of money.
It cannot be right, [and contradicts research you can find searching this site]. A half a million dollars picking cotton? Imagine what a trillionaire a grocery store owner must have been, or a doctor, or a gunsmith or blacksmith or other skilled worker.
- I’m not asking him to give up his title or his land. That is not what capitalism is about. Also, not sure what you mean by privileges. The right of the first night? That is not an economic question. Nor do I want democracy. I do want him to give people freedom, but that’s it. He can keep his land and title.
You, on the other hand, do want to strip him of everything.
-
You have to distinguish between people’s motives and people’s actions. In a free market, the motive may be greed, but who cares? The action can only be helping out the other guy in exchange for helping oneself. And oddly enough, as even Marx admitted, that is exactly the result of a free market. Everyone benefits. His only beef was that it can’t last, or so he thought, and an erroneous belief that someone, somewhere, was being ripped off.
-
I don’t remember how we got into the slavery issue here, but yes, I disagree with what those organizations consider slavery. Those well intentioned but foolish people [to be generous with their motives] are ruining the lives of the very people they think they are helping. Many times it is the unions in the US who are behind these movements, trying to eliminate competition. Do a search for John Stossel on sweatshops.
-
So the Uzis are to keep trespassers out. And to guard against theft.
We have a different picture suddenly. Those are not concentration camp guards, ready to bloody the workers into submission. They are security guards, the ones you will find in any workplace.
BTW, I would not put it past the unions to have those pictures posed by actors. The whole thing just doesn’t make sense. You need an expensive Uzi and expensive ammunition when a cheap wooden club will do?
There is a lesson to be learned here. Think about what you are seeing. Be not led by the nose when someone appeals to emotion.
-
I don’t believe that environment can change a 6 foot tall person grow into a seven foot tall one. Everyone is born with limitations, created by his DNA, and environment can only fine tune things within those limitations. We cannot all be Einsteins or Michael Jordans. And we cannot stop trying to improve our lot.
-
Also, I was very shocked by what you considered reliable research and evidence when I saw that slavery website. It was like referring me to a Donald Trump’s speech for quality research about Obama.
-
The jury is out about any refutation of ECP till I read those torrents. Robbo’s stuff is, sadly, lacking. As is the mere urging us to stop being bound by rationality. We are talking about a very specific technical problem which requires a very specific technical solution.
More from the ECP torrent-
“von Mises gives the example: Given the choice “whether we shall use a waterfall
to produce electricity or extend coal and better utilize the energy contained in
coal”, how is the decision to be made? We need some way of calculating benefits
of alternatives, and this in turn requires a common unit of measurement.”
"Neurath takes this example and responds: “The question might arise, should one
protect coal mines or put greater strain on men?
Why does that matter? Who would ask that in that particular manner?
The answer depends for example on whether one thinks that hydraulic power may be sufficiently may be
sufficiently developed or that solar heat might come to be better used, etc. If one
believes the latter, one may ‘spend’ more coal more freely and will hardly waste
human effort where coal can be used. If however one is afraid that when one
generation uses too much coal thousands will freeze**(right)** to death in the future, one
might use more human power and save coal. Such and many other non-technical
matters determine the choice of a technically calculable plan… we can see no
possibility of reducing the production plan to some kind of unit and then to
compare the various plans in terms of such units.”
This latter bit is trying to discredit mises by asking an irrelevant question. The fact that the overuse of coal could frezze people in the future proves scarcity exists. it continues…
Here he [mises] assumed that every choice made is implicitly an exercise in economic evaluation, weather
we like it or not. The response is implausible and begs the question. He merely offers a redescription,
which is plausible only if it assumes what it is supposed to prove – that all rational
choices involve units of comparison to which rules of calculation may be applied.
Neurath’s position is the stronger? one; comparability need not assume commensurability, there is no one
rule that can be mechanically adapted to produce a determinable decision regarding which plan to
adopt, and there is an ineliminable role for non-technical judgement even in technical decisions.
This last part, i think is saying that mises’ method of how people rank choices and outcomes is the “one of the methods that can be mechanically adapted to produce”, but not the one and only. I was under the impression that “and there is an ineliminable role for non-technical judgement even in technical decisions.” is kind of already baked into the mises’ method of mechanized rule.
This is the theme, of the papers..that you dont need to measure value in terms of only one common measurment…That it is perfectly feasible to make comparaisons using multiple measures. Isnt this, pardon my mainstream vocab. like making an interpersonal utility comparaison? or like trying to express a color in terms of inches?
Apfel,
"justintempler,
See one of my previous posts.
I’d love to get back to the ECP. But first I need you to read Robs article again, …"
You aren’t interested in dealing with the ECP. I gave you a real world ECP problem and showed why Rob’s solution falls flat on it’s face.
If Rob isn’t interested in defending his argument and you think you can do better then go right ahead.
I gave you a specific real world example of why anarcho communists can’t solve the ECP.
I’m not going to get distracted arguing about yachts and a fleet of 15 cars.
Show me how anarcho communists can build and maintain a modern day steel industry that you will need as a basis for any hope of maintaining any type of industrialized civilization.
or are anarcho communists going to be anarcho primitivists too?
I’m not interested in joining you and Rob back in the bronze age.
Esuric,
I have not aligned with, or even mentioned TVP, in this discussion. In fact I expressed some doubt on it.
You accuse me of being vague, yet do not explain why. I can’t imagine being more clear myself.
I never claimed that time-preference is ignored. I do not see why it could not be one of the many things considered, in the situations where it mattes.
And you again assume central planning. Not a single argument has been brought up against anarcho-communism directly. I at the very least expected some Hodgson. Oh, well…
No, I am not saying subjective preference is ignored. How can you deduce that from me claiming that “those affected by decisions participate in making them”?
What I am saying is that there are situations where subjective preference matters, and situations where it matters less. Those involved decide. When it comes to choosing an energy source, for example, I do not see why individual subjective preference is very important. But if the people involved feel it is very important, no one would stop them. For a supposed anarchist you seem to have a tough time understanding what lack of authority and coercion mean, or at least very eagar to equate what I suggest with Communism. Again, I suspect that it is because that is what most ancaps are used to debating.
Notice how you example only takes into account individual subjective valuation and nothing else. My critique that capitalism cannot take things such as the environment into account still stands. So does what I posted in the second post of this page.
Note how you also assume that individuals isolated from each-other have enough information to make this call. Like I said, in capitalism an individual only considers themselves and cannot see the bigger picture. Individuals in deliberation, however, have more information.
By “freely available” I mean precisely what I explain in the very next sentence. No one can own the wind or Sun.
My point being that wind energy is available to tap into for anyone who can afford a turbine and a piece of land that is windy. Natural gas is not available for anyone who can afford a drill - there is far less land where natural gas can be extracted then there is land where wind blows. It is more scare. If a company is to gain competitive advantage, the ability or resource they use for that purpose must be scarce, meaning that it is not available to everyone in the industry. Wind is not such a resource; natural gas is.
It is therefore more simple to gain market shares, and create entrance barriers for competitors.
The customers directly and entirely determine what gets produced and, in an indirect way, they determine how things are produced.
Indeed, and we off-course assume that they are perfectly rational and fully informed, as well as capable of addressing collective issues when using an individualistic outlook because… well, why the fuck not? We’re already assuming that people in sweatshops are happy, slavery can’t be profitable and that rich people are rich because they work hard and make others happy.
Also FYI I am familiar with basic economic theory, I’ve a BSc in finance (hard to believe I know). But I also know enough about anarchist theory and the philosophy of economics to know that very different assumptions are made in the different schools of economics. It’s not a matter of a different outlook or perception; some concepts literally don’t exist, or are so different that they can be said to be something else. Take surplus value, no Austrian or neoclassical economist would acknowledge it; it just doesn’t exist as a concept in those frameworks.
This does not become clear until one has studied several schools, and their philosophical basis.
Now you may not agree with what those different schools say, but demanding that someone use anarchist theory to address subjective valuation or profit is like demanding someone use neoclassical economics to address surplus value. The concept does not exist, not in the same way.
I really don’t give a shit about nature and animals.
I am aware of that, you have made your moral values quite known. Though I suspect that this is largely because you are grossly uninformed about how dependant you are on the ecosystem for your own survival. Where you to be informed, you would form new preferences based on the new information.
Some people do value nature, and they express this preference in the market, which is why so many “green” gimmicks are popping up everywhere.
Like I said, this is the problem. This does not help the environment at all, as “green” alternatives aren’t really that good for the environment. It just makes those people feel less guilty. Do you read my posts at all? I know they’re long, but if you don’t feel like reading them don’t debate me.
skylien,
And you ignore that for these 10 people it is very important who gets what.
Fuck, let them figure it out themselves then. 
Why do we need One Holy Principle, the magic of the Market, to solve everything? If the market is the best way in that case, fine, let them use it. I’m not saying outlaw the market, or shoot people who decide to use some kind of currency. Surprise, no laws in an anarchist society, you can do that. All I am saying is lets not base every single thing on what the market says, lets consider other things.
Drawing straws was an actual joke. I am not suggesting this as a system.
“Depends on the context” is the answer to all those questions. No Cartesian rationalism. No single answer that can be used in every situation. Also no coercion, no law, no authority. Why is this so hard to grasp?
Bearchu,
“I mean i dare not even talk about incentives to innovate”
Autonomy, mastery, purpose. Not up for debate, scientifically proven.
See the video I linked to, or search youtube for “the surprising truth about what motivates us”. Also read chapter 11 of The Market.
How are you planning on convince people rather, what is the catalyst for this transformation in human nature?
Finally, an actually important question. I have no idea. Nor does anyone; I am betting that there is no Master Plan for how to bring about anarcho-capitalism. I mean do you expect to bring about change by arguing on a Mises blog?
But it must begin somewhere. For now, I focus on educating myself and learning as much as I can. When I am more informed I can, hopefully, get some idea of how to do it. I’d love to hear any ideas you have on how you want to transform society.
The reason I argue on this site is attempt to falsify the theory. Fearing my own bias, and that of those who agree with those views, I go to forums where said views are loathed. So far, not a single objection has been raised for which there is not a satisfactory rebuttal (note that it may not satisfy everyone).
I am not a teenage anarchist with a Mohawk and issues with authority - I spent most of my youth being a strongly convinced libertarian, and as I’ve said I’ve an education in finance. I begun exploring this path due to what I considered overwhelming evidence. However, that does not mean I will abandon the scientific method, or become “sure” of something until it is empirically confirmed.
This latter bit is trying to discredit mises by asking an irrelevant question. The fact that the overuse of coal could frezze people in the future proves scarcity exists.
Just an example, chill… Also, he wrote this more than a hundred years ago.
The point, same one I’ve been trying to make, is that different questions are asked in the two societies. Different things are considered important, there are different goals. The question Neurath asks in indeed irrelevant within the context of a capitalist society, but perfectly rational in a anarcho-socialist one.
I was under the impression that “and there is an ineliminable role for non-technical judgement even in technical decisions.” is kind of already baked into the mises’ method of mechanized rule.
No, that is the point. There is no such role in Mises’s method; it is just mechanised. You cannot consider the beauty of a waterfall, for example, only the monetary value of such beauty, if any. It is all reduced to a mechanical process.
Here we find an interesting contradiction, for this goes against Hayek’s rejection of Cartesian rationalism. If you have the time, read the whole books I linked to, they offer some interesting discussion on that.
…like trying to express a color in terms of inches?
No, this is what money does. Everything is expressed in money, i.e. subjective valuation.
justintempler,
No you gave me a single sentence and I answered it vaguely.
Also, what you seem to not grasp, is that anarchists are big on democracy and deliberation, and deny the existence of a single optimal answer. What that means is that any answer I give you is a example of a possible answer. Even if I get a group of 10 people togehter and we deliberate as though it was a real problem, it’s still only be one possible way to go about it. Another group, in another situation, may do it differently.
Show me how anarcho communists can build and maintain a modern day steel industry that you will need as a basis for any hope of maintaining any type of industrialized civilization.
You are asking one person to do this? I could not, it is epistemologically impossible. It would be akin to central planning, with me as the planner.
I can, however, reference you to syndicalist theory, the deliberative process and workplace democracy, the mathematical theories of Kantorovich, Cockshott’s algorithm based on Kantorovich, real-life examples (Catalonia first and foremost, but also Chiapas, though they are far less industrially developed). That ought to give you the general idea. Sorry, it’s quite complex and dependent on the situation and context. That’s the point, we use more than just a few formulas.
I can be done, however. It has been done.
So, what about the people that don’t consent to this ‘democracy’? Are your decisions binding on them? How does that not represent a hierarchy of the majority versus the minority?
I thought anarchy was about abolishing these sort of structures?
It can be done. The mathematical theories of Kantorovich, Cockshott’s algorithm based on Kantorovich. It’s complex, and it’s not easy but, boy, the results would be well worth it. Golden yachts, fifteen cars per person, roasted chickens flying through the air and straight into your mouth, pretty girls, horny, no less. We could have everything if we pulled together and willed it strongly enough. So much better than wasting ourselves away in silly competition over things we only think we want.
Think outside the box. Waaaaay outside. And you’ll get it.
Apfel,
“No you gave me a single sentence and I answered it vaguely.”
You’d make a good politician. 
I didn’t ask how you would solve it, I asked how anarcho communists would solve it. I know it’s a complex problem, it’s meant to be, just like it would be in real life.
There’s a reason why your examples use “far less industrially developed” examples and resort to simple examples of comparing 10 units of X and 9 units of Y to make product A. As soon as you introduce any complexity of real world situations, all your theories fall apart.
You are lost in an imaginary world of how you wish the world was, instead of facing the reality of how it actually is.
How are you planning on convince people rather, what is the catalyst for this transformation in human nature?
Finally, an actually important question. I have no idea. Nor does anyone; I am betting that there is no Master Plan for how to bring about anarcho-capitalism. I mean do you expect to bring about change by arguing on a Mises blog?
I am also here to learn.
The question Neurath asks in indeed irrelevant within the context of a capitalist society, but perfectly rational in a anarcho-socialist one.
I underlined master plan, because anarcho-capiltalist dont need a master plan for anarcho-capitalism, we only need a plan for anarchism, capitalism is already here.
Also, i realize that you are an anarcho-communist but I find that most of the issues with capitalism you allude to in your posts seem to be issues that are brought about by the state.
Here we find an interesting contradiction, for this goes against Hayek’s rejection of Cartesian rationalism. If you have the time, read the whole books I linked to, they offer some interesting discussion on that.
I thought we were discussing mises’ reason for why EC is impossible. From what i have read, Hayek contended that it is an information problem, which I dont agree with. As you know for Mises it was the abscence of the price system. BTW beauty and nature can be expressed in terms of dollars. Otherwise most of my education was just nonsense.
…like trying to express a color in terms of inches?
No, this is what money does. Everything is expressed in money, i.e. subjective valuation.
Right, but i still am not convinced that data crunching computer and the methods of trying economically calculate with out commensurability are feasible. Its the same reason why i dont subscribe to most of the mathematical aggrigates and econometric models that litter the economic arena.
Otherwise most of my education was just nonsense.
Probably was.
You, sir, owe me a new monitor. Cola just does not fit the look I want for my screen.
justintempler,
Actually, you asked me specifically.
As I have been trying to say, there is no orthodoxy, no single answer. Anarcho-communists would solve it the way they felt was best for those involved, using the information available. I suppose if you gave me a detailed problem, I could call up a few dozen people and nag them into a mock deliberative process to stimulate what a solution could look like.
Or you could look at real world examples from Catalonia. It was actually pretty well developed, with well documented increases in scientific, agricultural and industrial output after syndicalism was introduced. I meant that Chiapas is less industrial, but still offers a good example of deliberative democracy.
And no on the last bit. I am trying to imagine a better world, instead of giving up and accepting what is. Every major change to society that has ever occurred was called a impossible fantasy. That doesn’t mean that anything is possible, just that calling something a fantasy is a poor critique and does not make it so.
Bearchu,
What exactly is against (just) the state? Most of the practical stuff could in theory be blamed on a state, but I still maintain that the existence of sweatshops and environmental destruction is not due to the state.
Still, the important points are the theoretical ones. Capitalism simply does not have the mechanisms required to take certain things into account or distribute certain information when making decisions.
I know about Hayek and Mises using different arguments; this is why I didn’t bring it up more than briefly, in case you’d be curious.
“beauty and nature can be expressed in terms of dollars”
Sure they can, they are being expressed that way every day. The question is if that allows us to make rational decisions. And the answer is that, if we consider “rational” to mean sustainable and ethical, no. However, if one “doesn’t give a fuck about animals and nature” and considers rationality to be equal to profit maximisation, yes.
It depends on the goals one has. And there is no “wrong” goal; a system can only be wrong insofar as it does not lead to the goal it proposes.
…i still am not convinced that data crunching computer and the methods of trying economically calculate with out commensurability are feasible
Nor should you be until you study the subject closely. Surely the existence of historical examples of it occurring ought to at least make you curious, despite the mocking comments of others in this thread? I know I started reading about ancap when I heard the Viking era society of Iceland being compared to an ancap society.
Well, I’m out. Thanks to those who didn’t resort to mockery and ad hominem.
Rebuttal of ECP torrent, Concerning Economics of the Calculation Problem:
- von Mises’s assumed that commensurability of values is possible. The claim is made supposedly on
a rational ground, but winds up being irrational; he assumes that all the vast complexities of the
world, all the various different and often incomparable values, can be reduced to just a single unit
and method.
Let us say a chemist has 25 different chemicals in 25 huge vats. He forgot which is which. Luckily, he knows that if he pours hydrychloric acid into each chemical, the resulting mixtures have 25 different colors, which he can use to identify which chemical is which. So he takes a bit of each chemical, puts it in a test tube, mixes with acid, and finds out what’s what.
The torrent could then argue:
The chemist assumed that commensurability of chemicals is possible. The claim is made supposedly on
a rational ground, but winds up being irrational; he assumes that all the vast complexities of the
world, all the various different and often incomparable chemicals, can be reduced to just a single unit
and method.
You see the flaw. Mises is not comparing values that are incommensurable. He is saying that there is a simple test to find out which is most valued, which is valued after that, etc.
And what is that test? Simple. Ask a person, “How many hours of hard work are you willing to put into achieving this thing you value?” The thing valued could be saving the environment, owning a car, protecting his honor, whatever. Another way of asking the same thing is “How much are you willing to pay to have this thing?”
That’s it. Whatever he is willing to pay most for is most valued etc.
2*. It is indeed our argument which is one of complexity. Our claim is that the world itself, and all in it,*
cannot be reduced to a single unit, that the value of some things cannot be measured in units.
The value of things depends on the situation and the scenario, and so does the goal.
From the above, we see the simple rebuttal of this line. We ask the person, “Given this situation, scenario, and goal, how much work [=money] are you willing to put in for it?”
- von Mises claims that putting a price on the environment, or virtues like honour, is "the nature of
things", a fact weather we like it or not. He doesn’t back this up in any way, he merely assumes what
he has set out to prove - that rational choice requires a single unit. This is only plausible if one is
already within that frame of mind.
By now we know how to refute this, Mises doesn’t back it up in any way because it should be obvious. Whether we like it or not, the question can always be asked and answered, “How much work or money are you willing to use to save the environment, or virtues, or honor?”
- The article then goes on to say that Mises is just not keeping his eye on the ball. All that Scrooge-like Mises cares about is profit, but there are many other values in this world:
…assume that the overall goal of production was to, say, minimize environmental harm and
satisfy human needs in the best possible way. That “rationality” was defined as producing in the
most sustainable way possible and with the best quality. In this scenario, how can one make a
rational decision, using only the information carried by the price, when price does not carry such
information?
The key to the error here lies in the innocent looking words “overall goal of production”, in fact, in the word “production”. Production sounds very abstract. It makes us forget that all production has somebody sitting there working to create that production. So that the real question we should be asking is “What goal should there be to this man’s work?”
Since we are, I assume, unanimous in agreeing that slavery is out of the question, the only just and possible answer is “A person should work for whatever goal he wants to.” Anything else is slavery.
And if we are trying to figure out what human needs he wants satisfied, and what he considers the best possible way to satisfy them, we don’t have to bother. Rest assured that he knows what he wants, and will go out and spend his money accordingly.
Now one may ask, but what about saving the environment? Maybe he wants to spend his money on that? If that were so, an entrepeneur would go out there and produce environmental friendly stuff. All desires, rest assured, will be sniffed out by someone interested in meeting them, because it means profut for him.
- One can pretend the issue doesn’t exist by choosing the method that results in the most profit. But in
no way does this indicate that your choice is better unless “better” is defined as “most profitable”.
That is petitio principii.
As other posters have pointed out, profit is deep stuff. The amount of profit is determined by two factors: how little I spent making the thing, and how much money I got selling it. Let us analyze each one in turn.
“How little I spent making the thing,” looks again like some selfish Scrooge like penny pinching, having nothing to do with benefitting the world at large. But this is a big mistake. “Spending money to make a product” means exactly the same thing as “using up the world’s resources to make my product, thus making it impossible to use them in some other fashion”. So that whoever makes the same product with less resources is doing a great good to the whole world. He is leaving more resources free to be used in other ways.
“How much money I got selling it” looks like pure unadulterated greed. And maybe it is. But what counts is not my emotions, but the result of my actions. If I do a generous deed for a selfish reason, I should be encouraged to keep on doing it, right? And let us see what it means if a person sells something at a higher profit today than he did yesterday. It means, quite simply, that today somebody needed something so badly, with such a burning desire, that he was willing to actually work hard and make money and then part with that hard earned money in order to fulfill that need. Yesterday he did not need it as badly, clearly, because he was not willing to pay as much for it. So today I served the world more than yesterday.
In short, the amount of profit to be made measures how much I have benefited mankind in supplying their needs, and at the same time leaving over resources to supply even more needs. What the article calls "minimize environmental harm and satisfy human needs in the best possible way."
- There follows, sadly, some very confused thinking on the part of the article. He begins by quoting Mises as saying that if we decide to just keep on making the the same things the same way in the same quantity forever, there is no calculation problem. All we have to do is keep on trucking.
To quote Mises:
"The static state can dispense with economic calculation. For here the same events in economic life
are ever recurring; and if we assume that the first disposition of the static socialist economy follows
on the basis of the final state of the competitive economy, we might at all events conceive of a
socialist production system which is rationally controlled from an economic point of view."
From this, he concludes something very strange:
Technically, any economy which is not in perpetual growth, and in which investment doesn’t occur,
is not subject to the economic calculation problem. In the case of choosing between aluminium and
iron to make cans, and both materials working equally well, both are considered a rational choice
within the context of such an economy (given that they are otherwise the same, i.e. same impact on
the environment, same quality, etc.).
Uh oh. Mises says if you don’t change anything you need not calculate. The article concludes that therefore you CAN change something [excuse the pun] and need not calculate. Once you change from iron to aliminium, you have rocked the whole boat. There is less aluminium available now for other thousands of other things, and more iron. And they can be interchanged in cans, maybe, but not in airplanes, for example. So of course you now have to start calculating.
He makes the same mistake when he writes:
In the case of PCs or papers, we would produce that which best satisfied people’s needs, if we had
to choose.
But once again, if before it was paper and now it’s PC’s the whole world has to recalculate.
Also, he is of course begging the question, "How will you know what satisfies peoples’ needs. It’s not just Pcs versus paper here. It is a case of:
In this corner, PCs, and giving up everything else imaginable that making PCs will require, and adding in all the myriad gains of less paper being made.
And in this corner, paper, and all the things we won’t have because of that paper, and all the extra things we will have because we won’t make PCs.
And in the third corner, is the whole world, who have to be asked individually which of those two corners they prefer, because it’s going to affect them profoundly.
And he makes the exact same mistake once again in this line, where he concludes that changing conditions do not require calculation anew:
However, steady-state does not mean progress is impossible, or that the world itself literally
becomes static and unchanging. Merely that the objective is to establish progress at a sustainable
scale that does not exceed ecological limits. Growth of knowledge and the development of
advanced technology is still very possible.
I leave it to the reader to find where he makes the error. I count three times in those few lines.
- Then comes another error. In a section headed “The Real Problem” [=not the calculation problem], he writes:
As long as you can’t have everything, choices need to be made - these will always involve trade-offs
and “opportunity costs”. In a moneyless society the “calculation problem” becomes transformed
from Mises’s argument to a question of what the most rational method of making said trade-offs is,
and what it needs to take into account. This off course depends on the specific and overall goals.
Have you spotted the error? The "question of what the most rational method of making said trade-offs is,
and what it needs to take into account." IS the calculation problem.
- And the Solution.
He comes up with a few ideas here. Use your judgement. Consider each case seperately, and its various possibilities. Use the scientific method. Develop rules of thumb, standard procedures, and overall aims, etc. Don’t forget computers, who can be trusted in some cases to make the decisions on their own. But this does not imply a computer-tyranny; the computers remain tools that assist us.
That’s it! That’s all he’s got.
What is his underlying mistake here? He forgets that the problem is not a practical one of how do we build this house, but something completley different. The underlying basic question he has failed to answer is “How do we know which of almost infinitely many situations involving millions or even trillions of variables, is the unique one people really want?” Every variable involved has repercussions on every consumer good to be made or not made. One tiny example. If I build the house out of wood, there is less wood to make every other wooden object [and every object that contains wood] known to man.
Heresy. Once we achieve full communism, scarcity will be abolished, you’ll be able to take as much of any good or service that you want out of the communal bank, and the ocean will turn into lemonade.
On the wonders of Catalonia: https://forum.freecapitalists.org/t/question-about-the-minimum-wage/15231/12