I got into a little debate with some Marxist who attacks every single book written by any Austrian economists. This is how the debate went:
Me:
Stergios D. Marangos,
“Even if you believe that wages are determined by trading ‘labor for leisure’ time - in which case you should be admitted to a mental hospital. The problem was and is dynamism - the capitalist system, for all its faults, has proven to be extremely capable of espousing change. Planned economies could easily function as a refined form of redistribution, of simple reproduction, which would be built off of the form of redistribution that lasted far longer than any form of Capitalism has”
Why do you even respond? You either haven’t read the book, or you’re unable to grasp the central argument (hint: it has nothing to do with the distribution of finished goods). Your criticism, I’m afraid, has nothing to do with this book, but rather targets a much broader audience. It’s quite clear that you’re just another Marxian mystic, who can’t get over the fact that Bohm-Bawerk exploded your master’s myths so long ago.
Him:
Eric,
This book is, at its core, an attempt to ‘refute’ socialist production methods based on their inability to function due to a lack of a pricing mechanism. This construct relies not only on consistency in its own argument of the functioning of socialist production, but of the what precisely price reflect in market economies. Since it has been written, the professional economists - as in not Marxian or Ricardian or NeoRicardian - have all but moved away from both the methods employed by Mises and, more completely, his depiction of the pricing system and its functionality - therefore his conclusions. The major issue I am confronting is how one can even begin a critique that has its roots in a phenomona which that person is unable to explain. Production has a fundamental role in the determination of prices, Ricardo and Marx believed this; Sraffa showed this. Profit, growth itself, reduces itself to a relation that occurs in the production process - a process which exchange can only spur forth but cannot replace. You can ignore it as much as you like, but that will not make it go away.
It seems that it is you who is the mystic. You have no substance at all in your posts, but instead choose to simply rehash statements that have no logical dependencies whatsoever. In all my posts, I describe the means and the methods of what I am addressing, whereas you seem to deem this encroachment of ‘proof’ as irrelevant when it comes to your ideology. Go back to grade school before you make me angry.
Me:
“Production has a fundamental role in the determination of prices, Ricardo and Marx believed this; Sraffa showed this. Profit, growth itself, reduces itself to a relation that occurs in the production process - a process which exchange can only spur forth but cannot replace. You can ignore it as much as you like, but that will not make it go away.”
I see you’ve decided to retreat from Marx and appeal to Piero Sraffa. Unfortunately, I’m not familiar with his work and have never read “Production of Commodities by Means of Commodities;” but any value theory must be universally consistent and applicable. This means that, it must not only explain the exchange ratio of commodities and services, but also of money. The cost of production theory of money can never explain why a 500 euro bill is able to buy a fine Italian suit, or a plasma screen television. Thankfully serious economists, who are not plagued by dogma and religion, can explain such phenomena with subjective value theory and marginal utility. See “Theory of Money and Credit” by Ludwig von Mises.
So again, you’re going to have to explain how mutually beneficial voluntary exchange can take place with categorically determined value. And then, you must explain why fiat currencies have value. Once you understand subjective value theory, then you can understand why profit is not the result of exploitation and that it exists even in your theoretical socialist utopia. But first thing is first.
Either way, your review has nothing to do with Mises’ central argument. This means that you either haven’t read the book, entirely misunderstood it, or are blinded by the self-evident conclusion because of your failed ideology.
Him:
Eric,
The fact of the matter, that you are simply an ideological reactionary, is now open for everyone to see. You have admitted yourself that you have no knowledge of Sraffa, who by coincidence happens to be the person that put to rest any fiction that relations of production do not have a deterministic role in the formation of value, distribution and therefore price. Therefore you have no knowledge of the topic at hand. Not only this, but you have no knowledge of Ricardo or Marx. As Sraffa is simply the proof of Ricardo and Marx, it is quite easy to determine this. Instead, you choose to fill your head with what your dogmatic tribe tells you about these people - then enter these forums and regurgitate it to unwitting minds. If you REALLY understood what has happened here, and what this all means, you would have understood that I have retreated from nothing. If you knew ANYTHING about the subject matter you would know that Sraffa was responsible for a revival of interest in classical thought, namely Ricardo and Marx. The fundamental point is that value and distribution theories, the prerequisite for price formation, are only internally consistent - without the simplification and avoidance of the problem in the independent postulation of ‘given’ incomes or appeal to external forces - from circumstances of production. Sraffa had completely stayed in line with the classicists in this regard. His divergence with Marx in particular was that he derived this from inputs in general, and not solely labor. The only effect that this has on Marx is to divide surplus creation between inputs - meaning labor is still exploited in an objective sense but not to the extent that Marx relied. However, Sraffa only saw a relationship between things and things, when all economic relations are in reality a relationship between people and people - something an Austrian should appreciate. Therefore, Sraffa is Marx with a veil. Main point: Regardless if one wants to take economic relations to the level of human relations, and bring with it exploitation and the like from production theories, the fact of the matter is the question of a surplus in production has been proven beyond doubt by Pierro Sraffa. The only way exchange based theories are functional is to ASSUME these relations into their assumptions from the begging, making them all but irrelevant for anything other than practical matters, i.e. not funtional as a concise theory of price.
First thing firsts is you should stop making show that you have any authority or understanding in this subject matter - ‘categorically’ determined value, objective value that is, in no way, shape, or form, limits exchange from taking place. The issue here is your loaded sentences - ‘mutually beneficial’ being inserted so that your subjective ‘service’ and ‘benefit’ will always be there for you to lean on. What you fail to comprehend, either from your limited mental capabilities or through years of brainwashing, is that when there exists a fundamental difference between theoretical determinants of value it is strictly impossible to transplant the conclusion of one into the other without making a complete mockery of yourself. When you begin from an individualistic and subjective determination of value, derive conclusions from it, then attempt to refute social and objective theories of value based on those conclusions, all you are doing is blowing smoke. Journalists do not even argue this low, but then again your tribe needs whatever it can get to survive - and indeed, it is amazing they have survived so long. So again, there is no logical extension of either Ricardo or Marx that comes to any point in which your overlords have told you. Why don’t you actually read these people? Or do you prefer being a tool?
Subjective value theory is extremely simple - you are fooling yourself if you truly believe that its critics simply do not understand it. Of course profit would exist in socialist economies; Marx, already 100 years ago, critiqued the ‘utopian socialists’ as he called them for this very reason that you do - it seems you and Marx agree, strange is it not? Why do you think all the industrialized countries of the world still make profit? They are more socialist than ever in history. It seems your limited mental abilities are once again blocking your puny attempts to understand economic theory. So sad. Either way, you are beyond saving - your commitment to nonsense is already solidified. Don’t worry, I will be right here on your back every step of the way.
Tell me, friend, what IS this central argument to which you continually allude yet have never made explicit? I have made quite clear the specific areas of disagreement I have with this text. Let us see you do the same??? (You may actually have to read a book, as opposed to going to the Mises institute website, to argue with me).
Me:
If I was well-read in Sraffa who would you appeal to then? Maybe Joan Robinson, or Kalecki, or what about Paul Davidson? Mises perfectly sums up your response:
“Marx and Engels never tried to refute their opponents with argument. They insulted, ridiculed, derided, slandered, and traduced them, and in the use of these methods their followers are not less expert. Their polemic is directed never against the argument of the opponent, but always against his person. The essence of Marxian philosophy is this: We are right because we are the spokesmen of the rising proletarian class. Discursive reasoning cannot invalidate our teachings, for they are inspired by the supreme power that determines the destiny of mankind. Our adversaries are wrong because they lack the intuition that guides our minds.” – Human Action, pp. 83-84
Marx did not have the luxury of seeing his theories manifest, that is, the starvation and genocide it created and continues to create. You, on the other hand, don’t have this luxury, and are given ample evidence against your ideology. What a tragedy it is that some people are so blinded by hatred that they cannot be convinced of facts even in the face of torrential evidence, empirical or otherwise.
Him:
**(He responds to another participant with this: “**The issue with the Soviet Union was not pricing. Their economic system, at a given technological ‘layer’, functioned far superior to that of the West for quite some time in the early-mid 20th century.”)
Me:
“The issue with the Soviet Union was not pricing. Their economic system, at a given technological ‘layer’, functioned far superior to that of the West for quite some time in the early-mid 20th century.”
How absurd. Yes, they were able to produce a lot of steel while millions starved in the streets and others waited on breadlines which stretched around entire blocks. Here’s Bohm-Bawerk: “How is it conceivable that, under Socialism, a young oak sapling which will be an oak tree, with the value of an oak tree, in two hundred years, can be made equal in value to an oak full-grown now? The central authority directing the national production must base its entire arrangements and dispositions on a calculation of present and future goods having different values, if its dispositions are not to be quite inept and monstrous. If it does not put less value on future goods it must find that a process which promises a greater number of products in the far future is more remunerative than a process which yields a small number in the present or near future, and it must, accordingly, always turn its productive powers to remote productive ends, however remote they are, as being, technically the most fruitful. The natural consequence would be very much as we have pictured it–misery and want in the present.” -Positive Theory of Capital, pp. 386, Interest under socialism.
Mises builds upon this argument in this book–you should read it. Furthermore, how does the cost of production theory of money explain why 500 euro bills are exchanged for plasma screen television sets (third time I’m asking you this)? Can you explain this? Or am I going to have to read an entire page of ad hominems once again?
Him:
Wow. What a sad little man. Should I now open Capital and regurgitate Marx’s opinions on the state of mind of his opponents? Perhaps Keynes? Maybe Polayni? Stiglitz for a more modern touch? No, I will not. Why? Because these subjective attacks are not only meaningless, but I can actually substantiate my claims because I have actually read the literature and worked through the issues.
As far as who I would have to appeal to ‘if’ - I would appeal to noone else, because I would not need to. You can squirm as much as you like, but you cannot escape the fact that Sraffa has completely demolished your dogmatic claims to universality. Though Robinson is indeed a good extension, I do admire her. Either way - It seems that it is you, my friend, who are now appealing to mysticism and subjectivity - your ridiculous quote says nothing of substance; nothing that I can not easily turn around in your direction…
If this is the height of your ability, I believe our little chat is over.
Me:
Are you ever going to answer a question?
