Well if your sole definition for explaining the whole corpus of socialism is based simply on the slogan of ‘from each according to his/her ability, to each according to their need.’ I think that is rather flimsy ground for establishing a whole system of political theory.
families don’t pretend to be economic systems conducting economic calculation. advocates of socialist economies do pretend to be advocating economic systems conducting economic calculation or featuring ‘rational production’.
best fit the utility schedules given that they can’t engage in economic calculation. Perhaps you can elaborate more why do you think that families can best fit the utility schedules of their members but societies larger than Dunbar’s number cannot ? Can you elaborate on the the information that can be conveyed by human interaction when such interaction is possible?
Socialism = abolition of private ownership of means of production. Multiple private owners competing over said goods is not socialism, however much you wish to believe it. The Misesian calculation argument is that absent private ownership over the means of production, prices cannot form to allow for economic calculation to take place, as any valuation of capital goods will be the arbitrary dictates of the central planner (be it commune or state or w/e.) The number is thus irrelevant to the Misesian calculation argument. Saying competing owners could calculate rationally is conceding the case. Altruism, incentives &c. are inconsequential for the Misesian/Hayekian arguments. We’re talking about socialism as an overarching economic system. Small groups of people relying on massive external markets and then doling out the goods by whatever scheme they devise, egalitarian, meritocratic &c. is not what the socialist calculation argument is concerned with.
Actually it proves nothing of the sort, because there is still competing sources of private ownership over capital goods…
And if there is respect for property and exchange, currency will eventually arise. And people will deal with other people in that manner. Eventually, we get a free market again. Respect for the rules of private property is what makes civilization possible. People can organize themselves in small groups, but because of such things like the division of labor they’ll want to interact with other groups and trade for benefit. To deny private property and trade would be to limit freedoms and limit trade. If people are not free to exchange, we have less economic growth and discovery.
What is important about having money and exchange is that we can measure cost, efficiency, productivity, demand, and other things relevant to an economy. Without money, we can only guess as to what the cost is, what the efficiency is, what the productivity is and what the demand is. As the economy changes, entrepreneurs and capitalists readjust where they put their resources, such that it better fulfills the demand of the consumers. Often enough, only the companies that produce things efficiently are able to survive in these markets. This gets us better market efficiency and allows for better use of resources and a higher standard of living while also meeting the most urgent needs of the consumers.
Socialists can’t calculate. Who is to decide who produces what and how much? How can you tell? Do we have property?
My friends, Mises’ argument find is best application in socialist economies, but is not confined to them. Every time we have no currency it applies. Every time we have no prices it applies. The whole idea is the existence (or not) of prices. If they are tampered with, than Mises’ argument creeps in. It truly is inconsequential whether prices are tampered with by total abolition (socialism), or merely regulated (credit expansion): as long as they are not genuine, a calculation problem arises.
But why should the argument apply only in cases where there’s no private property? Rothbard made a brilliant case about how this very problem applies to some very large corporation. Even if all property is privately owned (as in this case), our problem still arises. So, its not about property, but about prices.
The whole idea of prices is to convey information: how does X value good/service Y? Factoring in over millions of Xs and billions of Ys we can easily see how a price-less economy can’t work.
But if we have a few Xs and a few Ys, it becomes practical for a single human being to practically know, without prices, just by interaction, the preferences of said Xs over said Ys. This happens in the family: even if I don’t force my sister to pay for ever chess game we play, I can infer the place that a chess game has in her value scale by seeing what she’s wiling to give up to play (beg me long enough, forego a movie, etc.). So, as long as it is humanly possible to keep a rather strong and continuous personal intercourse with people, we need no prices to infer their preferences and hence, an “economy” can be organized.
And think about it: if Mises’ argument had no lower limit, than we’d never see “global products” in the marketplace. No one would sell a plane ticked that included the flight itself, refreshment, newspapers, etc. but we’d pay a separate price for each of these things. It is easy to see where reductio ad absurdum could take us in this case. Or than we’d never spit a bar bill among friends, but we’d always insist on everyone paying for exactly what he ordered. I don’t know you but I never go through that when 8 people ordered coffee. We could easily provide many more examples. Thus, there must be some lower limit. Statistics propose a number: 150 (from 100 to 230 with 95% confidence, to be more precise).
if people really believed that socialism would work, there would be nothing stopping them from forming their own communes under a libertarian/anarchist society. That’s what draws me most into the ideology. People are free to express themselves in almost any way imaginable, as long as they don’t infringe on anyone else’s rights.
What you mention reminds me of what Rothbard said in New liberty about how Feudalism worked by keeping the people alive and take all surpluses for the king. The king provided protection. That system theoretically worked.
no, you could never see her full value scale. at best you can see how she values any two things that you observe her demonstrating a preference between. and you have to wait till after she’s done it, to see what she did. in other words, your knowledge of her value scales is extremely narrow and lagging in time.
If they wish to be bored to death, they can go on. The communes will work economically; they’ll just be shitplaces to live in. Oh, sorry kibuzniks…
True. That’s why it works only when a limited number of pole and tradable goods/services are involved. Family, firm, etc.
it ‘works’ in so far as people don’t leave their families or die i suppose? is that your standard of ‘works’?
firms can and do ‘work’ (turn profits) with numbers of staff way above dunbars number. so what does this say for your theory? the limit on firm size is that it can’t come to encompass an entire market… a definite, but i would say, quite large, theoretical limit.
Firms employing more than 150 people work only in as much as there is some explicit advantage in organizing production on a large scale (say, there are large fixed costs), or there is some string entry limit (licence, reputation, etc.) . When (as in the majority of cases) this doesn’t happen, firms employing more than 150 people loose money due to inefficiency.
How else to explain the fact that in 1913, before the Fed came about, 85% of working-age guys in the where self-employed?
I think we are getting off track.
What do you think of this. assume dunbars number happened to be 10billion. is a socialist economy possible? will it feature economic calculation? will there be prosperity or starvation? how would it compare with capitalism?
I think this was the original view of a fascist state, though it focused a bit more on production (transportation, steel production, etc.) and the meaning of that word has been diluted to the point of being nonsensical.
Here’s the basic problem: the population of Utopia (or whatever you want to call this state) will increase to the point that the agricultural output, which will stagnate due to the socialist structure, will eventually be consumed entirely by the native population. Or something like Britains Corn Laws will take place and millions of Utopians will starve in order for the exports to continue. When this occurs, the market economies of surrounding countries will innovate to turn the arid lands into fertile ones (remember how India was supposed to starve by the year 2000 and in fact they ended up with a surplus?) and there will be a transition from a socialist state to a capitalist one in dear old Utopia. Normal Borlaug will live again!
(http://reason.com/archives/2000/04/01/billions-served-norman-borlaug)
You’re implicitly assuming that people could practically hold personal contacts with over a billion people. Making such an outlandish assumption, than yes there would be no prices. Whether property would be held privately or publicity, that is something else, and Mises’ argument doesn’t touch that; it is merely interested in the presence or not of prices.
To give a somewhat more realistic tone to this scenario: would a world “inhabited” by super computers (ala Matrix) need prices?
yes, this is Mises argument, it doesn’t matter how many people you can have fill out surveys for you, reporting to you their ‘alleged’ wishes. you need market prices which emerge from activity wherein people are demonstrating preferences.
Dunbar, is irrelevant to the argument
Again my friend, filing questionnaires is a very stupid way of gauging preferences, and I never advocated this.
But do you need questionnaires to run your family? No, you just check out the preferences of your family members while they act, as preferences are supposed to be measured. What prices add is simply that hey aggregate in a singe number the preferences of millions.
You can’t infer the preferences of millions the way you infer the preferences of your brother: you do not have daily contact with them, you don t have a chance to survey their every choice and infer preferences. Even if you did, the market economy is made of so many goods/services that you’d never have the time and mental ability to check out everybody’s actions, translate those into preference scales and than remembered the scales of everybody. Prices do just that, they simplify the process. But whet goods are few and people are less than 150, than it is possible to survey their action, infer preferences, and remember them.