But why would we? Sound money is market money. You can’t have a centrally planned capital goods structure and market money.
Socialism has always been the enemy of sound money. It’s a predictable consequence of the nature of socialism.
Liberty student, I am trying to put Mises’ case through the hardest tests. And the criteria is just simple: the Socialist Planner allows everything Capitalist to happen in his economy except private ownership of capital resources. Will he be able to allocate capital resources rationally then?
ok i understand better now, sorry about that.
here is my analysis:
case 1: planner overestimates equilibrium production demand
to sell this much product, the owner has to raise price above equilibrium price. There is not equilibrium demand at this new price, so there will be a surplus. People who would have purchased the product at equilibrium price hold off now that the price is raised.
case 2: planner underestimates equilibrium production demand
since production is lower than equilibrium, it can be offered at a lower price point than equilibrium (and competitors will push it here, if they exist). Now we have a shortage because there is more demand than product.
As you can see, production fixing is just backhanded price fixing as long as private property owners are allowed to set prices themselves.
In reality, fixing of either price or product on a wide scale often turns into fixing of both, as consumers complain about prices and shortages.
trial and error..
yes, lots of trying and as much erring. innefficient waste and inability to get information about where you erred, and what you error was, or to how to try better next time, with less resources, since you wasted so much in an earlier round…
more copyin and pasting http://mises.org/econcalc/POST.asp
Even if planners observed the money prices which continued to be generated on an unhampered market for consumer goods, or substituted their own unitary scale of values for those of their subject consumers, there would still be no possibility for the central planners to ever know or guess the “opportunity cost” of any social production process. Where actors, in principle, are not in a position to compare the estimated costs and benefits of their decisions, economizing activities, by definition, are ruled out.
A society without monetary calculation, that is, a socialist society, is therefore quite literally a society without an economy. Thus, contrary to what has become the conventional interpretation by friend and foe alike, Mises (pp. 21and 26) was not indulging in rhetorical hyperbole but drily stating a demonstrable conclusion of economic science when he declared in this article: “Without economic calculation there can be no economy. Hence in a socialist state wherein the pursuit of economic calculation is impossible, there can be–in our sense of the term–no economy whatsoever … Socialism is the abolition of rational economy.”
Proof That Socialism Cannot Work
Mises Daily by Dan Mahoney
Consider the decision by the Central Planning Board (CPB) to produce wheat for consumers. Perhaps it knows with certainty how much property consumers will be willing to give in exchange for wheat as opposed to, say, shoes. Based on this knowledge, the CPB must then decide how to provide this wheat and how much of the wheat to produce relative to shoes. How can it make this decision, having decided upon wheat production in general?
then there are the moral problems, like the coercion against consenting capitalist acts…
commodity money is a kind of production good. just as a truck is capable of transporting far away shoes to shoes that are on your feet, so too is commodity money able to transform shoes that you dont own into shoes that you do own
To restrict private ownership of capital resources, is to restrict private ownership of savings. The only way to do so, is to control the money. And so, the money is not market money, but centrally planned. If it was market money, there would be no way to enforce control of savings.
It’s mostly academic, but your initial premise is flawed. As Nir explained, commodity money is a capital good.
I think that this article will answer your question fully:
Market Socialism and the Property Problem: Different
Perspective of the Socialist Calculation Debate