Alan C. Posted August 16, 2013 Posted August 16, 2013 http://www.youtube.com/watch?v=KseRuyAjlHY#t=49m23s Begins at the 49m23s mark.
g0at Posted August 16, 2013 Posted August 16, 2013 Mises calculation problem! I brought this up in a discussion with a family member who is a zeitgister. It's rather long though, and frustrating to watch. Parts 1-5 http://www.youtube.com/watch?v=xTV8VAQtu3c http://www.youtube.com/watch?v=XGXjz14hFZo http://www.youtube.com/watch?v=HgsDPNU_ssY http://www.youtube.com/watch?v=2k-rHqN1REo http://www.youtube.com/watch?v=MDTVql_m8uM
Etnannarac Posted September 6, 2013 Posted September 6, 2013 Ludwig von Mises `s calcualion problem of socialism was the nail in the coffin for my belief in a vague socialist system to produce a functioning economy.
Phuein Posted September 7, 2013 Posted September 7, 2013 g0at, your video links are "private" and cannot be viewed, at least, for me. I just realized, after my extra-education from Libertarians, that the Zeitgeist folk actually support a strong and controlling government. What a frightening thought. While I do support their ideology of "always using the most advanced and friendly technology," instead of relying on outdated and harmful technology; it seems obvious now, that their ideas can't be achieved without forcing the "elite intellectual and scientific" community's opinions over everyone else. Yikes!
LaissezFaire Posted September 12, 2013 Posted September 12, 2013 Zeitgeist and LaRouche should team up and make me laugh.
kesler12 Posted September 21, 2013 Posted September 21, 2013 http://www.youtube.com/watch?v=KseRuyAjlHY#t=49m23s Begins at the 49m23s mark. Hi there, I am a newbie to FDR (and to economics). The salerno video raises a number of interesting questions for me. Why does abolishment of most privately earned capital eliminate the existence of a market (and therefore, exchange)? Why do you need exchange to determine prices?
Guest darkskyabove Posted September 21, 2013 Posted September 21, 2013 Why does abolishment of most privately earned capital eliminate the existence of a market (and therefore, exchange)? Why do you need exchange to determine prices? Quite the can of worms you're looking into. If you can make time, I highly recommend "Man, Economy, and State", by Murray N. Rothbard. It is written to be accessible to laymen, and will clearly answer these questions and many more. It is available for free at mises.org: https://mises.org/document/1082/Man-Economy-and-State-with-Power-and-Market in a variety of formats (PDF, HTML, or eBook). You might find your answers without reading the entire book; the contents are fairly descriptive. Besides mises.org, another great resource is http://oll.libertyfund.org/index.php?option=com_frontpage&Itemid=149. Again, titles available for free, this time covering far more than economics.
Alan C. Posted September 21, 2013 Author Posted September 21, 2013 Why does abolishment of most privately earned capital eliminate the existence of a market (and therefore, exchange)? Why do you need exchange to determine prices? It isn't possible to measure a quantity of utility (a "util" as he calls it). How does one measure a quantity of satisfaction, or comfort? An individual's ordinal value scale must be denominated as a numerical expression for cost accounting, or economic calculation. Trade and bidding provide exchange ratios which convey those numerical expressions as prices. Prices permit coordination of production between individuals; and especially so on a mass scale. Sure, people could coordinate verbally in person, but that doesn't scale well beyond a few hundred people without becoming unwieldly. There are only so many hours in the day and people need to eat. It isn't possible for everyone to spend all day running around, making assessments based upon direct observation and coordinating everything verbally in person.
kesler12 Posted September 22, 2013 Posted September 22, 2013 It isn't possible to measure a quantity of utility (a "util" as he calls it). How does one measure a quantity of satisfaction, or comfort? An individual's ordinal value scale must be denominated as a numerical expression for cost accounting, or economic calculation. Trade and bidding provide exchange ratios which convey those numerical expressions as prices. Prices permit coordination of production between individuals; and especially so on a mass scale. Sure, people could coordinate verbally in person, but that doesn't scale well beyond a few hundred people without becoming unwieldly. There are only so many hours in the day and people need to eat. It isn't possible for everyone to spend all day running around, making assessments based upon direct observation and coordinating everything verbally in person. Can't you have free-market exchange on a micro-level, without necessarily requiring the whole economy to do so? (Think of a petri dish arrangement, which demonstrates the fluctuating value of material goods) To some extent, isn't this how the NASDAQ obtains price evaluations?
Alan C. Posted September 22, 2013 Author Posted September 22, 2013 Free-market exchange doesn't impose a requirement on anyone. It's simply people consensually trading with each other without interference from others. One can look at the world (at various times in history) to see the effects of what you're talking about. The U.S. has largely had abundance while countries with central planning experience shortages, grinding poverty, and mass starvation. Local free-market exchange is good, but it's better if it takes places everywhere because it extends division of labor across all of society which benefits everyone.
kesler12 Posted September 23, 2013 Posted September 23, 2013 Free-market exchange doesn't impose a requirement on anyone. It's simply people consensually trading with each other without interference from others. That doesn't really answer my question. I wanted to know whether a centrally planned economy could overcome the issues of price evaluation, by using a limited free-market simulacrum.
Alan C. Posted September 23, 2013 Author Posted September 23, 2013 No, because prices must reflect individual value scales which can only be attained through exchange.
kesler12 Posted September 26, 2013 Posted September 26, 2013 No, because prices must reflect individual value scales which can only be attained through exchange. But what if you could arrange communitys of several hundred or even several thousand people, which broadly emulate the functions of a given economic sector? This would enable a real world evaluation of prices, crucial to avoiding the problems traditionally associated with centralised economys. What if a number of such simulacrums were set up in the interest of redundancy, with transactions being recorded and filtered into a computer in real time, where they could be subjected to statistical analysis, in order to not just get a median estimate but the best estimate possible? By setting up a free market environment where individuals have privately owned capital, and are isolated from the influence of the outside world, they can mutually supply each other with goods, thus providing an exchange ratio which can be used by society at large to convey those numerical expressions (in the form of a price index).
Guest darkskyabove Posted September 26, 2013 Posted September 26, 2013 Premise #1: Hi there, I am a newbie to FDR (and to economics). Premise #2: But what if you could arrange communitys of several hundred or even several thousand people, which broadly emulate the functions of a given economic sector? This would enable a real world evaluation of prices, crucial to avoiding the problems traditionally associated with centralised economys. What if a number of such simulacrums were set up in the interest of redundancy, with transactions being recorded and filtered into a computer in real time, where they could be subjected to statistical analysis, in order to not just get a median estimate but the best estimate possible? By setting up a free market environment where individuals have privately owned capital, and are isolated from the influence of the outside world, they can mutually supply each other with goods, thus providing an exchange ratio which can be used by society at large to convey those numerical expressions (in the form of a price index). Conclusion: Premise #2 contadicts Premise #1, therefore, no rational conclusion is possible. Trolling for the zeitgeist movement under the pretense of being a "newbie" to economics is laughable! With all those great ideas, how about eliminating the What if..?, What if...?, and try to prove your point?
kesler12 Posted September 27, 2013 Posted September 27, 2013 Premise #1: Premise #2: Conclusion: Premise #2 contadicts Premise #1, therefore, no rational conclusion is possible. Trolling for the zeitgeist movement under the pretense of being a "newbie" to economics is laughable! With all those great ideas, how about eliminating the What if..?, What if...?, and try to prove your point? You obviously have an axe to grind. FYI, I'm not here to 'JAQ off', as the saying goes. Reframe your answer in a way that is absent of this supremacist fanboyism.
Libertus Posted September 27, 2013 Posted September 27, 2013 No, really, you were trolling. You're not a newbie to economics, and you're not asking a question. That's two lies. So, how about, instead of pretending to ask a question, and acting unsatisfied when you don't like the answer, you go ahead and clearly state a position, and support arguments to support the position? So we can have an actual discussion.
Alan C. Posted September 27, 2013 Author Posted September 27, 2013 But what if you could arrange communitys of several hundred or even several thousand people, which broadly emulate the functions of a given economic sector? This would enable a real world evaluation of prices, crucial to avoiding the problems traditionally associated with centralised economys. Why would you want to herd people into communities ("arrange" as you say) rather than allow people to live where they want and associate with whom they want?Arranging communities would introduce an artificial barrier, thus creating price distortions in addition to introducing transactions costs. It wouldn't produce real-world evaluation of prices. Prices emerge spontaneously on the market. What if a number of such simulacrums were set up in the interest of redundancy, with transactions being recorded and filtered into a computer in real time, where they could be subjected to statistical analysis, in order to not just get a median estimate but the best estimate possible? The market would create reduncancy if it was necessary, and transactions are already recorded into computers. You say "best estimate," but best according to whom and according to what standard? You're making several assumptions. By setting up a free market environment where individuals have privately owned capital, and are isolated from the influence of the outside world, they can mutually supply each other with goods, thus providing an exchange ratio which can be used by society at large to convey those numerical expressions (in the form of a price index). A free-market environment isn't set up; it emerges spontaneously on its own as soon as individuals engage in trade. If individuals are artificially isolated then the market isn't free. Prices in small, isolated communities (eg. rural towns, etc.) already convey economic information to the outside world. That's precisely what prices are supposed to do. Many of the questions you asked in this thread were already answered in the video. Prices convey information about the real world, but if they're distorted (by artificial barriers, regulatory impediments, etc.) then the information they convey is false and misleading.
kesler12 Posted September 28, 2013 Posted September 28, 2013 No, really, you were trolling. You're not a newbie to economics, and you're not asking a question. That's two lies. So, how about, instead of pretending to ask a question, and acting unsatisfied when you don't like the answer, you go ahead and clearly state a position, and support arguments to support the position? So we can have an actual discussion. Now you go so far as to attribute sinister motives for my appearance here? Get real. I am here to learn information from those who portend to have reached a consensus on the matter of central planning. If I find those answers to be unsatisfactory, then I will say so. If you are so shallow as to take offense from this (and are unable to see past your own prejudices), then your in the WRONG forum. My mind is not made up on this issue, which is clearly more than you can say Why would you want to herd people into communities ("arrange" as you say) rather than allow people to live where they want and associate with whom they want?Arranging communities would introduce an artificial barrier, thus creating price distortions in addition to introducing transactions costs. It wouldn't produce real-world evaluation of prices. Prices emerge spontaneously on the market. The market would create reduncancy if it was necessary, and transactions are already recorded into computers. You say "best estimate," but best according to whom and according to what standard? You're making several assumptions. A free-market environment isn't set up; it emerges spontaneously on its own as soon as individuals engage in trade. If individuals are artificially isolated then the market isn't free. Prices in small, isolated communities (eg. rural towns, etc.) already convey economic information to the outside world. That's precisely what prices are supposed to do. Many of the questions you asked in this thread were already answered in the video. Prices convey information about the real world, but if they're distorted (by artificial barriers, regulatory impediments, etc.) then the information they convey is false and misleading. I don't necesarily 'want' anything, I'm just wondering whether such an arrangement could overcome the calculation problem. If a nation of people got together and decided to try out this dangerous experiment, could it be done (even theoretically) in the way I posit? Also, would you be able to go into more detail on why prices are so contingent on spontaniety, and why they would evaporate with even minor social tampering? Your criterion seems to be arbitrary, given that todays free market continues to function even with large numbers of regulations imposed by the state.
Alan C. Posted September 30, 2013 Author Posted September 30, 2013 Only market prices can solve the economic calculation problem, and that requires unimpeded trade.It's possible for societies to exist without economic calculation, but they'd remain in a state of primitive subsistence due to 1) a lack of information to coordinate production, and 2) diminished division of labor.Time is scarce, conditions change, and people's needs are transitory. Outdated prices send incorrect information to producers and consumers resulting in either surpluses or shortages. The more recent the price, the better the coordination.Suppose that you were required to wear a yoke for several hours daily. I could make the same claim that you're making; that you can still function despite the yoke. However, because your life would be curtailed during that time, you would be forced to rearrange your remaining hours to compensate for the lost productivity.
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