Economics Questions

Re: Soviet Union and Centrally planned economies?

Kakugo — Sun, 12 Aug 2012 15:02:00 GMT

Nikita Khrushchev understood the problem quite well, to the point he remarked on several occasions "Even if the whole world embraces Communism, Switzerland will have to remain capitalist to tell us the price of everything". He understood very well the problem is not as simple as data gathering and analysis: the problem is no accurate model can predict the consumers "whims".

Take this example: for years now Volkswagen has been pushing ultra-compact cars in the European market (first the Fox and now the Up) for over a decade now. Despite purchasing trend analysis (and Volkswagen has some damn fine people working in that sector), these cars have always been a resounding fiasco. I am sure VW did their homework and their analysts gave the green light for putting these cars on the market, yet consumers either choose to buy cars in same segment from other manufacturers or the larger, more expensive Polo. In short the market is telling VW "In spite of your analysis, we don't want an ultra-compact car from you". There are literally hundreds of such examples. It's an example of even how successful business like VW just cannot reliably predict how the market, which is made up of millions of individuals, each acting according to his/her will, will react as a whole.

Re: Soviet Union and Centrally planned economies?

cab21 — Sat, 11 Aug 2012 09:00:12 GMT

central planning cannot work as well as self planning. a self planner has all the potential for access to the best brains out there, without the gun pointed at the self planner to do what the central planner determines will be best for the self planners life.

Re: Soviet Union and Centrally planned economies?

RobinHood — Sat, 11 Aug 2012 03:47:22 GMT

The calculation problem that Mises talked about is not about purchasing trends and things of that nature, or about receiving statistics at a fast time rate, or about labor allocations for various "economic sectors", or about deciding WHAT should be made. Thus voting and polling and data gathering are totally irrelevant. The calculation problem is about HOW things should be made. And even the HOW is not about technical knowledge. It's about the CHEAPEST way to MAKE stuff [because that means the most efficient use of resources. Anything else will mean waste].

Who are you going to poll about that? Who knows what the cheapest way is? One person [=the govt] owns all resources, meaning there is no buying and selling of resources, because one person owns them all already. Thus there are no prices for resources, and thus no way of knowing what is the most efficient use of resources, which a free market tells you by the prices.

Obviously there are no computers who can figure out the cheapest prices when there are no prices at all.

Re: Soviet Union and Centrally planned economies?

Felipe — Fri, 10 Aug 2012 23:06:41 GMT

That sounds like something a socialist would say.

Re: Soviet Union and Centrally planned economies?

Seraiah — Fri, 13 Jul 2012 03:16:24 GMT

I'm going to rock the boat on the Mises forums here and do what no one else is likely going to do because it is such a unique and special opinion on the topic of socialism and a centrally planned economy.

No! Socialism bad! DO NOT WANT! Calculation problem. No point in replacing currency with X. Fin.

Re: Soviet Union and Centrally planned economies?

vive la insurrection — Fri, 13 Jul 2012 02:46:41 GMT

They have in fact solved chess, yes. The most advanced supercomputers can predict every possible move up to end-game and choose among its preferred response based on end-game paths.

Not that this matters. It's like going to a casino and talking about "chance" and "probability". It's a closed system.

There is no "problem" to solve in the economy. Socialism is impossible, it's just a random retardation on the market process, it's a grammatical error.

Re: Soviet Union and Centrally planned economies?

Smiling Dave — Fri, 13 Jul 2012 02:44:37 GMT

Wikipedia:

Solving chess means finding an optimal strategy for playing chess, i.e. one by which one of the players (White or Black) can always force a victory, or both can force a draw (see Solved game). According to Zermelo's theorem (game theory), a hypothetically determinable optimal strategy does exist for chess.

In a weaker sense, solving chess may refer to a proof which of the three possible outcomes (White wins; Black wins; draw) is the result of two perfect players, without necessarily revealing the optimal strategy itself (see indirect proof).^[1]

No complete solution for chess in either of the two senses is known, nor is it expected that chess will be solved in the near future. There is disagreement on whether the current exponential growth of computing power will continue long enough to someday allow for solving it by "brute force", i.e. by checking all possibilities.

Re: Soviet Union and Centrally planned economies?

Smiling Dave — Fri, 13 Jul 2012 02:41:12 GMT

They have in fact solved chess, yes.

Link, please?

Re: Soviet Union and Centrally planned economies?

Anenome — Fri, 13 Jul 2012 00:36:29 GMT

Smiling Dave:

Have these supercomputers solved chess yet?

32 pieces, 64 places on the board, each piece confined to a limited amount of simple moves.

Should be child's play for them if they can work out a vastly more complicated economy.

They have in fact solved chess, yes. The most advanced supercomputers can predict every possible move up to end-game and choose among its preferred response based on end-game paths.

What computers will never be able to solve is the game 'Go' which is a better analogy for an economy, despite still being millions of times less complex.

Re: Soviet Union and Centrally planned economies?

vive la insurrection — Thu, 12 Jul 2012 23:11:11 GMT

In Towards a New Socialism, he and co-author Allin Cottrell pr

There is so much wrong with socialism, and even the stuff you are stating it's enough to make ones head spin and overwhlemed by what to say that's justwrongwith the info given.

But to keep this short and sweet,It's failed so many fucking times, and even admittedly so by their side - why the hell do they keep trying to come up with new versions?

Lo and behold socialism can be nothing more than some "Platonic thing" that we must strive for. It's built off of "criticisms" (i.e. empty psychologisms) of actual factul action and process, and posits a "great triangle in the sky" in the place of what is.

The Market process way of thinking can do no such thing - it can only analyze human action. It can't constuct a damn thing.

Socialism isn'ta science, a theory, or anything else of such a nature: it is merely a social signaling language forsubsidized intellectuals, and a carte blanche word for politicians to gain power within our rotten institutional set up without looking like rat bastards.

Seriously, what else is there new to say to refute radical leftists and socialists? All we can do is wait around for them to die out. Hopefully we won't be caught in their fashionable crossfires. This seems to have been the position of Menger and Bohm-Bawerk as well, I think they're right.

"Science progresses when the old professors die out" Joseph Schumpeter

Re: Soviet Union and Centrally planned economies?

Autolykos — Thu, 12 Jul 2012 22:48:25 GMT

Dave, don't you remember the (in)famous match between Gary Kasparov and Deep Blue?

Re: Soviet Union and Centrally planned economies?

Smiling Dave — Thu, 12 Jul 2012 21:13:54 GMT

Have these supercomputers solved chess yet?

32 pieces, 64 places on the board, each piece confined to a limited amount of simple moves.

Should be child's play for them if they can work out a vastly more complicated economy.

Re: Soviet Union and Centrally planned economies?

Smiling Dave — Thu, 12 Jul 2012 20:36:27 GMT

Just saw an interesting argument of de Soto.

If the central planner has a computer, we can assume that the entrepeneurs [in a free market] will have one, too. Thus their options are so enlarged by the computer, that the central planner's comp [unless it's much more powerful than theirs] cannot absorb all those possibilities.

Page 69 of this work: http://www.jesushuertadesoto.com/books_english/socialism/socialism.pdf

Re: Soviet Union and Centrally planned economies?

Autolykos — Thu, 12 Jul 2012 13:59:01 GMT

I think their issue concerns the ability of people to pay for what they want. A person may be willing to pay a whole lot for something, but he may not be able to. They typically bring up situations in this context that arouse sympathy, such as a person who can't afford some kind of medical treatment but who'll die without it. Of course, innovations have arisen from the market to help with this, namely insurance and loans. On the other hand, I don't see how one person desiring something (however "badly") obligates anyone who has it to give it to him. As my dad used to say, life isn't fair.

Re: Soviet Union and Centrally planned economies?

Rcder — Thu, 12 Jul 2012 13:50:08 GMT

One could extend Cockshott and Cottrell's socialist voting scheme by allowing people to bid their votes up or down through some mechanism. That way, people can communicate how badly they want a certain allocation of labor. In so doing, of course, one gets much closer to simulating a market. Therein lies the irony, if you ask me.

That's what always got me about market socialists; if you concede that you need price mechanisms to communicate economic information then why institute a shadow of said mechanisms instead of the price signals themselves?