Socialist Economic calculation problem

The economic calculation problem is a criticism of socialist economics. It was first proposed by Ludwig von Mises in 1920 and later expounded by Friedrich Hayek. The problem refered to is that of how to distribute resources rationally in an economy. The capitalist solution is the price mechanism; without information provided by market prices Socialism lacks a method to rationally allocate resources.

Ludwig von Mises argued in a famous 1920 article "Economic Calculation in the Socialist Commonwealth" that the pricing systems in socialist economies were necessarily deficient because if government owned the means of production, then no prices could be obtained for capital goods as they were merely internal transfers of goods in a socialist system and not "objects of exchange," unlike final goods. Therefore, they were unpriced and hence the system would be necessarily inefficient since the central planners would not know how to allocate the available resources efficiently.This led him to declare "..that rational economic activity is impossible in a socialist commonwealth.". Mises developed his critique of socialism more completely in his 1922 book Socialism, an Economic and Sociological Analysis.

Those who agree with this criticism argue it is a refutation of socialism and that it shows that a socialist planned economy could never work.

....the government may "own" the means of production in socialism, but it is only in order for the workers to control it democratically, meaning, with practice of course, the workers would be able to learn how to allocate the goods.

suggestion: distribution centers with a voted on amount of stock based on population.

No this is a typical bourgeois glazing over details. The reason allocating enough goods was so difficult wa because of the enormous amount of industrialized means of production that was destroyed in the civil war thus making it even more difficult to obtain basic industrial goods for obvious reasons AND it agricultural goods became difficult to obtain because manufactured goods couldn't be traded in masse with the peasants. This context brought a rise to the NEP (New economic policy) which lenin admitted was a defeat. It was an indicator that the means of production had been badly damaged combined with the failure of german to overthrow capitalism and provide them with stability.

If anything, the problem was that the gov't DIDN'T own all of the means of production. The did not have farm land that could be collectivized and considering the peasantry was the majority of the nation, this presented a problem when the peasantry could not trade with the state for manufactured goods

actually, according to trotsky, the ussr's planned economy increased the amount of goods produced exponentially after the civil war =D i don't have the book with me here, but he lists the estimated production from before the revolution and after

it increased a great deal no doubt. That is one of the pluses of a collectivized economy.

But it is an improvement from devastation...and still couldn't satisfy 1 6th of the world...

What Mises seems to have forgotten is that under capitalism production is not exclusively a monetary calculation, once the most profitable methods have been chosen they then calculate the actual requirement in real world resources exactly as would be done under socialism.

I'll try and find an article I read which deals with this much more convincingly.

caculetion argumint=FAIL

they say there is no rational means for caculeting price. the idiots obfeusly dont know that the price is the same way as in CAPITALISM. acerding to teh amount of socially necesary reproduction time. its teh same. idiets. plus they have the suplie and demand equilibrium throu economics plaining. so thers no probelem.

axcept green or die! wrote:

caculetion argumint=FAIL

they say there is no rational means for caculeting price. the idiots obfeusly dont know that the price is the same way as in CAPITALISM. acerding to teh amount of socially necesary reproduction time. its teh same. idiets. plus they have the suplie and demand equilibrium throu economics plaining. so thers no probelem.

Give an example of what you consider socially necessary labor

Shabazz Freeman wrote:

No this is a typical bourgeois glazing over details. The reason allocating enough goods was so difficult wa because of the enormous amount of industrialized means of production that was destroyed in the civil war thus making it even more difficult to obtain basic industrial goods for obvious reasons AND it agricultural goods became difficult to obtain because manufactured goods couldn't be traded in masse with the peasants. This context brought a rise to the NEP (New economic policy) which lenin admitted was a defeat. It was an indicator that the means of production had been badly damaged combined with the failure of german to overthrow capitalism and provide them with stability.

If anything, the problem was that the gov't DIDN'T own all of the means of production. The did not have farm land that could be collectivized and considering the peasantry was the majority of the nation, this presented a problem when the peasantry could not trade with the state for manufactured goods

Most national attempts at socialism have relied upon capitalist markets, foreign and domestic, to determine the socialist system's accounting prices, observe successful innovations, and even import and export goods. Domestic black markets and gift-systems such as the Soviet's blat would expose socialism to market calculations. Global socialism, completely reliant upon central planning, would not have such methods to make socialism in tune with capitalist calculation - WIKI

Von Mises admits that a static socialist economy is sustainable in responce to the Marxist argument of simple reproduction he writes

'The static state can dispense with economic calculation. For here the same events in economic life are ever recurring; and if we assume that the first disposition of the static socialist economy follows on the basis of the final state of the competitive economy, we might at all events conceive of a socialist production system which is rationally controlled from an economic point of view'

inkus2000 wrote:

Shabazz Freeman wrote:

No this is a typical bourgeois glazing over details. The reason allocating enough goods was so difficult wa because of the enormous amount of industrialized means of production that was destroyed in the civil war thus making it even more difficult to obtain basic industrial goods for obvious reasons AND it agricultural goods became difficult to obtain because manufactured goods couldn't be traded in masse with the peasants. This context brought a rise to the NEP (New economic policy) which lenin admitted was a defeat. It was an indicator that the means of production had been badly damaged combined with the failure of german to overthrow capitalism and provide them with stability.

If anything, the problem was that the gov't DIDN'T own all of the means of production. The did not have farm land that could be collectivized and considering the peasantry was the majority of the nation, this presented a problem when the peasantry could not trade with the state for manufactured goods

Most national attempts at socialism have relied upon capitalist markets, foreign and domestic, to determine the socialist system's accounting prices, observe successful innovations, and even import and export goods. Domestic black markets and gift-systems such as the Soviet's blat would expose socialism to market calculations. Global socialism, completely reliant upon central planning, would not have such methods to make socialism in tune with capitalist calculation - WIKI

That is a nasty slander because the capitalist markets immediately isolated workers' states economically. Plus the peasant nations that aren't industrialized to the same level as advanced capitalist nations would have to look to the industry of capitalist nations to advance. Although the means of production are owned by capitalist, that does not make them a threat. If it wasn't for European nations exporting their most advanced factories and plopping them directly in russia, they would not have developed a proletariat that would revolt. (This is an precursor for more depth about Trotsky's theory of Permanent Revolution)

Plus WIKI is deeply reactionary. I would not use Wiki for any radical knowledge.

Furthermore his argument in 'no way' applies to the de-centralized systems of libertarian socialism, anarco-syndicalism ect. If we assume a mutualist (co-operative) libertarian socialist society, then the prices of these goods can be easily found as the co-operatives in question would be offer their services on the market.

His argument does seem to apply to centralized "command economies" .Taylor and Langes ideas on socialist economy where rooted in neo-classical economics - ie cappie economics - which is why they failed.


Here is an good refutation of the Austrian calculation argument - I.1.1 Didn't Ludwig von Mises's "calculation argument" prove that socialism can not work? and I.1.2 Does Mises' argument mean libertarian communism is impossible?

http://www.infoshop.org/faq/secI1.html

Shabazz Freeman wrote:

inkus2000 wrote:

Shabazz Freeman wrote:

No this is a typical bourgeois glazing over details. The reason allocating enough goods was so difficult wa because of the enormous amount of industrialized means of production that was destroyed in the civil war thus making it even more difficult to obtain basic industrial goods for obvious reasons AND it agricultural goods became difficult to obtain because manufactured goods couldn't be traded in masse with the peasants. This context brought a rise to the NEP (New economic policy) which lenin admitted was a defeat. It was an indicator that the means of production had been badly damaged combined with the failure of german to overthrow capitalism and provide them with stability.

If anything, the problem was that the gov't DIDN'T own all of the means of production. The did not have farm land that could be collectivized and considering the peasantry was the majority of the nation, this presented a problem when the peasantry could not trade with the state for manufactured goods

Most national attempts at socialism have relied upon capitalist markets, foreign and domestic, to determine the socialist system's accounting prices, observe successful innovations, and even import and export goods. Domestic black markets and gift-systems such as the Soviet's blat would expose socialism to market calculations. Global socialism, completely reliant upon central planning, would not have such methods to make socialism in tune with capitalist calculation - WIKI

That is a nasty slander because the capitalist markets immediately isolated workers' states economically. Plus the peasant nations that aren't industrialized to the same level as advanced capitalist nations would have to look to the industry of capitalist nations to advance. Although the means of production are owned by capitalist, that does not make them a threat. If it wasn't for European nations exporting their most advanced factories and plopping them directly in russia, they would not have developed a proletariat that would revolt. (This is an precursor for more depth about Trotsky's theory of Permanent Revolution)

Plus WIKI is deeply reactionary. I would not use Wiki for any radical knowledge.

LOLOLOL


You thought I actually believed that shit ? I was just trying to spark a bit of debate - well - read the link and your fears will disappear


Steel came the closest -

so you are suggesting a form of anarchism is the step forward?

Being an anarchist yes it provides great info chek out 'the myths of capitalist economics'

Im fine with a proper planned collectivized economy based on the workers' needs

Do you believe in centralized state gov or an arrangement of unified de-centralized collectives ?

okay first of all whie does inkus not get punished for doing tripel posts or double i can t remember and im not going back to the other page to check.

second of al

Quote :

Give an example of what you consider socially necessary labor

just the avergaege. liek if one person makes shoes in a longer time because he sucks at making shoes, the shoes arent worth more because he sucks. and vice versa shoes dont get worth less because people dont suck. its teh averige.

Anarchy is the revolution needed to implant communism into society, your coming from complete social equality and entering complete controlled economic and social equality. I have no idea about the main question though.