What Do You Think About Communism?

[Serb]

Marx failed to foresee fair market regulation.

Oh, LOL.

With labor laws, environmental laws and other regulations...

Which are the profanations and relict of the cold war. Let's talk about those regulations 20 years later.

[KrazyHorse]

Rafe's post is on track, but mildly confused (in structure if not understanding). There are two fundamental problems with all socialist economic systems: incentives and information. To some extent the first can be mitigated, to a point. The second problem appears intractable.

[Rafe]

Rafe's post is on track, but mildly confused (in structure if not understanding). There are two fundamental problems with all socialist economic systems: incentives and information. To some extent the first can be mitigated, to a point. The second problem appears intractable.

I didn't touch on the incentive problem because 1 it should be obvious and 2 it is also part of the information problem. When you enact proactive impositions on one individual from another individual you are indirectly engaging in price fixing. A tax on a neurologist for the purposes of some normative endeavor ( to give to the poor) is an extant signal that neurologists are consuming to many resources that are needed elsewhere or neurologists are not as valuable anymore.

No doubt it is as incentive problem, i wouldn't work for peanuts and the social order is to expansive and complex to obtain the benefits of living next to all my patients to they could remunerate me in some non-pecuniary form. The information society must act on is disrupted so i think it's still an information or signaling distortion, an incentive is fostered by some signal whether it be externalized by social pressures or shifted internally to satisfy some biological demand.

Lets not forget that this signal is fundamentally shifted upward to those that employ coercion and somethign is supplied in more discrete political markets via Tullock lotteries or rent seeking activity.

[Rafe]

Another fundamental contradiction is touched on in one of James Buchanen's articles "Afraid to be free: Dependency as desideratum "

http://www.springerlink.com/content/g6n46t030668m05m/

Under a social order that employs democracy you are free to give yourself additional stuff at somebody elses expense; your positive liberty is extended while somebody's negative liberty is truncated. Simultaneously, your free to pursue the type of labor YOU desire. Marx argues that when man is liberated from wage slavery he will simply do what he desires and that will be socially valuable. The contradiction is present in the fact that i can vote myself additional stuff while also deciding how i will provide value to society or if i even will provide value to society. Marx argues there will just be abundance or you will want to do productive things because this is man's un-alienated nature to be productive. I disagree and think Marx didn't extend his own conflict theory far enough to encompass the scope of individual self interest(we are in conflict with each other all the time) and not just class interest.

This problem is also prevalent in modern social democracies also. Individuals have varying preferences for things or actions they want to do. This doesn't just extend to material things but sexual pairings or aesthetic preferences. ADHD can be just classified as a extremely low preference for labor (Thomas S. Szasz (1960)). If individuals have a low preference for labor then teh social democracy enslaves those with labor preference differentials to individuals with low preferences in this regard.

Also i touch on the bio-pragmatism of collectivism and its' ability to scale to social orders here and how its' really a tribal ethos that doesn't have any traction.

http://apolyton.net/forums/showpost.php?p=5765633&postcount=152

[KrazyHorse]

I understand that the two issues are deeply intertwined. My point was simply that your post needed more clarity in internal structure to present a hierarchy of subjects (which difficulties were subsets of others).

Don't attempt to lead polytubbies to run before they can walk.

[KrazyHorse]

One post, two post
Red post, blue post

[Rafe]

I understand that the two issues are deeply intertwined. My point was simply that your post needed more clarity in internal structure to present a hierarchy of subjects (which difficulties were subsets of others).

Don't attempt to lead polytubbies to run before they can walk.

So the three arguments are 1 the function of the price system can we do away with it? 2 who has knowledge and where is it? 3 can democracy outperform a price system even though it delivers information in a somewhat mutilated form. They are all fundamentally pragmatic and epistemological.

Well I didn’t really touch on Von Mises who essentially argues that you need private ownership of capital goods for prices to emerge. This is because these effect the prices of goods in a lower stage of production ( consumption goods). If the state owns capital goods then the state must effectively trade with itself.

A normal production function exists so that entrepreneur’s or managers aggregate the available information and the pricing structure allows them to immediately evaluate the use of polymer A vs polymer B. The capitalist knows which to use, the socialist does not.

If the production f(x) calls for the assembly of a widget that needs a mixture of 5 A and 5B the socialist can say hey I can do this with 4 A and 4B, that is he can engage in technical efficiency. But when the constellation of possibilities presents the two options 1 widget = 5A+4B or 4A +5B the socialist becomes lost and cannot engage in cost calculation, that is the socialist cannot engage in economic efficiency. How many units of polymer A = 1 unit of polymer B? The socialist might observe that the resource that polymer B is extracted from is under-producing but he has to do additional work to find this information out. In a capitalist order this information is imputed in the price system and the capitalist needn’t have any idea container vessels with the raw material for Polymer B have fallen into the ocean via transit. When you start getting into more realistic production processes where production functions can become infinite the socialist is literally screwed unless he is god and omnipotent.

This is where the socialists, imho, go off the rails in regards to understanding the mechanism of the market as a vital signaling process and also modern interventionists with regards to labor policy. Labor economists will just declare labor is worth this but they are engaging in speculation. IF they can know, like a god, what is the value of labor then than can know what the value of all inputs are and employ identical methodology to simulate a price system.

This is not a clear explanation there are many articles on this online and youtube at Misesmedia.
Just search Economic calculation problem.

Another information problem is the Hayekian general knowledge problem. The idea here is that knowledge is not centralized and society is organized from the bottom up. Who has knowledge in society a few people society as a whole. This sort of fallacy can be seen with Hitler’s ubermensch or Nietzschean superman, Hegel or, I would argue, modern progressivism. The idea that special people exist and they have vitally important knowledge that the dirty masses do not have thus they must rule.

This idea is somewhat a terrestrial religious on that deifies man. We know that languages, culture and biological systems are not created from the top down yet for some reason we support notions of intelligent design in regards to economic systems.

While there are individuals with vital information that information is not applicable to all aspects of governance. Also skilled individuals will often be overly confident with regards to their understanding of complex phenomenon or employ their own biases.

The final argument was about the attenuated market mechanism of democracy. Can it perform the vital epistemological function of extracting skilled individuals, enacting socially valuable policy and creating efficient institutions? Modern voter theory for the past few decades argues no. Voters are rationally ignorant and the “identification problem” (the ability of voters to make complex metaphysical judgments about the cause and effect of complex phenomenon) results in the inability of biases in a voter population to cancel; The miracle of aggregation is on increasingly shaky ground.

So the three arguments are 1 the function of the price system can we do away with it? 2 who has knowledge and where is it? 3 can democracy outperform a price system even though it delivers information in a somewhat mutilated form.

[KrazyHorse]

Those are 3 aspects of the socialist calculation problem. To those I would add the thesis of The Road to Serfdom, namely that the increasing reach of the State in attempting to grab enough control/information (even with the sole intention of improving economic performance) will lead society to a condition in which a failure of the political system is easily translated to a socially (as opposed to merely economically) coercive situation.

[Rafe]

Those are 3 aspects of the socialist calculation problem. To those I would add the thesis of The Road to Serfdom, namely that the increasing reach of the State in attempting to grab enough control/information (even with the sole intention of improving economic performance) will lead society to a condition in which a failure of the political system is easily translated to a socially (as opposed to merely economically) coercive situation.

To your final argument in regards to coercion when one institution obtains significant power i think can be demonstrated via parasite ecology. In symbiosis when one of two agents has a its' exit options reduced the symbiosis trends from mutualism to predation(parasitism). When the a host gains exit capabilities the symbiosis begins to move toward mutualism(both benefit). This sort of accords with Marx's conflict theory in that all agents are pursuing asymetrical advantage over other agents. When one agent looses its' exit capability the other agent begins to take additional liberties.

Conflict theory can be extended to all human relations because in an evolutionary sense parents will exploit children and mates will exploit each other so even the most intimate relationships are in conflict.

This is why a society, i believe should attempt to advance negative liberty rather then positive as positive seems free rider friendly and consistent with models of biological predation. AS a society we should try to ensure individuals have amble exit capabilities from each other. The state complicates this as the state is an entity where your exit costs, in relation to the state, are significantly high.

For this reason i can agree with Marx's anarchism(not his socialism) and modern libertarian positions on eliminating the scope and power of government as much as possible.

Most of my positions on democracy are taken from public choice economics and not the Austrian school though.

[Asher]

Rafe,

I'm curious -- what's your educational background?

[KrazyHorse]

Public choice is about the application of economics to the study of politics. Austrian economics is about the difficulty of explaining economic performance by the actions of monetary and fiscal authorities. I'd say that the major intellectual foundations of the anti-socialist argument lie in their overlap, not properly to one or the other.

In other words, I'd say that one points out how hard central planning is, while the other points out how unsuited politicians are to engage in it.

[KrazyHorse]

Sorry for all the DPs. Poly hates my phone.

[Rafe]

Rafe,

I'm curious -- what's your educational background?

Biology Grad student. Not sure where to apply it yet but it yet though .

I read alot of econ bcs biology and economics are inextricably linked as you get to the higher level bio's.

[OzzyKP]

Only on Apolyton do serious threads quickly descend into trolling and silliness and lolcats lead to serious discussion.

[KrazyHorse]

Sorry once again.