Calculation and Socialism | Joseph T. Salerno

[PrivateAckbar]

My heart sinks whenever Joe's jokes don't go over.

[TheManiacalSatanist]

Everyone, take a look in the comments section at the dialogue between me and kajmobile. Thumb this post up if you think I completely destroyed him, or thumb it down if you think I lost.

[pipemn]

"Top-down state communism or Leninism requires calculation."

Right, but other forms of socialism just squander resources in contempt of such petty things like resorces preservation.

Very good point indeed :D

[ladyattis]

@dysesthesiaAethiopi1

Actually, Mr. Rockwell doesn't work with the Koch brothers. The last time I checked the LvMi is pretty much black marked by them. You won't find any LvMi being a guest at a Cato Institute meeting any time soon.

[TheManiacalSatanist]

@kajmobile You're not getting it. The number of hours is irrelevant. Each laborer produces different goods using different tools and processes. Because each of these processes require different things, each of these processes has it's own cost. Because of this, labor hours can NOT be used to calculate the cost of production because different laborers produce more/less within an hour. Attempting to put a universal price tag on an hour of labor, no matter what it is, is going to completely fail.

[kajmobile]

@Xasew if u dig 1 hole by hand for 5 hours, the cost is 5 hours.

if u dug a second hole for 5 hours with a bulldozer, the cost would be 5 hours plus the time it took to make the bulldozer times whatever percentage 5 hours consumes of the bulldozers lifespan

if it takes 10k hours to make a bulldozer and it will last 500 hours of use, the cost of using that bulldozer for 5 hours is 100 labor hours

so the second hole costs 105 labor hours

this is the same accounting system every biz today uses

[Myndir]

ALL monetary economic activity requires calculation. However, monopolies act within a market system that gives them prices and allows for them to calculate, unlike where there is only one economic agent.

Mises talks about the kind of "socialism" you refer to in his book Socialism, and defines it as syndicalism to distinguish it from what most people mean by socialism (public ownership of the means of production). It doesn't suffer from the calculation problem, but has other flaws.

[IngvilHaugen]

Do you know the difference between money and currency?

[kajmobile]

@sunnyvegas702 all production comes from labor. so the cost of anything produced is the amount of labor hours it consumed of the total labor hours we are able to work.

since we both abide by the same laws of physics, 1 hour of my labor time is exactly equal to 1 hour of your labor time regardless of how u think u perceive yourself

[kviesgaard]

Very interesting and thoughtful lecture. 

[Xasew]

@kajmobile
Let's say current production requires capital goods. The production of those capital goods required other capital goods in the past. The production of these capital goods also required capital goods. And so on, until you go temporally backwards enough to reach a point where no capital goods are required(e.g. the stone age). That's how far back you would have to go in history to do your neat calculations. Very useful.

[Myndir]

Need is always relative to a goal. People do not have needs: instead, there are things the need to be done/obtained in order for other things to be done/obtained.

[Xasew]

@Xasew
That's what happens if you try to add up the capital goods into the calculation. But if you don't, then it will lead to absurdities: Two identical ditches will have completely different prices if the other one's done with a bulldozer and the other one with bare hands.

[kajmobile]

@sunnyvegas702 u can organize companies because u can predict sales to some degree. and people will work at companies that produce the things people r buying.

consumer purchases dictate where u can work.

if ur sales prediction turned out wrong and revenue is less than expenses, the company will get shut down and the employees will have to work at another company that is producing things people r buying

[gliberty]

Great lecture, but I think rivers of lemonade and all, there are some fascinating and important moments in Fourier, particularly his critique of repressive cultural aspects of society, such as patriarchal ones, see e.g., The History Guide, Lecture 21, "The Utopian Socialists: Charles Fourier" (online).

[Garegin]

@mynameisalsojeff did you listen to the video. there are no price signals to calculate. its like stabbing in a dark. needs are not ends in themselves. a single end has an infinite amount of means.

[Xasew]

@kajmobile
47:45

Did you even watch the video?

[Xasew]

@kajmobile
Homogeneous means something else in economics. We're not talking about physics or chemistry.

[kajmobile]

@TheManiacalSatanist6 in ur car factory, the final cost of the cars will be ur factory employee time plus all the expenses incurred from buying tools, machines, gas, electric, water, materials, etc.

business from an accounting standpoint will work exactly the same as they do now. they would follow all of the same accounting rules and depreciation schedules. the only difference is employee compensation is fixed, they r not determined by the market.

[Episcopicide]

@TheManiacalSatanist6 Funny thing is he's right. I used to live in San Fransisco for some time. He hit the nail right on the head. And these problems STILL occur in smaller towns and communities. Not just big cities.