Government and Market

[Skooma Addict]

In case any of you were wondering, this is not another AnCap/AE thread. So now you can take a breath of relief and continue reading...

Ask any economist if the government has a productive role to play in society, and they will most likely say yes. Ask any economist if the free market is generally a good thing which is very beneficial for society, and they will most likely say yes. I believe that both of these points are true.

As far as I am aware, there are certain externalities which are not adequately internalized since they are not fully taken into account by the markets price system. Take leaded fuel for example, or smog. This especially seems like a problem if global warming is real. Here is one place where government can play a role. One idea is to tax negative externalities and subsidize things with positive externalities (a more controversial idea).

One other advantage of a government is that if there is the right culture and the correct institutions in place, it can adequately protect private property. Since private property is a requirement for civilization, I don't think there is anything particularly wrong with punishing people who violate it (most of the time). I value my car, T.V., and air conditioner more than the opponents of private property ideas of what is "right and wrong" or what is "exploitation."

Another advantage of a government is that some form of welfare can be used to help those who really are unable to help themselves. The idea that charity will take care of everything is really just betting on peoples lives. Welfare can ensure that people can have an at least respectable state of living. Obviously, too much Welfare is bad though.

Finally, socialism, mutualism, syndicalism ect have been refuted to death. Thus, you should all join my side. Especially you Jazzratt.

[GPDP]

I don't get it. Is this supposed to be a joke thread?

[Skooma Addict]

No.

Was that an honest question or were you trying to insult me in a sneaky manner?

[Zanthorus]

I think what he's trying to get at is that the "Austrian economics is a crackpot theory that no mainstream economist accepts" argument is bullshit because no mainstream economist accepts that socialism, mutualism or syndicalism are valid alternatives to capitalism.

[Havet]

One other advantage of a government is that if there is the right culture and the correct institutions in place...

"A Utopia that will work only if populated by saints is a perilous vision; there are not enough saints" - David D. Friedman



Finally, socialism, mutualism, syndicalism ect have been refuted to death. Thus, you should all join my side. Especially you Jazzratt.

Where have they been refuted?

What is your side specifically? Minarchism? Night-watchman Capitalism? I apologize but it was not obvious.

[GPDP]

I wasn't really insulting you. It's just an odd thread, considering you've been a steadfast supporter of ancapism all this time, so to hear you talking about positive government functions, such as anti-externality taxes and minimal welfare, is interesting to say the least. Have you renounced ancapism? Keep in mind I don't hang around this section that often, so I dunno if there's been any changes in your ideas recently.

Secondly, there's the assertion that "private property is a requirement for civilization." Care to substantiate this? Are you looking at this from a historical or anthropological point of view, wherein most egalitarian societies tended to be primitive and, if not made up of nomadic bands, mostly pastorial and/or horticultural tribal societies, which I suppose do not count as "civilization?" Or is it something more philosophical?

Also, there's the random strawman, where you say you value your car, TV, and fridge, as if communists want to take those away from you or make them common property for anyone to take from you when they want. We don't advocate this, and you know it, or should know it considering how long you've been here. When we say "private property," we mean factories and such, not your car. Though I do think we should stop using the word property, as it welcomes confusion and strawmen. But again, considering you should by all means know this by now, it makes me wonder if you're not just trolling.

The last line speaks for itself as to the seriousness of the tone of this thread.

[Skooma Addict]

@ Zanthorus

What? I am not saying that anything is wrong just because "mainstream economists" say so.

[Skooma Addict]

"A Utopia that will work only if populated by saints is a perilous vision; there are not enough saints" - David D. Friedman


I bought this for a while as well, and I think that if you moderate this statement a bit, then it does have some truth value. But it does not require society to be populated by saints. The fact is that no social system will work as intended if there is a highly exploitative (I can't believe I am using that word) culture and predatory institutions.

Also, I don't need to worry as much about Hayek's arguments about our inability to rationally plan society.


Where have they been refuted?

What is your side specifically? Minarchism? Night-watchman Capitalism? I apologize but it was not obvious.

Socialism has been dealt with by Mises, Hayek, and quite a few others such as Popper. Also, for as long as the incentive argument has been around, you would have thought that Socialists could come up with a better answer by now.

Mutualism is less well known and so it is more difficult to point out direct links. But I think it is pretty easy to point out some critical problems with ownership based on possession. Mutualists also seem to oppose "rent" and "usury" even though both are perfectly productive.

As for what I support, I don't know if I can really put a label on it. I have always hated labels. Maybe a Hayekian Liberal. But that is still misleading. "Minarchist" is also misleading since Minarchists often times only support the night-watchmen state. Give me some time and I'll find what fits best.

[Havet]

The fact is that no social system will work as intended if there is a highly exploitative (I can't believe I am using that word) culture and predatory institutions.

How do you define an "exploitative culture" and "predatory institutions"? What specific examples could you point out?


Socialism has been dealt with by Mises, Hayek, and quite a few others such as Popper. Also, for as long as the incentive argument has been around, you would have thought that Socialists could come up with a better answer by now.

Perhaps, but often their arguments were too centered on "stalinist communist" rather than other forms of communism.


Mutualism is less well known and so it is more difficult to point out direct links. But I think it is pretty easy to point out some critical problems with ownership based on possession. Mutualists also seem to oppose "rent" and "usury" even though both are perfectly productive.

Well then do so. It should be worth noting that some mutualists don't oppose "rent" and "usury" but rather think it will be rendered useless.

[Skooma Addict]

I wasn't really insulting you. It's just an odd thread, considering you've been a steadfast supporter of ancapism all this time, so to hear you talking about positive government functions, such as anti-externality taxes and minimal welfare, is interesting to say the least. Have you renounced ancapism? Keep in mind I don't hang around this section that often, so I dunno if there's been any changes in your ideas recently.

It was a gradual change really. I have actually been in denial for the past month or so. But I am not longer an AnCap.



Secondly, there's the assertion that "private property is a requirement for civilization." Care to substantiate this? Are you looking at this from a historical or anthropological point of view, wherein most egalitarian societies tended to be primitive and, if not made up of nomadic bands, mostly pastorial and/or horticultural tribal societies, which I suppose do not count as "civilization?" Or is it something more philosophical?

Private property is required for markets, which cause the expansion of the division of labor and indirect exchange. Without private property, we are either left at complete stagnation or a complete collapse and a regression to a simple barter economy.


Also, there's the random strawman, where you say you value your car, TV, and fridge, as if communists want to take those away from you or make them common property for anyone to take from you when they want. We don't advocate this, and you know it, or should know it considering how long you've been here.

Except that is not what I was saying. I value the goods that I can acquire thanks to markets and private property more than what socialists feel is is just and unjust.



Though I do think we should stop using the word property, as it welcomes confusion and strawmen. But again, considering you should by all means know this by now, it makes me wonder if you're not just trolling.

No, you just misinterpreted me. Why do you keep on trying to insult me?


The last line speaks for itself as to the seriousness of the tone of this thread.

My apologies for trying to end on a lighthearted note.

[GPDP]

It was a gradual change really. I have actually been in denial for the past month or so. But I am not longer an AnCap.

I see. I went through much the same process myself.


Private property is required for markets, which cause the expansion of the division of labor and indirect exchange. Without private property, we are either left at complete stagnation or a complete collapse and a regression to a simple barter economy.

I disagree, but I'm pressed for time, so I'll just thank you for the clarification. I do think, however, using the term "civilization" in the context you used it in can be seen as chauvinist. Would you say the Native Americans prior to European contact were uncivilized, since they had little to no concept of private property?


Except that is not what I was saying. I value the goods that I can acquire thanks to markets and private property more than what socialists feel is is just and unjust.

I apologize if I misread you. All I can say is, I thank you for being honest in saying that. I much prefer such views come out in the open than the usual wishy-washiness that is so prevalent among pro-capitalists. At least you come out and say it. Obviously, I find such a view to be disgusting, but I won't dwell on that for the purpose of this conversation.


No, you just misinterpreted me. Why do you keep on trying to insult me?

Again, my apologies. I was not trying to seriously insult. But you should perhaps take some time off from OI if you perceive every inquiry directed toward you has an insult hidden within. Not that I blame you; dealing with the likes of IcarusAngel must be grating.


My apologies for trying to end on a lighthearted note.

You gotta admit, the thread was confusing to several members, myself including. My personal interpretation was that, given your past views, you were just messing around, kinda like a mock performance of a gung-ho right-winger having his first post on RevLeft be a thread about how we're all wrong and we need to repent. Obviously that wasn't the intention, but the last line didn't help.

[IcarusAngel]

Syndicalism has not been refuted and most economists ignore it. It does not require the LTV - which in my opinion makes a lot of sense and may be verified by mathematics.

If we accept that the current fluctuating opinions of economists are correct, that essentially means that both the far left and far right are wrong and that their alternatives are incorrect.

From my perspective, it is good that free-markets are wrong, but it is bad that socialism and communism are wrong (presuming the "economists" are correct).

I'd like to see alternatives to business prop up, i.e., organizations that are not corporations that work democratically and yet "trade" with one another. They would have some dynamic, rather than static, property rights and laws. This means that property would constantly be changing based upon majority opinion rather than on God given rights etc.

Speaking of science, many views in science are considered to be in the majority and then are overthrown. Aristotle's version of physics lasted for centuries, even though simple experiments that the average person can perform refute the claims. Newtonian physics has been superseded by Einsteinian physics.

Just because "economists" - who are more narrow-minded than most social scientists - say something is correct doesn't mean it's correct.

[IcarusAngel]

Watch the documentary "Food Inc." Corporations are so powerful that they can force farmers, who "own" the land, to constantly take out loans from banks in order to continue to "improve" (i.e. make more unhealthy) their farming techniques. The farmers get hundreds of thousands of dollars into debt. At that point, they are slaves to the corporations, who they provide food to.

If they try and go independent, the corporations sue them, and since justice in capitalism is based on who can put the most money on the tipping scale the corporations usually can drive them out of business and give someone else the farm, who use the farm because they have nothing better to do.

This is essentially slavery. It's also inefficient, because if you fed the cows grass you could eliminate 90% of the ecoli and other problems with the meat. Corporations do not do this because they want all the food to taste the same and give all cattle specific diets. They also graze forests etc. to make room for the food, which contributes to global warming.

While each of the big four only controlled about 40% of the market combined, now they control a vast majority of the markets, without many independent agricultural businesses.

You can see this in any industry, like computers, automobiles, etc. There used to be many companies, now there are only one or two suppliers.

This is the "free-market" at work - it creates monopolies, and it is wrong.

[IcarusAngel]

I think what he's trying to get at is that the "Austrian economics is a crackpot theory that no mainstream economist accepts" argument is bullshit because no mainstream economist accepts that socialism, mutualism or syndicalism are valid alternatives to capitalism.

Because mainstream economists think "syndicalism" etc. is also bullshit doesn't imply at all that Austrian economics isn't bullshit.

It could be that they are both bullshit. Or, it could be that economists are correct in the case of Austrian economics, but incorrect in the case of Syndicalism.

This seems likely as economics is mainly about how to best run capitalism, it is NOT about how to refute alternatives to capitalism.

There has rarely or never been an instance when a theory in science that is part of a subdomain of current knowledge has been refuted and then has come back into existence.

For example, spaghetti programming was replaced by purely structured programming, but both would be replaced by pure object-oriented programming.

From the standpoint of the scientific method, Austrian economics is merely a footnote in history.

[Skooma Addict]

How do you define an "exploitative culture" and "predatory institutions"? What specific examples could you point out?


Somalia is (and was) a decent example, as are a lot of African countries really. If the legal code collapses then there is a risk of a complete social collapse, which generally means a rise in gangs/warlords and the like. Then if you look at many African governments they are merely parasitical institutions which do not serve any useful function whatsoever.



Perhaps, but often their arguments were too centered on "stalinist communist" rather than other forms of communism.


Yes, but those "other forms" also seek to abolish the market, and that requires a central authority, which means the criticisms I am referring to apply.



Well then do so. It should be worth noting that some mutualists don't oppose "rent" and "usury" but rather think it will be rendered useless.

Ownership based on possession especially fails when it comes to goods which are rival in consumption, and there is practically no incentive to maintain the capital value of your land or to even invest. If I build a mine, and I will lose ownership of the mine once I give up "possession of it," Then I may as well exploit as much of the mine as I can and forget about the long term benefits. If I don't, someone else will come along and take ownership over the mine for themselves.

There is more wrong with mutualism (The banking system many propose for example), but it is better to take one issue at a time.

[Skooma Addict]

I disagree, but I'm pressed for time, so I'll just thank you for the clarification. I do think, however, using the term "civilization" in the context you used it in can be seen as chauvinist. Would you say the Native Americans prior to European contact were uncivilized, since they had little to no concept of private property?


Well I don't want to be the guy that bashes Native Americans. But I will say that if today we were reduced to their living standards, then I would say that we failed to uphold civilization.


I apologize if I misread you. All I can say is, I thank you for being honest in saying that. I much prefer such views come out in the open than the usual wishy-washiness that is so prevalent among pro-capitalists. At least you come out and say it. Obviously, I find such a view to be disgusting, but I won't dwell on that for the purpose of this conversation.

Just to be clear I am not saying I value my private jet more than the socialists ideals about feeding starving people. Nothing like that at all. I just value my very cheap car more than socialist ideas regarding the illegitemacy of authority or hierarchy. Now, obviously you could make the argument that I would still have all of these thing in a socialist society, but that is a whole different argument. I just want to make sure I didn't come off the wrong way

[Skooma Addict]

I'd like to see alternatives to business prop up, i.e., organizations that are not corporations that work democratically and yet "trade" with one another. They would have some dynamic, rather than static, property rights and laws. This means that property would constantly be changing based upon majority opinion rather than on God given rights etc.

What if the majority says that black people can be property?

[Agnapostate]

Well I don't want to be the guy that bashes Native Americans. But I will say that if today we were reduced to their living standards, then I would say that we failed to uphold civilization.

Why would it be reasonable to expect that Native Americans would have remained in a stage of arrested development absent the infectious plague that killed the vast majority of them and the European appropriation of territory and productive resources that was facilitated as a result? Europeans tend not to use swords and armor or set people ablaze for their heresy anymore, so why would there be an assumption that Indians would not have progressed, especially since certain Amerindian societies had created a more progressed stage of urban development than their European "conquerors"?

[Skooma Addict]

Why would it be reasonable to expect that Native Americans would have remained in a stage of arrested development absent the infectious plague that killed the vast majority of them and the European appropriation of territory and productive resources that was facilitated as a result? Europeans tend not to use swords and armor or set people ablaze for their heresy anymore, so why would there be an assumption that Indians would not have progressed, especially since certain Amerindian societies had created a more progressed stage of urban development than their European "conquerors"?

Well I don't think the Native Americans would have progressed nearly at the rate the Europeans did. But then again Native American society isn't really my biggest interest. But I wasn't really arguing that point anyways. Just that if we today were reduced to the Natives living standards, I would not say we would be living in a civilized society.

Do you have any sources to back up your claim regarding Amerindian societies?

[Agnapostate]

Well I don't think the Native Americans would have progressed nearly at the rate the Europeans did.

"Native Americans" and "Europeans" are not homogenous, monolithic groups. But if Europeans were to progress more quickly, it would have likely been due to environmental deterministic factors that facilitated rapid transmission of technology across the east-west axis of Eurasia due to the climatological stability of that unified hemisphere (as popularly described in Guns, Germs, and Steel), which is the standard social scientific account.


But then again Native American society isn't really my biggest interest. But I wasn't really arguing that point anyways. Just that if we todays were reduced to the Natives living standards, I would not say we would be living in a civilized society.

If modern civilization were reduced to the fifteenth-century standards of any society, it would be a regression. Implicit in your statement is the apparent belief that fifteenth to eighteenth century development represents the height of Amerindian abilities. I've questioned the basis for that; you've not responded.


Do you have any sources to back up your claim regarding Amerindian societies?

Yes. They're called Teotihuacan, Tenochtitlan, Tikal, Cuzco, and Cahokia. Consider looking them up.

[Skooma Addict]

"Native Americans" and "Europeans" are not homogenous, monolithic groups. But if Europeans were to progress more quickly, it would have likely been due to environmental deterministic factors that facilitated rapid transmission of technology across the east-west axis of Eurasia due to the climatological stability of that unified hemisphere (as popularly described in Guns, Germs, and Steel), which is the standard social scientific account.

Idk, I am pretty skeptical about that being the only reason. But I haven't really looked into it.


If modern civilization were reduced to the fifteenth-century standards of any society, it would be a regression. Implicit in your statement is the apparent belief that fifteenth to eighteenth century development represents the height of Amerindian abilities. I've questioned the basis for that; you've not responded.

I didn't mean to imply that.


Yes. They're called Teotihuacan, Tenochtitlan, Tikal, Cuzco, and Cahokia. Consider looking them up.

I am aware of some of those cities, and I am sure they matched some of Europe's, but did they match Europe's best?

[Agnapostate]

Ask any economist if the government has a productive role to play in society, and they will most likely say yes. Ask any economist if the free market is generally a good thing which is very beneficial for society, and they will most likely say yes. I believe that both of these points are true.

Mainstream economics is characterized by the neoclassical synthesis, which can be crudely summarized by neoclassical approaches on microeconomic issues and Keynesian approaches on macroeconomic issues. The heavy role that government must play in the capitalist economy means that "free market" talk is mere rhetoric without application to reality.

Capitalism is an economic system heavily reliant on state interventionism for macroeconomic stabilization purposes and correction of market failures, from Pigovian taxation intended to combat the effects of negative externalities, to mandatory disclosure laws intended to combat agency problems such as adverse selection and moral hazard that result from information asymmetries, to antitrust legislation and other barriers to the efficiency-reducing concentration of monopoly and excessive oligopoly, the provision of public and merit goods, the protection of infant industries as a facet of strategic trade policy (every major capitalist country has evolved this way; consult Ha-Joon Chang), etc.

As an anarchist/libertarian, I cannot abide this pervasive state influence, and therefore cannot support capitalism.


As far as I am aware, there are certain externalities which are not adequately internalized since they are not fully taken into account by the markets price system.

Very clever of you, though a consistent free marketer would have at least analyzed the Coase theorem before apostasy.


One other advantage of a government is that if there is the right culture and the correct institutions in place, it can adequately protect private property.

Government is a necessary means of protection of oligarchically-owned productive resources in capitalist economies, yes. Absent such defense, capitalism could not be sustained.


Another advantage of a government is that some form of welfare can be used to help those who really are unable to help themselves. The idea that charity will take care of everything is really just betting on peoples lives. Welfare can ensure that people can have an at least respectable state of living. Obviously, too much Welfare is bad though.

More than that, welfare and related state programs are integral mechanisms of macroeconomic stabilization in the capitalist economy through maintenance of the physical efficiency of the working class, the psychological efficiency of the working class through forms of appeasement that deter embrace of more radical ideology, as well as the reduction of unemployment, underemployment, and underpayment, all forms of inefficiency.


Finally, socialism, mutualism, syndicalism ect have been refuted to death.

No one here is interested in your assertions sans argumentative support. Let's see you provide some in response to this comment, rather than the assertion that I expect you to provide.


I think what he's trying to get at is that the "Austrian economics is a crackpot theory that no mainstream economist accepts" argument is bullshit because no mainstream economist accepts that socialism, mutualism or syndicalism are valid alternatives to capitalism.

Mutualism and syndicalism are forms of socialism (with syndicalism actually more of a strategic approach to socialism than a specific variant in itself, though Austrians use the word "syndicalism" to refer to socialism, and use the word "socialism" to refer to anything that they dislike), so there's no need for much distinction from socialism, I think. It is true that socialists are a minority in the field of economics, though Austrians are even more of a minority.

Unlike Austrian ideology, however, socialism has actually had some influence on modern economics, with Marxist critiques of capitalism influencing even neoclassical labor economics, and institutionalism emerging as the main rival to the neoclassical school in that field. Heterodox economics also has a disproportionate influence in the field of political economy, with socialists dominating, and Austrians possessing only marginal influence.


Also, I don't need to worry as much about Hayek's arguments about our inability to rationally plan society.

You do, since distributed and tacit knowledge problems affect excessively large and centralized corporate structures, which characterize the interdependent oligopoly that capitalism has come to consist of.


Socialism has been dealt with by Mises, Hayek, and quite a few others such as Popper.

Austrians ultimately lost the socialist calculation debate on multiple counts, and their criticisms have either been refuted or bypassed. While I'm not an advocate of central planning and the command economy (and it's ironic that capitalism contains those features, particularly the former, which means the initial premises of the "debate" were flawed), the central planning of the USSR produced impressive growth and efficiency for several decades before atrophying due to what I believe was the increasingly sophisticated nature of the educated population. So Mises's first assertion is refuted by actual real-world events, loath to accept them though he would be. Next, there's a bypass in that the development of advanced information technology such as supercomputers enables vastly progressed calculation, though central planning would probably still be objectionable because of straightforward libertarian ethical reasons. Lange became interested in this process later in his life.

More than that, comment on the inevitable failures of central planning that the self-described socialist USSR had embarked upon on the basis of its failure to incorporate dispersed knowledge and a condemnation of the party dictatorship that state "socialism" involved is first found not in the Austrian literature, but in Peter Kropotkin's 1919 postscript to Words of a Rebel, which was published the year before the publication of Mises's 1920 essay. As Kropotkin wrote:


[P]roduction and exchange represent an undertaking so complicated that the plans of the state socialists, which lead inevitably to a party dictatorship, would prove to be absolutely ineffective as soon as they were applied to life. No government would be able to organize production if the workers themselves through their unions did not do it in each branch of industry; for in all production there arise daily thousands of difficulties which no government can solve or foresee. It is certainly impossible to foresee everything. Only the efforts of thousands of intelligences working on the problems can cooperate in the development of a new social system and find the best solutions for the thousands of local needs.

The entire libertarian approach went virtually ignored by the Austrian school (Mises did devote an irrelevant cutting remark to Proudhon in his essay without actual argument), which placed focus on central planning mechanisms and procedures on account of the emergence of them in the economic structure of a country which was to later become a superpower of the world. That was their most central failure, in my opinion.

Moreover, democratic market socialists have progressed beyond the mere punch in the gut that the development of the bureaucratic Lange model presented to Mises and have utilized Hayek's insights into dispersed knowledge problems to form a sound basis for advocacy of a decentralized market economy reliant on workers' ownership and management and in some cases a stakeholder economy, with Theodore Burczak in particular being integral in the development of "post-Hayekian" socialism, which even major Austrian scholars have admitted is serious. With the absence of any major Austrian argument against dispersedly planned socialism (with Mises incorrectly dismissing much of it as "workers' syndicalism," which he regarded as a form of capitalism), and the more recent development of adaptation of Hayek's insights by market socialists, the Austrians have now truly lost the economic calculation debate.

We ultimately don't really have a significant or seriously identified problem. Aside from the issue of knowledge, which can be dispersed more in the socialist than in the capitalist economy, even aside from the relative merits of central planning that were mentioned, is there a price problem? Market socialism is unaffected by this to begin with since it retains a price system and competitive market exchange. Decentrally planned socialism incorporates coordination between consumers and producers in aggregations of community assemblies and syndicate councils to determine values based on extraction and production costs and consumer utility in the manner of participatory economics ([url="http://nicomedia.math.upatras.gr/Econ-Dem/resources/Papers/BookReviews/Brown_Review_Albert&Hahnel_ThePoliticalEconomyOfParticipatoryEconomics .pdf).


This is a model designed to yield Pareto optimal allocation through decentralized planning. It is an effort to overcome the commodity fetishism of markets, market-bias towards private goods at the expense of public goods, externalities, and market failures of all kinds. Additionally, their model attempts to go beyond the hierarchical decision-making inherent in central planning. It is in many respects a well thought-through effort to go beyond markets without succumbing to the domination of central planning.

The model relies on the existence of "consumer councils" organized geographically by neighborhood, municipality, state, and federal jurisdictions. They start out small and local, yet become aggregated until their plans combine into a national system. The "consumer councils" are assumed to be self-interested with each member assumed to act in her/his own individual interest. They are "rational maximizers" as is assumed in neoclassicism. The effective "check" on each unit is the fact that they exist within a network of other local consumer councils, who also want to maximize self-interest. Also, the self-interest of consumer councils is checked by the rational maximizing behavior of "worker councils" in production. "Worker councils" likewise seek to achieve the best working conditions and most income under conditions that are not competitive but that are collectively monitored by other competing workers' councils. The democratically run worker councils are grouped by industry and proceed from the shopfloor upwards to the federal level. Plans are drawn through an iterative process in which consumer councils articulate what they want to purchase and worker councils articulate what they want to produce. Each person, as both consumer and producer, gets to vote according to the extent to which she/he is affected by the decision.

To sum up, the Austrians' critique of socialism has always been woefully incomplete. Mises's original paper, Economic Calculation in the Socialist Commonwealth, failed to address Enrico Barone's development of a Pareto optimal socialist economic model in his 1908 paper The Ministry of Production in the Collectivist State, for example, instead smugly commenting, "[socialists] have criticized freely enough the economic structure of 'free society, but have consistently neglected to apply to the economics of the disputed socialist state the same caustic acumen."

While Hayek commented on the market socialist models that were proposed during his lifetime in his and Lionel Robbins's debates with Oskar Lange, Henry Dickinson, and Abba Lerner, he dismissed decentrally planned socialism without argument, stating that "[t]he earlier systems of more decentralized socialism like guild-socialism or syndicalism need not concern us here since it seems now to be fairly generally admitted that they provide no mechanism whatever for a rational direction of economic activity." There was no elaboration on who "generally admitted" this, though the existence of widespread central planning and nonexistence of widespread decentral planning at the time was probably the chief basis for the Austrians' primary focus on the former.

Hayek was undoubtedly an important figure, and though Lange wanted a statue of Mises erected in the greatest hall of the central planning board to honor his identification of problems that socialists had to address, it's Hayek who deserves this honor, as we see the dispersed knowledge problems he identified prevalent in the orthodox firm structure of our present capitalist economy and a clear alternative available in socialism.


Also, for as long as the incentive argument has been around, you would have thought that Socialists could come up with a better answer by now.

What "incentive argument" is there? Most anti-socialists attack a strawman of equal distribution of all wealth and property regardless of labor effort or output, which no socialist model I have ever encountered advocated. Perhaps you could refer us to some specific ideologies, titles, authors, etc.? Socialists typically advocate remuneration based on individual output through labor (as opposed to capitalism's remuneration of output based on the combination of labor and capital, which permits some to work less yet be rewarded more), remuneration based on measurement of individual effort, or remuneration based on needs with consideration of individual effort integral to compensatory practice.


Mutualists also seem to oppose "rent" and "usury" even though both are perfectly productive.

They are not, since oligarchical control of productive resources is unproductive, with horizontal property rights being more efficient.


As for what I support, I don't know if I can really put a label on it.

"Statism" works.


Private property is required for markets, which cause the expansion of the division of labor and indirect exchange. Without private property, we are either left at complete stagnation or a complete collapse and a regression to a simple barter economy.

Socialism expands property rights by eliminating capitalists' theft and oligarchical control of productive resources. That said, it's disingenuous to conflate possessive/personal property and what's commonly referred to as "private property," with the latter referring to the means of production, which should not be controlled by an elite few because they affect the lives of many more. Such an arrangement actually implies encroachment upon property rights.


I do think, however, using the term "civilization" in the context you used it in can be seen as chauvinist. Would you say the Native Americans prior to European contact were uncivilized, since they had little to no concept of private property?

To be clear, the majority of Native Americans had no concept of individual private ownership of productive resources, but they certainly had personal possessions and concepts of collective tribal or national ownership of the territory and productive resources that they owned, which is why they were willing to sell partial control of them to Europeans, though they certainly weren't expecting forcible expulsion from their land, which is what they received. But yes, there are certainly elements of chauvinism in his comments. Most Austro-propertarians that I've encountered want to be edgy and anti-PC, defying the evil liberal egalitarians, so they set out to disparage non-European cultures' egalitarianism in their "brave anti-PC truthiness."


Just to be clear I am not saying I value my private jet more than the socialists ideals about feeding starving people.

No such approach is needed for advocacy of socialism. That's obviously popular for those with humanitarian interests, which should conceivably include everyone, but socialism is practical simply on the basis that equity and efficiency are positively related and that workers' ownership and management has theoretical and empirical reasons behind its superior productivity, despite your dismissal of studies and at least one meta-analysis simply because it is inconsistent with your preconceived notions.


Idk, I am pretty skeptical about that being the only reason. But I haven't really looked into it.

Then you don't have an argument, just misguided ethnocentrism.


I didn't mean to imply that.

Then you don't have an argument, or an appropriately phrased statement.


I am aware of some of those cities, and I am sure they matched some of Europe's, but did they match Europe's best?

What are Europe's best? The population of several exceeded that of later state capitals such as London and Paris.

[Skooma Addict]

Mainstream economics is characterized by the neoclassical synthesis, which can be crudely summarized by neoclassical approaches on microeconomic issues and Keynesian approaches on macroeconomic issues.

There is a pretty big divergence between economists on macro. There are very few vanilla Keynesians nowadays.


Very clever of you, though a consistent free marketer would have at least analyzed the Coase theorem before apostasy.

The Coase theorem presupposes there being no transaction costs. So...


More than that, welfare and related state programs are integral mechanisms of macroeconomic stabilization in the capitalist economy through maintenance of the physical efficiency of the working class, the psychological efficiency of the working class through forms of appeasement that deter embrace of more radical ideology, as well as the reduction of unemployment, underemployment, and underpayment, all forms of inefficiency.

I am pretty sure capitalism has in the past existed and was maintained without welfare.


You do, since distributed and tacit knowledge problems affect excessively large and centralized corporate structures, which characterize the interdependent oligopoly that capitalism has come to consist of.

I am not trying to plan society, so no. But every society is effected by tacit knowledge problems to a degree. The thing is that businesses can take a hierarchical structure to help combat this. They do this all the time in fact.


Austrians ultimately lost the socialist calculation debate on multiple counts, and their criticisms have either been refuted or bypassed. While I'm not an advocate of central planning and the command economy (and it's ironic that capitalism contains those features, particularly the former, which means the initial premises of the "debate" were flawed), the central planning of the USSR produced impressive growth and efficiency for several decades before atrophying due to what I believe was the increasingly sophisticated nature of the educated population. So Mises's first assertion is refuted by actual real-world events, loath to accept them though he would be. Next, there's a bypass in that the development of advanced information technology such as supercomputers enables vastly progressed calculation, though central planning would probably still be objectionable because of straightforward libertarian ethical reasons. Lange became interested in this process later in his life.

More than that, comment on the inevitable failures of central planning that the self-described socialist USSR had embarked upon on the basis of its failure to incorporate dispersed knowledge and a condemnation of the party dictatorship that state "socialism" involved is first found not in the Austrian literature, but in Peter Kropotkin's 1919 postscript to Words of a Rebel, which was published the year before the publication of Mises's 1920 essay.

I don't see anything here that actually explains how Mises lost the calculation debate. The U.S.S.R. as far as I am aware implemented market reforms pretty early since Lenin's initial plans proved to be a complete disaster. Also, how are you measuring "growth" and "efficiency?"


To sum up, the Austrians' critique of socialism has always been woefully incomplete. Mises's original paper, Economic Calculation in the Socialist Commonwealth, failed to address Enrico Barone's development of a Pareto optimal socialist economic model in his 1908 paper The Ministry of Production in the Collectivist State, for example, instead smugly commenting, "[socialists] have criticized freely enough the economic structure of 'free society, but have consistently neglected to apply to the economics of the disputed socialist state the same caustic acumen."

While Hayek commented on the market socialist models that were proposed during his lifetime in his and Lionel Robbins's debates with Oskar Lange, Henry Dickinson, and Abba Lerner, he dismissed decentrally planned socialism without argument, stating that "[t]he earlier systems of more decentralized socialism like guild-socialism or syndicalism need not concern us here since it seems now to be fairly generally admitted that they provide no mechanism whatever for a rational direction of economic activity." There was no elaboration on who "generally admitted" this, though the existence of widespread central planning and nonexistence of widespread decentral planning at the time was probably the chief basis for the Austrians' primary focus on the former.

Hayek was undoubtedly an important figure, and though Lange wanted a statue of Mises erected in the greatest hall of the central planning board to honor his identification of problems that socialists had to address, it's Hayek who deserves this honor, as we see the dispersed knowledge problems he identified prevalent in the orthodox firm structure of our present capitalist economy and a clear alternative available in socialism.

All of this and no actual explanation of where Mises went wrong. Although I do think that Mises did not elaborate on points where he should have. So that is a fair point. How about this, you link me to an article which actually makes an argument, and I will just read that. Unless you want to type it all out yourself.


What "incentive argument" is there? Most anti-socialists attack a strawman of equal distribution of all wealth and property regardless of labor effort or output, which no socialist model I have ever encountered advocated. Perhaps you could refer us to some specific ideologies, titles, authors, etc.? Socialists typically advocate remuneration based on individual output through labor (as opposed to capitalism's remuneration of output based on the combination of labor and capital, which permits some to work less yet be rewarded more), remuneration based on measurement of individual effort, or remuneration based on needs with consideration of individual effort integral to compensatory practice.

The argument is that under socialism, what incentive will there be for people to work hard?


They are not, since oligarchical control of productive resources is unproductive, with horizontal property rights being more efficient.

Horizontal firms are sometimes more efficient, but not often. Although I assume you will blame the fact that most firms are hierarchical on "market power." We can go through the pro's and con's of each. That is, unless you decide to dismiss what I am going to say before hand so the conversation never happens.


"Statism" works.


Too vague. It could imply any number of ideologies.


Socialism expands property rights by eliminating capitalists' theft and oligarchical control of productive resources.


Socialism does not expand on property rights. What function performed by capitalists is a violation of property rights?


Then you don't have an argument, just misguided ethnocentrism.

No, I just don't find that argument convincing when people make it when they compare Africa with Europe (which I am more familiar with), and so I am naturally skeptical when you make the same one concerning Native Americans. Every leftist nowadays accuses others of "ethnocentrism" and the like. Common tactic.


Then you don't have an argument, or an appropriately phrased statement.

I have no idea what you are talking about. My statement was easy to understand. If we were reduced to the living standards equal to those that the Natives Americans lived by, I would say we failed to uphold civilization. That was it.


What are Europe's best? The population of several exceeded that of later state capitals such as London and Paris.

Population obviously isn't everything. Look at cities in China or Indonesia for example. I would take Milan or Venice over any of the cities you listed. But I don't know why I am even having this conversation.

[syndicat]

I don't see anything here that actually explains how Mises lost the calculation debate. The U.S.S.R. as far as I am aware implemented market reforms pretty early since Lenin's initial plans proved to be a complete disaster. Also, how are you measuring "growth" and "efficiency?"

The argument was that there can be no rational calculation without a private property and market economy, due to absence of adequate information about relative preferences. The premise that a market and private property economy can provide efficient outcomes, of course, fails due to massive pervasive cost-shifting and extractive behaviors.


Private property is required for markets, which cause the expansion of the division of labor and indirect exchange. Without private property, we are either left at complete stagnation or a complete collapse and a regression to a simple barter economy.


Any argument for this? If markets were adequate to measure social opportunity costs, then why isn't market socialism capable of measuring social opportunity costs?

The long quote he gave from Hahnel & Albert is part of their technical argument showing that there decentralized planned economy would be Pareto optimal, and thus efficient as economists define this. This is because their decentralized planning procedures capture relative preferences for outcomes, and thus gain the needed information about social opportunity costs, and moreover do so better than markets because they have a way to "internalize" environmental and other external costs.



The argument is that under socialism, what incentive will there be for people to work hard?

In capitalism wealth does not derive from "hard work" but from various things that give economic power -- inheritance of a fortune, luck in speculative investment, power to exploit others. Low paid workers often work the hardest...have the harshest conditions, etc.

The incentive to work in a worker-controlled socialism derives from sharing in the commonly owned output, as provided through various systems of social provision, and for the able-bodied adults, compensation for their work effort.



I am not trying to plan society, so no. But every society is effected tacit knowledge problems to a degree. The thing is that businesses can take a hierarchical structure to help combat this. They do this all the time in fact.


Any business is inherently a hierarchical structure. Businesses tend to develop elaborate hierarchies as part of the strategy to control labor and derive the maximum revenue from labor and minimize labor expenses, through things like deskilling, use of software and hardware to pace workers and control the work they do, and close supervision. These things are all social costs.

In recent years businesses have adopted various "quality circle" and other forms of "participatory taylorism" because they know that workers develop knowledge of how best to do their jobs, and try to keep it from management, so management consultants try to devise schemes to induce them to help management figure out how to further increase productivity. But these are always imperfect because workers have a conflict of interests with management and will tend to reduce their cooperation. In a class economy, which means based on domination of workers, there is no solution to the tacit knowledge problem. So Hayek was right that it is a major issue but failed to realize how it undercuts his viewpoint.

[Skooma Addict]

The argument was that there can be no rational calculation without a private property and market economy, due to absence of adequate information about relative preferences. The premise that a market and private property economy can provide efficient outcomes, of course, fails due to massive pervasive cost-shifting and extractive behaviors.

What massive pervasive cost-shifting and extractive behaviors are you referring to?


The long quote he gave from Hahnel & Albert is part of their technical argument showing that there decentralized planned economy would be Pareto optimal, and thus efficient as economists define this. This is because their decentralized planning procedures capture relative preferences for outcomes, and thus gain the needed information about social opportunity costs, and moreover do so better than markets because they have a way to "internalize" environmental and other external costs.

As for Pareto efficiency, I don't see how Walrasian general equilibrium analysis is going to prove useful at all.


In capitalism wealth does not derive from "hard work" but from various things that give economic power -- inheritance of a fortune, luck in speculative investment, power to exploit others. Low paid workers often work the hardest...have the harshest conditions, etc.

The incentive to work in a worker-controlled socialism derives from sharing in the commonly owned output, as provided through various systems of social provision, and for the able-bodied adults, compensation for their work effort.

Well it is a very good thing that people can't get rich simply by working hard. That would not be good at all.

As for your response to the incentive problem, I think he things you mentioned are precisely the reasons why people won't work hard. How does having community owned output make a person want to work harder? Also, how is this compensation allocated? Is it proportionate to how hard people work?



Any business is inherently a hierarchical structure. Businesses tend to develop elaborate hierarchies as part of the strategy to control labor and derive the maximum revenue from labor and minimize labor expenses, through things like deskilling, use of software and hardware to pace workers and control the work they do, and close supervision. These things are all social costs.

Hierarchies develop because they are efficient business models. This is why they generally outcompete "horizontal" firms. Coordination problems within firms are often times reduced when you adopt a hierarchical structure.



In recent years businesses have adopted various "quality circle" and other forms of "participatory taylorism" because they know that workers develop knowledge of how best to do their jobs, and try to keep it from management, so management consultants try to devise schemes to induce them to help management figure out how to further increase productivity. But these are always imperfect because workers have a conflict of interests with management and will tend to reduce their cooperation. In a class economy, which means based on domination of workers, there is no solution to the tacit knowledge problem. So Hayek was right that it is a major issue but failed to realize how it undercuts his viewpoint.

But it doesn't undercut his viewpoint at all. Deregulation combined with the markets price system allows for signals to be given to people who are completely unaware of the events which caused these signals to occur. If A copper mine burns down due to a fire, the price of copper will rise, and other mines may increase their production. This can happen without anybody knowing why the price rise occurred. Hayek understood what he was talking about.

[anticap]

Skooma Addict:

In your comments about "private property" you are attacking a straw man. Nobody gives a fuck about your fucking air conditioner, etc. The issue is exploitation. You can read one perspective on the distinction here (anonym.to strips anchors from links, so you'll have to scroll down to section B.3.1 - "What is the difference between private property and possession?"): http://anarchism.pageabode.com/afaq/secB3.html#secb31

Again, that's one perspective from one group of anarchists. Opponents of exploitative private property who come from different tendencies, and from different groups within those tendencies, may explicate it differently, but the gist will remain the same: the objection to private property isn't about expropriating your iPod.

Now stop tossing around such fallacious ignorance in your posts as though it were common knowledge that socialism is about not letting people have their own toothbrushes.

[syndicat]

What massive pervasive cost-shifting and extractive behaviors are you referring to?

Pollution is the most obvious case. I can shove my exhaust down your throat because me and the oil company can decide to ignore your cost. Global warming is shifting of costs onto humanity in a way that threatens its survival, destroys water systems, raises sea level. Over-fishing, clear-cutting of forests, pushing aside of indigenous peoples to wantonly extract their resources to exhaustion. Pollution to air and water from herbicides, pesticdes and oil based fertilizer. Shifting of human costs onto workers...close monitoring, intensifying pace of work, de-skilling raise blood pressure and lead to heart disease over time. Expose workers to toxic chemicals and other causes of occupational illness. Working class doesn't live as long as the elite classes.



As for Pareto efficiency, I don't see how Walrasian general equilibrium analysis is going to prove useful at all.

It's not their only argument. What is efficiency? Efficiency is understood in terms of maximizing social benefit. Capitalism is woefully inefficient because it inevitably generates unemployment, generates vast shifting of costs, tends to create an overleveraged financial system that breaks down every so often, requires bloated internal bureaucracies that diminish output and represent largely a policing force that is a drag on productivity.

In any event, Hahnel and Albert talk about how correct evaluations of social opportunity costs can be captured by a socially interactive and iterative planning procedure in which consumers and producers reveal relative preferences by being constrained to stay in their respective budgets.



As for your response to the incentive problem, I think he things you mentioned are precisely the reasons why people won't work hard. How does having community owned output make a person want to work harder? Also, how is this compensation allocated? Is it proportionate to how hard people work?

People will be more motivated to work when they control their own work. All studies show that worker participation and control increase productivity. By systematically trampling worker self-management, capitalism suppresses productivity. Also, there is such a thing as a social motivation in terms of work that supports social benefits in which one shares or has access to, or supports through social solidarity. In regard to remuneration for able-bodied adults, if we eliminate power and wealth differences as a basis for remuneration, the only plausible basis is the recompense for the disutility of working, that is, the effort and sacrifices that people make. And these can be judged by looking at the actual effects from their work.

It's not a relevant objection to say that we must know the social benefit derived from the product because that consideration enters into the allocation of resources for producing goods and services. That is, people are only remunerated for their work effort when the goods and services they produce warrant production based on a relative evaluation of costs and benefits.



Hierarchies develop because they are efficient business models. This is why they generally outcompete "horizontal" firms. Coordination problems within firms are often times reduced when you adopt a hierarchical structure.

Ah, no. They need not be any more efficient than needed to ensure they are not out competed. Firms actually develop hierarchical division of labor to (1) increase profits, and (2) expand control over labor (which increases the power and position of the bureaucratic class within the corporation). The market itself is a transmission belt of oppression in the sense that firms that adopt a more egalitarian structure will tend to be defeated in the cost-minimization game. But, as I stated above, this is about cost-shifting and suppression of worker degree of control. hence is inefficient.



But it doesn't undercut his viewpoint at all. Deregulation combined with the markets price system allows for signals to be given to people who are completely unaware of the events which caused these signals to occur. If A copper mine burns down due to a fire, the price of copper will rise, and other mines may increase their production. This can happen without anybody knowing why the price rise occurred. Hayek understood what he was talking about.


Workers have tacit knowledge of work, as I explained. Hierarchical, taylorized work systems cannot gain this tacit knowledge, which workers have a stake in hiding from management.

[Drace]

Since private property is a requirement for civilization, I don't think there is anything particularly wrong with punishing people who violate it (most of the time).

Lol.
Good job, you made economics sound like a cult.

[Skooma Addict]

Skooma Addict:

In your comments about "private property" you are attacking a straw man. Nobody gives a fuck about your fucking air conditioner, etc. The issue is exploitation. You can read one perspective on the distinction here (anonym.to strips anchors from links, so you'll have to scroll down to section B.3.1 - "What is the difference between private property and possession?"): http://anarchism.pageabode.com/afaq/secB3.html#secb31

Again, that's one perspective from one group of anarchists. Opponents of exploitative private property who come from different tendencies, and from different groups within those tendencies, may explicate it differently, but the gist will remain the same: the objection to private property isn't about expropriating your iPod.

Now stop tossing around such fallacious ignorance in your posts as though it were common knowledge that socialism is about not letting people have their own toothbrushes.

That is not what I meant. I am saying that we won't be able to maintain a nice standard of living under socialism, and I value a good standard of living more than I care about your feelings concerning hierarchy or authority.


Pollution is the most obvious case. I can shove my exhaust down your throat because me and the oil company can decide to ignore your cost. Global warming is shifting of costs onto humanity in a way that threatens its survival, destroys water systems, raises sea level. Over-fishing, clear-cutting of forests, pushing aside of indigenous peoples to wantonly extract their resources to exhaustion. Pollution to air and water from herbicides, pesticdes and oil based fertilizer. Shifting of human costs onto workers...close monitoring, intensifying pace of work, de-skilling raise blood pressure and lead to heart disease over time. Expose workers to toxic chemicals and other causes of occupational illness. Working class doesn't live as long as the elite classes.

That does not prove that markets cannot provide efficient outcomes, especially since negative externalities are not always side effects. Besides, the government can take care of this problem. The market does not need to be removed from society. Some of the things you listed I don't really see as problems.


It's not their only argument. What is efficiency? Efficiency is understood in terms of maximizing social benefit. Capitalism is woefully inefficient because it inevitably generates unemployment, generates vast shifting of costs, tends to create an overleveraged financial system that breaks down every so often, requires bloated internal bureaucracies that diminish output and represent largely a policing force that is a drag on productivity.

How can you measure "social benefit" without presupposing cardinal utility?


People will be more motivated to work when they control their own work. All studies show that worker participation and control increase productivity.

That isn't true. There are many studies which are aimed at finding the most efficient production process, and only a small minority of those advocate worker run firms. You can go all the way back to Taylor even though his ideas are obsolete in many ways now.


By systematically trampling worker self-management, capitalism suppresses productivity. Also, there is such a thing as a social motivation in terms of work that supports social benefits in which one shares or has access to, or supports through social solidarity. In regard to remuneration for able-bodied adults, if we eliminate power and wealth differences as a basis for remuneration, the only plausible basis is the recompense for the disutility of working, that is, the effort and sacrifices that people make. And these can be judged by looking at the actual effects from their work.

It's not a relevant objection to say that we must know the social benefit derived from the product because that consideration enters into the allocation of resources for producing goods and services. That is, people are only remunerated for their work effort when the goods and services they produce warrant production based on a relative evaluation of costs and benefits.


How about this. What will the productive farmer get that the unproductive one won't?


Ah, no. They need not be any more efficient than needed to ensure they are not out competed. Firms actually develop hierarchical division of labor to (1) increase profits, and (2) expand control over labor (which increases the power and position of the bureaucratic class within the corporation). The market itself is a transmission belt of oppression in the sense that firms that adopt a more egalitarian structure will tend to be defeated in the cost-minimization game. But, as I stated above, this is about cost-shifting and suppression of worker degree of control. hence is inefficient.

They need to be very efficient in order not to be outcompeted. If you have a firm which consists of thousands of people, you need a hierarchy to lessen coordination problems. This fact is well known. But you are correct when you say that firms develop a hierarchical structure to increase profits.


Workers have tacit knowledge of work, as I explained. Hierarchical, taylorized work systems cannot gain this tacit knowledge, which workers have a stake in hiding from management.

Everyone has tacit knowledge. Management attempts to attain it, and then implement and standardize it if it is useful. This would not happen in a large worker run firm.



Lol.
Good job, you made economics sound like a cult.


Well I am not sure what the portion which you quoted has to do with economics. But anyways, I think what I made a pretty fair and moderate point.

[Left-Reasoning]

Finally, socialism, mutualism, syndicalism ect have been refuted to death. Thus, you should all join my side. Especially you Jazzratt.

This is false.

[Dean]

In case any of you were wondering, this is not another AnCap/AE thread. So now you can take a breath of relief and continue reading...

Ask any economist if the government has a productive role to play in society, and they will most likely say yes. Ask any economist if the free market is generally a good thing which is very beneficial for society, and they will most likely say yes. I believe that both of these points are true.

As far as I am aware, there are certain externalities which are not adequately internalized since they are not fully taken into account by the markets price system. Take leaded fuel for example, or smog. This especially seems like a problem if global warming is real. Here is one place where government can play a role. One idea is to tax negative externalities and subsidize things with positive externalities (a more controversial idea).

One other advantage of a government is that if there is the right culture and the correct institutions in place, it can adequately protect private property. Since private property is a requirement for civilization, I don't think there is anything particularly wrong with punishing people who violate it (most of the time). I value my car, T.V., and air conditioner more than the opponents of private property ideas of what is "right and wrong" or what is "exploitation."

Another advantage of a government is that some form of welfare can be used to help those who really are unable to help themselves. The idea that charity will take care of everything is really just betting on peoples lives. Welfare can ensure that people can have an at least respectable state of living. Obviously, too much Welfare is bad though.

Finally, socialism, mutualism, syndicalism ect have been refuted to death. Thus, you should all join my side. Especially you Jazzratt.

What a meathead ideology. Keep enjoying yourself in lala land - we'll be on the ground fighting the consistent tyranny of state and capitalist functions.

Keep supporting the ruling-class, and pretending that what they promote is contrary to what they enact. Drink that kool-aid!

Again, I love how the one factor that you think produces privilege - "the state" - is now a critical theme for your ideology. It just shows how incredibly confused you are.

When did it cease to have the one corrupting force in the market, and become a benevolent force?

Truly spectacular.

[Zanthorus]

@ Zanthorus

What? I am not saying that anything is wrong just because "mainstream economists" say so.

No, I meant I thought you were giving an example of why "mainstream economists say so" is a crap argument.

[Skooma Addict]

What a meathead ideology. Keep enjoying yourself in lala land - we'll be on the ground fighting the consistent tyranny of state and capitalist functions.

Keep supporting the ruling-class, and pretending that what they promote is contrary to what they enact. Drink that kool-aid!

Again, I love how the one factor that you think produces privilege - "the state" - is now a critical theme for your ideology. It just shows how incredibly confused you are.

When did it cease to have the one corrupting force in the market, and become a benevolent force?

Truly spectacular.

Typical.

[Dean]

Typical.

The same is true for you, since you've consistently dodged requests to explain how the supposedly singular source of privilege has become a necessary evil in order to keep privilege in check.

And its also typical of you to provide literally no counter argument except for base contradiction. I feel like I'm in a Monty Python skit:

"I came here for an argument, and you're just contradicting me!"
"No, I'm not!"

:rolleyes:

[Skooma Addict]

Dean, you didn't make an argument. If you want to know why I think a government is necessary, read the first post.

[Nolan]

Lenin's ideas didn't fail, the "war communism" was changed because there was a war and Bolshevik Russia wasn't quite ready. Your view of Soviet history is extremely simplistic.

[Skooma Addict]

Lenin's ideas didn't fail, the "war communism" was changed because there was a war and Bolshevik Russia wasn't quite ready. Your view of Soviet history is extremely simplistic.

As far as I know it was a complete disaster.

To quote Richman,


The results were catastrophic. Industrial production by 1920 was 20 per-
cent of the pre-war volume. Gross agricultural output fell from more than
69 million tons in the period 1909-1913 to less than 31 million in 1921. Sown
area dropped from over 224 million acres in the period 1909-1913 to less
than 158 million in 1921. From 1917 to 1922 the population declined by 16
million, not counting war deaths and emigration. Eight million persons left
the towns for the villages from 1918 to 1920. In Moscow and Petrograd, the population declined 58.2 percent.'After this Lenin thankfully implemented the NEP (market reforms).

http://mises.org/journals/jls/5_1/5_1_5.pdf

[Nolan]

This was caused by the mess that was World War I, the Russian Civil War, military intervention by 14 countries, and the resulting famine, not Lenin's policies.

It's odd that you praise the NEP since it was in no way capitalist.

[Skooma Addict]

This was caused by the mess that was World War I, the Russian Civil War, military intervention by 14 countries, and the resulting famine, not Lenin's policies.

It's odd that you praise the NEP since it was in no way capitalist.

Well I think blaming it all on War doesn't really cut it. Other countries fought in world war 1 as well, and while I don't have the statistics I am willing to bet that they generally didn't fare as badly as Russia. More importantly, there are also many things which clearly resulted from Lenin's War communism. Such as..

The peasant was required to deliver everything in excess of his own and his family's needs. Naked requisition from so-called kulaks [the more prosperous peasantry] of arbitrarily determined surpluses provoked the two traditional replies of the peasant: the short-term reply of concealment of stacks and the long-term reply of refusal to sow more land than was necessary to feed his own family.

Edward Hallett Cam, The Bolshevik Revolution, 1917-1923, vol. 2 (London: Macmillan,
1952), p. 150

As for the NEP, it was a step in the right direction.





The reform was comprehensive. The first and major change was the
elimination of grain requisitioning and substitution of a proportional tax,
first in kind, then in currency, levied on the peasants individually. The
peasants were now free to keep a portion of their surplus production and
trade it in the markets that developed as a result. The inducement to
produce was a tonic that had immediate effects. The harvest of 1922 was
most favorable, and agricultural production returned to the pre-war level by
1925.

Besides the change in the tax, other measures were enacted to facilitate
the recovery of free trade. When collectivization of farming met resistance,
private landholdings were allowed. Peasants were free to cultivate the land
as they wished and were granted security of tenure. At first there was only
surreptitious leasing of land and hiring of labor, but by the end of 1922 this
was permitted by the new agrarian code. Compulsory labor was abolished;
wages were linked to productivity. Workers could be fired by their employers.

[syndicat]

That isn't true. There are many studies which are aimed at finding the most efficient production process, and only a small minority of those advocate worker run firms. You can go all the way back to Taylor even though his ideas are obsolete in many ways now.



How do you define "efficient"? If you use profitability as the criterion, you're begging the question. Of course Taylor and the whole industrial engineering tradition claims to be for "efficiency." But their "efficiency" doesn't count disempowerment, disutility and adverse health consequences of intensified pace of work and tighter supervision. Because these costs are not reflected as higher labor expenses, they don't count. this is a cost-shifting with a vengeance.


They need to be very efficient in order not to be outcompeted.

Begs question. They need to be profitable not to be out-competed. Not the same thing as efficient.

[RGacky3]

Since private property is a requirement for civilization

never been proven,

BTW, government is not a catch all phrase, you have to specify wha type of government,

[REVLEFT'S BIEGGST MATSER TROL]

It was a gradual change really. I have actually been in denial for the past month or so. But I am not longer an AnCap.


http://www.youtube.com/watch?v=HfHX3mAbyrs&feature=related

This video displays the celebrations of the users of Revleft, who hope with the demise of "Olaf's" commitment to Anarcho - Capitalism, at least a week can go past without "Ludwig Von Mises" being mentioned.

(Vader is Mises himself, yo!)

[Dean]

Dean, you didn't make an argument. If you want to know why I think a government is necessary, read the first post.

I have. It's a big joke that boils down to these points:

-"Ask any economist" and he'll tell you both the market and government have a "role to play" (shit! you must be right! what a great point.)
-"Externalities" (aka an obtuse way to shift the blame from the market onto "external forces") like smog play an effect.

I guess things like psychology and human needs don't play a part in economics except as "externalities," thereby excusing all failure of the market to accommodate for these facts.

I'll repeat my point again: how can anyone take you seriously if your entire concept of the market shifts from "only blame the state" to "only the state can save us (from certain things, of course)"? You don't engender much confidence in your understanding of the market.

[Skooma Addict]

-"Ask any economist" and he'll tell you both the market and government have a "role to play" (shit! you must be right! what a great point.)


I wasn't saying that since most economists believe it, that it must then be true. Although this sort of reminds me of the creationists who don't like it when people point out that most biologists don't believe in God.


-"Externalities" (aka an obtuse way to shift the blame from the market onto "external forces") like smog play an effect.

Externalities are a problem since they aren't fully taken into account by the markets price system.


I'll repeat my point again: how can anyone take you seriously if your entire concept of the market shifts from "only blame the state" to "only the state can save us (from certain things, of course)"? You don't engender much confidence in your understanding of the market.

Because not all of us just put on the ideological blinders for our whole lives. People change their opinions on things all the time. You should get used to it, even if you are yourself dogmatic.

[Os Cangaceiros]

Finally, socialism, mutualism, syndicalism ect have been refuted to death.

Not according to your pal Mises, at least in regards to syndicalism.

[IcarusAngel]

Mises said that syndicalism would destroy civilization and return humans to a pre-industrial, pre-civilization type of society.

http://mises.org/books/socialism/contents.aspx

[Agnapostate]

Oaf: Your offerings of short two-bit responses to rather lengthy commentary on my part is the reason for my delays in reply; I'm not particularly interested in an exchange if your tactic is simply to regurgitate the same assertions over and over again without actual refutations.


There is a pretty big divergence between economists on macro. There are very few vanilla Keynesians nowadays.

Modern Keynesianism has come to be characterized by what Robinson called its "bastardized" variant, which has incorporated the IS/LM curve, the Hicks-Modigliani paradigm, etc. There is a limited spectrum of variation, however, particularly since the majority of economists are liberals. For example, this administration's stimulus bill drew relatively wide mainstream consensus.


The Coase theorem presupposes there being no transaction costs. So...

So some of your contemporaries regard such conditions as institutionally viable, though I can expect no less of people who still cannot explain the nature of public good provision in "anarcho"-capitalist fairyland to me.


I am pretty sure capitalism has in the past existed and was maintained without welfare.

Capitalism is scarcely a few centuries old, while advanced human civilization is thousands and organization two hundred thousand years old. But in the period that capitalism has existed, it's been with the integral component of state intervention, with social welfare merely being a mechanism for appeasing the physical efficiency and psychological unrest of the working class and propensity to adopt more radical ideology. That is what accounts for the positive relationship between the welfare state and economic efficiency in capitalist countries. Consider Headey et al.'s Is There a Trade-Off between Economic Efficiency and a Generous Welfare State? A Comparison of Best Cases of 'The Three Worlds of Welfare Capitalism' (http://www.jstor.org/stable/27522452):


Acrucial debate in policy-making as well as academic circles is whether there is a trade-off between economic efficiency and the size/generosity of the welfare state. One way to contribute to this debate is to compare the performance of 'best cases' of different types of state. Arguably, in the decade 1985-94, the US, West Germany and the Netherlands were 'best cases' - best economic performers - in what Esping-Andersen (1990) calls "the three worlds of welfare capitalism". The US is a liberal welfare-capitalist state, West Germany a corporatist state, and the Netherlands is social democratic in its tax-transfer system, although not its labor market policies. These three countries had rates of economic growth per capita as high or higher than other rich countries of their 'type', and the lowest rates of unemployment.

At a normative or ideological level the three types of state have the same goals but prioritise them differently. The liberal state prioritises economic growth and efficiency, avoids work disincentives, and targets welfare benefits only to those in greatest need. The corporatist state aims to give priority to social stability, espe cially household income stability, and social integration. The social democratic welfare state claims high priority for minimising poverty, inequality and unem ployment. Using ten years of panel data for each country, we assess indicators of their short (one year), medium (five year) and longer term (ten year) perform ance in achieving economic and welfare goals. Overall, in this time period, the Netherlands achieved the best performance on the welfare goals to which it gave priority, and equalled the other two states on most of the goals to which they gave priority. This result supports the view that there is no necessary trade-off between economic efficiency and a generous welfare state.

The Dutch model achieved maximization of efficiency, since poverty, inequality, and unemployment are themselves forms of inefficiency entirely aside from their socially undesirable nature. I do realize that you don't like econometrics because it produces unpleasant results, of course, so...


I am not trying to plan society, so no. But every society is effected tacit knowledge problems to a degree.

This is a horridly constructed sentence, so I do extend my apologies if I have misinterpreted it. Tacit knowledge problems often cannot be avoided, but vertical, centralized organizational structures will lose more tacit knowledge than horizontal, decentralized ones.


The thing is that businesses can take a hierarchical structure to help combat this. They do this all the time in fact.

Hierarchical structures do not eliminate tacit knowledge; their emergence alongside vertical centralization usually exacerbates it. There is no mechanism as effective as workers' self-management for the elimination of tacit and other lost dispersed knowledge problems.


I don't see anything here that actually explains how Mises lost the calculation debate.

Since I'm sure you didn't read carefully, I'll be kindhearted enough to provide a short list for you, not that our sole reference is to Mises.

(1) Central planning worked powerfully in the Soviet Union for several decades, from the perspective of pure economic efficiency that the Austrians purported to be interested in. The authoritarianism of the regime is of far more relevance to me. Refutation.

(2) Decentralized planning and market socialism worked powerfully in Spain and Yugoslavia, respectively, directly challenging the Austrians' baseless dismissal of them without actual argument. Refutation.

(3) Advances in information technology have permitted more sophisticated planning procedures. Bypass.

(4) In the theoretical literature alone, the socialists have had the last and best word, from Cockshott and Cottrell to Albert and Hahnel to Vanek to Burczak, etc. Refutation.


The U.S.S.R. as far as I am aware implemented market reforms pretty early since Lenin's initial plans proved to be a complete disaster.

The early history of the USSR is not a particularly interesting growth model, since "War Communism" and the New Economic Policy characterize the years up to 1928. The years from that point to the German invasion and from the post-war recovery throughout the 1950's and 1960's are the illustrative ones.


Also, how are you measuring "growth" and "efficiency?"

http://en.wikipedia.org/wiki/Economic_growth

http://en.wikipedia.org/wiki/Economic_efficiency

You should probably take an introductory economics class someday; I'm not going to guide you through every basic principle.


All of this and no actual explanation of where Mises went wrong.

Then you're not reading properly.


Although I do think that Mises did not elaborate on points where he should have. So that is a fair point. How about this, you link me to an article which actually makes an argument, and I will just read that. Unless you want to type it all out yourself.

There is a very significant literature on the topic, and it's quite diverse. If you're interested in an anarchist layperson commentary, consult Section I.1 (http://anarchism.pageabode.com/afaq/secI1.html#seci11) of the FAQ. If you're actually a serious student of the debate, consult Mises's Economic Calculation in the Socialist Commonwealth (http://mises.org/econcalc.asp) and Lange's On the Economic Theory of Socialism (http://www.jstor.org/stable/2967660). If you want a recent exposition of the Austrians' ultimate loss on any of the grounds I mentioned, consult Cockshott and Cottrell's Calculation, Complexity And Planning: The Socialist Calculation Debate Once Again (http://ricardo.ecn.wfu.edu/~cottrell/socialism_book/calculation_debate.pdf), or Albert and Hahnel's "participatory economics" literature, or Theodore Burczak's Socialism After Hayek.


The argument is that under socialism, what incentive will there be for people to work hard?

This contains an implicit assumption of your "equality of outcome" strawman. To expose that, why don't you write a short paragraph explaining why a socialist remunerative program discourages hard work?


Horizontal firms are sometimes more efficient, but not often.

It would obviously be tedious to support every single assertion with arguments and evidence, so I'll ask that you limit such attached material to statements likely to be disputed. This would be one of them, considering the theoretical reasons and empirical research that indicates the more efficient and productive nature of workers' ownership and management.


Although I assume you will blame the fact that most firms are hierarchical on "market power." We can go through the pro's and con's of each. That is, unless you decide to dismiss what I am going to say before hand so the conversation never happens.

Your "pros" are utopian fantasies that assume that large centralized firms emerged because of economies of scale benefits, instead of the open violence of primitive accumulation that facilitated the development of capitalism. The benefits of horizontal democratic organization are obvious; this is more facilitative of the reclamation of distributed and tacit knowledge, and the elimination of the divorce of labor and capital also eliminates principal-agent problems by removing the basis for a divergence of interests. That's why the empirical literature supports the benefits of workers' ownership and management.


Too vague. It could imply any number of ideologies.

The state is the state; a statist is a statist. And you are a statist.


Socialism does not expand on property rights. What function performed by capitalists is a violation of property rights?

Wealth is generally inherited (http://www.jstor.org/stable/1833031), and the most disproportionate wealth distributions were created through a period of primitive accumulation that involved development from the ashes of feudalism in Europe, and in America, slavery, genocide of the indigenous population and dispossession, formal state discrimination against immigrants, and the exacerbation of the consequences through other statist policies. http://www.mutualist.org/sitebuildercontent/sitebuilderfiles/MPE.pdf

Those wealth differences continue to develop because of the nature of the capitalist labor market, which involves arrangements of extraction of surplus value from workers in the production phase and usage of that gain in the circulation phase to sustain a cycle of capital accumulation.

http://i357.photobucket.com/albums/oo18/Dolgoff/ed4a754f.png

How exactly did you suppose that many people were born order givers and others order takers? Or have you retained your naive fantasy of rises and falls based on self-reliance and hard work?

Anticipatory responses aren't very difficult since you simply repeat the same prattle over and over again, so before your cries of capitalists simply being "other workers" that enter into a symbiotic relationship with manual workers that involves their assumption of risk and whatever other babbling about time preference that you plan on offering us, please recall that those functions are valid only if the institutional structure of the capitalist economy is intact, meaning that a mine simply could not function without miners, but a corporate purchase of land amenable to mining is irrelevant if they are not recognized as owners of the land. It's the difference between the material and social requisites of production. And support of that is dependent on an assumption of the superior efficiency of capitalist ownership, which the empirical literature on workers' ownership and management is in flat contradiction to.


No, I just don't find that argument convincing when people make it when they compare Africa with Europe (which I am more familiar with), and so I am naturally skeptical when you make the same one concerning Native Americans.

You'd perhaps be amazed by how little your declarations interest me when they're unencumbered by those weighty arguments and evidence.


Every leftist nowadays accuses others of "ethnocentrism" and the like. Common tactic.

Actually, being the leftist here who's spent a considerable amount of time on Stormfront surveying and studying the enemy, I rarely accuse others of "ethnocentrism"; there's quite a number of people who have no shame in it at all. It's simply that your particular statement was Eurocentric and symptomatic of a propertarian rhetorical phenomenon.


I have no idea what you are talking about. My statement was easy to understand. If we were reduced to the living standards equal to those that the Natives Americans lived by, I would say we failed to uphold civilization. That was it.

If modern civilizations reverted to the conditions of antiquated ones or future ones to those of modern ones, they would have "failed" in a sense. It's simply that your post stank of the stereotypical misconceptions that the public at large has of Indian social organization. Here's a summary by Charles Mann in his 1491:


U.S. historian George Bancroft, dean of his profession...argued in 1834 that before Europeans arrived North America was "an unproductive waste...Its only inhabitants were a few scattered tribes of feeble barbarians, destitute of commerce and of political connection." Like Las Casas, Bancroft believed that Indians had existed in societies without change - except that Bancroft regarded this timelessness as an indication of sloth, not innocence.

In different forms Bancroft's characterization was carried into the next century. Writing in 1934, Alfred L. Kroeber, one of the founders of American anthropology, theorized that the Indians in eastern North America could not develop - could have no history - because their lives consisted of "warfare that was insane, unending, continuously attritional." Escaping the cycle of conflict was "well-nigh impossible," he believed. "The group that tried to shift its values from war to peace was almost certainly doomed to early extinction." Kroeber conceded that Indians took time out from fighting to grow crops, but insisted that agriculture "was not basic to life in the East; it was an auxiliary, in a sense a luxury." As a result, "Ninety-nine per cent or more of what [land] might have been developed remained virgin."

Four decades later, Samuel Eliot Morison, twice a Pulitzer Prize winner, closed his two-volume European Discovery of America with the succinct claim that Indians had created no lasting monuments or institutions. Imprisoned in changeless wilderness, they were "pagans expecting short and brutish lives, void of any hope for the future." Native people's "chief function in history," the British historian Hugh Trevor-Roper, Baron Dacre of Glanton, proclaimed in 1965, "is to show to the present an image of the past from which by history it has escaped."

Since several Amerindian societies matched or exceeded European urban development and technological innovations in such fields as astronomy and mathematics, and since the lack of wider prevalence of these feats was due to the environmental challenges to convenient transmission, your Indian-specific statement was inaccurate, and colored by racist historical assumptions. I don't blame you; it's difficult to sit through public school lessons and watch Pocohantas and conclude otherwise.


Population obviously isn't everything.

Another implied strawman, since I never claimed that it was. But high population density is usually connected to advanced urban development.


I would take Milan or Venice over any of the cities you listed.

Why would that be? At times, those cities were less developed and populated than American urban centers. For example, Teotihuacan was at its height in A.D. 600, while Venice had not yet existed for two centuries.


But I don't know why I am even having this conversation.

Nor do I, as your ignorance is even more apparent in the subjects of history and anthropology than it is in economics.


Hierarchies develop because they are efficient business models. This is why they generally outcompete "horizontal" firms.

Actually, they generally "outcompete" horizontal firms because of the economies of scale issue; market concentration has empowered monopolistic and oligopolistic firms so that they can generate high barriers to entry.


Coordination problems within firms are often times reduced when you adopt a hierarchical structure.

Have you ever taken a logic class? Why exactly is it that you believe that anyone here is inclined to simply accept your baseless assertions without arguments or evidence?


But it doesn't undercut his viewpoint at all. Deregulation combined with the markets price system allows for signals to be given to people who are completely unaware of the events which caused these signals to occur.

The major weaknesses of prices in the capitalist economy are the divergences with costs (negative externalities), and other forms of market failure, such as information asymmetries, under-provision of public goods, etc.


That does not prove that markets cannot provide efficient outcomes, especially since negative externalities are not always side effects.

This is an interesting surprise. Why don't you explain which negative externalities are not spillover effects that impact third parties?


Besides, the government can take care of this problem.

The capitalist economy relies on Pigovian taxation to deal with negative externalities, yes. This is ultimately inefficient. In the case of sin taxes, for example, some products will be sufficiently inelastic that the price increases will not accomplish the effect of a inward demand shift, and will instead increase black market activity because lower prices are offered.


How can you measure "social benefit" without presupposing cardinal utility?

Ever heard of very simplistic qualitative assessments? You know, like "Gee, BP oil spill in the ocean...baaaaad."


That isn't true. There are many studies which are aimed at finding the most efficient production process, and only a small minority of those advocate worker run firms.

This is an open, blatant falsity, and unsurprisingly is unsupported by any external references or citations of these "many studies." Provide us with a few meta-analyses and literature reviews that illustrate that workers' ownership and management is an inherently inefficient and unproductive mechanism.

[Skooma Addict]

Oaf: Your offerings of short two-bit responses to rather lengthy commentary on my part is the reason for my delays in reply; I'm not particularly interested in an exchange if your tactic is simply to regurgitate the same assertions over and over again without actual refutations.
You could cut your posts in half and convey the same amount of information. Your claim that I only regurgitate assertions is itself a regurgitated assertion. You always seem to be very angry when you type your posts.


So some of your contemporaries regard such conditions as institutionally viable, though I can expect no less of people who still cannot explain the nature of public good provision in "anarcho"-capitalist fairyland to me.Do you even remember what we were talking about here? You for some reason implied that I haven't studied the Coase theorem since I mentioned how there are some externalities which aren't taken into account by the markets price system. You for some reason mentioned the Coase theorem even though it does not apply to what I was referring to. So maybe you should read up on the Coase theorem.



Capitalism is scarcely a few centuries old, while advanced human civilization is thousands and organization two hundred thousand years old. But in the period that capitalism has existed, it's been with the integral component of state intervention, with social welfare merely being a mechanism for appeasing the physical efficiency and psychological unrest of the working class and propensity to adopt more radical ideology. That is what accounts for the positive relationship between the welfare state and economic efficiency in capitalist countries. Consider Headey et al.'s Is There a Trade-Off between Economic Efficiency and a Generous Welfare State? A Comparison of Best Cases of 'The Three Worlds of Welfare Capitalism' (http://www.jstor.org/stable/27522452):I am pretty sure there was very little welfare (and in some portions of those countries, no welfare) in England and America during the industrial revolution, and even at earlier times. Try to remember what it was were talking about.


Tacit knowledge problems often cannot be avoided, but vertical, centralized organizational structures will lose more tacit knowledge than horizontal, decentralized ones.Say you have a firm with thousands of people. A hierarchical structure allows for the management to acquire and standardize workers tacit knowledge. This is much more difficult for a horizontal firm with the same number of people. There is no price system which operates between individuals in a horizontal firm to convey and standardize such knowledge.

By the way, how would a horizontal firm locate and fix bottlenecks?


(1) Central planning worked powerfully in the Soviet Union for several decades, from the perspective of pure economic efficiency that the Austrians purported to be interested in. The authoritarianism of the regime is of far more relevance to me. Refutation.It "worked" after Lenin implemented market reforms. A great example of attempting to destroy the market was Lenin's war communism, and look how that turned out.



(2) Decentralized planning and market socialism worked powerfully in Spain and Yugoslavia, respectively, directly challenging the Austrians' baseless dismissal of them without actual argument. Refutation. I don't know about Yugoslavia, but it didn't work in Spain (so I am hesitant to believe you when you say Yugoslavia is a good example). Read Caplan on the subject (and yes, I am aware of the failed refutation of Caplan on this where the author says something like "killing 5,000 people is not mass murder").


(3) Advances in information technology have permitted more sophisticated planning procedures. Bypass.Wow really? Advances in IT have permitted more efficient planning procedures? That's amazing!


(4) In the theoretical literature alone, the socialists have had the last and best word, from Cockshott and Cottrell to Albert and Hahnel to Vanek to Burczak, etc. Refutation.
So whoever has "the last word" is correct? So I guess all the bunk theories which scientists stop addressing in order to peruse other goals are correct now. There are almost always advocates of such theories who continue to argue against the mainstream rival theory. But anyways, I don't think there has been a "last word" on the topic.


The early history of the USSR is not a particularly interesting growth model, since "War Communism" and the New Economic Policy characterize the years up to 1928.
They aren't interesting to you since war communism was a complete disaster, and market reforms were required.


http://en.wikipedia.org/wiki/Economic_growth

http://en.wikipedia.org/wiki/Economic_efficiency

You should probably take an introductory economics class someday; I'm not going to guide you through every basic principle.You do know that economists can mean different things when they say "growth" and "efficiency," right? I have taken econ 101, but I am not sure if you have since you don't seem to understand the Coase theorem.

Also notice that you and the person I asked the efficiency question to defined efficiency differently? Fancy that, I guess you think syndicat needs to take econ 101.


This contains an implicit assumption of your "equality of outcome" strawman. To expose that, why don't you write a short paragraph explaining why a socialist remunerative program discourages hard work? Why don't you answer my simple question. As I pointed out earlier, this was a problem for the U.S.S.R., and I don't see why it wouldn't be for what you propose.


It would obviously be tedious to support every single assertion with arguments and evidence, so I'll ask that you limit such attached material to statements likely to be disputed. This would be one of them, considering the theoretical reasons and empirical research that indicates the more efficient and productive nature of workers' ownership and management.Goldratt advocates hierarchical firms when he talks about ways of dealing with the Theory of Constraints. Michael Hugos explains how hierarchy allows for more efficient internal logistics systems and well functioning supply chains.


Your "pros" are utopian fantasies that assume that large centralized firms emerged because of economies of scale benefits, instead of the open violence of primitive accumulation that facilitated the development of capitalism. The benefits of horizontal democratic organization are obvious; this is more facilitative of the reclamation of distributed and tacit knowledge, and the elimination of the divorce of labor and capital also eliminates principal-agent problems by removing the basis for a divergence of interests. That's why the empirical literature supports the benefits of workers' ownership and management.I think the economies of scales argument makes a lot more sense than what you are saying.



The state is the state; a statist is a statist. And you are a statist. If you could remember what it was being discussed, I was asked which term I would use to describe myself. Obviously "statist" could imply any number of ideologies, and it is too vague anyways. Besides, the word "statist" is generally understood to mean a person who supports a big intrusive government.


Wealth is generally inherited (http://www.jstor.org/stable/1833031), and the most disproportionate wealth distributions were created through a period of primitive accumulation that involved development from the ashes of feudalism in Europe, and in America, slavery, genocide of the indigenous population and dispossession, formal state discrimination against immigrants, and the exacerbation of the consequences through other statist policies. http://www.mutualist.org/sitebuilder...rfiles/MPE.pdf (http://www.mutualist.org/sitebuildercontent/sitebuilderfiles/MPE.pdf)

Those wealth differences continue to develop because of the nature of the capitalist labor market, which involves arrangements of extraction of surplus value from workers in the production phase and usage of that gain in the circulation phase to sustain a cycle of capital accumulation.

http://i357.photobucket.com/albums/oo18/Dolgoff/ed4a754f.png

How exactly did you suppose that many people were born order givers and others order takers? Or have you retained your naive fantasy of rises and falls based on self-reliance and hard work?

Anticipatory responses aren't very difficult since you simply repeat the same prattle over and over again, so before your cries of capitalists simply being "other workers" that enter into a symbiotic relationship with manual workers that involves their assumption of risk and whatever other babbling about time preference that you plan on offering us, please recall that those functions are valid only if the institutional structure of the capitalist economy is intact, meaning that a mine simply could not function without miners, but a corporate purchase of land amenable to mining is irrelevant if they are not recognized as owners of the land. It's the difference between the material and social requisites of production. And support of that is dependent on an assumption of the superior efficiency of capitalist ownership, which the empirical literature on workers' ownership and management is in flat contradiction to.So what function performed by capitalists is a violation of property rights?


Actually, being the leftist here who's spent a considerable amount of time on Stormfront surveying and studying the enemy, I rarely accuse others of "ethnocentrism"; there's quite a number of people who have no shame in it at all. It's simply that your particular statement was Eurocentric and symptomatic of a propertarian rhetorical phenomenon.Lol, this is great stuff. I merely said that if we were reduced to the Natives living standards, then I would say we failed to uphold civilization. You for some reason saw this as some attack on Natives in particular.

How about this. If we were reduced to the Europeans living standards during the dark ages, I would say we failed to uphold civilization. Better?



If modern civilizations reverted to the conditions of antiquated ones or future ones to those of modern ones, they would have "failed" in a sense. It's simply that your post stank of the stereotypical misconceptions that the public at large has of Indian social organization. Here's a summary by Charles Mann in his 1491:

Quote:
U.S. historian George Bancroft, dean of his profession...argued in 1834 that before Europeans arrived North America was "an unproductive waste...Its only inhabitants were a few scattered tribes of feeble barbarians, destitute of commerce and of political connection." Like Las Casas, Bancroft believed that Indians had existed in societies without change - except that Bancroft regarded this timelessness as an indication of sloth, not innocence.

In different forms Bancroft's characterization was carried into the next century. Writing in 1934, Alfred L. Kroeber, one of the founders of American anthropology, theorized that the Indians in eastern North America could not develop - could have no history - because their lives consisted of "warfare that was insane, unending, continuously attritional." Escaping the cycle of conflict was "well-nigh impossible," he believed. "The group that tried to shift its values from war to peace was almost certainly doomed to early extinction." Kroeber conceded that Indians took time out from fighting to grow crops, but insisted that agriculture "was not basic to life in the East; it was an auxiliary, in a sense a luxury." As a result, "Ninety-nine per cent or more of what [land] might have been developed remained virgin."

Four decades later, Samuel Eliot Morison, twice a Pulitzer Prize winner, closed his two-volume European Discovery of America with the succinct claim that Indians had created no lasting monuments or institutions. Imprisoned in changeless wilderness, they were "pagans expecting short and brutish lives, void of any hope for the future." Native people's "chief function in history," the British historian Hugh Trevor-Roper, Baron Dacre of Glanton, proclaimed in 1965, "is to show to the present an image of the past from which by history it has escaped."
Since several Amerindian societies matched or exceeded European urban development and technological innovations in such fields as astronomy and mathematics, and since the lack of wider prevalence of these feats was due to the environmental challenges to convenient transmission, your Indian-specific statement was inaccurate, and colored by racist historical assumptions. I don't blame you; it's difficult to sit through public school lessons and watch Pocohantas and conclude otherwise. Cool, I guess.


Another implied strawman, since I never claimed that it was. But high population density is usually connected to advanced urban development.Oh, so I didn't strawman you, I "implied stawmaned" you.


Why would that be? At times, those cities were less developed and populated than American urban centers. For example, Teotihuacan was at its height in A.D. 600, while Venice had not yet existed for two centuries.Implied strawman. I obviously didn't mean that I would prefer to live in Venice in A.D. 600.


Actually, they generally "outcompete" horizontal firms because of the economies of scale issue; market concentration has empowered monopolistic and oligopolistic firms so that they can generate high barriers to entry.Which barriers apply to industry-entering horizontal firms which don't apply to entering hierarchical firms?


This is an interesting surprise. Why don't you explain which negative externalities are not spillover effects that impact third parties?
What? Negative externalities are not always side effects of production processes. This should be easy to grasp.


Ever heard of very simplistic qualitative assessments? You know, like "Gee, BP oil spill in the ocean...baaaaad."
Remember what we were talking about? You have to measure social benefit.


This is an open, blatant falsity, and unsurprisingly is unsupported by any external references or citations of these "many studies." Provide us with a few meta-analyses and literature reviews that illustrate that workers' ownership and management is an inherently inefficient and unproductive mechanism.I can't find a PDF version, but read Decentralization, Hierarchies and Incentives:A Mechanism Design Perspective byDilip Mookherjee. That should be something good to introduce you to the topic. Also, here is this...


As argued by Erich Gutenberg (1951), a firm can be seen as a ‘productive relationship’whereby productivity depends more on the organization and complementarily of factor inputs rather than just the potential productivity of each input (Albach et al., 1999). This concept of productivity is atypical in the sense that the firm’s productivity is not only determined by neoclassical input-output relations but is also influenced by the organization of workers. Several other authors such as Greenan (2003), Carlson (2001) and Foray (2004) have also pointed out that the organization of workers (combined with other factors) influences how successful a firm is in achieving its objective. In other words, the firm can be seen as a system where the way in which its elements (in our case, workers) are organized will determine the extent to which it can achieve its objective. These authors argue that characteristics such as teamwork and the monitoring of workers are therefore crucial to the workings of the firm. In short, this strand of the literature affirms that a firm’s production depends on its hierarchical structure.

[Agnapostate]

Since you once again chose not to reply to significant portions of my comments, I'll need to assume that those are undisputed points, and thank you for your concession.


You could cut your posts in half and convey the same amount of information. Your claim that I only regurgitate assertions is itself a regurgitated assertion. You always seem to be very angry when you type your posts.

Oaf, your comments (when and where they actually appear, as you selectively crop out many of my points, on which I'll be glad to reciprocate) are not actual responses to my own; they are irrelevant assertions or meandering speculations on your part, without the attachment of evidence or logical argument.


Do you even remember what we were talking about here?

Certainly. Do you? I don't regard the Coase theorem as particularly meaningful or subject to major application to externalities myself, though I do nod to Coase's writings on the firm, of course. I'm simply pointing out that some of the other Austro-propertarians have cited it as an alternative to Pigovian measures, insisting that it's simply a matter of measuring property lines correctly.


I am pretty

Not particularly. However, I was speaking of state interventionism, which was plentiful. If you knew your economics, you might be aware of the fact that trade barriers were erected in the nineteenth century, for example.


Say

Your bald assertions are tiresome, and have been. Provide arguments and evidence, or do not reply. Further assertions that lack argumentative support will be ignored completely. :lol:


It "worked" after Lenin implemented market reforms.

The NEP lasted until 1928; the gains I spoke of mainly came about in the 50's and 60's. Do attempt actual knowledge of the historical economic record before prattling next time.


I don't know

That's an accurate assessment. The problem, however, is that every anti-anarchist screed that Bryan Caplan has ever written has been thoroughly rebutted, though he is probably not sufficiently knowledgeable of the historical record to even attempt to circulate his commentary. The murder of 5,000 people is mass murder, and a war tragedy. However, your utopianism has reached new heights if fabled "anarcho"-capitalist fairyland eliminated all murder and crime somehow, particularly in a wartime environment. If you have actual criticisms of decentralized planning mechanisms in anarchist Republican Spain or market socialism in Titoist Yugoslavia, please mention them. Since you clearly do not, I'd advise that you concede this point, and move on to another one that you can offer a pretense of debating. :thumbup1:


Wow really?

Clever fellow! I'm glad you've conceded the point through your lack of contention.


But anyways, I don't think

Yes, that's generally true. Another spot-on assessment!


They aren't

Relevant to my statement? Yes, that would be correct, since the most effective gains produced by central planning occurred during the period that I mentioned. The time frame that you referred to was not characterized by central planning.


You do know

More than you? Yes, certainly; that's quite unavoidable. syndicat referred to Pareto optimality, which is generally accepted as a criterion of efficiency measurement, and was immediately referred to in the article that I cited. If English is not your first language, please state this plainly, and we can employ the use of Babelfish or some other translator that would facilitate more effective reading comprehension on your part.


Why don't you answer my simple question.

Questions usually have question marks. Since you apparently seem incapable of explaining the "incentive problem" of the socialist economy, I'll have to assume that it does not exist, unless you're able to finally provide an explanation in this next response.


Goldratt

Let's try this again: Cite an econometric meta-analysis or literature review that supports the assertion that the majority of the research on the topic yields the result that workers' ownership and management is an inherently inefficient and defective organization model.


I think

There's the problem. The more significant problem is that we are not interested in your unsupported speculation. Post evidence, arguments, or simply stop talking. You are losing this particular debate even worse than the majority of those you attempt to engage in on the forum.


Besides, the word "statist" is generally understood to mean a person who supports a big intrusive government.

Hence my suggestion that you adopt the term.


So what function performed by capitalists is a violation of property rights?

You wouldn't happen to be a broken bot, would you? If you did not understand the first time, go back and read it again; I am not interested in repetition with you.


Lol

My thoughts exactly.


Oh, so I didn't strawman you, I "implied stawmaned" you.

I never claimed that population was the only criterion of measurement of urban development. Who exactly were you speaking to when you replied as though that had been said?


Implied strawman. I obviously didn't mean that I would prefer to live in Venice in A.D. 600.

Obviously not, since it was an underdeveloped city.


Which barriers apply to industry-entering horizontal firms which don't apply to entering hierarchical firms?

How many hierarchical firms do you believe enter? The majority of firms in existence are proprietorships and partnerships not even sufficiently large to be classified as corporations. Corporations simply control the vast majority of market shares. As for labor cooperatives, their primary issue is the acquisition of startup loans even before they commence operation.


What? Negative externalities are not always side effects

Yes, that was your statement. Do attempt to defend it, since I'm not particularly interested in the bait-and-switch.


Remember what we were talking about? You have to measure social benefit.

Since you've apparently never seen a graph, that would be the difference between marginal private benefit and marginal social benefit as indicated through price level. When you take a first-year micro course, you might learn this.


I can't find

What I asked for? Evidently not, so let's try it again. Cite several econometric meta-analyses or literature reviews that illustrate that workers' ownership and management

This last post of yours is quite impressive. I don't believe I've ever encountered any other post on any other forum that is so lengthy yet lacks a single sound argument.

[anticap]

Skooma, remember this?






I've entered exchanges with you before. They've always ended with your repetition of assertions previously rebutted, instead of the formulation of new counter-arguments....This is what you say, but you are wrong.Nope, I'm going to agree with Agnapostate's assessment of your style of "argumentation," which I've also criticized you for. It seems to be your M.O.As if your agreement somehow settled the matter.I can't imagine what gave you the impression that I thought that it did. I simply agreed with the assessment, because it's been my experience as well.

Well, now you've kindly sparked a memory of something specific, and empowered me to bolster my above agreement with a bit of hard evidence...

Here's Agnapostate responding to you in this thread:



The argument is that under socialism, what incentive will there be for people to work hard?This contains an implicit assumption of your "equality of outcome" strawman. To expose that, why don't you write a short paragraph explaining why a socialist remunerative program discourages hard work?

And here's me responding to you back in December, nearly five months ago (then, as now, your question concealed an implicit assumption, which I exposed and refuted):



... what is the motivation to work hard? Why should I increase my productivity?It isn't wage labor, that's for certain. The capitalist pays the worker the market value of her ability to work. He then takes the product of her labor out into the market to realize his profit. The worker has already been paid; she is not motivated to "work hard" by the promise of realizing a share of the profit, which belongs to the capitalist.

Motivation to work hard comes when the worker realizes the full value of what she produces -- a situation that cannot exist under capitalism, which is characterized by the exploitation of surplus value. Capitalists are forced to resort to all manner of tyrannical methods to increase productivity (http://kapitalism101.wordpress.com/frederick-taylor-the-biggest-bastard-ever/). The existence of such methods is evidence enough that the above is true.

Of course, we all know know perfectly well that there are reams of such evidence of your "argumentation" M.O. in the forum database, but who can be fucked to go in search of them? Not I! I wouldn't even know what keywords to try. So I thank you for your help.

[Agnapostate]

Perhaps more annoying than his repetition of the same comments over and over again without actual counter-argument is his provision of little one-liners in response to actual arguments, as though no one will notice that such idiocy isn't even the shadow of a refutation. What else can one say when I post this?


Wealth is generally inherited (http://www.jstor.org/stable/1833031), and the most disproportionate wealth distributions were created through a period of primitive accumulation that involved development from the ashes of feudalism in Europe, and in America, slavery, genocide of the indigenous population and dispossession, formal state discrimination against immigrants, and the exacerbation of the consequences through other statist policies. http://www.mutualist.org/sitebuildercontent/sitebuilderfiles/MPE.pdf

Those wealth differences continue to develop because of the nature of the capitalist labor market, which involves arrangements of extraction of surplus value from workers in the production phase and usage of that gain in the circulation phase to sustain a cycle of capital accumulation.

http://i357.photobucket.com/albums/oo18/Dolgoff/ed4a754f.png

How exactly did you suppose that many people were born order givers and others order takers? Or have you retained your naive fantasy of rises and falls based on self-reliance and hard work?

Anticipatory responses aren't very difficult since you simply repeat the same prattle over and over again, so before your cries of capitalists simply being "other workers" that enter into a symbiotic relationship with manual workers that involves their assumption of risk and whatever other babbling about time preference that you plan on offering us, please recall that those functions are valid only if the institutional structure of the capitalist economy is intact, meaning that a mine simply could not function without miners, but a corporate purchase of land amenable to mining is irrelevant if they are not recognized as owners of the land. It's the difference between the material and social requisites of production. And support of that is dependent on an assumption of the superior efficiency of capitalist ownership, which the empirical literature on workers' ownership and management is in flat contradiction to.

And Oaf's response is...


So what function performed by capitalists is a violation of property rights?

http://forums.youthrights.org/images/smilies/lol.gif http://forums.youthrights.org/images/smilies/lol.gif http://forums.youthrights.org/images/smilies/lol.gif

[Skooma Addict]

Since you once again chose not to reply to significant portions of my comments, I'll need to assume that those are undisputed points, and thank you for your concession. Your posts are too long and repetitive. You also make petty arguments which just derail the topic (such as the whole conversation about Native Americans). Also, you didn't address all of my points, so it goes both ways. Finally, given that you only quoted the first word of what I said, I have to go back and forth between your post and my previous one to know what you are even talking about. However, I am not going to do this. You are also taking this conversation way too personally.


Certainly. Do you? I don't regard the Coase theorem as particularly meaningful or subject to major application to externalities myself, though I do nod to Coase's writings on the firm, of course. I'm simply pointing out that some of the other Austro-propertarians have cited it as an alternative to Pigovian measures, insisting that it's simply a matter of measuring property lines correctly.You brought up the Coase theorem where it didn't apply, which makes me believe you don't understand it. If you did, you wouldn't have brought it up.


Not particularly. However, I was speaking of state interventionism, which was plentiful. If you knew your economics, you might be aware of the fact that trade barriers were erected in the nineteenth century, for example.So you admit that welfare is not required for a stable capitalist economy?


Your bald assertions are tiresome, and have been. Provide arguments and evidence, or do not reply. Further assertions that lack argumentative support will be ignored completely. :lol:See, because you couldn't quote correctly, I have to go searching for what you were responding to here.

Ah, so here it is...

"Say you have a firm with thousands of people. A hierarchical structure allows for the management to acquire and standardize workers tacit knowledge. This is much more difficult for a horizontal firm with the same number of people. There is no price system which operates between individuals in a horizontal firm to convey and standardize such knowledge.

By the way, how would a horizontal firm locate and fix bottlenecks?"

Firms will traditionally use the well known SCEI model to aquire and standardize tactic knowledge, but Nokana's model does not apply to horizontal firms. How would a horizontal firm standardize such knowledge?

Again, how would a horizontal firm deal with bottlenecks?


The NEP lasted until 1928; the gains I spoke of mainly came about in the 50's and 60's. Do attempt actual knowledge of the historical economic record before prattling next time.Were the 50's and 60's times where the market was destroyed and replaced by socialism to the extent that it was under war communism? You are just avoiding war communism since it was a complete failure, and only market reforms improved the situation.


Questions usually have question marks. Since you apparently seem incapable of explaining the "incentive problem" of the socialist economy, I'll have to assume that it does not exist, unless you're able to finally provide an explanation in this next response.This was a problem in the U.S.S.R., and I also cited it earlier. So you should be familiar with it. Although I don't know the specific form of socialism which you propose, and I am assuming you don't propose simply assigning quotas which must be fulfilled. You might also propose some kind of common stock of goods which are available to everyone, but then there is no incentive to work harder since your entire product (or a set portion) goes to the common stock. So, what is the incentive given to people under the system which you propose to work hard?


Let's try this again: Cite an econometric meta-analysis or literature review that supports the assertion that the majority of the research on the topic yields the result that workers' ownership and management is an inherently inefficient and defective organization model.Why? I never claimed such a thing.


There's the problem. The more significant problem is that we are not interested in your unsupported speculation. Post evidence, arguments, or simply stop talking. You are losing this particular debate even worse than the majority of those you attempt to engage in on the forum.You want me to give supporting evidence suggesting that economies of scale exist?


You wouldn't happen to be a broken bot, would you? If you did not understand the first time, go back and read it again; I am not interested in repetition with you. I read it, and there is nothing in it which explains which functions performed by capitalists is a violation of property rights. I assume you just forgot what we were talking about and got into another one of your ramblings.


How many hierarchical firms do you believe enter? The majority of firms in existence are proprietorships and partnerships not even sufficiently large to be classified as corporations. Corporations simply control the vast majority of market shares. As for labor cooperatives, their primary issue is the acquisition of startup loans even before they commence operation.A firm doesn't need to be a corporation to be hierarchical. Also, I think that if sole proprietors can acquire startup funds, labor coops could as well.


Yes, that was your statement. Do attempt to defend it, since I'm not particularly interested in the bait-and-switch. If someone grows apples on their farmland and then makes apple pies to sell, there are no negative externalities. Negative externalities which cannot be internalized are only side effects of some production processes.


Since you've apparently never seen a graph, that would be the difference between marginal private benefit and marginal social benefit as indicated through price level. When you take a first-year micro course, you might learn this.The price level does not measure "social benefit." In case you didn't know, it is impossible to measure social benefit since utility is ordinal.


What I asked for? Evidently not, so let's try it again. Cite several econometric meta-analyses or literature reviews that illustrate that workers' ownership and management
Read the article I showed you. Then you can go to the "references" section and read more for yourself.


Perhaps more annoying than his repetition of the same comments over and over again without actual counter-argument is his provision of little one-liners in response to actual arguments, as though no one will notice that such idiocy isn't even the shadow of a refutation. What else can one say when I post this?I challenge you or anyone on this forum to show me an explanation of what function performed by capitalists is a violation of private property anywhere in that quote.

[Agnapostate]

Your posts are too long and repetitive.

Long and repetitive precisely because yours are short and repetitive. Mine contain lengthy arguments which occasionally need to be repeated because you're prone to regurgitate your two-bit assertions, though you've not composed a single argument.


You also make petty arguments which just derail the topic (such as the whole conversation about Native Americans).

You made inaccurate remarks about Native Americans related to stereotypical misconceptions about indigenous societies, and being a Native American and someone who's actually bothered to study social science a bit, I decided that I could help you out.


Also, you didn't address all of my points, so it goes both ways. Finally, given that you only quoted the first word what I said, I have to go back and forth between your post and my previous one to know what you are even talking about. However, I am not going to do this.

That would be direct reciprocation, idiot. You decided that you were going to cut out comments that weren't convenient, since you couldn't even pretend to respond to them, so I decided that quoting your posts in their entirety was unnecessary.


You are also taking this conversation way too personally.

Oaf, I've dealt with too many imbeciles that vomit the same nonsense that you have to care anymore, to the extent that I even did to begin with.


You brought up the Coase theorem where it didn't apply, which makes me believe you don't understand it. If you did, you wouldn't have brought it up.

The Coase theorem has every application to externalities, since properly drawn property lines could conceivably eliminate the need for Pigovian taxation. It's once again the real-world conditions that Austro-propertarians do not understand that prevents that. If you're unaware of that particular application, however, I'd suggest that you'd be the person here that doesn't understand it, as with so many other economic concepts.


So you admit that welfare is not required for a stable capitalist economy?

If I made that claim, it would not be an "admission." But I will not make that claim regardless, since social welfare programs are indeed required for efficiency maximization in the capitalist economy. I was merely pointing out that interventionism has existed in the capitalist economy since the earliest periods of industrialization and factory wage labor, which might reasonably be called the earliest period of capitalism, which has only existed since the early-to-mid nineteenth century.


See

That you still haven't responded to my comments? Quite clearly. Tacit knowledge is possessed by entrepreneurs, which means that the inequality generated by capitalism will reduce the number of potential entrepreneurs and thus create tacit knowledge problems. Socialism's recognition of the positive relationship between equity and efficiency facilitates maximization of entrepreneurial capacities, and the parallel maximization of tacit knowledge.


Were the 50's and 60's times where the market was destroyed and replaced by socialism to the extent that it was under war communism. You are just avoiding war communism since it was a complete failure, and only market reforms improved the situation.

The dichotomy between the market and socialism is a falsity; socialism provides foundations for freer and more competitive market exchange than capitalism because of its elimination of market power. I ignored War Communism because a period characterized by the allocation of essentially all industrial and labor output to military conflict and the ravages of civil war is not a good period for study, which is also why I do not focus on the 1940's. The rapid industrialization in the decade before that, however, was implemented during a period when the capitalist West was struggling through depression. Kuznets has remarked that, "the shift of labor force out of agriculture of the magnitude that occurred in the USSR in the 12 years from 1928 to 1940 took from 30 to 50 years in other countries."

Overall, from the period of 1928 to 1975, GNP growth in the USSR exceeded that of the USA for every time period except that of the 1940's, and real consumption per capita regularly exceeded USA levels from the 25 years from 1950 to 1975. Full employment was achieved (though I'd suggest that there were still underemployment problems), and education, literacy, and family ownership of basic appliances leaped enormously over the decades. By any reasonable estimate, central planning and the command economy yielded impressive results in many ways. Its deficiencies were that the lack of decentralized sovereignty and liberty created the coordination problems that apply to the market and state capitalist economies alike, from an economic perspective detached from their morally objectionable nature.


This was problem in the U.S.S.R., and I also cited it earlier. So you should be familiar with it.

You'll have to link back to your specific citation, since I didn't happen to spot it. I'm keenly aware that the state capitalist USSR had remunerative problems, but I've asked three or four times that you outline a specific problem with the socialist economy in providing work incentives, and cite specific theory and commentary that advocates that a remunerative mechanism with that problem exist. You haven't done that, after persistent requests, so I'm now going to assume that no such problem exists.


Why? I never claimed such a thing.

Actually, you falsely claimed that the majority of the empirical literature illustrated that workers' ownership and management was inferior to the organization model of the orthodox capitalist firm. Since your posts are so much more bark than bite, I asked you to provide an econometric meta-analysis or literature review to that effect, since individual studies could be exceptions to the norm. But you haven't yet provided the slightest empirical research whatsoever, not even a peer-reviewed study.


You want me to give supporting evidence suggesting that economies of scale exist?

What? Where is the argumentative support of your baseless contradictions? We couldn't care less about the fact that you stick your tongue out and chant that everyone here is wrong. What matters to everyone here is that you actually provide argumentative refutation. That you've ignored every identification of organizational deficiencies in the orthodox capitalist firm and the nature of market power in generating barriers to entry is a problem on your end.


I read it, and there is nothing in it which explains which functions performed by capitalists is a violation of property rights. I assume you just forgot what we were talking about and got into another one of your ramblings.

Extraction and re-circulation of surplus value facilitated by the social relations of production created by primitive accumulation. Not difficult.


A firm doesn't need to be a corporation to be hierarchical. Also, I think that if sole proprietors can startup acquire the funds, labor coops could as well.

Once again, we are not interested in what you think. Your meandering speculations are entirely useless without evidence. However, realistically, the dominant financial institutions of the capitalist economy are not those that cater to labor cooperatives, workers generally lack wealth and access to credit, and since proprietorships and partnerships already control disproportionately minuscule market shares, it would be that much worse if cooperatives had even less of a support network. Workers' ownership and management are not the standard form of firm organization because of the barriers to entry generated by market power.


If someone grows apples on their farmland and then makes apple pies to sell, there are no negative externalities. Negative externalities which cannot be internalized are only side effects of some production processes.

Poor sentence structure on your part, since your statement was that "negative externalities are not always side effects," which I interpreted as a statement that there were negative externalities that were not side effects. You didn't validate that statement when it was originally posted.


The price level does not measure "social benefit."

The difference between the MPB and MSB curves is the social benefit. Have you ever even looked at a simple micro textbook?


In case you didn't know, it is impossible to measure social benefit since utility is ordinal.

Most Austro-propertarian misapplications of utility result from their misunderstandings of its nature. Apparently, you haven't read Caplan as closely as you think you have.


Read the article I showed you.

I have read the article before, which is why I know that it is not a review of the literature on workers' ownership and management, but on the role of centralized structure on information and coordination more generally. It has little to no application to this discussion, which leads me to believe that you have not read it yourself, but instead mistakenly believed it to be a document that was somehow in contradiction to my perspective, though you didn't understand exactly how. The problem is that it first establishes a paradigm that I've rejected:


A decentralized market economy distributes decision-making authority to individual agents, who are motivated by their self-interest and are coordinated by market prices. This was contrasted with a socialist economy where decision making authority is vested in a central planner, on the basis of information communicated by individual agents.

There are parallel false premises in the socialist calculation debate in that capitalism is characterized by decentralized market exchange, and socialism by centralized marketless planning. I do not advocate centrally planned socialism, and indeed maintain that central planning impedes the establishment of collective ownership and management, in the anarchist tradition. Capitalism is itself dependent upon central planning in that it relies on state power for macroeconomic stabilization purposes, is composed of interdependent oligopolies rather than perfect or even monopolistic competition, as well as orthodox firm structure that approximates a hierarchical dictatorship and also runs into diseconomies of scale, knowledge problems, and agency costs.

Mookerjee's review resonates along those lines, as it also ultimately illustrates the principal-agent problems that I've correctly attributed to the divorce of capital and labor:


What have we learned from the existing literature? It identifies a number of potential costs of delegation: moral hazard for intermediaries owing to noncoincidence of their own objectives with the principal's, and their monopsony power over subordinates. These can result in production distortions (insufficient sourcing from subordinates), cascading of information rents across vertical layers, and problems of coordinating different horizontal branches. If agents do not collude, these agency costs of delegation can be avoided if (and only if) the principal can monitor subcontract costs or quantities, if contracts flow down the hierarchy, and agents are risk-neutral. If any one of these conditions do not hold then agency costs cannot be avoided.

The fact that such conditions do not hold is the very reason why discussion of the organizational deficiencies of the orthodox capitalist firm is relevant.


On the other hand, managerial risk aversion or limited capacity for principals to monitor local conditions or agent decisions can cause significant control losses from delegation, that grow with the size and complexity of the organization. This provides an explanation of organizational diseconomies of scale, i.e., why larger firms tend to be more "bureaucratic" and less able to control costs.

This is the last time I'll be articulating my request: Provide econometric research in the form of a meta-analysis or literature review that empirically demonstrates that workers' ownership and management is an inherently inefficient and unproductive organizational strategy in comparison to the orthodox capitalist firm.


I challenge you or anyone on this forum to show me an explanation of what function performed by capitalists is a violation of private property anywhere in that quote.

Here's how an argumentative exchange should function:

1. You make claim A.

2. I issue a refutation of claim A.

3. You respond to the refutation of claim A. Repetition of claim A does not constitute a response.

But you've been perpetually incapable of adhering to that process. As well-observed by Dean:


In fact, your posts almost never amount to anything more than flippant contradictions.

An insightful comment, as there's perhaps not been a single legitimate or sound argument in your posts, and persistent refusal to provide the empirical evidence that I keep asking for.

[RebelDog]

Finally, socialism, mutualism, syndicalism ect have been refuted to death.

They haven't even been born yet, so they cannot be dead.

[Skooma Addict]

You are more concerned with making a spectacle than having an actual discussion. Also, I will cite (and have provided) material where it is relevant. I am not going to go search for material and references for every single one of my posts. This is a discussion forum for the layman. It is not some serious academic website. Nobody cites evidence for every single point they make. Instead of refuting what I say, you just whine. It might be convincing to people who already agree with you, but to me it is just boring.

Also, I will not respond to all of your posts, since half of them are either repetitive or just your usual petty insults. I also notice that you didn't respond to my most important points.



The Coase theorem has every application to externalities, since properly drawn property lines could conceivably eliminate the need for Pigovian taxation. It's once again the real-world conditions that Austro-propertarians do not understand that prevents that. If you're unaware of that particular application, however, I'd suggest that you'd be the person here that doesn't understand it, as with so many other economic concepts. It only applies when there are no transaction costs. Just drop it already.


If I made that claim, it would not be an "admission." But I will not make that claim regardless, since social welfare programs are indeed required for efficiency maximization in the capitalist economy. I was merely pointing out that interventionism has existed in the capitalist economy since the earliest periods of industrialization and factory wage labor, which might reasonably be called the earliest period of capitalism, which has only existed since the early-to-mid nineteenth century.I am not going to go searching for the direct quote, but you said something like "Welfare and other related state programs are required for macroeconomic stabilization in the capitalist economy." Yet, there have been periods in capitalist economies where welfare was either minuscule or nonexistent in some places. You then decided to stop talking about welfare all together and start talking about state interventionism more broadly.


That you still haven't responded to my comments? Quite clearly. Tacit knowledge is possessed by entrepreneurs, which means that the inequality generated by capitalism will reduce the number of potential entrepreneurs and thus create tacit knowledge problems. Socialism's recognition of the positive relationship between equity and efficiency facilitates maximization of entrepreneurial capacities, and the parallel maximization of tacit knowledge.I already told you that Nokana's SCEI model allows hierarchical firms to turn workers tacit knowledge into explicit knowledge, after which it can be standardized and applied to the entire firm if it proves useful enough. You can look this up for yourself.

Tacit knowledge problems are dealt with in the market by the markets price system, as Hayek explained. Before you ask me to cite anything, try looking this up for yourself. If you still can't find anything, then I will help you.

Everybody possesses tacit knowledge, not just entrepreneurs. So, how do horizontal firms with thousands of people deal with tacit knowledge problems? How can the turn tacit knowledge into explicit knowledge, and the standardize it?

And for the fifth time, how do horizontal firms locate and deal with bottlenecks?


The dichotomy between the market and socialism is a falsity; socialism provides foundations for freer and more competitive market exchange than capitalism because of its elimination of market power. I ignored War Communism because a period characterized by the allocation of essentially all industrial and labor output to military conflict and the ravages of civil war is not a good period for study, which is also why I do not focus on the 1940's. The rapid industrialization in the decade before that, however, was implemented during a period when the capitalist West was struggling through depression. Kuznets has remarked that, "the shift of labor force out of agriculture of the magnitude that occurred in the USSR in the 12 years from 1928 to 1940 took from 30 to 50 years in other countries."

Overall, from the period of 1928 to 1975, GNP growth in the USSR exceeded that of the USA for every time period except that of the 1940's, and real consumption per capita regularly exceeded USA levels from the 25 years from 1950 to 1975. Full employment was achieved (though I'd suggest that there were still underemployment problems), and education, literacy, and family ownership of basic appliances leaped enormously over the decades. By any reasonable estimate, central planning and the command economy yielded impressive results in many ways. Its deficiencies were that the lack of decentralized sovereignty and liberty created the coordination problems that apply to the market and state capitalist economies alike, from an economic perspective detached from their morally objectionable nature.I am only familiar with War Communism and the NEP. I am not familiar with the periods that you are referring to. But I highly highly doubt that the U.S.S.R. ever attempted to destroy the market to the extent that it did under war communism.


You'll have to link back to your specific citation, since I didn't happen to spot it. I'm keenly aware that the state capitalist USSR had remunerative problems, but I've asked three or four times that you outline a specific problem with the socialist economy in providing work incentives, and cite specific theory and commentary that advocates that a remunerative mechanism with that problem exist. You haven't done that, after persistent requests, so I'm now going to assume that no such problem exists.The peasant was required to deliver everything in excess of his own and his family's needs. Naked requisition from so-called kulaks [the more prosperous peasantry] of arbitrarily determined surpluses provoked the two traditional replies of the peasant: the short-term reply of concealment of stacks and the long-term reply of refusal to sow more land than was necessary to feed his own family.

Edward Hallett Cam, The Bolshevik Revolution, 1917-1923, vol. 2 (London: Macmillan,
1952), p. 150

Then, after market reforms were put into place...

The reform was comprehensive. The first and major change was the
elimination of grain requisitioning and substitution of a proportional tax,
first in kind, then in currency, levied on the peasants individually. The
peasants were now free to keep a portion of their surplus production and
trade it in the markets that developed as a result. The inducement to
produce was a tonic that had immediate effects. The harvest of 1922 was
most favorable, and agricultural production returned to the pre-war level by
1925.

Besides the change in the tax, other measures were enacted to facilitate
the recovery of free trade. When collectivization of farming met resistance,
private landholdings were allowed. Peasants were free to cultivate the land
as they wished and were granted security of tenure. At first there was only
surreptitious leasing of land and hiring of labor, but by the end of 1922 this
was permitted by the new agrarian code. Compulsory labor was abolished;
wages were linked to productivity. Workers could be fired by their employers.

Now, I know you know the incentive argument. So just tell me what the incentive is to work hard under the system you propose. If it makes you feel better I will phrase it as a simple question. Under the system you propose, what is the incentive to work hard?


Actually, you falsely claimed that the majority of the empirical literature illustrated that workers' ownership and management was inferior to the organization model of the orthodox capitalist firm. Since your posts are so much more bark than bite, I asked you to provide an econometric meta-analysis or literature review to that effect, since individual studies could be exceptions to the norm. But you haven't yet provided the slightest empirical research whatsoever, not even a peer-reviewed study.Okay, I will help you out here.

This....


Actually, you falsely claimed that the majority of the empirical literature illustrated that workers' ownership and management was inferior to the organization model of the orthodox capitalist firm.Is not the same thing as this...


Cite an econometric meta-analysis or literature review that supports the assertion that the majority of the research on the topic yields the result that workers' ownership and management is an inherently inefficient and defective organization model.
And I will tell you now that I am unaware of any article which specifically addresses what the majority of the research claims. It is just pretty obvious. Most articles on efficient firms do in fact end up advocating some kind of hierarchy. Just the way it is.

I also for example don't know of any piece which explicitly states that most firms nowadays are hierarchical, even though we all know that they in fact are. Hierarchical firms are the dominant form of firm, and I don't think referring back to the emergence of capitalism and the feudal age really provides a satisfying answer for why this is the case.



What? Where is the argumentative support of your baseless contradictions? We couldn't care less about the fact that you stick your tongue out and chant that everyone here is wrong. What matters to everyone here is that you actually provide argumentative refutation. That you've ignored every identification of organizational deficiencies in the orthodox capitalist firm and the nature of market power in generating barriers to entry is a problem on your end. Cool down and relax. No need to get angry here. All I did is ask you a question since your post wasn't clear.

So, do you want me to provide evidence showing that economies of scale exist?


Extraction and re-circulation of surplus value facilitated by the social relations of production created by primitive accumulation. Not difficult. This is pretty vague and even then nothing here strikes me as a violation of property rights. Capitalists "extracting" what Marxists refer to as "surplus value" from workers is in no way inconsistent with property rights, as such a relationship is contractual.


Once again, we are not interested in what you think. Your meandering speculations are entirely useless without evidence. However, realistically, the dominant financial institutions of the capitalist economy are not those that cater to labor cooperatives, workers generally lack wealth and access to credit, and since proprietorships and partnerships already control disproportionately minuscule market shares, it would be that much worse if cooperatives had even less of a support network. Workers' ownership and management are not the standard form of firm organization because of the barriers to entry generated by market power.My assertion seemed pretty reasonable. If sole proprietors can acquire startup funds, why not worker coops? I am not going to go searching for evidence on this right now. If more than one worker was attempting to form the coop, then they could very well more easily acquire startup funds than a single sole proprietor. There you go again with "market power," but you have not provided any reason why coops face stronger barriers to entry than a sole proprietor.A coop can be efficient if it is in the right place serving the right market.



The difference between the MPB and MSB curves is the social benefit. Have you ever even looked at a simple micro textbook?Yes, I have. I read Mankiw's book when I took micro. Now, if you are going to just define social benefit as the difference between the MPS and MSB curves, then fine, go ahead. But if you are going to define it as the total sum of benefit to all individuals in a society, then you are faced with the reality that it is impossible to measure "social benefit." Utility is ordinal, as it is just a state of mind in the same sense happiness or love is a state of mind.


Most Austro-propertarian misapplications of utility result from their misunderstandings of its nature. Apparently, you haven't read Caplan as closely as you think you have.I prefer reading people like Dennett, Churchland and Metzinger on topics related to this. Now, given that you are a utilitarian, I expect you to have strange beliefs when it comes to social benefit and utility. However, we have moved on since the 19th century.


I have read the article before, which is why I know that it is not a review of the literature on workers' ownership and management, but on the role of centralized structure on information and coordination more generally. It has little to no application to this discussion, which leads me to believe that you have not read it yourself, but instead mistakenly believed it to be a document that was somehow in contradiction to my perspective, though you didn't understand exactly how. The problem is that it first establishes a paradigm that I've rejected:If you read it before you would have said so when I first presented it to you. The more likely scenario is that you just skim read it. Anyways, remind me of what it is we were talking about again? You said it isn't relevant, but I don't even remember what we were talking about here.



This is the last time I'll be articulating my request: Provide econometric research in the form of a meta-analysis or literature review that empirically demonstrates that workers' ownership and management is an inherently inefficient and unproductive organizational strategy in comparison to the orthodox capitalist firm. There is a decent piece on the growth of the structure of firms that I read for one of my classes. Unfortunately, I looked and I cannot find any online PDF version. Anyways, it is titled The Firm as a Dedicated Hierarchy: A Theory of the Origin and Growth of Firms.


Here's how an argumentative exchange should function:

1. You make claim A.

2. I issue a refutation of claim A.

3. You respond to the refutation of claim A. Repetition of claim A does not constitute a response.But you never refuted claim A. You simply forgot that I made claim A. Thus, I restated claim A.

[Dean]

Government, security and financial firms provide services to the highest bidder. In this way any accumulation of capital will consistently support a narrow portion of the population.

The reason this will be a consistent process is due to a tendency of the market to provide incentive for a narrow range of choices which provide for the best return for investments. In fact, the recent Collateralized Debt Obligation crash provided a great example of this narrowness:

http://online.wsj.com/public/resources/documents/info-flash07.html?project=normaSubprime0712&h=530&w=980&hasAd=true&settings=false


The similarity of the triple-B-rated investments in a mezzanine CDO, though, increases the likelihood that they will all suffer at once.
(follow the link if you don't understand why the triple-b investments are a narrow, yet apparently lucrative choice)

http://www.wikinvest.com/wiki/Collateralized_debt_obligation_%28CDO%29

According to data from Securities Industry and Financial Markets Association (http://www.wikinvest.com/wiki/Securities_Industry_and_Financial_Markets_Associat ion) global CDO issuance increased from $157 billion in 2004, to $503 billion in 2007.[3] (http://www.wikinvest.com/wiki/Collateralized_debt_obligation_%28CDO%29#_note-2) The total outstanding CDO is estimated to be over $2 trillion.[4] (http://www.wikinvest.com/wiki/Collateralized_debt_obligation_%28CDO%29#_note-3)


Of course, this is the real way in which finance (and therefore economic power) is managed. Piddly bullshit like "state intervention" and other emotive, idealist concerns rarely provide for any concrete examples to analyze in the market, and this is why you are still stuck in a childish, theoretical milieu. You'd have to critically assess real market systems to understand anything about the economy, and you've made it pretty clear that you're totally disinterested in it (I think you famously called fractional reserve banking "fraud" :laugh:).