Two ex-socialists go funny
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I think there is a very marked difference to what is implied by Von Mises. Power of disposal is the key, it implies that the body, not the community has the power to allocate and also therefore not allocate distribution.
==============================================Baron von Mises took the view that a single mind, a single planning authority, would assume absolute control over the (apriori) allocation of inputs and outputs within what he called a “socialist economy”. He dubbed this the “Fuhrer principle”. This naff fairytale has been endlessly regurgitated to the point of utter tedium ever since, by Ancaps and others (I don’t know if Stuart would now consider himself to be an Ancap or a liberal or some sort of hybrid or whatever)
At any rate, the position of the SPGB is absolutely clear. There won’t be anything remotely like what Mises had in mind in a socialist society because there can’t be. It is completely antithetical to the basic principles that inform such a society – quite apart from being completely impractical. Sure, there will be planning in a socialist society as there must be in any society (including capitalism) but it will be a polycentric planning system operating at different spatial levels of organization – global, regional, and above all, local. The interactions between all these production and distribution units being effected via distributed computer networks and operating on an essentially self-regulating basis that does away with the market completely.
I don’t know why this seems to be so difficult to comprehend yet you have people like Stuart droning on about the Hayekian “knowledge problem” – as if anyone literally advocates apriori society-wide planning in that sense. (Actually, not even Cockshott does in that apriori sense though he does support the idea of central planning AFAIK.)
The whole thing is a complete red herring. Perhaps Stuart in his next “Moneyweek” article might care to address this model of a socialist society that socialists like us advocate rather than some bogus model that few if anyone actually advocates
“But as far as know, Von Mises is just saying that without a single unit of account (i.e prices in units of money) you wouldn’t be able to make calculations and allocations based on this single unit of account. The question for us to ask is if such a single unit of account is as necessary as he thinks.”
As Einstein is often misquoted as saying “’Not everything that can be counted counts and not everything that counts can be counted”
(It was from actually from William Bruce Cameron, Informal Sociology: a casual introduction to sociological thinking)Perhaps I’m playing Devil’s advocate here, but if the argument is that production goods cannot be effectively allocated without a pricing mechanism how is saying “planning will be decentralised” an answer to that? Surely Von Mises could just say that even in a decentralised system this problem would still persist, there is still no way to compare dissimilar goods and make efficient allocative decisions in the face of competing demands.
If Von Mises is saying something like “only markets can effectively allocate production goods, and you can’t have markets without prices” then I would have thought it would be better to target the assumptions he’s making about needs and market efficiency. Or is he saying more than that?
StuartW2020:
Since you are so unexpectedly gracing this forum with your presence, perhaps you would reply to point (2)
here:https://www.worldsocialism.org/spgb/forum/topic/two-ex-socialists-go-funny/page/3/#post-204299
Perhaps I’m playing Devil’s advocate here, but if the argument is that production goods cannot be effectively allocated without a pricing mechanism how is saying “planning will be decentralised” an answer to that?
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DJP.The reason why it is an answer is because, quite simply, a decentralised or polycentric system of planning allows you to have a feedback mechanism whereas an apriori society-wide system of central planning, by definition, does not. Once you have a feedback system you have a means with which to effectively allocate inputs based on their relative scarcity/abundance. In other words, you have a self-regulating system of stock control in place, using only calculation in kind and straightforward mathematics to adjust the ratios of different inputs that comprise any particular bundle of inputs to ensure the most effective allocation of these inputs – based on their relative scarcity/abundance as mentioned.
This is the answer to Mises´ claim that you need a single unit of accounting to ensure the effective allocation of resources in a socialist society. You don´t. Mises couldn’t see this because he started from the false premise that a socialist society would be a centrally planned system (and the sense of society-wide planning). He was thus not able to recognize the possibility that a completely nonmarket system of production could indeed incorporate a feedback mechanism (providing it was a decentralised or polycentric system)
It’s not as if we have to reinvent the wheel here. All the basic aspects required for an effective system of socialist allocation beyond the market already exist. Even under capitalism, you can’t run a business without them. It is not money or any other single unit of account that is the necessary foundation of an advanced system of production but rather, calculation in kind. Try running a modern supermarket without stock control and you will soon enough discover the truth of this.
The whole Misesian calculation argument is a red herring and an irrelevance
@DJP,
I agree that I think the decentralisation argument isn’t sufficient (Cockschott, IIRC, would argue that if it can be calculated at the firm level, it can be computed at the global plan level).
For von Monkeys, IIRC, the issue isn’t consumer goods, but rational (and we will come back to that word) use of intermediate goods. He concedes that a socialist commonwealth can decide between 100 hectolitres of wine and 2000 hectolitres of oil, i.e. it can make consumer choices. But the production methods are opaque.
e.g. to produce the wine we can either use these two methods
Grapes….| 300 | 3000
Water……|1000 | 100
Wood……| 100 | 300With both methods producing the required quality and quantity of wine. Monkeys says we cannot rationally choose between the two without some sort of price metric, with knock ons for gluts, bottlenecks and shortages further down the production line.
As Robo says, we can use the law of the minimum, regulated stock control, etc. Cockschott says Kantorovich’s linear algebra can do the job.
My usual example of this is a sodoku in which one square is incorrectly filled in, after that all the other squares are filled in wrong, but they are filled in incorrectly while applying the rules correctly.
Now, Monkeys’ rationality is a flexible thing: in his introduction to a book about the Incas, a complex moneyless economy, he shifts the goalposts to say that this required tyranny to achieve. But usually, in rationality Monkeys is actually assuming his conclusion, a utility maximising market relation.
For instance, we could argue that so long as the goals of society are achieved, it doesn’t matter if a better productive method is available, our rationality is based on outcomes, not infinite ever increasing efficiency and sparing of labour.
“people like Stuart droning on about the Hayekian “knowledge problem””
I think I’ve written about it twice, maybe three times, in my whole life. Robin, on the other hand, really has been droning on about it for, what, five decades?! Fair enough, it’s an interesting subject, but the mistake you are making is in thinking that I am as ideologically committed to the opinions I write about as you are to yours.
“Since you are so unexpectedly gracing this forum with your presence, perhaps you would reply to point (2)”
I couldn’t see an actual question to respond to ZJW, but you and Robin seem to be confused how someone who once held to one set of ideas now holds to another. Surely that is not so surprising? The universe is infinite and our minds are limited and partial so all ideas are going to be wrong in some sense. Knowing that, we can listen to people we disagree with and learn something, rather than assuming that they must be bad-faith actors will evil intentions.
“he shifts the goalposts to say that this required tyranny to achieve”
That is closer to what I think than I have had the opportunity to say in my articles. Socialism is I’m sure in fact possible, but be careful what you wish for.
https://www.acton.org/religion-liberty/volume-33-number-2/3-things-you-need-make-socialism-work
“Perhaps Stuart in his next “Moneyweek” article might care to address this model of a socialist society that socialists like us advocate rather than some bogus model that few if anyone actually advocates”
One final thing is that what I say in the few articles I have written about this subject are completely uncontroversial to almost everyone, including most economists and socialists. The burden of proof is very much on you and the tens of people who agree with you. Perhaps write a book about it? I’ll review it when it comes out.
Actually, in saying that a socialist society could easily decide what consumer goods should be produced Mises made an enormous concession, even though he was just stating the obvious.
David Ramsay Steele (another one-time socialist who went funny) recognises this in his From Marx to Mises, a title that reflects his own itinerary, and criticises Mises for it.
Mises, he wrote on page 118,
“wrote ‘in any social order, even under Socialism, it can very easily be decided which kind and what number of consumption goods should be produced. No one has ever denied that.’”
Steele commented:
“Well I deny it. A society that cannot value factors ipso facto cannot value final goods-therefore a society that can value final goods can value factors, so Mises’s unwarranted concession about consumer goods contradicts his economic calculation argument. Without knowing what consumer goods cost to produce, the administration is in no position to select the kind and number of consumer goods.”
Why not? Of course it can, even if it is only a wish list. The decision of what to produce is a quite different decision than how to produce it.
Mises’s reply to Steele would no doubt have been to say that his argument was that a society without a market mechanism would not be able to decide how to produce what it wanted in a “rational” way. But, as has been pointed out, Mises’s argument here is circular as he defines “rational” as what the unrestricted market decides.
SW – “Fair enough, it’s an interesting subject, but the mistake you are making is in thinking that I am as ideologically committed to the opinions I write about as you are to yours.”
So perhaps was correct all along “You’re not going to make the big bucks writing accurately about Socialism in a magazine owned by Bill Bonner!!”
We’ve all got to make a living.
The magazine is no longer owned by Bill Bonner, not that it matters. And if you think you can make “big bucks” in journalism, then I suggest you try it. Perhaps tell us how it went from your pad in Monaco.
I’m closing up digital shop now for Christmas, or for the holiday period as I guess you’d prefer me to call it, so I shall say farewell again. It was nice to hear from you all. You might be interested to hear that these Dan and I are in a reading group with another ex-socialist who has gone funny, Dave Flynn, and another friend of ours. We are reading the classics of liberalism and political economy, perhaps working up to Capital. Some things, you see, never change! With best wishes to you all and hoping you all have a happy and prosperous, er, holiday period, Stuart
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