From Youtube and from the university, after hearing many arguments for and against socialism and after reading a lot of Orwell, I've concluded that socialism is really a management system -that is, it is not a real alternative to "free-markets". But I don't like either term because it seems to me that lots of economics is subjective so when we say capitalism we aren't really refereing to anything in the world except as far as certain hypotheticals are met or not (This applies to everything I suppose but more so for the use of capitalism as a word).
I think this can be deployed in any arguments against capitalism -freedom isn't necessarily going to make you wealthier and intervention won't necessarily make you poorer, the difference lies in the fact that an economist would say that even if a central planned economy can produce more stuff, that doesn't mean that producing more stuff is unambigously good in relation to all the foregone opportunities.
So I would be wary of debating whether or not capitalism or socialism are superior organizational models -these are objective and outside of the subjective spirit of human action. Instead one should say, that hypothetically,If people prefer to keep their wealth, then taking it away must decrease wealth assuming we take wealth and preference in a purely praxeological manner (since it is technologically feasible for central planning to create wealth), that is, wealth as much as it is a subjective thing and not an objective one. I would be reservedly bold and say further that the more one strays from this line of argument the more liable you are to encounter insufferable contradictions. We should also,not be so opposed to socialists too, since their recommendations are just attempts at entrepreneurial activity and their theories are written for a different audience and different purpose than ours -thus comes equivocation and there can be no dialectic w/equivocation. Comments?
Sounds like a lot of BS to me.
"Sounds like a lot of BS to me"
/thread
Seriously though, the free market is more efficient, and just then the government. There's an actual connection between producer trying to please consumer, and the consumer getting what they want unlike politics where the government just gets to decide what it wants in the facade of some choice.
Isn't our current president not evidence of this?
Freedom has always been the only route to progress.
To clarify, if economics is basically subjective then why talk about objective stuff (wealth/productivity)? It doesn't matter how much is produced but what matters is rather the opportunity cost. So we should argue on opportunity cost and not on objective stuff.
The only way to eliminate economic profit (meaning revenue minus opportunity cost equals zero) is through free and competitive markets. This implies that capitalism is more efficient (remember, the defintiion of efficiency is the point at which you can't be made better off by making more transactions).
Human action is subjective, in that what one individual perceives as in his best interest might not be seen in the same way by another individual. One individual might want to pursue a career in law, while another might wish to pursue a career in theater. Which is better? It differs from one person to the next.
Economics is objective. Put a price ceiling on gas prices below the free market price, and there will be a shortage. This is what happens.
How do you talk about oppurtunity cost if you restrict individual choice? Suppose gas is at $3 per gallon. There will be individuals that fill up their gas tank on their SUV 3 times a week; there will be individuals who can only afford to do so once per week. Who are you to decide that gas should be priced at $1.50 per gallon? If you decree by law that the price shall be no higher than $1.50 per gallon, there will be a shortage. There will be long lines. The state, instead of realizing the futility of forcing the prices lower will just institute rationing. With rationing, you will get at most whatever the state permits to get. You no longer get to choose how much gas you would like to buy. And don't forget the time you lose by waiting in line.
Which world would you rather live in - the world where you buy as much gas as you need, or the world where the state chooses for you?
Even if socialism is just some other form of "organization," you are still left with that nasty little economic calculation problem...
Which means that socialism is a piss poor form of organization since it is doomed to fail because there is no way to determine how much and what to produce.
justinx0r: The only way to eliminate economic profit (meaning revenue minus opportunity cost equals zero) is through free and competitive markets. This implies that capitalism is more efficient (remember, the defintiion of efficiency is the point at which you can't be made better off by making more transactions).
Free markets are efficient because they preserve profits (and losses). Not because they eliminate them!
There is no misunderstanding that i have come across regarding the word capitalism, there might be different interpretations but the word in itself is not subjective at all. It is has a clear definition that is commonly agreed upon. Some people might want to disagree but that does not make it subjective. Socialism is not a management system; I think that gives far too much credit to central planning to call socialism a management system.
Management system definition: management system is the framework of processes and procedures used to ensure that an organization can fulfil all tasks required to achieve its objectives.
Socialist governments might use different management systems within their daily activities but defining socialism as a management system is trying to make out as if it is more organised and planned than it actually is. The governments spend money ad hoc and on a whim more often than not, changing from one supplier to the next and trying one method and the next, often with a varied set of motives. Not necessarily to improve efficiency or reduce cost or other such logical reasoning. Several cases can be found where the socialist governments make decisions where no clear objective can be found. It might be technically feasible for central planning to create wealth, but more often than not central planning requires taxation and miss allocates resources. So even though it might be feasible it is not what central planning is known for.
You should not be wary of debating whether capitalism or socialism is better, only a socialist would be wary of that debate because the evidence speaks for itself and they do not have half a leg to stand on.
fakename:So I would be wary of debating whether or not capitalism or socialism are superior organizational models -these are objective and outside of the subjective spirit of human action.
You are sooo far off base with this idea. There is no "subjective spirit of human action" besides the insight that all values are subjective. Austrians aren't saying socialism is the wrong value to hold (at least not qua austrians) but rather that if you value abundance of material goods including necessities like food, water, clothing and shelter, then socialism is the wrong means. The statement is properly objective with regard to facts, and properly subjective with regard to value. The antecedent is often assumed because no one is advocating socialism for the purpose of making humanity worse off.
We should also,not be so opposed to socialists too, since their recommendations are just attempts at entrepreneurial activity and their theories are written for a different audience and different purpose than ours -thus comes equivocation and there can be no dialectic w/equivocation.
First, how is advocacy of socialism an attempt at entrepreneurial activity? How is advocacy of anything entrepreneurial activity? Second, the audience of a theory has no bearing on the validity of a theory. You are flirting with polylogism here.
they said we would have an unfair fun advantage
DD5: justinx0r: The only way to eliminate economic profit (meaning revenue minus opportunity cost equals zero) is through free and competitive markets. This implies that capitalism is more efficient (remember, the defintiion of efficiency is the point at which you can't be made better off by making more transactions). Free markets are efficient because they preserve profits (and losses). Not because they eliminate them
Free markets are efficient because they preserve profits (and losses). Not because they eliminate them
Are you talking entrepreneurial profit or accounting profit?
In any case; why are markets efficient because they preserve - accounting or entrepreneurial - profit?
The state is not the enemy. The idea of the state is.
I disagree because even in your framework you're ignoring a crucial difference between capitalism and socialism: the means of organization. Capitalism is self organizing from the bottom up, starting from the individual unit. It relies on voluntary association between property owners and ends, in terms of its organizational powers, where property owners decide to disassociate with one another. Socialism attempts to manage from the top down. It applies categorical judgements of either an individual or oligarchal managerial class to all people regardless of consent. As such wealth is by definition destroyed at least on net because resources are being allocated against the will of their owners. As such any benefits accruing to any individual or group must always necessarily come at expense to others, leaving them worse off.
Socialism as a management philosophy ignores the fact that you need market input and feedback to manage effectively, and without that feedback all you're doing is making decisions with undiscoverable consequences. Free market capitalism on the other hand self organizes like a language, and analogously socialism is the claim that you can invent and impose a language from scratch without the consent or input from those who actually wish to communicate with each other. It's nonsense because the very process of interaction is what generates the information you need to function, and any attempt to codify the results - say as is a dictionary - is just historic in nature. It doesn't tell you anything about future conditions.
"From Youtube and from the university, after hearing many arguments for and against socialism and after reading a lot of Orwell, I've concluded that socialism is really a management system -that is, it is not a real alternative to "free-markets". But I don't like either term because it seems to me that lots of economics is subjective so when we say capitalism we aren't really refereing to anything in the world except as far as certain hypotheticals are met or not (This applies to everything I suppose but more so for the use of capitalism as a word).
So I would be wary of debating whether or not capitalism or socialism are superior organizational models -these are objective and outside of the subjective spirit of human action. Instead one should say, that hypothetically,If people prefer to keep their wealth, then taking it away must decrease wealth assuming we take wealth and preference in a purely praxeological manner (since it is technologically feasible for central planning to create wealth), that is, wealth as much as it is a subjective thing and not an objective one. I would be reservedly bold and say further that the more one strays from this line of argument the more liable you are to encounter insufferable contradictions. We should also,not be so opposed to socialists too, since their recommendations are just attempts at entrepreneurial activity and their theories are written for a different audience and different purpose than ours -thus comes equivocation and there can be no dialectic w/equivocation. Comments?" - fakename
AdrianHealey:Are you talking entrepreneurial profit or accounting profit?
Accounting is a method by which one can ascertain entrepreneurial profit (or loss) in terms of money.
AdrianHealey:In any case; why are markets efficient because they preserve - accounting or entrepreneurial - profit?
Do you understand that profits in terms of money is proof that scarce resources are employed efficiently, i.e., for the most urgent needs of the consumers, and that losses signify precisely the opposite?
DD5: justinx0r: The only way to eliminate economic profit (meaning revenue minus opportunity cost equals zero) is through free and competitive markets. This implies that capitalism is more efficient (remember, the defintiion of efficiency is the point at which you can't be made better off by making more transactions). This is the point at which profits are maximized. Free markets are efficient because they preserve profits (and losses). Not because they eliminate them!
justinx0r: The only way to eliminate economic profit (meaning revenue minus opportunity cost equals zero) is through free and competitive markets. This implies that capitalism is more efficient (remember, the defintiion of efficiency is the point at which you can't be made better off by making more transactions). This is the point at which profits are maximized.
The only way to eliminate economic profit (meaning revenue minus opportunity cost equals zero) is through free and competitive markets. This implies that capitalism is more efficient (remember, the defintiion of efficiency is the point at which you can't be made better off by making more transactions). This is the point at which profits are maximized.
They eliminate economic profit - not accounting profit which is what you're referring to (they're two seperate things). Free markets are efficient because firms compete to the point where there is zero economic profit ie. where marginal cost equals marginal revenue.
justinx0r:They eliminate economic profit - not accounting profit which is what you're referring to (they're two seperate things)
See above.
justinx0r:Free markets are efficient because firms compete to the point where there is zero economic profit ie. where marginal cost equals marginal revenue.
Absolutely false. You and others here are misapplying the concepts of final state equilibrium or the imaginary construct of the ERE. That modern textbooks still cling to such rubbish is very unfortunate.
Markets exist precisely because no such equilibrium can ever materialize. Markets are a category of human action, and human action and the concept of final state equilibrium are incompatible. It is nonsense to claim that markets are efficient because they tend to end human life as we know it. Markets are efficient because it is a process by which man can rationally economize in such a changing world, i.e., employ scarce means to attain the most urgent ends first. In such a world, profits are proof of efficiency. The more profits, the better the consumers are serviced and supplied.
Markets exist precisely because no such equilibrium can ever materialize. Markets are a category of human action, and human action and the concept of final state equilibrium are incompatible. Ok? You do realize you are stating nothing new here right? Everyone knows that there is no final equilibrium. It is nonsense to claim that markets are efficient because they tend to end human life as we know it. Strawman. Markets are efficient because it is a process by which man can rationally economize in such a changing world, i.e., employ scarce means to attain the most urgent ends first. You do realize I have already stated this, right? In such a world, profits are proof of efficiency. The more profits, the better the consumers are serviced and supplied. Exactly. I hope you re-read what you wrote because it hasn't really refuted anything I said. | Post Points: 20
Markets exist precisely because no such equilibrium can ever materialize. Markets are a category of human action, and human action and the concept of final state equilibrium are incompatible.
Ok? You do realize you are stating nothing new here right? Everyone knows that there is no final equilibrium.
It is nonsense to claim that markets are efficient because they tend to end human life as we know it.
Strawman.
Markets are efficient because it is a process by which man can rationally economize in such a changing world, i.e., employ scarce means to attain the most urgent ends first.
You do realize I have already stated this, right?
In such a world, profits are proof of efficiency. The more profits, the better the consumers are serviced and supplied.
Exactly.
I hope you re-read what you wrote because it hasn't really refuted anything I said.
I think both sides have a point here.
On one hand, it's too much to say that markets are efficient only to the extent that they eliminate profits. Profits themselves are market phenomena, and in the real world of fluid market data, their emergence and even their increase at some points in the market, are just as salutary for human prosperity as is their dwindling under competition in other points in the market.
On the other hand, it's too much to say that the ceteris paribus tending toward profit elimination is the same thing as "tending toward the end of human life as we know it". The tendency toward profit elimination is a real and important part of the market economy, even though it is (and should be) always off-set by constant shifts in the market data. Also this...
The more profits, the better the consumers are serviced and supplied.
...is open to misinterpretation. It's important to note that while more profits for an individual firm is a sign that that particular firm is servicing consumers well, more profits in the economy as a whole is not necessarily an indication that consumers are being serviced better than they would be had profits in the economy as a whole been lower.
justinx0r: Ok? You do realize you are stating nothing new here right? Everyone knows that there is no final equilibrium.
I don't respond to what you know because I am not you and I don't know what you know or don't know. I respond only to what you say and write. And what you say is incorrect. It logically contradicts what you claim to know.
justinx0r: Strawman.
Not according to what you wrote above.
You said markets are efficient because they eliminate profits. This is to totally misunderstand praxelogy and economics.
The socialist is not likely to be impressed very much by your explanation for why markets are efficient. He has a much more efficient method by which he plans to eliminate profits.
Daniel James Sanchez:The tendency toward profit elimination
under the special unrealistic assumptions ........ which helps us mentally grasp and explain how the function of the entrepreneur coordinates........etc, etc....
However, this is entirely different from saying that "markets are efficient because they eliminate profits". This logically implies that the emergence of profits represent an inefficient state of the market to begin with, while the final state of rest (equilibrium) represents the (ideal) perfect and efficient state. The market is efficient because it takes us to that efficient state of equilibrium. That is what is implied by such a statement.
Daniel James Sanchez:.is open to misinterpretation.
Not according to what you wrote above. You said markets are efficient because they eliminate profits. This is to totally misunderstand praxelogy and economics.
Wrong. I said they eliminate economic profit, not accounting profit. Thus your strawman.
I suggest you brush up on the definitions of the words I'm using and on your intermediate micro textbook.
My comments in bold:
From Youtube and from the university, after hearing many arguments for and against socialism and after reading a lot of Orwell, I've concluded that socialism is really a management system -that is, it is not a real alternative to "free-markets".
Well, maybe it's not an alternative, but the existence of one means, by definition, that you don't have the other. I think everyone agrees that capitalism requires private ownership of the means of production [=the capitalist]. Socialism requires that the means of production are owned by the state.
But I don't like either term because it seems to me that lots of economics is subjective
What parts of economics do you see as subjective?
so when we say capitalism we aren't really refereing to anything in the world except as far as certain hypotheticals are met or not (This applies to everything I suppose but more so for the use of capitalism as a word).
Not sure what this means. The word capitalism can be looked up in the dictionary.
I think this can be deployed in any arguments against capitalism
What can be deployed?
-freedom isn't necessarily going to make you wealthier and intervention won't necessarily make you poorer,
Mises wrote a whole book, Socialism, devoted to this very topic. He argues the opposite of what you claim here.
the difference lies in the fact that an economist would say that even if a central planned economy can produce more stuff, that doesn't mean that producing more stuff is unambigously good in relation to all the foregone opportunities.
Restating that in simple English, you are agreeing that socialism is incredibly wasteful, a destroyer of resources.
So I would be wary of debating whether or not capitalism or socialism are superior organizational models -
If one system is far less wasteful than the other, it may not be "superior", but I think we can fairly say most people would rather not waste their country's money.
these are objective and outside of the subjective spirit of human action.
I don't know what this means. I think LS hit the nail on the head here.
Instead one should say, that hypothetically,If people prefer to keep their wealth, then taking it away must decrease wealth
Decrease whose wealth? If the wealth of those who got it taken away, this is clearly true, and not bound by assuming anything praxeological.
assuming we take wealth and preference in a purely praxeological manner
Not sure what this means at all. LS for the win.
(since it is technologically feasible for central planning to create wealth),
If by creating wealth we mean getting maximal use of our resources, or close to it, this is wrong. See Mises' book Socialism.
that is, wealth as much as it is a subjective thing and not an objective one.
So there is a subjective and an objective definition of wealth? What are these two definitions?
I would be reservedly bold and say further that the more one strays from this line of argument
Which line of argument?
the more liable you are to encounter insufferable contradictions.
Such as?
We should also,not be so opposed to socialists too, since their recommendations are just attempts at entrepreneurial activity
Say a clumsy buffoon gets on the stage and starts dancing. He is making an attempt, but he should get out of the way and let the competent dancers do their thing, if the dance compan y wants to succeed. Besides, socialists want to steal everyones money. Why should we not oppose that?
and their theories are written for a different audience
No. They are trying to convince the masses that the right thing is to take away money from anyone who has any. We are trying to convince the same audience the exact opposite.
and different purpose than ours -
We both want the same thing, increase human happiness. The q is, who is driving us over a cliff and who is pointing in the right direction?
thus comes equivocation
Not sure what this means.
and there can be no dialectic w/equivocation.
Not sure what this means. Also, what does w/e stand for?
Comments?
Have you studied any Logic?
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