Its a dumb question. Maybe I'm derping. When we say "the market makes an economic use of resources", what does the word "economic" mean?
In that sense it's probably derived from the word 'economize' (or vice versa), or coordinated within the means-end framework of the individual; i.e. the economization of resources (means) towards the achievement of given ends.
It is an axiomatic truth (a category of action by Mises) that people prefer their more urgent wants to be satisfied with a priority compared to their less urgent wants. If your political philosophy restrains individuals from disposing with their property the way they would dispose (without violating another actor's property rights) of it if you did not intervene, then you are making them relatively less wealthier (resources are allocated and utilised comparatively less economically). You might say that libertarians suggest ethics that also restrain individuals from disposing of their property in some particular ways, like, for example, using their kitchen knife to murder their wife, which also makes them subjectively less gratified (the happiness the individual would experience from the death of his wife). Yes, but his wife is dead, which diminishesh her gratification to nil for infinity. The point is that individual's enrichment that diminishes someone else's gratification is making one guy relatively more wealthier on the expense of another guy who is now worse off. This is important in the individual co-existence (divison of labour) framework. And remember that property rights are a priori presumed before any economic act be performed and consequently economic theory be developed. So saying that property rights do not matter, so my act of enrichment that diminishes someone else's gratification is insignicant is inconsequential.
Sieben: Daniel James Sanchez:The Austrian claim is that capitalism is a social division of labor in which resources are allocated in a way linked to the priorities of the members of the society. Look at how many times "social division of labor" occurs in Human Action. It would have to be *all* the members of society. If it were just some then it means that central planning is compatible with capitalism. Or am I misreading you here?
Daniel James Sanchez:The Austrian claim is that capitalism is a social division of labor in which resources are allocated in a way linked to the priorities of the members of the society. Look at how many times "social division of labor" occurs in Human Action.
Capitalism is linked to the priorities of all the members of society. Even the priorities of panhandlers and children effect demand via their effects on the actions of producers.
Sieben: Daniel James Sanchez: What Mises proved is that the planning czar is entirely impotent in this regard. He proved that socialism, as a rational system of social production and provision, is impossible. Err, socialism is rational in that it is purposeful blablabla. Socialism is "impossible" in that it cannot be universally "economic", where "economic" means incorporating the priorities of individuals. But isn't there a hidden provision here? When when we say "the priorities of individuals", we really mean their priorities expressed through property rights.
Daniel James Sanchez: What Mises proved is that the planning czar is entirely impotent in this regard. He proved that socialism, as a rational system of social production and provision, is impossible.
What Mises proved is that the planning czar is entirely impotent in this regard. He proved that socialism, as a rational system of social production and provision, is impossible.
But isn't there a hidden provision here? When when we say "the priorities of individuals", we really mean their priorities expressed through property rights.
No, we mean priorities period. If a planning czar could magically arrange production so that it occurred exactly it would have been arranged in a market economy, but completely according to his commands, there would be no property rights in the means of production, but there would be rationality: resources would be allocated in a way advantageous according the wants of individuals in society. There wouldn't be mountains of mechanical pencil lead with no mechanical pencils to put them in. There wouldn't be mountains of polka CDs nobody wanted. Etc.
Jonathan M. F. Catalán:I don't think it's worth bringing in property rights.
It is worth it a billion times. Property rights is implied in the very act of exchange between two parties. There cannot be any exchange without a de facto institution of property rights. It is logically impossible.
Jonathan M. F. Catalán:This type of action led to the establishment of property rights, in my opinion;
It is the other way around. First there must be recognized property rights , only then can there be exchange. Later on as the division of labor expands and society becomes more "civilized",it may become economically expedient to develop more sophisticated and formal institutions of property rights, such as one that may be formally embedded in legal codes that may be demanded in order to facilitate exchange.
Daniel James Sanchez:No, we mean priorities period. If a planning czar could magically arrange production so that it occurred exactly it would have been arranged in a market economy, but completely according to his commands, there would be no property rights in the means of production, but there would be rationality:
Sieben:But if you just mean priorities period, then why aren't ALL possible systems economic?
It is not just about priorities (and I don't think that's what he means). We may regard the priorities as settled (as Mises would say it). But there is the embarrassing situation that the planner finds himself in; He cannot calculate the costs of any of the endless possibility of choices between different means, and therefore cannot compare between them.
DD5,
You missed my point.
First there must be recognized property rights , only then can there be exchange.
We're not talking only about exchange; we're talking about choosing means and ends.
Sieben,
No there wouldn't. Just because its the same superficial outcome does not mean its "economic". There is no link to the priorities of all individuals. Its just kind of happenstance. But if you just mean priorities period, then why aren't ALL possible systems economic? After all, my priorities are incorporated into the statist system because my priorities still matter even though there's aggression.
Right. The question is whether or not a central planner can coordinate in lieu of the market, and the answer is 'no'.
Sieben:There is no link to the priorities of all individuals. Its just kind of happenstance.
You're misunderstanding the scenario. It is no mere coincidence that the magic czar happened upon an advantageous arrangement. He made the arrangement for the express purpose of arranging production in a way that was advantageous with regard to the priorities of individuals. He deliberately wanted to avoid such situations as mountains of mechanical pencil lead with no mechanical pencils to put them in, and mountains of polka CDs nobody wanted.
Sieben: But if you just mean priorities period, then why aren't ALL possible systems economic? After all, my priorities are incorporated into the statist system because my priorities still matter even though there's aggression.
But if you just mean priorities period, then why aren't ALL possible systems economic? After all, my priorities are incorporated into the statist system because my priorities still matter even though there's aggression.
If you were a petty comrade, your priorities would matter for the immediate consumption opportunities at hand. But they would have no way of expressing themselves via the structure of production. If you were a planning czar, the priorities of you and your lackeys can find expression in a few pet industries you arrange to make sure you are taken care of, but you would have no way of adjusting the structure of production according to the priorities of anybody else. Therefore that would not be a system of social production and provision.
Danny:You're misunderstanding the scenario. It is no mere coincidence that the magic czar happened upon an advantageous arrangement. He made the arrangement for the express purpose of arranging production in a way that was advantageous with regard to the priorities of individuals. He deliberately wanted to avoid such situations as mountains of mechanical pencil lead with no mechanical pencils to put them in, and mountains of polka CDs nobody wanted.
Danny:If you were a petty comrade, your priorities would matter for the immediate consumption opportunities at hand. But they would have no way of expressing themselves via the structure of production.
Sieben: But preference can only be revealed via action. If the masses aren't acting, any coincidental market outcomes aren't "economic" because they didn't *incorporate* people's priorities, even though they *match* them.
But preference can only be revealed via action. If the masses aren't acting, any coincidental market outcomes aren't "economic" because they didn't *incorporate* people's priorities, even though they *match* them.
Okay, so you recognize that the outcomes "match" the priorities. And by assumption, the magic czar was able to cause that match deliberately and could do so again. That is "economic" inasmuch as anybody cares about systems of production being economic, unless people fetishize either the process by which it occurs, or property rights for their own sake.
Sieben: Danny:If you were a petty comrade, your priorities would matter for the immediate consumption opportunities at hand. But they would have no way of expressing themselves via the structure of production. They do express themselves in the structure of production. Everyone's preference to roll with the status quo vs rebel/die is revealed. What is not revealed is information about people's favorite icecream etc. So the system is at least partially "economic". But in real market economies, people's preferences about everything aren't revealed either. Like we don't know which sports car I prefer because I haven't chosen between any. So the universal permutation of preference expression can't be a defining criterion for markets either.
I said everybody's preferences are to some degree expressed in a market, not that all preferences held by each person are.
Jonathan M. F. Catalán: We're not talking only about exchange; we're talking about choosing means and ends.
Exchange is the process by which one chooses means and ends. When you talk about one, you are also talking about the other.
Robinson Crusoe can choose between means and ends even without having a second person to exchange with. I was discussing something much more elementary than exchange.
sidenote: thats 'autistic exchange'
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
"But in real market economies, people's preferences about everything aren't revealed either. Like we don't know which sports car I prefer because I haven't chosen between any. So the universal permutation of preference expression can't be a defining criterion for markets either."
How are you supposed to demonstrate your preference if you do not have what the other party of the exchange wants; to put it in other words, you do not have enough money to effectively demand the sports car you prefer more to all the other sports cars. You are not part of the demand for the particular, favourite of yours, sports car.
"No there wouldn't. Just because its the same superficial outcome does not mean its "economic". There is no link to the priorities of all individuals. Its just kind of happenstance. But if you just mean priorities period, then why aren't ALL possible systems economic? After all, my priorities are incorporated into the statist system because my priorities still matter even though there's aggression."
"No there wouldn't. Just because its the same superficial outcome does not mean its "economic". There is no link to the priorities of all individuals. Its just kind of happenstance.
But if you just mean priorities period, then why aren't ALL possible systems economic? After all, my priorities are incorporated into the statist system because my priorities still matter even though there's aggression."
Let me put it this way. In order to demonstrate your preferences to other individuals who participate in the division of labour, you must be an owner of something. Clearly, you own your body, you can choose to supply your labour as a dentist. By doing so, you increase the supply of dentist services and impact the formation of the price of these particular services. That is how your preference to work as a dentist is incorporated in the price mechanism. That is how others gain knowledge that an additional one individual to the previously already occupied dentists is now offering the same services. Thanks to your non-restricted acting on your most prior way of occupation a more economic (that is to say, creates economic affairs with lower alternative costs) allocation of resources takes place. Thanks to the price mechanism you can calculate your inpit and output prices, which lets you determine whether or not to continue working as a dentist. That is the point of the calculation problem! Under socialism the dictator pretends as if you do not own your body, so he assigns you where to work, for example, as a truck driver. Clearly, then, your private preference for employment was ignored. The question arises, how can he be sure that by decreeing you to be a truck driver, he is not directing such an allocation of resources that results in relatively higher alternative costs. He can not know now, can not know in the future also, because there isn't a profit-loss mechanism in which these alternative costs to manifest.
'We're not talking only about exchange; we're talking about choosing means and ends.'
I thought that all we were talking about here was the economic interaction between human individuals in a socialistic regime compared to a non-socialistic regime and more precisely to such an action-coordination system that does not limit (or limits them relatively less) the non-intitiating violence ways of use of one's property. A socialistic State circumscrabes an individual's possible array of choices, some of which may or may not include an exchange as a mean to an end or itself be an end. Hence, exchange is a part of the, as you like to put it, means -ends framework.
'Property rights is implied in the very act of exchange between two parties. '
Jonathan M. F. Catalán:Robinson Crusoe can choose between means and ends even without having a second person to exchange with. I was discussing something much more elementary than exchange.
In an autistic economy, one does not need to raise the issue of property rights. I don't think the context of this discussion, as well as your response of : "I wouldn't mention property rights", was that of an autistic economy.