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Economic Calculation Problem Debunked!??

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ulrichPf replied on Mon, Apr 25 2011 5:28 PM

justintempler,

Don't bother asking him practical scenrios, he will not answer them, other than raising more unrelated abstractions or the standard: "these things will not be be needed in my society.

What is considered a luxury has obviously varied throughout time, go back far enough then even having a fixed meal a day was a luxury. If one day most people have yachts then he would no doubt be screaming that these things are a human right, not for the infantile rich.

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Robin,

"...and the question of how you might trade your time for a new chainsaw when the old one wears out  simply does not arise in a society in which one "gives according to one's abilitiies and takes according to one needs".

Sure it does lest you forget Soviet Russia in the 1970s1980s when there was wheat to be harvested rotting in the fields with the rusting of it's farm machinery and it's empty grain silos because people's abilities were being utilized in Russia's factories.

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eliotn replied on Mon, Apr 25 2011 9:29 PM

Now I will do a complete rebuttal, right now, since someone asked for one.

"The economic calculation argument (ECA) has to do with the claim that, in the absence of market prices, a socialist economy would be unable to make rational choices concerning the allocation of resources and that this would make socialism an impracticable proposition. Tracing the historical development of this argument, this article goes on to consider some of its basic assumptions about how the price mechanism actually works in practice; in so doing, it attempts to demonstrate that the argument is based upon fundamentally shaky foundations. A rational approach to the allocation of resources in a socialist economy is then sketched out. Such an approach is predicated on a particular view of socialism as entailing a largely decentralised – or polycentric – structure of decision-making in contrast to the view typically held by proponents of the ECA that socialism would entail central – or society-wide – planning. Applying a decentralised model of socialist decision-making, this article identifies a number of key components of such a model and goes on to show how, through the interactions of these key components, the objections to socialism raised by the ECA are decisively overcome."

I think rational choices would be a bit of a stretch.  As the planners in charge of socialism can still make rational choices towards means and ends that they want to achieve, the problem is that they would be misallocating, as they don't have enough information.

Now some questions:
1. In your introduction you haven't defined socialism.  How do you define it?

2. Ok, socialism is polycentric?  How would that work?  What would the government be like, if there was one?

Good luck.

Historical background:

"...

The aborted attempt to introduce so called “war communism” in 1918-1921 (in reality, a rigorous system of centralised rationing which, moreover, still retained elements of the market, rather than “free access” communism)"

I agree it retained elements of the market.  And it was centralized.  But how would retaining elements of the market cause it to fail?  And which elements specifically?

"The aborted attempt to introduce so called “war communism” in 1918-1921 (in reality, a rigorous system of centralised rationing which, moreover, still retained elements of the market, rather than “free access” communism)"

It seems like you are forgetting other socialist movements.  I look forward to seeing evidence that describes how your system will not fail.

 

An illustrative example:

"

So what exactly is the ECA about? To elucidate its core claims it would be helpful to use a hypothetical – and highly simplified – example.
 
Assume a factory in socialism manufactures a particular kind of consumer good, X. Assume that in order to manufacture X only two kinds of inputs are needed, A and B. Let us then suppose that there are three different methods for producing 1 unit of X which involve three different combinations of A and B, as follows:
 
Method 1 requires 9 units of A and 10 units of B Method 2 requires 10 units of A and 9 units of B Method 3 requires 10 units of A and 10 units of B
 
This prompts the question: which method should this factory chose in order to produce 1 unit of X? One might argue that it would make sense to use as few resources as possible to produce a given output since that would leave more resources over for doing other things. This alludes to what economists call “opportunity cost”. The opportunity cost of doing something is the best alternative you forego as a result. If you use a certain quantity of resources to produce one thing then you deny yourself the opportunity of using those same resources to produce something else. By minimising your opportunity costs you maximise the amount of resources that can be used for other purposes."

First, you are implicitly assuming that the goods are homogeneous.  This is not necessarily true, even if they are indistinguishable, people may use how they are made in terms of their valuations.  Using as few resources as possible isn't always the best choice, and you don't allude to the problem of picking between two different resources, even though you implied that it may be an issue!  And you seem to be missing the point of opportunity cost, as it is really just the "next best option".  The point isn't to minimize opportunity costs, the point is to pick the production process that can achieve the desired ends, using the goods (means).
 

"

"In terms of our example, this would require our factory at the outset to reject method 3. Why? Because while method 3 uses the same number of units of B as method 1, it uses more units of A."

Not always the right choice.  Do consumers prefer goods that are made by method 3?  Do workers prefer working in method 3?  Is the good different when produced by method 3?  A factory that only tries to minimize by amount of resources may be in error.

"In other words, there is no opportunity cost involved in rejecting 3 in favour of 1 or 2 assuming the output is identical in each case."

Not necessarily true.

"However it is possible method 3 may result in a slightly higher quality version of X because of the additional unit of A or B used (compared to method 1 or 2) in which case a small opportunity cost might be incurred."

At least you admit that the goods may be different.  And wrong use of opportunity cost in this excerpt.  It should be that the opportunity cost of producing X units of method 1 is Y units of method 2 that are higher quality.

"All this is fairly straightforward and there is no suggestion by proponents of the ECA that a socialist economy cannot ascertain whether one method of producing something is more – or less – technically efficient than another."

You are vague with this statement.  Is it only in cases where methods of production are worse in all possible aspects?  It could be interpreted more broadly.

"Socialism is based on the common ownership of the means of production."

How does common ownership exist?

Going to next section.

 

"

But what is actually happening in this “transformation process” whereby the “incommensurable subjective valuations” of individuals purportedly come to be expressed as objective exchange ratios or prices? Do the latter in fact actually capture the former? There is a kernel of truth in the claim that they do in that obviously if someone is willing to pay a price for a good he or she must ipso facto subjectively value that good. Otherwise the “willingness to pay” for it would not have arisen. But, of course, in a market economy mere “willingness to pay” is not enough; the means of payment – purchasing power- is what is crucially required and it is only willingness to pay that is backed up by purchasing power that actually affects prices. This is what economists call “effective demand” (presumably to be distinguished from “ineffective demand”). The subjective valuation that a pauper places on a square meal may be considerable but in the absence of the wherewithal to pay for such a meal, this counts for nothing. In short, the subjective valuations individuals place on goods cannot reasonably be said to be captured or embodied by the objective prices such goods attract in the market. Indeed, one might add that to suggest that they do, flatly contradicts a key myth of bourgeois economics – namely, that our wants are essentially “infinite” and the resources to meet them, limited.
 "
Comments:
1.  If someone is willing to pay for a good, they value the good more than the means used, not just that they value the good.
2.  You used purchasing power as the term?  I would say a good with purchasing power.
3.  True on willingness to pay backed up by enough purchasing power.
4.  Fallacy when you say that the subjective valuations are not captured by the market process.  The point is that they reflect relative valuations of goods, not if they would prefer having it as opposed to not having it.
5.  How does it contradict scarcity?  It doesn't follow.
6.  SCARCITY EXISTS.  IT IS NOT A MYTH.  EVEN IF EVERY PHYSICAL GOOD THAT I COULD EVER WANT EXISTED, THE FACT THAT I CAN DO ONLY ONE THING AT A TIME REFLECTS SCARCITY, AS I DO NOT HAVE THE POWER TO SATISFY ALL OF MY WANTS SIMULTANEOUSLY.  THE FACT THAT PEOPLE ACT IMPLIES SCARCITY, AS IF ALL WANTS ARE SATISFIED, PEOPLE WOULD NOT NEED TO ACT.
Sorry about my rant, but I think this is a clear weakness in the argument.
 
"It may be objected that while it does not aim to “quantify” our wants as such (along a cardinal scale), price does nevertheless reflect our subjective valuations insofar as it sheds light on our preferences (along an ordinal scale)."
 
No.  Price is a reflection that people have different subjective valuations.  You are attempting to confuse the issue by use of equivocating aggregate prices with individual valuations.  And how does your argument address that there are no universal prices?
 
"However, this still does not get round the basic problem: in a market economy you cannot express a preference if you do not have the means to do so: purchasing power."
 
Why not just clearly say that the problem is that people are poor, instead of cloaking it in eloquent language?  And the point of a preference is showing willingness to exchange X for Y through action, it is meaningless if I don't have X.
 
"While, according to conventional economics, effective demand determines price in conjunction with supply of the goods demanded, this effective demand is itself grossly unequally distributed by virtue of the unequal distribution of income."
You just redefined demand, presuming it is quantifiable.  How is this so?  And please be more coherent with your ideas.
And this begs the question.  How did these rich individuals get their wealth?
 
"Austrians respond to this by arguing that such differentials reflect the valuations individuals place on different occupations and the different contributions they make to society (which “society” duly “rewards” them for) but there is no way of testing this claim since such valuations are themselves subject to the limitations of “effective demand”"
How did they get the wealth to begin with?  This isn't an effective argument, as I can just respond that in a free market economy, individuals originally got their wealth this way.
 
"Thus, frivolous luxury goods can be “valued” more highly – i.e., attract a higher price – than food for the hungry because a rich elite has vastly more purchasing power at its disposal to competitively bid for, and so push up the price of, the former compared to the latter."
 
Problem?  Keep in mind prices determine costs, and if it wasn't costly to produce these luxury goods, entreprenuers would bid the price down to remain competitive.
 
"We should bear these points in mind in considering the merits or otherwise of the ECA; it is based on so-called objective data"
 
Not based on objective data.  Prices may appear objective, but are inherantly based on subjective valuations, and may change if the valuations change.
 
"To believe otherwise is to commit what is called the Fallacy of Composition – the illusion that what is true for each part of a whole must be true for the whole"
I think you are commiting a strawman.  Austrians never claim that prices are subjective, rather they depend on subjective valuations.
 
I want a break as this article is long. I will continue reviewing it.

Schools are labour camps.

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robbo203 replied on Tue, Apr 26 2011 1:20 AM

Sure it does lest you forget Soviet Russia in the 1970s1980s when there was wheat to be harvested rotting in the fields with the rusting of it's farm machinery and it's empty grain silos because people's abilities were being utilized in Russia's factories

 

I  think you have  a long way yet to go in your researches if you seriously imagine for one moment that Soviet state capitalism was a society based  on the principle "from each according to ability to each according to need".  Not even the most ardent Stalinist would make such a claim.  Lenin freely admitted that what existed in Russia was state capitalism and admired the state capitalism of the German War economy as an exemplar to be followed. 

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But Robin I thought Marx and Engels held that socialism becomes the inevitable outgrowth of capitalism because the evolution of the latter type of society generates problems which can only be solved by a transition to socialism. not collapse.

I'll contunue my calculation in kind criticism after you've had a chance to respond to eliotn. He brought a relevant point that pertains to my argument and your answer may negate my need to continue.

 

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eliotn replied on Tue, Apr 26 2011 7:17 AM

"I  think you have  a long way yet to go in your researches if you seriously imagine for one moment that Soviet state capitalism was a society based  on the principle "from each according to ability to each according to need".  Not even the most ardent Stalinist would make such a claim.  Lenin freely admitted that what existed in Russia was state capitalism and admired the state capitalism of the German War economy as an exemplar to be followed. "

 

Just devil's advocate, but isn't "from each according to ability to each according to need" emergent in the market process, as employers are looking for people who have the abilities they want, and people can buy goods they "need" through the market process?

Define capitalism.  How can I distinguish capitalism from socialism?

Schools are labour camps.

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Can I get a "hear hear" from anyone who 1) actually read the article 2) knows the basics of anarcho-communism 3) has anything but ad hominiem to offer?
I'd just like to know before I begin debating...

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Esuric replied on Tue, Apr 26 2011 12:19 PM

 I  think you have  a long way yet to go in your researches if you seriously imagine for one moment that Soviet state capitalism was a society based  on the principle "from each according to ability to each according to need".  Not even the most ardent Stalinist would make such a claim.  Lenin freely admitted that what existed in Russia was state capitalism and admired the state capitalism of the German War economy as an exemplar to be followed.  

Socialists seem to forget that Lenin instituted real socialism between 1919 and 1921. The result? 4 million dead from starvation, millions imprisoned in gulags, and massive migrations out of cities due to food shortages. It got so bad that Lenin had to institute his "reforms," i.e. partial market liberalization (he allowed farmers to own their own land, engage in some form of exchange, but continued to control capital intensive industries). Of course, he was heavily criticized, but Lenin was a relatively pragmatic socialist. 

"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."

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robbo203 replied on Tue, Apr 26 2011 12:25 PM

But Robin I thought Marx and Engels held that socialism becomes the inevitable outgrowth of capitalism because the evolution of the latter type of society generates problems which can only be solved by a transition to socialism. not collapse.

Yes and no.  Marx and Engels certainly envisaged the movement towards socialism as being propelled forward by the inner contradictions of capitalism - above all , its increasing inability to rationally utilise the productive potential it had created in its midst .  Interestingly, some of their writings read like a glowing panegyric to capitalist productivity which may come as surprise to some of anarchocaps who may never have read Marx before, preferring to rely instead on unreliable second hand accounts.   I would not, however, go so far as to talk of capitalism collapsing in the sense of imploding of its own accord.  M & E insisted instead on the need for the working class to bring capitalism to an end politically and consciously by democratically  capturing the capitalist state into order to dismantle the system shored up by this state.

The idea that capitalism might "collapse" of its own accord is one that has been put forward by various leftists from time  to time and is usually associated with the concept of the falling rate of profit advanced by Henryk Grossman in 1929 and developed by others since ( like John Strachey).  This however overlooked Marx's own argument about the counter tendencies to the tendency for the rate of profit to fall . The Marxian theory of crises which centres on the key concept of disproportional growth,  holds that there are no permanant crises in capitalism (and therefore no reason to suppose that capitalism would collapse) but, rather, a continuous trade cycle of bust and boom .  Every recession works to restore the conditions under which economic growth becomes possible only for that growth to lead back to recession.  Engels however latter departed somewhat from this position when the prolonged depression of the late 19th century led him to believe - quite wrongly - that capitalism had entered a "trough of despond" from which it would not be able to extricate itself.  But, essentially, the idea that capitalism would collapse is not part of the traditional Marxian perspective.

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Welocme to the forum Apfel.

1] yes. have you actually read the previous posts?

2] no. do you know the basics of Austrian economics, in particular can you summarize what the calculation problem is [which the OP made a total hash of]?

3] that was itself an hominem attack. Plenty of stuff besides ad hominem up there. It will be a good entrance into the debate if you will let us see your level of honesty and intellect by showing how accurately you can summarize the points raised, then refute them if you can.

4] A thought occured to me. If we are talking about for each according to his need, how can there ever be a revolution, meaning how can private ownership of property end? After all, the current owners of any property will all say they need [remember, need is "self determined"] everything they have already, plus more.

 

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The financial burden of the civil war and industrialization, moreover, called
for the nationalization of the banks, and the subsequent devaluing of the
currency. “The printing of notes,” Carr argues, “remained the sole serious
available source of funds to meet current public expenditure and to make
advances to industry.” So although the financial policies of War Communism
produced the “virtual elimination of money from the economy,” it would be
quite mistaken to view this result as the product of any anti-market intention.
The destruction of the rouble, according to Carr, was “in no sense the produce
either of doctrine or of deliberate design.”

The collapse of the currency had originally “been treated by every responsible
Soviet leader as an unmixed evil against which all possible remedies should be invoked.”
It was only after no remedy could be found that Soviet leaders began to make a virtue out of the
elimination of money, and “the view became popular that the destruction of
the currency had been a deliberate act of policy.”

The Soviet experiment with Pure Communism
Boettke, P. J.

 

tl;dr - that money was abolished purposefully because of ideology is Soviet propaganda; they where fighting a costly war and the economy suffered because of it, money became virtually useless

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money wasn't abolished purposefully but they printed the heck out of those paper notes...by accident?.

I didn't purposefully clean out my fridge but I did keep eating everything and never went to the store to stock up.

ymmv

 

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

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"Can I get a "hear hear" from anyone who ... 2) knows the basics of anarcho-communism..."

The basics of anarcho-communism....

Judging from the infoshop Anarchist  FAQ link that you posted on thezeitgeistmovement forum? nope.

"Some may decide on equal pay, others on payment in terms of labour time, yet others on communistic associations (we have indicated elsewhere why most anarchists consider that communism would be in people's self-interest, so we will not repeat ourselves here)."

one part makes the claim that you can determine prices, one part claims that you do not use prices and instead uses calculation in kind, and yet another part claims to be using the labor theory of value.

You are going to have to define YOUR version of anarcho-communism instead of throwing out multiple versions that contradict each other. Pick one flavor of anarcho-communism and follow it all the way through.

 

 

 

 

 

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1) I began; interupped the attemped when faced with ignorace and ad hominems in order to ask that question. Thanx for making it easier; now I know who's posts I can focus on.

2) Yes, I know a bit about the Austrians but I'm learning more. Yes, I can summarize the ECP, or rather the ECPs plural -
for I agree with the article that one could argue that von Mises and Hayek bring up two distinct arguments against the possibility of socialist planning, von Mises focusing on the nature of practical rationality and Hayek on epistemological arguments against primarily centralised planning.

Focusing on the first, I'd say that the issue is one of how to efficiently allocate resources: for instance in the choice
"whether we shall use a waterfall to produce electricity or extend coal and better utilize the energy contained in
coal” to quote von Mises, how is the decision to be made? We need some way of calculating benefits of alternatives, and this in turn requires a common unit of measurement.

3) I know, sorry :P

4) But that would be a lie. They'd want it, but they would not need it, truly. By need being self-determined one means that there will not be a central planning agency deciding how much of something I get. But, again, a capialist way of thinking is interposed on a communist society; that Marx's words can't apply if everyone is greedy and wants everything is self-evident. Therefore, an anarcho-communist society assumes that a cultural shift away from this thinking as a necessity before the revolution can occur.

Or to quote Captain Jean Luc Picard, in an episode dealing with a moneyless world, "I think we can all excercise some self-control". :)

 

 

 

nirgrahamUK,

I'd say stupidity, not accident. This is why anarchists are not fans of the USSR.
The point being that the incident in question is in no way similar to the suggestion made by anarcho-communists, and thus can't be used to "debunk" it.


justintempler,

Anarcho-communism = no money, no labour-units or energy units, etc, no markets.
Anarchist FAQ = general anarchist theories, including for example mutualism, which does include money and markets. Anarchist FAQ isn't all communist, though communist ideas are included among other "flavours" of anarchism.

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Apfelstrudel:
nirgrahamUK,

I'd say stupidity, not accident. This is why anarchists are not fans of the USSR.
The point being that the incident in question is in no way similar to the suggestion made by anarcho-communists, and thus can't be used to "debunk" it.

but when anarcho-communists 'give up' having a money, and then face extreme poverty and societal collapse from the lack of economic calculation, this won't be stupid, and so can't be compared to the State-communist experience?

Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid

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robbo203 replied on Tue, Apr 26 2011 1:08 PM

 

Socialists seem to forget that Lenin instituted real socialism between 1919 and 1921. The result? 4 million dead from starvation, millions imprisoned in gulags, and massive migrations out of cities due to food shortages. It got so bad that Lenin had to institute his "reforms," i.e. partial market liberalization (he allowed farmers to own their own land, engage in some form of exchange, but continued to control capital intensive industries). Of course, he was heavily criticized, but Lenin was a relatively pragmatic socialist.

Sorry but this is complete and utter nonsense. It is the same nonsense penned by the likes of the discredited conservative historian, Richard Pipes, who argued that what came to be called "War Communism" was not simply a 'temporary measure' but an ambitious attempt to introduce "full-blown communism." (The Russian Revolution, Fontana, 1992) as well as by the anarcho-capitalist, Murray Rothbard, in his dismally ill informed essay "The Death Wish of the Anarcho-Communists" .

It would be far more accurate to say that the (partial) collapse of discernably capitalist structures and forms of accounting was much more a consequence, than a cause, of the extraordinarily calamitous events that overtook Russia in the aftermath of the Bolshevik Revolution, culminating a bloody civil war and invasion by a number of western imperialist powers. What was established in the period of so called "war communism" (1918-21) - a term that was not used at the time but retrospectively introduced by Lenin - was a system based on state ownership, not common ownership, of the means of production and, by a decree passed on November 29th, 1920, any industrial concern employing over 10 workers was to be promptly nationalised. Control of the economy became increasingly centralised in the hands of the state and labour, far from being the free labour of a communist society, was increasingly regulated by the state and later subjected to Trotsky's infamous "labour militarisation" programme. Wage labour was not exactly abolished but up to 90% of wages were paid in kind. The collapse of the rouble in hyperinflation meant that money was largely, but not entirely, replaced by barter. Huge numbers of workers deserted the towns for the countryside prompted by massive food shortages and the prospect of benefitting from land redistribution but conditions in the rural areas themselves were likewise grim. The state pursued a policy of forcible confiscation of food while severe drought aggravated the situation enormously resulting in large scale famine.

In short, nothing about this brief period in Russian history resembled anything like a genuine communist society and the conditions - in particular, the absence of a sufficiently developed infrastucture and the general lack of communist consciousness among what was an overwhelmingly peasant population - that might have allowed such a society to come into being were notably ABSENT. You cannot introduce a communist society without mass understanding and support. This is basic Marxism. Anyone who claims that what happened in Russia in the period 1918-21 was "communism" does not understand the first thing about Marxism or communism.

 

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nirgrahamUK,

Except off-course, it's been explained in detail why economic calculation would not be a problem.
Also, money is not "given up". We don't just decide one day that "nope, no money anymore!". Rather, the need for money and markets is transcended, by designing a society where they are not needed. The abolishment of money is a consequence of the way society is built, not what society is built on.

 

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I would not, however, go so far as to talk of capitalism collapsing in the sense of imploding of its own accord.

So Marx never said capitalism would collapse, but Mises said communism [to use Marx's word] would.

How prophetic of both of them.

Too bad robbo forgot a few quotes of Uncle Karl:

The development of Modern Industry, therefore, cuts from under its feet the very foundation on which the bourgeoisie produces and appropriates products. What the bourgeoisie, therefore, produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable."
—Karl Marx and Frederic Engels, The Communist Manifesto[133]
Just a reminder, the Manifesto was published in 1848, a bit before 1929.
Communism is for us not a state of affairs which is to be established, an ideal to which reality will have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence."
 
Those two are from Wikipedia on Marx. Oddly enough, the article did not bother to find a single quote supporting robbo's position. Instead it mentions explicitly over and over just the opposite of what robbo claims.
 
Here is an excerpt from a very pro Marx article, one that considers him a great genius:
 
This was what made Marx and Engels's analysis of the coming communist society so powerful: their brand of socialism would succeed not because of mere striving and wishful thinking but because it was based in scientific study and represented the culmination of an inevitable trend in the modern world. Accordingly the Manifesto contained little discussion of political organization or revolutionary activity. Instead it presented communism as the direct product of a process of historical change involving a class struggle that was rooted in the effects of industrialization. The working class was destined to become a majority in society, and it would be bound, in the face of obvious economic oppression, to demand change, which could only be achieved by seizing economic and political power. In this view societies passed through great epochs: as feudalism had given way to capitalism, so capitalism would give way to communism. It was this faith in the inevitability of communism, as predicted by scientific socialism, that was Marx's great contribution.
 
But apparently the Marxists had themselves a problem recruiting troops with this. If it is all inevitable anyway, why should I get myself killed fighting for communism? I'd rather leave things as they are for now, thank you very much. Trotsky, who headed the army, had to do something.
 
We have no record of his fiery speeches that I know of, but we can see how he wheedled out of it, rather unconvincingly, if you ask me. What Marx really meant, though not what he said, was [according to Trotsky]:
 
The bourgeoisie and the working class are thus located on a soil which renders our victory inescapable – not in the astronomical sense, of course, not inescapable like the setting and rising of the sun, but inescapable in the historic sense, in the sense that unless we gam victory all society and all human culture is doomed.
 
So troops, stop being so lazy. All society and human culture is at stake here.
 
Those Marxists who still knew how to read were outraged at this travesty. As one Trotskyite put it:

...apparently arouses in the aforementioned comrades a violent reaction. This takes the form of heatedly denouncing as un-Marxist any suggestion that capitalism can be possibly followed by a society other than socialism; crystallizes in a mechanical formulation of inevitability; and accuses us of “abandoning Marxism” in posing the existence of historical alternatives.

Well! We have to calm these guys down. How about boring them to death with sophistry? If you have the extra room in your brains, here's what they came up with:

http://www.marxists.org/archive/draper/1947/12/inevitsoc.htm

But never fear. The true blue anti-robbo cops gave as good as they got:

To remove the principles of inevitability and spontaneity from Marxism, says Mattick, is to emasculate the teachings of Marx. It is to deny the concept of the universal operation of dialectic materialism and to ascribe to human consciousness a vastly over-rated role.

So robbo, you wouldn't want to emasculate the teachings of Marx, now would you?

 

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Apfelstrudel

"Anarcho-communism = no money, no labour-units or energy units, etc, no markets."

 
Great now that you have told me what it is not, you can start to explain what your version of it is. I'm assuming your version relies heavily on calculation in kind to an attempt to substitute for money.
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Apfel.

1. Robbo's solution of the calc problem has been ripped to shreds earliera few times over by the posters here. He made up his own version of the problem, and evaded the real problem by saying "Who cares? Anything will work. Votes, point systems, common sense, you name it."

2. You wrote:

They'd want it, but they would not need it, truly. By need being self-determined one means that there will not be a central planning agency deciding how much of something I get. But, again, a capialist way of thinking is interposed on a communist society; that Marx's words can't apply if everyone is greedy and wants everything is self-evident. Therefore, an anarcho-communist society assumes that a cultural shift away from this thinking as a necessity before the revolution can occur. Or to quote Captain Jean Luc Picard, in an episode dealing with a moneyless world, "I think we can all excercise some self-control".

So there is no central planning agency deciding what I need. On the other hand it's not me deciding for myself either. Then who will decide? And will this decision be enforced by violence, or be merely an opinion with no teeth?

Also, Marx really messed it up, you are saying. As did Lenin and Stalin and Trotsky and Castro and Che and every last Marxist and Communist on the face of the Earth until now. They tried to set up Communism BEFORE anyone had this cultural shift. A real Marxist would be writing psychology books about self control. Robbo himself is wasting his time on the calculation problem, because what we need first thing is to have a huge cultural shift.

 

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It is not my version, the lack of money (or rather, the lack of any need for money) is a basic anarcho-communist tenet, and an important point that separates anarcho-communism from other forms of anarchism.

As Rob already explained, "Calculation in kind is only one feature of interlocking system of coordinated features each serving a different function."You can't take the problem out of context. Yes, in natura calculation is a part of it; but so is for example deliberation.

 

Rob, check your PM for more info on the Zeitgeist connection if you haven't already.

 

 

Dave,

I never said you didn't decide for yourself. In fact I thought I made it pretty clear that you did, only excersising self-control and refraining from being greedy and ruining it for everyone else. No force, no coercion. Just responsibility, maturity, adulthood. We all learn at some point taking all the toys is not OK, other kids want to play to - the same kind of realisation must occur on a global level before a anarcho-communist society can exist.

I never said Marx messed up. I don't agree with him 100%, but those where different times. His theory needs to be updated sometimes.

I agree that psychology is important; even financial analysts recognize this (thus the field of behavioural finance). This is one reason that I first became interested in the works of Jaque Fresco (though I am more doubtful now), since he places such a great importance of behaviour and environment

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Apfelstrudel

"As Rob already explained, "Calculation in kind is only one feature of interlocking system of coordinated features each serving a different function."You can't take the problem out of context. Yes, in natura calculation is a part of it; but so is for example deliberation."

I'm still waiting for rob to respond to eliotn's post concerning the the flaws in his manufacturing example. If he can't address those flaws then there is no point on me giving him an even more difficult problem.

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robbo203 replied on Tue, Apr 26 2011 2:01 PM

 

So Marx never said capitalism would collapse, but Mises said communism [to use Marx's word] would.

 

As usual , Smiling Dave, your grasp of the argument is completely  inept. 

I specifically defined what I meant by "collapse" - capitalism imploding through the agency of some mechanism internal to itself.  If you are familiar with the literature (which I doubt)  you will be aware that the most commonly identified mechanism to which capitalism's  anticipated collapse is attributed is the falling rate of profit

You quote Marx thus

"The development of Modern Industry, therefore, cuts from under its feet the very foundation on which the bourgeoisie produces and appropriates products. What the bourgeoisie, therefore, produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable"

 

Yes but this is NOT A THEORY OF CAPITALIST COLLAPSE .  It is a theory about capitalism creating the conditions that will lead to its ABOLITION.  I dont subscribe to the inevitablism  of Marx's argument  but saying that it is inevitable that capitalism will be abolished  - through working class political organisation and action -  is NOT the same as saying capitalism will collapse.

Try to be a little more subtle and discerning in your theoretical ruminations in future.  You are constantly making blunders of this sort and putting your foot in it....

As far Mises predicting the collapse of Communism he was, as usual, talking tripe.  And, incidentally, celebrating the collapse of so called "communism" in the Soviet Union - actually  state run capitalism-  may be a little premature,  its seems , if Ian Bremmer is right and we are set to see a significant resurgence of state capitalism based on the phenomenon of sovereign wealth funds,  at  the expense of the so called free market.   Different from the old fashioned state capitalism of the soviet union in not being particularly ideologically grounded but state capitalism nevertheless

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Esuric replied on Tue, Apr 26 2011 2:15 PM

 was a system based on state ownership, not common ownership, of the means of production and, by a decree passed on November 29th, 1920, any industrial concern employing over 10 workers was to be promptly nationalised. Control of the economy became increasingly centralised in the hands of the state and labour, far from being the free labour of a communist society, was increasingly regulated by the state and later subjected to Trotsky's infamous "labour militarisation" programme. Wage labour was not exactly abolished but up to 90% of wages were paid in kind. The collapse of the rouble in hyperinflation meant that money was largely, but not entirely, replaced by barter. Huge numbers of workers deserted the towns for the countryside prompted by massive food shortages and the prospect of benefitting from land redistribution but conditions in the rural areas themselves were likewise grim. The state pursued a policy of forcible confiscation of food while severe drought aggravated the situation enormously resulting in large scale famine.

So we entirely agree about the conditions characterizing this period, but it's not "real communism" because it doesn't fit your own, personal, and entirely revised definition of communism. Wonderful. 

"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."

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Esuric replied on Tue, Apr 26 2011 2:29 PM

 I specifically defined what I meant by "collapse" - capitalism imploding through the agency of some mechanism internal to itself.  If you are familiar with the literature (which I doubt)  you will be aware that the most commonly identified mechanism to which capitalism's  anticipated collapse is attributed is the falling rate of profit

First, Marx's explanation for the inevitable demise of capitalism revolves around his theory of accumulation, of which his so-called "law of the declining rate of profit" is merely one component (they key factor revolves around the so-called "organic composition of capital"). Marx's theory of accumulation predicts a slow and gradual decline towards the complete and systemic destruction of capitalism. In other words, his framework cannot explain the cyclical fluctuations that we perceive; it cannot account for the "boom" which always precedes the "bust."

You haven't shown any familiarity with Marx's actual economic framework.  I'm convinced, therefore, that a serious and fruitful conversation with you is absolutely impossible. I will respond when/if you make a serious point.

[EDIT]

 The Marxian theory of crises which centres on the key concept ofdisproportional growth,  holds that there are no permanant crises in capitalism (and therefore no reason to suppose that capitalism would collapse) but, rather, a continuous trade cycle of bust and boom .  Every recession works to restore the conditions under which economic growth becomes possible only for that growth to lead back to recession.  Engels however latter departed somewhat from this position when the prolonged depression of the late 19th century led him to believe - quite wrongly - that capitalism had entered a "trough of despond" from which it would not be able to extricate itself.  But, essentially, the idea that capitalism would collapse is not part of the traditional Marxian perspective.

Please substantiate this claim. Marx's theory entirely ignores relative disproportionalities; it is a theory of overproduction.

"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."

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robbo203 replied on Tue, Apr 26 2011 2:56 PM

Robbo's solution of the calc problem has been ripped to shreds earliera few times over by the posters here. He made up his own version of the problem, and evaded the real problem by saying "Who cares? Anything will work. Votes, point systems, common sense, you name it

 

Yet another example ,Smilling Dave, of  your complete inability to grasp what the argument is about.  You are confusing so many different things that  you are virtually drowning in your own incoherency.

You say my solution to the ca;lculation prtoblem has been ripped to shreds by the posters here.  Really?  Actually, what Ive noticed increasingly is just how remarkably slapdash such criticism has been and how poor the level of debate has been.  What has been completelty ignored is that the solution put forward consists of several interlocking components.  The function of one component is different from another but they are all necessary to the overall functioning of the system itself

What has happened is this.  My critics  have looked at one particular component and deduced that,  becuase it does not perform a particular function,  that therefore  my solution is invalid.  What they fail to see is that that function is actually intended to be perfomed some other component, not the component under discussion.  Its the total picture you need to grasp not just one aspect of it.  Sadly this is what you and others have conscpicuously failed to do

 

There are four basic compenents to the model proposed

They are
 

1) calculation in kind

2) a self regulating system of stock control

3) the law of the minimum

4) a hierarchy of production goals.

Now please try to read the article again - this time carefully - and try to get a grasp of what the functions of these different components are .  Also try not to confuse this with the issue of ratioining.  The points system you refer to above doesnt actually have anything to do with the argument about economic calculation. 

I really dont want to spend my time here constantly having to correct misunderstandings and point out non sequiturs

 

 

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1.  Oh, so abolition is not the same as collapse. Marx said it would be abolished inevitably, but not that it would collapse.

And "internal" is not the same as "cuts under its own feet" and "producing its own grave diggers".

And Marx was all about "working class political organization and action", but at the same time "Accordingly the Manifesto contained little discussion of political organization or revolutionary activity. Instead it presented communism as the direct product of a process of historical change"

And of course we have this gem from Uncle Karl:

The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring order into the whole of bourgeois society, endanger the existence of bourgeois property.

In other words, the forces of capitalism endager its existence. But that is just abolishing it, not collapsing it.

To be fair, you seem to be making the following distinction.

Abolishing means that the proletariat will be so angry at their being screwed over that they will revolt. Whether Marx said or meant that they will do this on their own [powered by the fuel of historical inevitability], or that they will need some prodding [because they don't know or care about all of civilization collapsing and have to be reminded], is an internal debate amongst the Marxists.

Collapsing  means even if everyone is happy and have no reason to complain, because everything is peachy, something will go wrong. Hey, I don't think that kind of collapse will happen either.

2. I notice you havent stopped replying to all of the critiques of your article once they left you no room to nit pick.

3. And did you really go to high school at age 53, as you claimed in an earlier post?

 

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Esuric replied on Tue, Apr 26 2011 3:29 PM

 3. And did you really go to high school at age 53, as you claimed in an earlier post?

Irrelevant

"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."

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So we entirely agree about the conditions characterizing this period, but it's not "real communism" because it doesn't fit your own, personal, and entirely revised definition of communism. Wonderful.

Sorry Esuric, that period, as was everything that happened on the face of this earth so far, even in so called Communist or Socialist or Soviet countries, was Capitalism. State Capitalism, but Capitalism nonetheless. No wonder it all "collapsed" or was "abolished".

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Esuric,

I am guessing that you or, any other anarcho-capitalist worth their salt, would claim that true capitalism has never existed. And if I where to say that >>it's not "real capitalism" because it doesn't fit your own, personal, and entirely revised definition of capitalism<< you'd tell me I'm wrong. You'd tell me >>it's not real capitalism because it doesn't follow the theories, and actually contradicts them on many points!<<

 

The exact same thing, in reverse, is true of Communism. And we're not even discussing orthodox Marxism here, but anarcho-communism, which despite the word "communism" being in there is different. You know, kinda like anarcho-capitalism is not just the capitalism we see around us, but very different. Wow, seems that "anarcho-" changes a lot! A prefix changes the meaning of a word, who'd a thunk it? :D

 

 

Also, would anyone care to comment/correct my definition of the ECP, and perhaps enlighten us to what the real issue is, if we have misunderstood?

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Esuric replied on Tue, Apr 26 2011 3:36 PM

 I am guessing that you or, any other anarcho-capitalist worth their salt, would claim that true capitalism has never existed.  

This is why we should stick to theory and facts. 

"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."

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tl;dr version of this thread:

Ye olde communist argument that all communist experiments ever were really capitalism and that's why the results were as seen.

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Robbo,

Let me make sure I understand you. This is what you think:

1. None of those four points solves the calculation problem. But the four of them put together will do the job. In this case, the whole is greater than the sum of its parts.

2. What you put together in your paper, about do we use 10 of M and 9 of N, or 9 of N and 10 of M, or maybe even 10 and 10, is the calculation problem.

3. The longish quote from Mises describing the calculation problem is really just a verbose way of describing what you did so well in the paper in a few words. He was also talking about 10 M's and 9 N's.

4. The answer to Mises' question "How should the director build his house?" is "Go through my 4 point checklist. Calculate in kind, self regulate your stocks, use the law of the minimum, and set up a heirarchy of production goals."

5. Anything where people do not get according to their own self determined need is Capitalism. Socialism and Communism have never been tried in practice.

6. Self determined need excludes childish and selfish desires. Those are bourgeois, and will disappear after the revolution.

Do I have it right?

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Esuric:

 3. And did you really go to high school at age 53, as you claimed in an earlier post?

Irrelevant

I see a relevance, in that it shows he is a liar. unless he really did finish high school at 53. But in that case, as Trump said to Obama, show me the paperwork.

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1. I can ride a bicycle when it is whole and assembled. If I disassemble it, I can't ride it. Does that mean that" the whole is greater than the sum of its parts"? Not really, maybe in a figurative way... mostly it just means that things tend to need to be whole, and not disassembled, in order to work the way they're supposed to.

2. That is an example of a calculation problem, far from the whole thing.

Please do elaborate as to exactly what you consider the ECP to be.


3. No, but the Ns are a gross simplification that a person not familiar with the problem, that doesn't understand the direct quote of von Mises, may require.
 

4. A "checkpoint" like that is more an example of different things that can be considered. An anarcho-communist approach rejects Cartesian rationalism and the algorithmic conception of practical reason.
Rather, the knowledge that informs decision making is taken to be uncertain, and the rules of rationality rarely determine a single answer given what is known. The answer, furthermore, can differ depending on the situation and context. It is the mark of the pseudorationalist, to paraphrase Neurath, to assume that for a rational choice, we need to find a method that can resolve any conflict. That reason requires not standards, measures or methods plural, but a standard, a measure, a method singular.

 

5. Anything that has markets and money is not socalism. If calling it a form of capitalism makes you uncomfortable because you envision capitalism to be something different, let's call it "statist economy" or "bureaucratic centrally planned market statism". Whatever, doesn't matter - it's neither true socialism nor true capitalism.

 

6. No, the "revolution" will not occur until they are gone. But we could call their disappearance a moral or philosophical "revolution" too . But yes, the change in society from being one based on selfishness and greed to one based on egalitarianism and sustainability is paramount to anarcho-communist thought.

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I never said you didn't decide for yourself. In fact I thought I made it pretty clear that you did, only excersising self-control and refraining from being greedy and ruining it for everyone else. No force, no coercion. Just responsibility, maturity, adulthood.

But who is to say if I am being greedy etc? Do I decide whether my need is legitimate, or does somebody else? Either way you are in trouble.

Also, would anyone care to comment/correct my definition of the ECP, and perhaps enlighten us to what the real issue is, if we have misunderstood?

The calculation problem is not what Robbo said it was. It is the last thing he addressed, the heirarchy of production.

I'm a bit buzzed now, so I will explain it this way. Imagine that Captain Kirk of Star Trek lands on a strange planet. It is one huge field of tiny little eggs, as far as the eye can see. Wherever he goes, he must step on an egg and kill it. All the eggs look alike. His mission is to collect a certain thousand eggs, or the universe explodes. Sadly, those thousand are indistinguishable from the others. So as he steps forward to collect what might be one of the thousand that save the universe, he is killing many others under his big feet. And those killed ones might be the very eggs he is looking for. Of course, if he does nothing, or just picks the ones closest to him, the odds are the same of the universe exploding. You can see that he has a problem.

Now if, hovering above ground, is an aircraft full of natives telling him "We need the egg at coordinate 57 longitude, 38 latitude, and at 2 longitude, 67 latitude, etc.", his mission is easy. Sadly, some eggs will be crushed, but the universe will be saved.

Mises was saying that even if we have a heirarchy of production, food first, yachts later, the question remains unanswered, "What kind of food?" An answer such as "use the law of the minimum to decide" is absurd, because we can probably say with certainty that not everyone will like that food. Many would prefer to have tastier stuff than that garbage, even if it means their ipods will contain only 50,000 songs, not 100,000. On the other hand, music buffs would rather have the songs than the higher quality food. Someone will have to suffer, no matter what decision is made.

Of course, it would be nice if you could just take a poll, but the possibilities are so intertwined, and the variations so endless, that the list cannot be made. In fact, there are many unintended consequences as well. The innocent decision to use brick instead of wood to guarentee a solid house, may very well, somewhere down the road nobody even thought of, mean there won't be enough brick for building a factory that makes things people want. And yet, if we use wood, the houses won't last as long. Every single decision has to take into consideration every possible effect on everything else.

In other words, at every step of the way, whatever decision is being made about what to produce exactly, it makes untold other options impossible. [This is analogous to Captain Kirk's problem. Choosing one egg means killing alot of others].

And who is to say what the right thing to produce is, in what quantity, of what materials, using what land and how much and what quality labor, how much time and material to put aside for seeking new stuff? As well as many thousands and thousands of other questions.

As an aside, Robbo's answer of "Just keep replenishing what you have" is ridiculous. Is the population number to be static? Is it's composition eternal, with every poll showing us the same amount of men, women, children, as yesterday? If I wanted a certain book today, will I want the same book tomorrow, or a book at all? Will I always want to live in the same place? If Robbo took over the world before Ipods were on the market, we would never have Ipods, because there would be no budget for them in our stock, which we mindlessly [remember, he thinks a computer will be ideal for this work] replenish over and over, allocating it always to the same place for the same thing.

Enter the alien craft, guiding us to the right eggs. this is the price mechanism. Smith. a talented entrepeneur, not a computer, risking his very fortune on every decision [so that he is very likely to be as sure as can be], takes his best guess as to what people will want. He thinks they want Ipods. Ipods with some steel in them [I don't know if they do or not in reality, but they do in this example] so he goes to the steel mill to buy some.

"Sorry", he is told. "Jones wants all my steel to build microwaves. None left for you. Unless you pay me more than he does."

So a bidding war begins between Smith and Jones. Smith has a growing sense of horror, because if he matches Jones' bid for the steel, he will have to raise the price of the Ipods beyond what he thinks people are willing to pay. He retreats from the field. "I guess I'll have to make those Ipods out of plastic."

Jones is perfectly happy, because he thinks people are so desperate for microwaves they will pay the higher price caused by this bidding war for steel.

The Ipod egg has been shattered to save the microwave egg. But the correct decision has been made.

Summing up, the existence of a price for Ipods, for microwaves, and for steel have automatically [assuming Smith and Jones have estimated the people's desires correctly] gotten people exactly what they want. Cheap plastic Ipods and sturdy steel microwaves.

Of course, it is more complicated than that, because of thousands of products need steel. All are bidding for it. And for every other factor of production under the sun. But they are all taken care of by the same principle, the price system. 

Now Robbo raised a few objections to this.

First, it is all founded on guesswork. Smith and Jones have to guess as to what people want. And if they guess wrong, resources have been wasted. Had he read up on the calculation problem, he would have known that Mises addressed himself to this problem. The posters here also addressed it, calling it the nirvana fallacy. Meaning, true it's not perfect, but it sure beats Captain Kirk's situation.

I don't remember the other objections now. The buzz has taken over.

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z1235 replied on Tue, Apr 26 2011 5:06 PM

A two-step ECP debunk:

(1) Sheep don't calculate. Shepherds do.

(2) Turn people into sheep.

Q.E.D.

After all, sheep have no use for money or markets, and yet -- through a carefully constructed set of interlocking components (mainly paddocks, doors, and fences) -- they still get whatever they want, whenever they want it. Lucky bastards. 

 

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Oh, yeah. Now I remember. His other objection was "Why can't everyone have what they want for free? Why does everything have to be paid for? This is unfair to the poor."

Damm, but that sounds so foolish reading it. I mean, really.

 

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robbo203 replied on Tue, Apr 26 2011 5:13 PM

 

Esuric

So we entirely agree about the conditions characterizing this period, but it's not "real communism" because it doesn't fit your own, personal, and entirely revised definition of communism. Wonderful

No , "ridiculous". would be more accurate.   If you knew anything about the history of communism you would soon realise that my definition of communism is neither my own personal one.  Nor is it an "entirely revised definition of communism" .  Actually the opposite is the case - yours is the revisionist definition of "communism", not mine.  Up to the Russian Revolution and indeed beyond,  communism was generally understood to be more or less synonymous with "socialism " -   a moneyless wageless stateless society in which individuals would give according to their ability and take according to their needs,  Even the Bolsheviks, despite the tremendous disservice they did to the communist cause, plainly recognised this.  If you dont believe I would be more than happy to supply you with a barrow load of quotes

You know,  the more I'm on this site the more I am coming to realise just how woefully ignorant you anarcho caps actually are about the very thing you profess to have competently refuted.  Its actually come as quite a shock to me,   I guess I expected more  from a site that sets out to promote a particular world view through argumentation.  Do you guys do any reading,  any research, outside of the narrow horizons of such a worldview?

 

 

 

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robbo203 replied on Tue, Apr 26 2011 5:24 PM

Smiling Dave

Oh, so abolition is not the same as collapse. Marx said it would be abolished inevitably, but not that it would collapse.

And "internal" is not the same as "cuts under its own feet" and "producing its own grave diggers".

 

Bingo!  Got it in one! Give the boy a lollipop!

Collapsist theories of capitalism generally assume capitalisrm will disappear of its own accord without human intentionality being invoked or involved.  In other words that there is some flaw or defect in the very mechanism of capitalist production itself that will cause the system to  implode.

Happy now that youve grasped the difference??

What a clever boy.....

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