First, I'm not sure if I understand what is so uniquely Austrian about the calculation argument. As I understand it the point is that entrepreneurs maximise profits by putting goods to their most valued uses and the price system is exactly what allows them to do this by means of relative price adjustments and profit and loss accounting (very briefly put). My first point is that this implicitly assumes some sort of harmony of interests, in some cases where this assumption doesn't hold, I don't see how the calculation argument is valid. In the case of asymmetric information, externalities or monopoly power entrepreneurs maximise profits by going against what is in the public interest (yes, Austrians will find this term objectionable). But the other point I'd like to make is that this is a pretty standard point in even principles level micro...
Second, in reality firms costs are highly interdependent and often inextricable from one another. What implications does this have for profit loss accounting? Well, as far as I can tell a lot of big firms don't actually know exactly how to maximise profits so they resort to rules of thumb. My can't government do this? And more importantly, in firms still exist and are efficient, clearly there are some other considerations as to what serves consumers best, why shouldn't they be applied to governments as well?
Third, one of the big arguments against math that I've noticed is that it isn't necessary, something along the lines of "we can express these arguments in verbal logic". I think this is completely besides the point, identifying correct arguments and saying, ex post, that we can say what is in mathematical terms in verbal logic misses the point. The math was useful in fleshing out these arguments in the first place.
Four, I've asked this before, but I want to ask it again: what justifies the large salaries of econ PhD in the private sector? Their model building abilities and econometric skills are often used so what causes firms to be so systematically misguided (that is, according to Austrians).
Five, what is wrong with the concept of willingness to pay?
Scineram:Businesses and enterpreneurs assign prices arbitrarily.
So what happens when Walmart prices a good higher then consumers are willing to pay? Who bears the cost of this error? What happens when government allocates more resources on a project then they should, who bears the cost of that error? How is it you don't understand the functional/mechanical differences between the two alternatives.
When walmart places a bad price they pay the consequences and bear the cost, when they find a good price, they gain the rewards. This gain, benefit(profit) tells walmart that they should continue performing this action.
Government on the other hand does not have this feedback mechanism. There is no immediate way to tell whether they are doing good, or bad. They have no idea when the arbitrary price(tax) they make is too high, or too low for example. This is why I stated earlier that a government can only correctly calculate when it's done by accident. As they are oblivious to consumer response and feedback. They have no mechanism to measure citizen's satisfaction rating, where walmart on the other hand does.
Scineram:what good would that be?
What good would what be?
Scineram:Then don't compell society to anarchocapitalism!
This is the most confused thing I have read in a while.
Lets say Hypothetically speaking we are neighbors. Lets assume for obvious reasons that I refuse to submit into your servitude as a personal slave. Am I somehow compelling you to sow and harvest your own crops? Am I compelling you, against your will to do your own work? Simply because I refuse to sow and harvest your crops for you. How on earth am I compelling you simply because I refuse to be your slave?
You must be deeply confused. Whos gun is placed at whos head. Think about it....
Scineram:There are no exact anwers. But you do ignore all the nonmarket feedback mechanisms for producers?
Like?
Scineram:Nirvana fallacy, that is.
Explain yourself.
Scineram:There are no exact anwers.
So you are effectively denying the functionality of the price mechanism? You don't think it serves a purpose and that Austrian's are just speaking jibberish w hen they mention pricing and calculation?
scineram:There are more important things than consumer satisfaction. Like homicide rates.
Might as well have said, "There are more important things than values. Like values."
scineram:Businesses and enterpreneurs assign prices arbitrarily.
Depends which definition of arbitrary you use. Can you clarify?
Don't entrepreneurs make educated guesses to set prices? Models aren't churning out those numbers.
scineram:Don't entrepreneurs make educated guesses to set prices? Models aren't churning out those numbers.
You tell me. I am asking you to clarify which definition of arbitrary you were using.
Also, if you could explain what is educating the educated guess, that would also be helpful.
I will get back to this topic...
You come across as a self-satisfied little expletive Student.
You come across as a self-satisfied little expletive Student
Thanks for that. Great input, I mean it, that's a really superb contribution you've made there.
CrazyCoot, this is not a place for petty swipes such as that.