Economics Questions

Re: Can Statistics Replace The Price Mechanism?

Alex Habighorst — Mon, 20 Sep 2010 04:51:02 GMT

As Mises would say, that is only economic history. One glaring problem with getting rid of the pricing system and replacing it with statistics is that it tries to replace a dynamic system, that sponteaneously takes place by the actions of numerous individuals throught the economy and replaces it with averages that are usually out of date fairly quickly.

There is also, the problem of organizing what statistics mean what and how one could rationally plan for others without knowing their preferences etc. Even if one had all the knowledge generated by the pricing mechanism etc. It would still be nigh impossible to create any kind of plan for it because there would simply be far too many valuations to take in.

Re: Can Statistics Replace The Price Mechanism?

Bert — Mon, 20 Sep 2010 04:21:48 GMT

Statistics can show trends, but don't necessarily show what people value the most. And this is very important when you consider two or more "trends". Where do you allocate the most resources the most efficiently when there are hundreds of statistical "trends"?

Too bad no omnipotent being exist to answer this question. There is no substitute for the price system to know where to allocate resources. All "trends" become mere historical records in a matter of minutes and seconds. They don't represent real-time value in a market.

Re: Can Statistics Replace The Price Mechanism?

djussila — Mon, 20 Sep 2010 04:05:32 GMT

Statistics can show trends, but don't necessarily show what people value the most. And this is very important when you consider two or more "trends". Where do you allocate the most resources the most efficiently when there are hundreds of statistical "trends"?

Re: Can Statistics Replace The Price Mechanism?

Clayton — Mon, 20 Sep 2010 01:50:32 GMT

It's been said that prices are not need to manage resources because needs and wants can be managed by government better, through statistical gathering.

I heard different - I heard that needs and wants can be managed by government better, through my grilled cheese sandwich.

What's wrong with this analysis?

It's not one.

Clayton -

Re: Can Statistics Replace The Price Mechanism?

Clayton — Mon, 20 Sep 2010 01:48:32 GMT

You should ask soviet bureacrats about that.

It's just never been done right.

Clayton -

Re: Can Statistics Replace The Price Mechanism?

Vitor — Mon, 20 Sep 2010 01:02:34 GMT

You should ask soviet bureacrats about that.

Re: Can Statistics Replace The Price Mechanism?

Jonathan M. F. Catalán — Mon, 20 Sep 2010 00:53:17 GMT

Statistics simply can't replace the role of price as a rationing (or economizing) mechanism. How will one accurately weight opportunity cost? What will replace profit and loss? What will replace the uniformity-of-profit principle as what guides the distribution of capital in the market? How will statistics flexibly respond to a change in preference?

For example, the government knows there is a demand for a postal service. Yet, it has been unable to provide this service in an economical matter, and in the long-run this has brought about both an unprofitable government organization and one that does not meet the demand of its consumers (it really has no incentive to do so, either way).

Re: Can Statistics Replace The Price Mechanism?

EconomistInTraining — Mon, 20 Sep 2010 00:52:48 GMT

Statistical gathering (by a coercive institution) cannot be done without changing the needs and wants it is measuring

Oh well.

Re: Can Statistics Replace The Price Mechanism?

Nonfederal Nonreserve — Mon, 20 Sep 2010 00:19:33 GMT

Statistical gathering (by a coercive institution) cannot be done without changing the needs and wants it is measuring.

Re: Can Statistics Replace The Price Mechanism?

Caley McKibbin — Sun, 19 Sep 2010 19:17:53 GMT

Mr. Statistician, I want a free Ferrari 458 Italia.

So little, Ghandi? I want the world.

Re: Can Statistics Replace The Price Mechanism?

Bert — Sun, 19 Sep 2010 19:15:06 GMT

From what time period will we use statistics to represent real-time prices? Numbers by themselves don't mean anything if they don't represent the actual value attributed to them through exchange. Can statistics, or by what you mean arbitrary numbers assigned to various goods with no real meaning that will not fluctuate with the demands of the market, replace the price mechanism? No. Here's a recent thread on what you're asking for.

Re: Can Statistics Replace The Price Mechanism?

hugolp — Sun, 19 Sep 2010 19:08:49 GMT

Another Ferrari here. If you promise me one I will vote for you.

Re: Can Statistics Replace The Price Mechanism?

z1235 — Sun, 19 Sep 2010 17:57:53 GMT

Mr. Statistician, I want a free Ferrari 458 Italia.

Re: Can Statistics Replace The Price Mechanism?

Sieben — Sun, 19 Sep 2010 17:08:14 GMT

You survery americans and they want 300 million cars, 300 million houses, free education, free healthcare, and free hamboigas. What do?

Re: Can Statistics Replace The Price Mechanism?

djussila — Sun, 19 Sep 2010 16:58:44 GMT

What do you mean?