The next generation

john eden

male pale and stale
Hmm... I'm not convinced by the class angle.

Yeah I know and that is basically the root of our disagreement. :)

My belief is that class society exists to perpetuate itself, in the interests of those at the top of the ladder.

We've been over this before, but it is sometimes possible for people at the bottom of the ladder to force concessions out of those in power - things that ensure a basic standard of living - welfare state, minimum wage etc.

That isn't possible if the apparatus of the state is done away with.

Tho I recognise that you are more focussed on economic growth and (what you would call) prosperity not being hindered by tax and bureaucracy...

The thing about production and how much to produce - nobody is pretending that the transition would be easy. And whilst there are no historical examples of it happening successfully, I do still believe that humanity is creative enough to produce things based on need and not profit or competition or whatever.

Vast swathes of time and effort is spent on revenue collection, planned obsolescence, useless innovation, non-productive jobs. Possibly that energy could be spent on other things - like making stuff last longer or forever, developing creative ways of sharing resources....

Will it work? Well we're nowhere near it yet, but it's worth thinking about.
 

vimothy

yurp
People seem to be starting from the assumption that a communist economy couldn't ever be popular with people, based mostly on the evidence that all centrally planned communist economies so far have ended up failing miserably and being very unpopular. But couldn't that be because they were run by a bunch of authoritarian assholes? People like to point at the track record of communism and say "hey nice idea but it didn't work!" without ever offering up much of a reason WHY it didn't work, aside from Vimothy's rather weak "economies are just too complicated to control!" argument, which I find pretty funny coming from a man seems to subscribe quite religiously to modern economic theory, aka the theory of how economies work!


Rather weak!? Are you mad? An entire empire spanning half the globe crumbled because of this "rather weak... argument". If modern economics is anything it is an explanation of why Communism failed -- and I told you why in one simple thought experiment. Answer the question if it's so simple: on what basis are you manufacturing capital goods?

Thinking that understanding economics means you can plan a macroeconomy is akin to thinking that meterologists can control the weather.

Some other massive errors in this thread, like this:

I think that even beyond a moral argument, an economic argument could be made for an almost exponential increase in such things as ingenuity, efficiency, technological progress and productivity in a society composed of enfranchised, engaged individuals living and working in an environment engineered to support their wellbeing. Does that sound crazy?

Yes it does sound crazy, for two reasons:

1. There is no economic argument, which is why you're not making it and neither is anyone else -- you're simply saying there could be an economic argument. Well, there could, but there isn't.

2. Communism has already failed on economic dimensions, for reasons I outlined above.

And I still find it contradictory that the general feeling is that 1, our overlords are underserving upper class twits and yet that 2, the solution is centralised economic control just with better overlords.
 

noel emits

a wonderful wooden reason
Yes it does sound crazy, for two reasons:

1. There is no economic argument, which is why you're not making it and neither is anyone else -- you're simply saying there could be an economic argument. Well, there could, but there isn't.
Well first this depends on what we mean by economic and what is actually required of an economy, what is it and what is it there for? I suppose I'm talking about this:
I do still believe that humanity is creative enough to produce things based on need and not profit or competition or whatever.

Vast swathes of time and effort is spent on revenue collection, planned obsolescence, useless innovation, non-productive jobs. Possibly that energy could be spent on other things - like making stuff last longer or forever, developing creative ways of sharing resources....
And others have made the argument, in specific mathematical terms - Buckminster Fuller for one. Whether these are recognised as such or understood is a different matter.

But I already said the 'economic' justification is in addition to the 'moral' one turtles was talking about. What are we aiming for as a species or society? Progress? How is that defined? Do we just want to content ourselves with inventing more elaborate economic games to no particular end?

I guess that leads on to what's so bafflingly stupid about the neo-con thing. If they are into the Straussian idea that mankind needs myths live by, which I am sympathetic to, then why do they have to go and choose such rubbish myths? The point is that we can choose. Perhaps we should use a little imagination in that regard, as a planet.
 
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vimothy

yurp
Maybe I'm not explaining myself very well. Let me try again...

Well first this depends on what we mean by economic and what is actually required of an economy, what is it and what is it there for?

An economy is the set of social relationships determining what is produced, how much is produced and who it is produced for. In a market economy, most of these decisions are made by individual buyers and sellers brought together in the market. In a command economy, most of these decisions are made by whatever government body or figure is given control by whoever is in power. Frequently, the person in power of a command economy is a dictator, but this is not necessary in theory nor always true in fact. The basic question we are trying to answer in this thread is which economic system is "better" (scare quotes because I'm well aware there's a variety of ways to define "better" in this context).

Because we live in a world of scarcity, we must make choices as to how we use our limited resources. One might describe it as the fundamental human problem. The government must decide which public programmes are most in need of funds (e.g. the NHS), and which are least in need (e.g. arts). You the consumer must decide if you want to blow all your money now on expensive sandwiches and cocaine, or save up for that summer holiday in the Seychelles. We can see from our two definitions above that in a command economy (like the USSR) all decisions relating to the management of scarce resourses (i.e. what is being produced, how much is being produced and who it is being produced for) are made by a government body. Possibly the people on this government body are fantastically intelligent, with degrees in theoretical physics from Oxbridge, possibly not. But the fundamental thing to remember is that resources are limited and choices will have to be made. In a market economy, on the other hand, the individual makes his or her choices as they see fit. Resources are not managed from the top down, but are left to be put into operation at the micro level. Collective decisions then emerge in aggregate.

Let's take our two states, the command and the market, and look at a simple economic model. Imagine you are the head of the economic planning committee in the Socialist Republic of Britain. You need to make bread. We all want to eat bread. How do you know? Well, it's just fucking obvious, isn't it? Everyone eats bread, it's a staple food source. So that's good - quite a simple decision that could easily be harder if it wasn't such a universally consumed product. It might be very difficult to decide if other things you know very little about, possibly that have just been invented, should be mass produced. But let's gloss over the really difficult questions and focus on what we know that we know. Make bread. How much bread should we make? Er -- fuck. Ok, how much bread did we sell when we were a market economy? Good job we are able to compare our figured decisions to actual market outcomes, because that helps to make sense of it all. Add to that number or amount the opinion of the petty bureaucrat (i.e. you): every family gets two loaves a week. That way, the same amount of bread consumed under market conditions is consumed under command economy conditions. Great. Is this an improvement? You have redistributed bread such that rather than having individuals buy and sell the total amount of bread they desire, you, in your Oxbridge wisdom, have decided for them. This is the very essence of Communism and to me, this is a morally bankrupt economic system. It shouldn't be something that you the government impose on me the individual. But at least at this stage it's possible that you could describe this as fairer, because everyone gets the same amount of bread. Note that the success of command economies along this (moral) dimension of fair distribution of consumables is reliant entirely on the good will and sense of the person in charge. You have to put a lot of faith in the dear leader, and historically the dear leader hasn't done a brilliant job.

However, the economic failure that this leads to is much deeper and more fatal than the immorality of having a government committee make everyone's decisions for them... Why? Because resources are scarce and it is not anywhere near as simple as saying, "how much bread do we need? Right-o, that's sorted then!"

Really think about this. First of all, you need to decide how much bread you want to give everyone. Then you need to make it. Here's where communism meets reality. Yeast flour and salt, and probably some preservatives. That's all you need to make bread. Of course, you also need somewhere to make it (a factory), some stuff to make it with (capital goods), and some people to operate the stuff (slaves... sorry, workers). Under a market economy the owner of a factory will sell it or rent it to whoever wants to buy at a price he or she finds appropriate. The producers of capital goods will sell or rent them to individuals or firms who want to buy at a level they find appropriate. And workers will sell their labour to firms who want to buy at a level they find appropriate. Everyone in a market economy makes a trade off between what they have to sell and what they will receive for it (i.e. the price). No government involvement is required, but bread is produced and sold on the open market every day.

Under a command economy, the situation is very different, because you have one single entity trying to make all these tiny micro level decisions. What does this actually mean? It's about how you make trade offs with your scarce resources. Remember the pictures of lines of people waiting for bread in the USSR -- this is the reason why there were shortages. It all boils down to the fact that prices "clear" markets, i.e. that prices regulate supply and demand. You tell you factories in the Socialist Republic of Britain to make bread, and that's what they do. You tell your producers of capital goods to make ovens and that's what they do. You tell your farmers to grow wheat and your steel manufacturers to make steel, and that's what they do. In the absence of any other needs, everything is fine, because no choices have to be made. But this isn't the world we live in. In the world we live in, resources are scarce. At what point do you tell your steel manufacturers, "hey, slow down production, we have a surplus"? At best, only when you already have a surplus. Under a market economy, the price of steel would go down, and individuals would shift resources away from steel manufacturing towards something more profitable. What happens when you have a crop failure, and you run out of wheat? Under a market economy, the price of wheat would rise, and so would the price of bread. Producers and consumers would look for alternatives. But you don't have individual decision makers, just you and your comittee. What are you going to do? You're going to have a bread shortage.

Step back from the micro one good perspective: what else does your economy need? Shit -- that's a pretty hard question to answer. You basically have no real idea beyond the vague and obvious: food, shelter, energy. How do you know if too much of your resources are being used up in the production of bread? You don't, because you can't, because you have no way of knowing, because there are no price changes, because there is no price. You have to guess. I guess that we will consume X amount of bread, therefore we will order our manufacturers to make X amount of capital goods, which I'm guessing is the approriate level, for which I guess we will need X amount of steel and other materials, and I'm just going to hope that these are productive firms, but I have no way of knowing that either because they aren't competing at the level of price, but rather are being subsidised by we the government. In fact, communism historically has simply tried to appropriate market economy levels, because it has no other way to judge and no basis on which to make decisions where scarce resources are traded off against different ends.

[cont... apologies for the boring length of this...]
 

vimothy

yurp
It comes back to my question: you might imagine (incorrectly) that you can research and discover the correct level of consumption for simple goods like bread or pencils. But what you will never know is what the correct production process is and what the correct mix of resources is for that production process. Firstly, everything is changing all the time: crops fail, new mines are discovered, new production processes are found. The balance of resources changes. Even a superhuman Oxbridge physicist could not agggregate all the rapidly changing microeconomic data and make decisions for those micro units of economic resource. Secondly, the level of complexity is so vast that it would be impossible even if it were static. Make bread, ok. But make capital goods? And who makes the capital goods that make the capital goods? And who makes the capital goods that make the capital goods that make the capital goods? It all turns to gibberish, which is why the Soviet Union was so inefficient. Mises pointed this out nearly 100 years ago, and it's a shame that so few Communists today are familiar with the debate:

One may anticipate the nature of the future socialist society. There will be hundreds and thousands of factories in operation. Very few of these will be producing wares ready for use; in the majority of cases what will be manufactured will be unfinished goods and production goods. All these concerns will be interrelated. Every good will go through a whole series of stages before it is ready for use. In the ceaseless toil and moil of this process, however, the administration will be without any means of testing their bearings. It will never be able to determine whether a given good has not been kept for a superfluous length of time in the necessary processes of production, or whether work and material have not been wasted in its completion. How will it be able to decide whether this or that method of production is the more profitable? At best it will only be able to compare the quality and quantity of the consumable end product produced, but will in the rarest cases be in a position to compare the expenses entailed in production. It will know, or think it knows, the ends to be achieved by economic organization, and will have to regulate its activities accordingly, i.e. it will have to attain those ends with the least expense. It will have to make its computations with a view to finding the cheapest way. This computation will naturally have to be a value computation. It is eminently clear, and requires no further proof, that it cannot be of a technical character, and that it cannot be based upon the objective use value of goods and services.​

All of which makes john eden's comment quite ironic:
Vast swathes of time and effort is spent on revenue collection, planned obsolescence, useless innovation, non-productive jobs. Possibly that energy could be spent on other things - like making stuff last longer or forever, developing creative ways of sharing resources....
 

noel emits

a wonderful wooden reason
The basic question we are trying to answer in this thread is which economic system is "better" (scare quotes because I'm well aware there's a variety of ways to define "better" in this context).
Well not exactly. I'm thinking about other ways to organise societies but not necessarily communism or a complete command economy. I'm not interested in reducing it to that dull binary.
Because we live in a world of scarcity, we must make choices as to how we use our limited resources. One might describe it as the fundamental human problem.
What to do about the problem that we find ourselves with now where major economic players consider it to be against their interests for scarcity to be reduced or for needs to be reduced, or indeed for the means of production to be removed from their more or less exclusive hands? This is all counter productive to meaningful progress and improvement I would say. Would you really say this is an unavoidable side-effect of the only meaningful way you can see for a society to be organised? It's a big stumbling block.

Thanks for the big post.
 
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vimothy

yurp
People seem to be starting from the assumption that a communist economy couldn't ever be popular with people, based mostly on the evidence that all centrally planned communist economies so far have ended up failing miserably and being very unpopular. But couldn't that be because they were run by a bunch of authoritarian assholes? People like to point at the track record of communism and say "hey nice idea but it didn't work!" without ever offering up much of a reason WHY it didn't work, aside from Vimothy's rather weak "economies are just too complicated to control!" argument, which I find pretty funny coming from a man seems to subscribe quite religiously to modern economic theory, aka the theory of how economies work!


I just want to come back to this once again to reiterate the fact that I have put forward an argument explaining why Communism and command economies have failed historically, though it is by no means mine. It is not at all a weak argument but a classic, long running problem of Marxian economics that even goes back to Marx and Das Kapital, where it was described as the "transformation problem" and a prize was offered to the reader who could solve it.

At the time Mises wrote Economic Calculation In The Socialist Commonwealth, it was widely felt that the Communists and economic planners had won the debate, and that the Austrians were a bunch of cranks on the wrong side of history. However, the theoretical problem never went away, it was just addressed in a manner similar to your (pretty weak) response here: imagine that it could be solved. Lange said that a big enough computer with a unit of account system (i.e. the price system Communism is trying to escape) could mirror or even better market allocation of resources. No one was ever capable of engineering such a system or producing such a computer, rather the argument was that such a system is conceivable. It is conceivable, but so are flying pigs.

What Mises and Hayek demostrated is the impossibility of both aggregating economy-wide knowledge without a unit of account for measurement, making decisions without being able to measure one set of resource allocation preferences against another, and the elusive nature of knowledge itself. Most knowledge is not known to a committee head, no matter where he went to university. Most knowledge is tacit, temporal and highly dispersed. It will never be extracted. It doesn't matter how well meaning you are, what matters is that for all intents and purposes you are an ignoramus.

And we know how it turned out. Communism collapsed; large scale economic planning was discredited.

So: there is no theoretical basis for a successful communist economy that I am aware of, beyond the one advanced here (i.e. merely that it is conceivable that there might be a theoretical basis, which we might discover in the future); there are no historical examples of successful communist economies.

There is also the question of why Communism seems to go with the mechanisms of the police state in every instance where the Communists took power. (It makes nomadologist's statement that, "Not at communists are Stalinists, or Leninists, or whatever you want to pigeonhole them as" look rather amusing. Communists are never authoritarians until they get into power). As I said upthread, Communism must be imposed and capitalism (trading for personal profit) must be suppressed. I think it's that simple. Communists have no other choice. noel emits seems like a genuine person and I think his calls for goals or determined consideration about what progress means for us as a species or a society are heartfelt. However, it runs perfectly with the "command" metaphor. What this means in practice is someone deciding what's best for the rest of us and then forcing us to do it. Which is exactly what happened in Communist countries.

One final thing. noel, I think you are being slightly contradictory here. At one point you say,

...setting aside the question of whether 'economic growth' is the ultimate desirable anyway...

Yet you then go on to say,

What to do about the problem that we find ourselves with now where major economic players consider it to be against their interests for scarcity to be reduced or for needs to be reduced, or indeed for the means of production to be removed from their more or less exclusive hands?

When it should be clear that growth is the mechanism that reduces scarcity or needs or poverty (or whatever you want to call it), which is why it's desirable in the first place.
 

noel emits

a wonderful wooden reason
noel emits seems like a genuine person and I think his calls for goals or determined consideration about what progress means for us as a species or a society are heartfelt. However, it runs perfectly with the "command" metaphor. What this means in practice is someone deciding what's best for the rest of us and then forcing us to do it. Which is exactly what happened in Communist countries.
Well I'm all for things getting better because I think the human race is capable of more. But I'm more for removing the barriers to that happening than in imposing more control if anything.

I haven't 'made calls for goals or determined consideration' exactly, I've been discussing what was suggested. But then those things are already at work anyway. Don't know what makes you think I'm arguing for communism. There are numerous changes that could be made to our economic and legal mechanisms that would favour people and their needs more.

When it should be clear that growth is the mechanism that reduces scarcity or needs or poverty (or whatever you want to call it), which is why it's desirable in the first place.
One mechanism, not the only mechanism. I guess technological progress being the obvious other.

Anyway I should probably only talk about this stuff when I am drunk. So maybe later. :)
 
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swears

preppy-kei
Vimothy:

Isn't a lot of the success of western, capitalist countries down to the role the state has played? Universal healthcare and education, workers rights, rule of law... Isn't there some long term planning that profit-driven private industries just aren't very good at? I don't see businesses solving climate change without state intervention, for example. I see it as a question of extremes: in Russia the USSR failed, but so did the pro-market "shock therapy" reforms that followed.
 

ripley

Well-known member
Vimothy:

Isn't a lot of the success of western, capitalist countries down to the role the state has played? Universal healthcare and education, workers rights, rule of law... Isn't there some long term planning that profit-driven private industries just aren't very good at? I don't see businesses solving climate change without state intervention, for example. I see it as a question of extremes: in Russia the USSR failed, but so did the pro-market "shock therapy" reforms that followed.

Ah, but Swears, the USSR failed because it was fundamentally flawed, and the shock therapy failed because reality was flawed!
 

vimothy

yurp
Isn't a lot of the success of western, capitalist countries down to the role the state has played? Universal healthcare and education, workers rights, rule of law... Isn't there some long term planning that profit-driven private industries just aren't very good at? I don't see businesses solving climate change without state intervention, for example. I see it as a question of extremes: in Russia the USSR failed, but so did the pro-market "shock therapy" reforms that followed.

The role of the state is vital. But if the (original) question is, "can communism work?" The answer is no, it can't, even with really good leaders. Western capitalist countries all have huge states, and are successful, so I'm not arguing for dismantling government, I'm just arguing that government can't plan and run an entire economy. It's too complicated, especially if you don't have prices that mean anything.

Shock therapy was a bad idea. Douglass North was on the committee that went to Russia to advise them on liberalisation, and told the Russians to ignore what the other economists (like Sachs) were advising. They didn't listen, unfortunately. Of course it isn't as simple as ticking a few boxes (privatisation - check, remove price controls - check: everything will be fine now). But there are other reasons why Russia specifically had the problems it had.

Personally, as far as development goes, I very much favour Dani Rodrik's "growth diagnostics" and intelligent institutional economics. From an FT review of dani's book:

Part of the problem hitherto may have been a confusion of ends with means. Rodrik quotes Larry Summers, fellow Harvard academic and former US treasury secretary, to the effect that no country has failed to grow after implementing the following: integrating with the global economy through trade and investment, maintaining sound government finances, and putting in place an institutional environment that protects property rights and enforces contracts. How to get to those desirable states is another question, however. It is not as if the average African president during his or her first day in power finds a draft order on the desk saying ''Integrate with global economy: yes/no? Tick one.''

Orthodox outcomes may result from unorthodox policies and vice versa. The central American state of Haiti cut its trade tariffs heavily and removed import quotas in the 1990s, while in south-east Asia, Vietnam continued with high import taxes and restrictions and extensive state intervention in the economy. Yet Vietnam is rapidly becoming the new China, foreign multinationals are investing like crazy and happily exporting; Haiti remains desperately poor and largely isolated from global trade.

Rodrik's approach involves an eclectic, practical approach of ''growth diagnostics'': trying to work out what is holding a country back - poor infrastructure? lack of education? too much regulation? - and designing responses appropriately.​
 
N

nomadologist

Guest
I saw a programme the other day about China's economic development and they were talking to this old woman whose son was having to work two jobs (or something like that) to pay for her medical treatment because the family couldn't afford medical insurance. Sound like another country you know of? Communism, my arse.

A third of Americans don't have health insurance either. Plenty of Americans have to work three jobs to pay their cancer treatment bills or whichever. Sounds like AMERICA.


Regardless, this doesn't mean that their economy couldn't do well and eventually do better than some others in the first world.
 
N

nomadologist

Guest
I think taking a highly idealistic position can lead to disappearing up one's own arse.

I remember a philosophy professor (post-modernist, obv.) waxing lyrical about his ideal political attitude: one that moved randomly through all possible stances. Certainly gets a tick for 'thinking outside of the box,' but a big cross as regards the likelihood of convincing others that it might be a good flag to rally behind.

Your comment also reminds me of the Marxist false consciousness thing: you're the clairvoyant, everyone else is a dupe. I don't think that that attitude is helpful either.

A "post-modernist" philosophy professor? Do we have to waste threadspace going over why "post-modernism" is not a set of precepts to which one either subscribes or does not, and is instead a state of cultural being after modernism again? Please let's not.
 
N

nomadologist

Guest
Do we also need another thread where someone who has taken a couple of years in an econ program somewhere tries to convince people of his particular and fashionable, widely held brand of reductionism where humans and their potential and aspirations all bow down to the Almighty Dollar, mostly by writing treatise-length posts about why he already believes this, as if this is somehow proof that humans are not capable of doing more, living better, doing things for reasons beyond their own immediate gain in the here and now?

Yawn.
 
N

nomadologist

Guest
Perhaps he should be forced to do it? ;) I doubt he'd want to.

You know, there's a certain sense in which being very learned and intelligent can hugely undermine the kind of blind certainty that is so useful for convincing others that you know what the fuck you are talking about. It takes a very rare talent to combine the two. Well that's the received opinion anyway, do the voting public respond better to politicians who try to honestly convey the complexities and nuances of truth than to those that take a very definite and intransigent line on everything? Look at some high profile US politicians, like say, the President. They're uncomprehending certainty and blissful ignorance is so useful to the party for this reason. Yeah, maybe he knows what's going on, I don't think so. Starting to suspect that they;ve been lying to him though.

I don't think you have to be *book smart* to make good decisions about how to live or even how to allocate resources. Most people will do the "smart thing" that benefits as many people as possible if they have enough accurate information to use in charting the way.

That is, unless they've grown up indoctrinated in the ways of mindless conspicuous consumption, vapid consumerism, "greed is good" Reagan-era cokehead Ibanker bullshit, and the rest of it. Pair our culture with the male ego and female desperation and the child's boundless love for entertainment and voila you've got countries full of fat, prematurely atherosclerotic morons with all the access to information you could ever ask for and no one but Rupert Murdoch out there to sell it over the airwaves he and similar titans of capitalism own and operate.
 
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