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Old April 25th, 2016, 03:21 AM   #31
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The problems of socialism are not based on the irrationality or dishonesty of public planners

Mises’ critique does not even address the critical issue of incentives. He did not claim that, since the profit motive is absent under socialism, bureaucrats have no incentive to try to follow the guidance of reason in their production decisions. To the contrary, Mises readily accepted that government officials are totally dedicated to the efficient production of goods and services.
The problem he identified was not lack of motivation on the part of planners. Instead, the cause of socialism’s irrationality is that those highly motivated and competent civil servants have no rational mechanism to guide their productive efforts and thus any decisions they make are necessarily arbitrary. Their position is akin to that of the captain of a ship in the midst of the ocean without a compass. No matter how able he is, any efforts he makes to set the course of his ship are doomed from the outset.
Although Mises’ analysis is purely economic, it illustrates the effects of an abstract philosophic principle in an economic practical context. That principle is that capitalism is the only economic system based on reason, while socialism rests on arbitrary whim. While capitalism cannot be effectively defended solely on economic grounds, Mises’ exposition is of tremendous value to philosophical defenders of capitalism.
The problem is that Mises starts by assuming that the profit motive is absent in "Socialism", but if that is the case, you better withhold the "Socialist" label from any system that retains the profit motive and the market, regulation is not prohibition.
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Old April 25th, 2016, 04:12 AM   #32
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Why Socialism Must Always Fail: Ludwig Von Mises on Economic Calculation under Socialism
BY EMMANUEL FORGOLOU


“Without calculation, economic activity is impossible. Since under Socialism economic calculation is impossible, under Socialism there can be no economic activity in our sense of the word … All economic change, therefore, would involve operations the value of which could neither be predicted beforehand nor ascertained after they had taken place. Everything would be a leap in the dark. Socialism is the renunciation of rational economy.” — Ludwig von Mises,


Economic calculation in a capitalist economy

Under capitalism every individual plays a dual role in the determination of economic values. First as a consumer, secondly as a producer. As a consumer, he establishes the valuation of goods and services ready for consumption. As a producer, he allocates productive resources to the uses that yield the highest product. This is the very essence of the free market mechanism, which ensures rationality in production and consumption alike.
As a consumer, each individual spends his money on the goods and services that best satisfy his needs. The pattern of consumer preferences is conveyed to producers in the form of prices. This is the crucial function performed by market prices under capitalism.
Prices of consumer goods and services are the signals producers use to determine what goods and services are to be produced. Let’s look at how this works.
Let’s say that shampoo has a high price on it. This means that consumers value shampoo a lot, which is why they are willing to pay such a high price for it. The high price acts as a signal to producers. It tells them that they can make a large profit by producing and selling shampoo. As a result, they will shift resources to the production of shampoo. The end result is that more resources will be used to produce shampoo because this good is highly valued by consumers.
A high price indicates to producers that consumers place a high value on a certain good or service. From the producers’ perspective, the high price means that they can realize a large profit by producing and selling this good or service. Thus the pursuit of profit induces producers to direct more resources to the good or service in question.
In contrast, a low price signals that consumers do not particularly value a good or service. The low price shrinks the producers’ profit margin, so they will naturally shift resources away from this good or service. As a result, rationality is achieved by producing more of the goods and services that are highly valued by consumers and less of those that are not preferred by consumers.
The market mechanism also achieves rationality in production. Again, the role of prices is essential. In this case the signals guiding the actions of producers are the prices of productive resources (land, labor, capital, technology). A high price for a certain factor of production indicates that this resource will raise the cost of production and thus lower the producers’ profit margin. Therefore producers will end up using less of this particular resource.
In contrast, a low price for a resource signals that producers can lower the cost of production and thus increase their profit margin by using this factor of production. The end result is rationality in production by lowering costs through the increased use of less costly resources and the corresponding reduced use of costlier ones.
This is the very essence of the price system that ensures rationality in consumption and production alike. This is because prices are formed as the result of the actions of consumers who spend their own money on the goods and services they desire and resource owners who sell the resources they own in the market.


Economic calculation under socialism: “a leap in the dark”


Since under socialism there is no private ownership, those actions are rendered impossible. In the most consistent versions of socialism (such as the War Communism implemented right after the Russian Revolution), money is abolished and goods and services are distributed by governmental decree. This is a bona fide recipe for total irrationality.
More “moderate” versions of socialism do not eliminate money. They allow individuals to have some income which they can spend as they see fit. This enables the establishment of prices for consumer goods and services, which give socialist planners (who play the role of “producers” under socialism) some signals as to the goods and services that need to be produced.
However, this signal is distorted, as consumers do not earn their income in a free market. Instead, their income is determined by socialist planners, who arbitrarily set the prices of resources (rents, wages, interest rates). Resource prices set in this manner are totally disconnected from the facts of reality, as there are no price signals conveying to planners information about those facts.”
Since, by definition, productive resources are not privately owned under socialism, there can be no market where the prices of those resources are formed by the interaction by demand and supply.
Even if socialist planners have some knowledge of the goods and services that need to be produced, the obstacles they face in selecting the proper methods of production are impossible to overcome. In the absence of private ownership of the factors of production, there be no market where the prices of those resources are established.
In producing any good or service, socialist planners are confronted with a vast array of resource combinations. Some processes are more land-intensive, others more labor-intensive, still others more capital-intensive. Furthermore, there is an enormous variety of different types of land, labor, and capital. Similarly, there is a multitude of technologies to choose from.
Without the guidance of price signals, there is only one way of selecting among those alternatives: The planners’ whim. This exposes the utter irrationality of socialism, eloquently expressed in Mises’ statement that “Everything would be a leap in the dark.”


The problems of socialism are not based on the irrationality or dishonesty of public planners

Mises’ critique does not even address the critical issue of incentives. He did not claim that, since the profit motive is absent under socialism, bureaucrats have no incentive to try to follow the guidance of reason in their production decisions. To the contrary, Mises readily accepted that government officials are totally dedicated to the efficient production of goods and services.
The problem he identified was not lack of motivation on the part of planners. Instead, the cause of socialism’s irrationality is that those highly motivated and competent civil servants have no rational mechanism to guide their productive efforts and thus any decisions they make are necessarily arbitrary. Their position is akin to that of the captain of a ship in the midst of the ocean without a compass. No matter how able he is, any efforts he makes to set the course of his ship are doomed from the outset.
Although Mises’ analysis is purely economic, it illustrates the effects of an abstract philosophic principle in an economic practical context. That principle is that capitalism is the only economic system based on reason, while socialism rests on arbitrary whim. While capitalism cannot be effectively defended solely on economic grounds, Mises’ exposition is of tremendous value to philosophical defenders of capitalism.

Why Socialism Must Always Fail: Ludwig Von Mises on Economic Calculation under Socialism | Capitalism Magazine
The five happiest countries on earth are socialist countries. The number one country on earth rated the most business friendly, is a socialist country.

When you can square that circle, let me know.

Until then the only failure is your never ending whine about socialism, that is in dire need of a block of cheese.
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Old April 25th, 2016, 09:03 AM   #33
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The five happiest countries on earth are socialist countries. The number one country on earth rated the most business friendly, is a socialist country.

When you can square that circle, let me know.

Until then the only failure is your never ending whine about socialism, that is in dire need of a block of cheese.
Which nations would that be?

Danish PM in US: Denmark is not socialist - The Local
https://www.washingtonpost.com/news/...ry-whos-right/
Denmark Tells Bernie Sanders It?s Had Enough Of His ?Socialist? Slurs | Stock News & Stock Market Analysis - IBD
Denmark says it isn?t the socialist utopia Bernie Sanders thinks it is ? Quartz
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Old April 25th, 2016, 09:52 AM   #34
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This has been gone over, reposted, and proven beyond any doubt on several occassions, Ad nauseum.

If you didn't pay attention the first 500-600 times or so, then that can be a medical situation that could require attention. Which in a socialist country where everyone is covered, and happy, unlike the worst healthcare system on the planet, that resides in a for profit for everything country, with the highest homocide rates, instances of child poverty, homelesness, and incarceration, you can get that attention easily.
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Old April 25th, 2016, 10:58 AM   #35
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The problem is that Mises starts by assuming that the profit motive is absent in "Socialism", but if that is the case, you better withhold the "Socialist" label from any system that retains the profit motive and the market, regulation is not prohibition.
You start by not understanding Mises

Take some time and read
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Old April 25th, 2016, 03:06 PM   #36
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This has been gone over, reposted, and proven beyond any doubt on several occassions, Ad nauseum.

If you didn't pay attention the first 500-600 times or so, then that can be a medical situation that could require attention. Which in a socialist country where everyone is covered, and happy, unlike the worst healthcare system on the planet, that resides in a for profit for everything country, with the highest homocide rates, instances of child poverty, homelesness, and incarceration, you can get that attention easily.
yeah because the entire continent of Africa and South American and Mexico and China and Russia have much better health care than the United States. Never mind you failed to list any socialist nations. Just talking out your ass in a angry manner as usual. Do you always wake up all pissed off. It is kind of amusing if you do
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