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Old April 21st, 2018, 04:22 AM   #1
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Economic Calculation Problem

One aspect of socialism is what is known as "central planning" or a "command and control" economy, and associated with that is something known as the "economic calculation problem". It basically shows that a "free market" system is better than "central planning", in the sense that it is more efficient at determining demand and optimally adjusting supply (how much resources & effort to put into it, and knowing this as early as possible) accordingly - which in turn, leads to better prosperity (increase in standard of living & quality of life) for everyone.

The reason is simple: in a free market system, unlike a command and control system, one is not impeded from exploring options and alternatives to improve the efficiency in producing the goods or services they provide; so when they figure out a better way, the cost for those goods/services goes down (all other things being equal).

More:

https://wiki.mises.org/wiki/Economic...lation_problem
https://mises.org/library/economic-c...t-commonwealth
https://fee.org/articles/economics-a...ation-problem/
https://www.cato.org/cato-university...ourse/module11
https://en.wikipedia.org/wiki/Econom...lation_problem
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Old April 21st, 2018, 04:31 AM   #2
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Originally Posted by Neil View Post
One aspect of socialism is what is known as "central planning" or a "command and control" economy, and associated with that is something known as the "economic calculation problem". It basically shows that a "free market" system is better than "central planning", in the sense that it is more efficient at determining demand and optimally adjusting supply (how much resources & effort to put into it, and knowing this as early as possible) accordingly - which in turn, leads to better prosperity (increase in standard of living & quality of life) for everyone.

The reason is simple: in a free market system, unlike a command and control system, one is not impeded from exploring options and alternatives to improve the efficiency in producing the goods or services they provide; so when they figure out a better way, the cost for those goods/services goes down (all other things being equal).

More:

https://wiki.mises.org/wiki/Economic...lation_problem
https://mises.org/library/economic-c...t-commonwealth
https://fee.org/articles/economics-a...ation-problem/
https://www.cato.org/cato-university...ourse/module11
https://en.wikipedia.org/wiki/Econom...lation_problem
(My bold)

So, in other words, when a pharmaceutical distributor supplies a town with a population of 5,000 residents with 1 million opioids, this is an example of the free market “efficiently determining demand and optimally adjusting supply” ?
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Old April 21st, 2018, 05:38 AM   #3
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(My bold)

So, in other words, when a pharmaceutical distributor supplies a town with a population of 5,000 residents with 1 million opioids, this is an example of the free market “efficiently determining demand and optimally adjusting supply” ?
No; your example doesn't provide the correct scenarios (and it's only one ambiguous scenario) to express an illustration to examine the concept. Is your scenario distributor run by a central planning committee, or is it a privately owned company in a free market system? What's the comparison situation, and what are the outcomes for each one?

What I mean is this: a way to illustrate the concept would be to say something like, "in a command and control system, some central planning committee makes the decision that the distributor it controls is to supply X opioids to the town, whereas in a free market system, a privately owned & run distributor makes the decision that Y opioids are to be supplied to the town."

Then it would be followed with an explanation of what the outcomes were (i.e., which ones had a larger surplus or shortage). You should also throw in an explanation on how in each case they arrived at numbers X & Y, then you should explain how they each increased or decreased X & Y numbers based on demand or whatever they use, in order to minimize the surpluses/shortages.

BTW - keep in mind that you can't just make up the numbers scenario; it has to be something from a real example, something that was actually observed. Science is what we observe; making numbers up is science fiction.

That's only scratching the surface. For instance, there can be delays; for example, the ingredients or the materials used to make the containers for the opioids need to be produced somewhere else. What will the central planning system do to deal with the delay? What will a private company do to deal with the delay?

Suppose one of the patients is someone recovering from surgery, and this person is responsible for finishing the construction or repair of a key bridge that the town needs, but because of the delay in the opioid delivery, it's taking this person longer to recoup - which in turn means it's delaying the construction or repair of the bridge. The question in this case would be, which system is better for mitigating these types of problems, a free market system, or a socialist system? The argument is that a free market system would be better at mitigating these types of problems - the free market system would have that bridge constructed or repaired sooner; the free market system would allow the opioid manufacturer to find another producer of ingredients or containers sooner; etc.
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Old April 21st, 2018, 06:18 AM   #4
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Originally Posted by Camelot View Post
(My bold)

So, in other words, when a pharmaceutical distributor supplies a town with a population of 5,000 residents with 1 million opioids, this is an example of the free market “efficiently determining demand and optimally adjusting supply” ?
Opioids are controlled substances, that would be a central Government problem.

That is the problem with a Central Government they miss the problems in the individual communities.
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Old April 21st, 2018, 06:26 AM   #5
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Originally Posted by Neil View Post
No; your example doesn't provide the correct scenarios (and it's only one ambiguous scenario) to express an illustration to examine the concept. Is your scenario distributor run by a central planning committee, or is it a privately owned company in a free market system? What's the comparison situation, and what are the outcomes for each one?

What I mean is this: a way to illustrate the concept would be to say something like, "in a command and control system, some central planning committee makes the decision that the distributor it controls is to supply X opioids to the town, whereas in a free market system, a privately owned & run distributor makes the decision that Y opioids are to be supplied to the town."

Then it would be followed with an explanation of what the outcomes were (i.e., which ones had a larger surplus or shortage). You should also throw in an explanation on how in each case they arrived at numbers X & Y, then you should explain how they each increased or decreased X & Y numbers based on demand or whatever they use, in order to minimize the surpluses/shortages.

BTW - keep in mind that you can't just make up the numbers scenario; it has to be something from a real example, something that was actually observed. Science is what we observe; making numbers up is science fiction.

That's only scratching the surface. For instance, there can be delays; for example, the ingredients or the materials used to make the containers for the opioids need to be produced somewhere else. What will the central planning system do to deal with the delay? What will a private company do to deal with the delay?

Suppose one of the patients is someone recovering from surgery, and this person is responsible for finishing the construction or repair of a key bridge that the town needs, but because of the delay in the opioid delivery, it's taking this person longer to recoup - which in turn means it's delaying the construction or repair of the bridge. The question in this case would be, which system is better for mitigating these types of problems, a free market system, or a socialist system? The argument is that a free market system would be better at mitigating these types of problems - the free market system would have that bridge constructed or repaired sooner; the free market system would allow the opioid manufacturer to find another producer of ingredients or containers sooner; etc.
(My bold)

Yes, pharmaceutical distributors use a central planning commission alright. They have lobbyists that ply politicians with millions in campaign contributions that in turn allows them to legally flood our unsuspecting population with opioids in supplies far in excess of legitimate demand. That doesn’t just happen by accident.
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Old April 21st, 2018, 06:30 AM   #6
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Originally Posted by Camelot View Post
(My bold)

Yes, pharmaceutical distributors use a central planning commission alright. They have lobbyists that ply politicians with millions in campaign contributions that in turn allows them to legally flood our unsuspecting population with opioids in supplies far in excess of legitimate demand. That doesn’t just happen by accident.
Opiates are controlled by the government.. The FDA was to be oversight..

for yeas the Government did nothing. Until Trump came along.. and he is decentralizing the enforcement. Like a Good Capitalist.
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Old April 21st, 2018, 06:58 AM   #7
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Originally Posted by Neil View Post
One aspect of socialism is what is known as "central planning" or a "command and control" economy, and associated with that is something known as the "economic calculation problem". It basically shows that a "free market" system is better than "central planning", in the sense that it is more efficient at determining demand and optimally adjusting supply (how much resources & effort to put into it, and knowing this as early as possible) accordingly - which in turn, leads to better prosperity (increase in standard of living & quality of life) for everyone.

The reason is simple: in a free market system, unlike a command and control system, one is not impeded from exploring options and alternatives to improve the efficiency in producing the goods or services they provide; so when they figure out a better way, the cost for those goods/services goes down (all other things being equal).

More:

https://wiki.mises.org/wiki/Economic...lation_problem
https://mises.org/library/economic-c...t-commonwealth
https://fee.org/articles/economics-a...ation-problem/
https://www.cato.org/cato-university...ourse/module11
https://en.wikipedia.org/wiki/Econom...lation_problem
So, central planning is bad when governments do it/ but good when multinational/multidivision corporations like Walmart, G.E. and Exxon do it!

*let me know when you find another example of a corporation like Sears- which had a CEO who believed all of the let the market decide horseshit enough to encourage internal competition....and destroyed the whole company before they had a chance to fire him!

corporations also show their socialist bonafides when they strive to create monopolies and buy government politicians and regulators to ensure their advantages over upstarts.

The biggest fraud in existence today is that the billionaires and corporate foundations that fund Cato, von Mises, and other anti-government propaganda, are themselves the agents in society who have access to government power and use it. They just don't want common people to be able to use government for their benefit!
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Last edited by right to left; April 21st, 2018 at 07:02 AM.
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Old April 21st, 2018, 07:10 AM   #8
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Originally Posted by right to left View Post
So, central planning is bad when governments do it/ but good when multinational/multidivision corporations like Walmart, G.E. and Exxon do it!

*let me know when you find another example of a corporation like Sears- which had a CEO who believed all of the let the market decide horseshit enough to encourage internal competition....and destroyed the whole company before they had a chance to fire him!

corporations also show their socialist bonafides when they strive to create monopolies and buy government politicians and regulators to ensure their advantages over upstarts.

The biggest fraud in existence today is that the billionaires and corporate foundations that fund Cato, von Mises, and other anti-government propaganda, are themselves the agents in society who have access to government power and use it. They just don't want common people to be able to use government for their benefit!
Exactly it is naive to think the wealthy interests don’t try to bribe the government to centrally plan for them vs. the common man that wants the government to side with them. Socialism = human nature.
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Old April 21st, 2018, 08:20 AM   #9
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Originally Posted by right to left View Post
So, central planning is bad when governments do it/ but good when multinational/multidivision corporations like Walmart, G.E. and Exxon do it!

*let me know when you find another example of a corporation like Sears- which had a CEO who believed all of the let the market decide horseshit enough to encourage internal competition....and destroyed the whole company before they had a chance to fire him!

corporations also show their socialist bonafides when they strive to create monopolies and buy government politicians and regulators to ensure their advantages over upstarts.
Yes, you see when the Government FUBARs it's planning there is no place to rid yourself of the FUBAR

if Walmart FUBARs it's central planning I can go to Target, or Kmart.
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Old April 21st, 2018, 08:27 AM   #10
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Opiates are controlled by the government.. The FDA was to be oversight..

for yeas the Government did nothing. Until Trump came along.. and he is decentralizing the enforcement. Like a Good Capitalist.
Trump's policies have not been put into place.
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