3 ms·

The Socialist Calculation Debate: Reckoning with Mises

3 points by bwestergard 6y ago

kkoncevicius 6y ago
I think the article misses the point, a bit. I am not familiar with Mises directly, but I read Hayek, who also analysed this price information problem. This article frames the monetary price issue as an issue about profits - without prices manufacturers do not know if doing something will be profitable or not. That might be true but that is secondary. The main point to me seemed that the prices, as they are formed on the market, tell individuals what to do and what not to do in the social interest. Example: imagine in some city one district has a water shortage. Quickly the people there will start offering higher prices for water. Then someone who is willing to work for social good can look at those prices to determine the needs of the people. Or put it another way - if you want to help society you should do things with highest monetary rewards. It is not tied to profit, as you can choose to do those things even at a loss for yourself. The prices just give you the information you need evaluate the needs. Few nice consequence of this: 1) even the greedy people will end up doing good for society, since they will be chasing those same price signals; 2) people are rewarded in accordance to how much they are able or willing to contribute.
- bwestergard 6y ago
  Thanks for the feedback. I hope to provide some more satisfying conclusions at the end of this series of posts - posting here was perhaps premature. I think the difficulty with your reading is that Mises does not appeal to “social interest” or any related concept in this essay, and we know from his other writings that he sees welfare as radically subjective (the market order is held to be “efficient” in the sense of satisfying each consumer’s preferences, whatever those may be). Hence my footnote on Mises’ use of the term “efficiency”, which is as close as he gets to discussing welfare. http://socialistplanning.org/posts/reckoning-with-mises#fn12 http://socialistplanning.org/posts/reckoning-with-mises#fn12
  - kkoncevicius 6y ago
    It is an interesting topic, and I hope your later writings will achieve more attention on here. I am also curious to see any possible proposals for overcoming the price information issue. I haven't heard any satisfactory proposal, that doesn't start with "all the jobs will be replaced by machines, and then ...".

3 points by bwestergard 6y ago

I think the article misses the point, a bit. I am not familiar with Mises directly, but I read Hayek, who also analysed this price information problem. This article frames the monetary price issue as an issue about profits - without prices manufacturers do not know if doing something will be profitable or not. That might be true but that is secondary. The main point to me seemed that the prices, as they are formed on the market, tell individuals what to do and what not to do in the social interest. Example: imagine in some city one district has a water shortage. Quickly the people there will start offering higher prices for water. Then someone who is willing to work for social good can look at those prices to determine the needs of the people. Or put it another way - if you want to help society you should do things with highest monetary rewards. It is not tied to profit, as you can choose to do those things even at a loss for yourself. The prices just give you the information you need evaluate the needs. Few nice consequence of this: 1) even the greedy people will end up doing good for society, since they will be chasing those same price signals; 2) people are rewarded in accordance to how much they are able or willing to contribute.

bwestergard 6y ago
Thanks for the feedback. I hope to provide some more satisfying conclusions at the end of this series of posts - posting here was perhaps premature. I think the difficulty with your reading is that Mises does not appeal to “social interest” or any related concept in this essay, and we know from his other writings that he sees welfare as radically subjective (the market order is held to be “efficient” in the sense of satisfying each consumer’s preferences, whatever those may be). Hence my footnote on Mises’ use of the term “efficiency”, which is as close as he gets to discussing welfare. http://socialistplanning.org/posts/reckoning-with-mises#fn12 http://socialistplanning.org/posts/reckoning-with-mises#fn12
- kkoncevicius 6y ago
  It is an interesting topic, and I hope your later writings will achieve more attention on here. I am also curious to see any possible proposals for overcoming the price information issue. I haven't heard any satisfactory proposal, that doesn't start with "all the jobs will be replaced by machines, and then ...".