5 ms·

In practice, the trouble of resolving supply and demand problems politically have been far more disastrous than the problem of planning supply and demand. I fi

In practice, the trouble of resolving supply and demand problems politically have been far more disastrous than the problem of planning supply and demand. I find the Austrian-influenced critique of communism unconvincing. Many Communist countries chugged right along, growing their economies at a pace that alarmed Western observers, before they sagged and broke down under their increasingly cruel, incompetent, kleptomaniacal, bureaucratic government systems. But before this happened people were afraid Communism could actually win. When Khrushchev said "we will bury you" people took him seriously. But if von Mises was right they should never have gotten anywhere in the first place. Also consider that the internal economy of any real-world corporation is 'centrally planned' in a limited sense. When you call up the HR department or tech support, you don't have to pay them for their labor. Hayek was the Austrian that got it right--it's not that central planning is inefficient, it's that efficient central planning for a broad market economy can only be accomplished when you begin to devalue the actions of the humans of the world that aren't in line with what the planners want. Eventually, what is lost is all incentives for planners to plan for anyone but themselves. This goes all the way back to Marx, who would talk about things like how capitalists as a social class do not really provide 'labor value'; that the capitalist even makes money at all is an accident of human organization and that they are not really valuable or needed in the world. To the hardcore Marxist, capitalists are not merely overpaid, they are in fact worthless by definition.

jswinghammer 13y ago
Hayek and Mises were in total alignment on this point: economic calculation under socialism is impossible. Without a working price system economic coordination is impossible to sustain. Those communist countries were not growing at all. If you look at actual output compared to capitalist nations at the same time there is no comparison. The case of East vs. West Germany is sufficient to demonstrate this case. In fact the problem that subsidies create in society is a little window into the problem of socialism that exists on a larger scale. Hayek would probably agree with the sentiment that you expressed though.
- cynicalkane 13y ago
  Hayek literally wrote the book on the "sentiment that I expressed", it's called The Road to Serfdom. Hayek's views on the "economic calculation problem" were more subtle than 'it doesn't work' and they needed to be because by the time he wrote the book, communism was a real economic power and it was getting more powerful. I'm not sure how you think Russia went from backwards feudalism to nuclear superpower by "not growing at all".
  - jswinghammer 13y ago
    Hayek is an interesting character because "The Road to Serfdom" is not really his finest or clearest viewpoint on markets at all. I saw a video interview with him (you can find it on youtube if you want) where he just restates what I did that the economic calculation problem renders socialism unable to coordinate production effectively. Russia as compared to the United States is still a backward country. Their wealth is nowhere near the United States and certainly didn't gain any ground during the Cold War period. It doesn't take much, if any, "growth" to force a nation as large as Russia to build a large military-particularly when you don't actually need to figure out the logistics of that army fighting an actual war (since Russia could never have done such a thing against the United States). Add to that forced labor and the basic confiscation of whatever you need to accomplish your goals and it all is pretty straightforward.

jswinghammer 13y ago

Hayek and Mises were in total alignment on this point: economic calculation under socialism is impossible. Without a working price system economic coordination is impossible to sustain. Those communist countries were not growing at all. If you look at actual output compared to capitalist nations at the same time there is no comparison. The case of East vs. West Germany is sufficient to demonstrate this case. In fact the problem that subsidies create in society is a little window into the problem of socialism that exists on a larger scale. Hayek would probably agree with the sentiment that you expressed though.

cynicalkane 13y ago
Hayek literally wrote the book on the "sentiment that I expressed", it's called The Road to Serfdom. Hayek's views on the "economic calculation problem" were more subtle than 'it doesn't work' and they needed to be because by the time he wrote the book, communism was a real economic power and it was getting more powerful. I'm not sure how you think Russia went from backwards feudalism to nuclear superpower by "not growing at all".
- jswinghammer 13y ago
  Hayek is an interesting character because "The Road to Serfdom" is not really his finest or clearest viewpoint on markets at all. I saw a video interview with him (you can find it on youtube if you want) where he just restates what I did that the economic calculation problem renders socialism unable to coordinate production effectively. Russia as compared to the United States is still a backward country. Their wealth is nowhere near the United States and certainly didn't gain any ground during the Cold War period. It doesn't take much, if any, "growth" to force a nation as large as Russia to build a large military-particularly when you don't actually need to figure out the logistics of that army fighting an actual war (since Russia could never have done such a thing against the United States). Add to that forced labor and the basic confiscation of whatever you need to accomplish your goals and it all is pretty straightforward.