It seems to me that commies understanding of economics still remains at a very primitive level. Marx wrote Das Kapital during the marginal revolution and he never seemed to quite grasp it, his critique of capitalism was still based on the classical/ Ricardian framwork.
I would say the reason why communism won't work really comes down to economic calculation, and coercion being the offshoot of the incentive problem, which can be solved in a compulsive and coercive way. But the ECP can never be solved by AI or big data or any technology, however advanced. For prices cannot emerge via any equation, the price of a good is based on the subjective valuation of both parties, and this presupposes private ownership in not just the MoP but consumer goods as well. Higher Q lower P or lower Q higher p, this relationship between P and Q is in no way linear, it's in no way pre-existed. It's solely based on the subjective valuation of both parties. It can very well be the case that when we cut the price in half, the quantity demanded does not simply double. For the marginal utility of a good does not diminish in an exactly inverse proportion. The seller must set the price at the most profitable level, and he can only do that with the apparatus of economic calculation. It is precisely the fact that there are so many ways to make the same good that we need economic calculation to find out which way is the most profitable, and whether there are any more valuable uses for the MoP remain unsatisfied and unrealized.
The failure to grasp this leads to production chaos. As per Mises "we have a socialist community which must cross the whole ocean of possible and imaginable economic permutations without the compass of economic calculation.
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."
Socialism, Mises, p.122.
Kevin Hua
npub198…glphg
2024-08-28 01:34:56
in reply to nevent1q…6g4g
Author Public Key
npub198f5q53gh9t8p48pevgd7mexx47nmam6854wk5say7rf6vhtjwpsqglphgPublished at
2024-08-28 01:34:56Event JSON
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"content": "It seems to me that commies understanding of economics still remains at a very primitive level. Marx wrote Das Kapital during the marginal revolution and he never seemed to quite grasp it, his critique of capitalism was still based on the classical/ Ricardian framwork. \n\nI would say the reason why communism won't work really comes down to economic calculation, and coercion being the offshoot of the incentive problem, which can be solved in a compulsive and coercive way. But the ECP can never be solved by AI or big data or any technology, however advanced. For prices cannot emerge via any equation, the price of a good is based on the subjective valuation of both parties, and this presupposes private ownership in not just the MoP but consumer goods as well. Higher Q lower P or lower Q higher p, this relationship between P and Q is in no way linear, it's in no way pre-existed. It's solely based on the subjective valuation of both parties. It can very well be the case that when we cut the price in half, the quantity demanded does not simply double. For the marginal utility of a good does not diminish in an exactly inverse proportion. The seller must set the price at the most profitable level, and he can only do that with the apparatus of economic calculation. It is precisely the fact that there are so many ways to make the same good that we need economic calculation to find out which way is the most profitable, and whether there are any more valuable uses for the MoP remain unsatisfied and unrealized.\n\nThe failure to grasp this leads to production chaos. As per Mises \"we have a socialist community which must cross the whole ocean of possible and imaginable economic permutations without the compass of economic calculation.\n\nAll economic change, therefore, would involve operations the\nvalue 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.\" \n\nSocialism, Mises, p.122.",
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