Before 1920, the debate over socialism was how best to approach it. No-one doubted that it could be done. The question was how to implement it.

Economic debate focused on the incentive problem – the ‘who will take out the garbage?’ problem. If everyone is to be paid equally, then what would motivate people to do the hard, dirty jobs? These were the kinds of issues that discussion of socialist economics focused on.

In 1920, Ludwig von Mises published Economic Calculation in the Socialist Commonwealth. Mises showed that there was a much more fundamental problem.

The whole purpose of socialism was to replace capitalism – the private ownership of the means of production, with socialism – the public ownership of the means of production. But if there is no private ownership of capital goods, there will be no market for capital goods, because all the capital goods will have one owner: the ‘community’ or state.

Since there will be no market for capital goods, therefore there will be no prices for capital goods.

Prices are used to calculate the most economical way of doing things. This is fundamental, because the purpose of all economising is to satisfy a given subjective want with the least waste of resources necessary to do it.

Under capitalism, if you’re trying to figure out whether to sow wheat to grow lambs, or sow barley to grow seed, or whether to repair your old tractor or buy a new one, you can compare money prices. Prices provide a lowest common denominator for quantities that cannot otherwise be compared, like comparing the productivity of cows to make milk, with the productivity of tractors to grow apples.

Under socialism, the central planning authority will be faced with an impossible task. It will not be able to compare prices, but only to compare quantities directly. Thus socialism is not an alternative economic system that could work for a modern economy using complex, roundabout methods of production. It abolishes rational economising above the level of barter, and can only result in planned chaos.

Both logic and history proved Mises right.

Peter, just read that last thread that you started too. Personally I think that you’re my way or the highway attitude is a bit misplaced. Most specifically, in my opinion, while the separateness of individuals and the subsequent competition between them is vitally important both from the personal and social perspective, so is our connectedness as a community and our subsequent tendency to cooperate together.

‘Good’ comes from both of these sources, but not when they are expressed in the extreme. Instead, what we are looking for is balance.

With regard to your issue of pricing, there are two main theories concerning how we should understand value. One is the ‘labour theory of value’, which basically looks at what it costs to produce something. The other is called ‘marginal utility’, which basically looks at how much we are willing to pay for things.

Within a more cooperative society, the labour theory of value will serve us better because if we are working together to produce something that we then consume, we will effectively be paying for it exactly what it cost to produce. Within a more competitive society, as sellers will be trying to sell for as much as possible, and the buyers to buy for as little as possible, marginal utility will be our choice for understanding value.

With my ‘walk the middle road and look for balance’ approach, I think that both these methods have a role to play.

To your comment….. I do not advocate a heavily centralized system, (neither by the way do I think that most people who call themselves socialists do), but I do not see why a central authority could not use the methods of the labour theory of value to determine the relative ‘value’ of different things and make their decisions accordingly.

Hopefully this comment will help swing this discussion away from the us-or-them debate of the previous one.

I came from that place that socialism may have first grown.
The truly under privileged.
Few here truly knew hunger and what seemed a hopeless future, I did.
Having carried the idea communism or Socialism was the answer I look back and see it never was never can be.
We in this country are a combination of socialism and capitalism, and it works ok.
Education health pensions and welfare the list is very long and is in some way socialist.
However truly honestly I think a new way must be found, not past ideas that we miss used like communism blackened the word socialism.
Or socialism that knew how to give but not how to get first what it wanted to give.
We must one day confront the truth, we want no one to be without but some want to take not give back socialism alone is waste, our system refined and reworked may be the future but looking at the past for todays answers is not helping.;

I concur with Peter Hume’s opening post and disagree with Gilbert Holmes notion of a middle way

Capitalism versus Collectivism defines, economically,

1 the ownership and control of property and the means of wealth creation between private (capitalist) versus collective (government) ownership

2 whether “personal reward” should be based on “individual need” or “productive effort”

Capitalism concerns itself solely with economic ownership and control of productive resources

I view myself as a libertarian capitalist.

I do not believe there is any merit in middleclass welfare or corporate welfare. We are better off with fewer subsidies, less government interference and fewer bureaucrats, requiring fewer and less taxes levied against private individuals and businesses.

Leaving the rewards in the hands of those who take the risks.

Risks which government is neither entrepreneurially or emotionally equipped to take.

History has shown, creating a (collectivist) government monopoly does not benefit consumers over a privately owned monopoly and ineffectual companies end up less effectual when nationalised than they were when in private hands.

“Philanthropy” was not invented by “socialists” nor was “noblesse oblige”.

“Love”, ”compassion” and “charity” existed for millions of years before the notion of a “welfare state” was dreamed up.

The “market“ needs only to be regulated to maintain honesty in trade and where there is need to counter any imbalance of power between millions of disorganised consumers and a few organised suppliers.
there is an cynical old saying...

“capitalism” is what people expect for themselves and “collectivism” is what they expect for everyone else.

Well I don’t. I have a capitalist expectation for myself and for everyone else too.

I applaud you and wish you all the enjoyment you can derive from the rewards of your risks and efforts.

I do not expect to enjoy such “rewards” when I am just a mere bystander to those “efforts”.

Likewise, I expect my reward to come only from my risks and efforts and not from any government “redistribution” of other peoples rewards.

Cont....

To Gilbert and Bellys comments

Gilberts idea of a middle path, I presume Gilbert means a pluralistic system

And Belly’s comment “However truly honestly I think a new way must be found, not past ideas that we miss used like communism blackened the word socialism.”

If I could describe what I take Belly to mean that

“The moderation of socialism” has been blackened by the “excesses of communism”

We have seen before how “collectivism” cannot be treated as a “self-regulating” process able to stop at “moderate” and limiting itself to economic matters.

Ego and other human emotions drive people with access to power to see themselves as an all-knowing, all powerful authority. They then insinuate themselves into an ever increasing range of human activities, dominating private choices to education, healthcare, regulating more and more aspects of everyday life well beyond the expectation of the “moderate socialist”. Eventually determining state directed / limiting individual choices to religious faith ending up as another despotic autocracy, the type of thing which people revolted against in the first place.

The above reflecting Lenin statement

“the goal of socialism is communism”

What I see is this -

The danger of setting up “moderate socialism” is like setting a heavy object in motion –

Once moving, it achieves its own momentum -

Rapidly becoming out of control and unable to stop at “moderate socialism”, instead rolling on and into the “excessive communism” –
regardless the good intensions of those who set it on its initial course.

And that is the fatal flaw in all “collectivism”.

Whereas capitalism, since it devolves authority, cannot become the victim of its own momentum in the same manner as collectivism.
And capitalism does not mean we are the de facto victims of global corporations, any more than we are the victims of foreign empires, because, like I said previously

The “market“ needs only to be regulated to maintain honesty in trade and where there is need to counter any imbalance of power between millions of dis-organised consumers and a few organised suppliers (aka global corporations)

Gilbert, spoken like a true "public servant"

I suppose all bureaucrats must believe something approaching your idea of good central authorities, or they could not live with themselves.

Which comes first, the belief, or the job?

I believe that Mises may be your own personal God, Peter Hume.

It is either "believe in me, or be cast into the hellfire".

My own view is that there is no such thing as a "middle way", if only because it allows you to be shot at from both sides. (I'll ignore for the moment the option of ducking, so they hit each other)

But there must be a case for "horses for courses", which is, I believe, what GilbertHolmes was taking great pains to point out.

Capitalism in its rawest, no-government-intervention form is, for example, absolutely lousy at providing basic facilities for the elderly. Stern (in his former guise) and I have had this discussion before, on the topic of the disappearance of the bus service that allowed my mother, now getting close to ninety, to get to the local library.

The stark reality is that my mother has lost all her economic power, at the same time as her legs are less able to carry her about. Nobody is going to establish a commercially-viable bus service for her demographic - and, according to you, nor should the taxpayer be allowed to do so.

I believe that this is a very short-sighted view.

(Unless of course, you are Dick Smith, one of our leading capitalists, who would also like to see a reduction in our population. Rushing a few more old ladies to an early grave might fit the bill nicely.)

There is certainly more than a touch of religion in this, isn't there Peter Hume? No room for doubt, no room for wavering from the cause, no room to accommodate ideas that do not fit neatly within the tightly-laced corsets of your favourite theory. Eh?

Relax a little. Too much dry economics makes Jack a very dull boy indeed.

Peter
Both you and Mises incorrectly assert that all socialism is centralised and authoritarian. This may stand for Marxist/Leninist socialism but is a total anathema to large parts of the left. Socialist ideas are not limited to Marxian Social Democracy, and so von Mises ignores far more socialistic ideas than he attacks.

Prices are not used to calculate the most efficient way of doing things only the cheapest. Prices hide the actual costs that production involved for the individual, society, and the environment, and instead boils everything down into one factor, namely price.

Indeed, prices often mis-value goods as companies can gain a competitive advantage by passing costs onto society (in the form of pollution, for example, or de-skilling workers, increasing job insecurity, and so on). This externalisation of costs is actually rewarded in the market as consumers seek the lowest prices, unaware of the reasons why it is lower (such information cannot be gathered from looking at the price).
Using prices, to the exclusion of all other considerations, means basing all decision making on one criterion and ignoring all others. This has seriously irrational effects, because the managers of capitalist enterprises are obliged to choose technical means of production which produce the cheapest results. All other considerations are subordinate, in particular the health and welfare of the producers and the effects on the environment.

Once again Peter go here to see why and how Mises was wrong.
http://www.infoshop.org/page/AnarchistFAQSectionI1#seci11

Stern
<<Ego and other human emotions drive people with access to power to see themselves as an all-knowing, all powerful authority. They then insinuate themselves into an ever increasing range of human activities, dominating private choices to education, healthcare, regulating more and more aspects of everyday life>>

But only for socialists right? Capitalists with access to power never fall prey to "ego and other human emotions" do they? The shallowness of your argument could not be more striking.

Pericles, I remember your old mum

My commuting costs fell to 30% of what they were previous (a drop of 70%) when Margaret Thatcher broke the UK rail monopoly on commuter travel into London.

It was the likes of me who were being financially violated to pay for your mums cheap bus fares.

as road users are financially abused to pay for the non-effectual mega-subsidised commuter rail network in Melbourne, along with the worst (state government selected) ticketing system ever implemented (at a price no private operator would have ever spent).

Mikk “But only for socialists right? Capitalists with access to power never fall prey to "ego and other human emotions" do they? The shallowness of your argument could not be more striking.”
(re my original comment “Ego and other human emotions drive people with access to power....”

My point Mikk, I am observing a common human frailty and common to all humans regardless of their political leanings

It is not that capitalists are less likely to abuse power than any socialists,

It is that capitalism devolves power and does not rely, like collectivist models of organisation, on the concentration of authority and thus “power” in one place.

The “human frailty” issue means the potential for catastrophic consequences from any “centralised system” of control is far more damaging than where control is devolved.

Example –

If you rely on central heating and the switch on the power supply fails, you lose all the heating to all the rooms of your house.

If you rely on devolved room heaters, each empowered to be turned on or off separately and one of the switches breaks, you still have heat in the other locations.

The ensuing loss of “heat” being less “catastrophic” than under the “decentralised” system.

Another example – do you suppose Stalin could have possibly got away with murdering 30 million people if he owned a mere business, instead of owning USSR?

“The shallowness of your argument could not be more striking.”

Only for those who cannot grasp concepts which either challenge or fly high above their own dogmatic prejudices

Aw man! I cant believe I missed you under you new moniker Col. Welcome back. (Belatedly)

I still like Col Rouge better than Stern. Why did you have to change on me Col!

I've got some reading to do. So much to catch up on.

<<It is that capitalism devolves power and does not rely, like collectivist models of organisation, on the concentration of authority and thus “power” in one place. >>

It may not "rely" ,as you put it, on the concentration of power but the reality is that in a capitalist system power DOES concentrate to one place and one small group of people. The mega wealthy.

<<The “human frailty” issue means the potential for catastrophic consequences from ANY “centralised system” of control is far more damaging than where control is devolved.>>

So where do you stand on the average capitalist corporation? Surely you recognise the "centralised system of control" that is inherent in such organisations. Why does your ideology not also apply in business?

When will you recognise that not all socialist thought is predicated on centralisation and authoritarianism? Libertarian socialism, syndicalism, anarchism, mutualism and many others all reject central authority and control and seek to replace capitalist exploitation with decentralised, democratic workers control.

At least learn what socialism actually is before you critisise a straw man and make yourself look stupid.

I wondered where my old mate col rogue was

I appreciate belly’s recognition that the society in which we live has aspects of both communist and capitalist systems built into it. I also think that we can look at what we have got in Australia and say to ourselves, considering our current situation in a historical perspective, that we have got it ok. We have got reasonably democratic systems of governance that have helped ensure our welfare, our rights in the workplace, etc.

This is not to say that I do not want the place to improve. Also as Belly said, we need to find a new way forward. Realistically I think that much of the wealth that we now live on was not created so much by the capitalist system, or by the huge economic growth experienced by the USSR throughout most of the 20th century, but by the incredible amount of energy, in the form of fossil fuels, that we have been burning.

Advocating once again for the middle way, I think that the time is coming where we will not be able to afford (either in an environmental or an ecenomic sense) to sacrifice the efficiencies available to us either through competition or cooperation. We’re gonna need both.

Personally I’m in favour of both centralization and decentralization. Yes to democratic governance on the large scale and yes to local political autonomy within the broader social structure

You were lucky, Stern.

>>My commuting costs fell to 30% of what they were previous (a drop of 70%) when Margaret Thatcher broke the UK rail monopoly on commuter travel into London.<<

I'd be interested to hear from you what they are today.

http://www.nationalrail.co.uk/

Check it out and let me know how it compares, won't you.

Peter/stern et al.
Again you all
a. oversimplify. (stern) People are far more complex than you give them credit for.
b. Assume (incorrectly) that the options are limited hard and fixed at each end of the continuum.

All of you seem to deny the obvious
a. Just because other, perhaps more acceptable options (hybrids?) hasn't been articulated doesn't mean they don't exist.
Either or scenarios only work when *all* factors are known and allowed for. The point I made before that either wasn't understood or ignored was that all factors aren't known and are unlikely to be ever known.
Given these incalculables it stands to reason that any plan/philosophy must therefore be flexible to adapt to the ever changing needs/situations. dogmatising a one off solution i.e. Capitalism or What ever immediately fixes the solution to a narrow band of circumstances.

Capitalism as *part* of the solution is fine, I have no issues with it in that context. But as the entire solution? we end up with a Malthusian conclusion with is devoid of ethics. suitable automatons but not people.

Neither is Dogma driven socialism the answer.

To then say to me what is the solution I must answer I have a general framework but beyond that I have neither the motivation of time to write/design it especially when I favour democratic participation

Looking for balance within our society is not about some half-arsed compromise between opposing ideals. The middle way is a genuine, well thought out political position with a long history.

Understanding the search for democracy as the search for balance between our connectedness as a community and our separateness as free individuals, we can witness the tendency toward increasing democracy within our institutions of government over the last couple of hundred years as an example of this.

What's more, while the polarized debate between the more extreme elements tends to steal the headlines, the moderate position is actually far more popular than either of the extremes.

While our current economic institutions therefore may be skewed too far toward the right; toward individualism and competition, the answer in trying to correct this is not to polarize the debate by arguing in favour of collectivism and cooperation, but to assert the balanced, moderate position.

Pericles... train fare ... about the same price as 1983 but who knows how much UK government subsidy

Houlle... time for a change of model... like the motor.... currently an SLK

Examinator “oversimplify. (stern) People are far more complex than you give them credit for.”

Please expand on that “simplistic dismissal”, start with referencing what I said from which you draw such a generalist and arbitrary conclusions

“Just because other, perhaps more acceptable options (hybrids?) hasn't been articulated doesn't mean they don't exist.”

your “more acceptable options”.... are also called “whimsy”, “stuff-and-nonsense”, “hypothetical inertia” and “bulltish”....

when you actually stoop to articulate one, we will doubtless be able to shoot it down in flames

re “Either or scenarios only work when *all* factors are known and allowed for.... all factors aren't known and are unlikely to be ever known”

Capitalism “works” quite well without all knowing all the factors.... we call them “Futures Markets”

Re “we end up with a Malthusian conclusion with is devoid of ethics. suitable automatons but not people.”

Such an absolute prediction cannot be presumed.

To “hoist you on your own petard”, I did see you write, recently

“perhaps more acceptable options (hybrids?) hasn't been articulated doesn't mean they don't exist.”

Re “..what is the solution I must answer I have a general framework but beyond that I have neither the motivation of time to write/design it especially when I favour democratic participation”

Even gibbering idiots can be aware of a ”framework” and most have more energy than you...

If find it hypocritical in the extreme for you to parade criticism of working systems and then admit you lack the “motivation of time to write/design” an alternative.

And the last time i looked, “capitalism” is wholly compatible with what you call “democratic participoation”, the danger is the inherent arrogance and temptations of collectivism is not!

Gilbert Holmes. "hasbeen" was right...

“Gilbert, spoken like a true "public servant...... etc"

mikk “The mega wealthy.”

Try work on joining them,,

instead of firing up the envy engine.

And - Buffet and Gates are giving most of it away

You folks are focused on 'sytem'...when you should be looking at 'people'.

Some have mentioned ego and the such like...but it all misses the boat.

Marxism as belly said hasn't, isn't and won't 'work'. It will just produce the gray mindless social zombies of Orwellian note.

No 'system' will ever deliver justice or fairness, because systems are implemented by 'people'.

Haven't we heard enough, and seen enough to know that the 'nice' face of politicians masks that cold power hungry, 'vested interest' inside?

Human society is a dynamic thing. In a constant state of flux and change.
Again..because of 'people'. Only changing the heart will bring about true justice, but even this is limited to the daily walk of individuals.

I know..I know.. 'sounds so pessemistic' but it isn't..it's realistic. The only hope I can offer is the one I experience each Sunday in fellowship and worship, and throughout the rest of the time in my own daily walk of both up and down.

The framework is wonderful though, being a child of God (in the born again sense) is quite a life changing experience

Hi Stern/Col,

Personally I thought that hasbeen ("Gilbert, spoken like a true "public servant. I suppose all bureaucrats must believe something approaching your idea of good central authorities, or they could not live with themselves.") must have misread my comment, the relevant section of which read, "I do not advocate a heavily centralized system."

Who knows however, maybe he/she just got the public servant feel from me.

As for you, you do oversimplify, as did Adam Smith and David Ricardo from your perspective and Karl Marx and friends from the collectivist perspective before you. The world is not so simple that we are either solely competitive or solely cooperative, so why should our economic and political systems be based on one or the other.

Humanity is organic, social and adaptive, therefore evolves over time with developments that impact upon the society, whether they be technological, social or otherwise. Consequently, there is no perfect system, just systems that work for societies for periods of time depending upon their positioning on the planet and in history, with their own cultural biases.

Added to that is personal weaknesses; greed, power, etc. It is these things that cause systems to fail...human weakness. So the system that understands this and facilitates a level of control over it, is a system that COULD work. Capitalism , communism and every other "ism" fails to recognize human failings, and has the underlying premise of honesty, good intent and altruism in all at all times. I don't believe that any one of us could say that this has been our experience within our interactions with humanity.

Therefore all systems are bound to suffer grandiose flaws.

The systems that have enabled societies and nations in the past to thrive against external forces, are I suppose the ones we regard has having been successful. However today, those boundaries have changed. We are now an international marketplace AND workforce. We are entering into a new concept again of social systems that must embrace this reality, and the difficulties arising from it, for which no precedence has been set.

This now draws into consideration such things as multiculturalism, costs of labour across national boundaries, and then costs of goods and services, international money-flow...The New World Order. A single global cultural entity, or a co-operation of multi-cultural tolerance and equality? These are complex national issues for all nations, and all struggling for dominance at the bargaining table of the World Stage.

We will evolve systems of necessity and political relevance as the times afford each of our regions while the personalities that drive change through leadership (good or bad) come and go. But being what we are, we will do what has to be done, well after the need for it to be done is gone. So it's usually ugly. That's what I've gleaned from some history.

TBC..

Ours is a unique situation in Oz, we are English-speaking, our strongest alliances are with the US and the UK, yet our closest neighbors is Asia and that trading bloc. Our largest buyer is China, but our largest political ally is the US. And we're one of the richest and most desirable places on the planet. That puts us between a rock and hard place if any hostilities occur between the US and China. The system for THIS country, is to tread carefully along this precipitous road. Our system must develop strength to be independent of them, while brokering tolerance between them. We're serving two very different masters.

So for our own country, as far as "systems" are concerned in the global context of our relationships and the Global Village, I'm sure you can see that previous models, in relative terms, are moot.

Permit me a modicum of doubt on this assertion of yours, Stern.

>>Pericles... train fare ... about the same price as 1983 but who knows how much UK government subsidy<<

My last monthly season from Tonbridge to Cannon Street in 1981 was £32. It is now £292. What is the equivalent calculation for your commute?

>>My commuting costs fell to 30% of what they were previous (a drop of 70%) when Margaret Thatcher broke the UK rail monopoly on commuter travel into London.<<

You make such a virtue out of specifics, when others...

>>...draw such a generalist and arbitrary conclusions<<

...that I think you should respond accurately, and precisely. After all, you can clearly recall the 70% drop, so it shouldn't be difficult to tell us what it went from, and to. We can then use the National Rail web site to confirm that it is still "about the same price".

How about it?

Hai.. It is good..

Belly:>> We must one day confront the truth, we want no one to be without but some want to take not give back socialism alone is waste, our system refined and reworked may be the future but looking at the past for todays answers is not helping.<<

Comrade Belly, I want equity for all, but to achieve that the "all" must be as "one" with no segment of detractors who "take and do not give back" as you succinctly put it. How do we define in a single word what has failed us historically in regard to socialist societies, greed.

A single greedy self serving pleb could not disrupt a society as corruption requires networking. Do you see where I am going? There are a bunch of greedy baskets out there all looking for that little edge that gives them more than the guy next door.

It is an admirable dream, intersected by a reality tainted by human greed. Belly you told me some time back that the NSW Labor Right should be torn away and rebuilt, time for a change, a new broom. But what comes in the years following "the change"? The status quo does, and that is what the change removed. History is a teacher, and particularly correct in regard to the ongoing nature of humanity. The "power corrupts" adage is appropriate as a nutshell cause to the fall of most likely every society we have formed. History decrees the "perfect" passes, while tainted endures.

Stern/col

It is unfortunate that you have returned to type (name calling etc)
I had hoped that Like Polycarp you had learn from your absence.I'll ignore this lapse and treat you as I would an open minded individual.
(perhaps for the benefit for others)
You clearly can't see that the underpinning assumption of your comments is that humans and the motivations and therefore their reactions can't be predicted with precision. The only possible method of approximations can't prove individuals only possibilities.

You know or should know the future markets is predicated on those possibilities not absolutes.

Were it as accurate as you seem to imply then there would be no risk, no justification for high levels of profit.Especially given that degree of risk underpins all interest.

I also note that you are tending to over state the ability of economics, a non testable (in a scientific sense) topic.

My point is your methodology is flawed
I repeat I have no interest in proselytizing any solution simply because of the level of defensive galloping inertia that abounds here.
PS one can't prove something doesn't exist only that something does.
Therefore, you can't unequivocally declare that there isn't another way. Have a good life :-)

AGiR… of course it is always about people

Like someone said

“economics are the method, the objective is to change the soul”

Pericles I was wrong, I will correct myself…..
My weekly return ticket, Chesham to Baker St / Marylebone in the metropolitan line in 1983 was UKP35 and replaced by private coach service PND12/week

daily ticket is now PND6 or 7 (depending on cash or “oyster”) but that is one way, not return would be about PND70 less a bit for weekly return v one-way day (my error).

Strangely, nowhere near the same escalation as your example

GilbertHolmes “As for you, you do oversimplify, as did Adam Smith….”

Thankyou for including me in a statement along with Adam Smith… one of the nicest things anyone has ever said

Yes, the world is a complex place but some of us manage to swing between the “macro” and the “micro” with ease.

We cut through to real issues, it makes our reasoning seem "simplistic" because what you have difficulty grasping and perceive as “complex” really is not, it is just big and runs on very fast cycle but comes back to applying the right “mental model”…

Like dearest Margaret said “Any woman who understands the problems of running a home will be nearer to understanding the problems of running a country.”

(some of us men have also managed our own household)

The problem with the collectivist model, it imagines we are like worker ants and part of an ant-hill colony, where the workers are uniformly equal and work for the benefit of the colony…..

The first problem of the collectivist “model” is in the basic biology

Ants do not have partners for procreation in the way humans do

One or a few queen ants have all the babies and the workers have none.

That is the start of the reason why collectivist theories never work….

So it is simply a matter of “biology”…..

And collectivists start from the wrong “biological” model

Leading to just one collectivist disaster after another collectivist disaster.

Examinator.. re "names" and

“I'll ignore this lapse and treat you as I would an open minded individual.”

I have not called you names so drop the "victim" posturing, it is petulant and childish

“You clearly can't see that the underpinning assumption of your comments is that humans and the motivations and therefore their reactions can't be predicted with precision.”

they cannot...

the multi-trillions of interactive variables from the 6 billion individuals on the planet

You neither have a clue to what might happen at any time in the future, regardless what your ego tells you.

you do not know what innovations are being developed to improve life nor what diseases mutating to threaten humanity or which despotic madman might decide to inflict his own horror next.


Re” You know or should know the future markets is predicated on those possibilities not absolutes.”

That is why I used them to illustrate what I wrote -

being “Capitalism “works” quite well without all knowing all the factors.... we call them “Futures Markets””


What is it Examinator… your pompous arrogance prohibits you from agreeing with me, forcing yourself to appear an idiot by trying to make it sounds as if you disagree with me?


“My point is your methodology is flawed”


clearly you do not comprehend my methodology, which really disqualifies you from judging it


“I also note that you are tending to over state the ability of economics,”

not at all,


but I do notice you lack the courage to present a view, merely criticizing what others are prepared to present.


“I repeat I have no interest in proselytizing any solution simply because of the level of defensive galloping inertia that abounds here.”


see my comment above


“Therefore, you can't unequivocally declare that there isn't another way. Have a good life :-)”

I never tried to

As I previously suggested “when you actually stoop to articulate one, we will doubtless be able to shoot it down in flames”


As for my life… it is rich and blessed, and trust me… it is


very, very, very Good

Stern,

Adam Smith was far from stupid. Neither was Rene Descartes. They simply built their systems on a flawed concept.

Descartes (I think therefore i am) said tha human consciousness is essentially separate from the rest of nature, and with that he began the rise of the 'enlightnement' and the cult of the individual that is only now beginning to subside into the background of a better future.

Smith, Ricardo and Thatcher in economics, Freud in psychology, Newton in physics, Darwin in evolution theory were all caught within this cult of the individual.

I am not saying that they or you are wrong, just that you are only representing half of the truth: As well as being indiviudals, we are also a community. We are both self-interested and benevolent, matter and energy, competitive and cooperative.

Paradox is everywhere!

By the way I wasn't calling you a bean-counting bureaucrat. I was actually referring to myself.

Stern you see the world from a very black and white perspective. That is, it either has to be all this or all that.

In the collectivist model you describe with the ant-hill analogy, the workers are all uniformly equal as far as the right to access the same opportunities which an ideal system would ensure as best as able, is egalitarian and not only presented to a priveleged group. This means a fair exchange for labour including for those who take risks, who invest and for the innovative and inventive among us.

Where there is a disparity, is where the few get to dictate to the rest of us based purely on economic power, and this is one of the risks inherent in capitalism. Without some regulation you have anarchy in the economic sense.

The risk in pure socialism is similar in that it assumes an equal input from all citizens for an equal return.

A mixed system that is not so black and white can work toward a fairer distribution of wealth that still rewards risk/innovation but not to the point of disenfranchising the majority for the benefit of a few.

Our view of economics is related to our view of human nature but that nature is complex. Adam Smith may have had a point about self-interest despite the fact that his own works were highly contradictory in the dichotomy between self-interest and morality.

Is the power of human empathy enough to ensure fairness?

At its best, human nature does aspire to that end, but at its worst the effects are keenly felt at the lower end of society. That is when the most vulnerable (those who lack power) are at the mercy of and beholden to their 'masters' goodwill.

The job of government is to represent the people. One way is via regulatory measures. It is time to mature out of the shackles of purist ideology (communist/socialist/capitalist) and look more pragmatically at a blend, what works and what sort of society we wish to build and why.

Pelican

Excellent post.

Col Stern, if you are unable to comprehend anything of Pelican's reasonable comments, at the very least, note that she did not stoop to insults of anyone at any stage.

You have every right to express your opinion, however, by peppering your responses with the verbal excrement of disparagement results in alienation of people you are trying to convince.

Balance is required in communication just as much as it is in governance and business. There is no single, fixed 'right' way unless you are promoting totalitarianism. As species we have been successful by adapting and cooperating; competition is fantastic for innovation but it does not ensure that all people are given equality of opportunity.

Thanks for the clarification, Stern.

>>Pericles I was wrong, I will correct myself… My weekly return ticket, Chesham to Baker St / Marylebone in the metropolitan line in 1983 was UKP35 and replaced by private coach service PND12/week<<

But in the interests of that accuracy and specificity that you prize so much, we need to adjust your initial assertion, don't we.

Let me remind you of your starting position:

>>My commuting costs fell to 30% of what they were previous (a drop of 70%) when Margaret Thatcher broke the UK rail monopoly on commuter travel into London<<

But Thatcher's attention to British Rail had absolutely no impact on the price structure of the London Underground system.

So your claim that your price reduction was the result of her policies falls down on two counts:

1. You compared bus travel with train travel. That would be an uncomfortable hour, A40/M40/Westway. But I guess the tube trip wasn't that great either, was it.

2. You used the London Underground to get from Chesham to the City, so any changes to the National Rail system would not have impacted you anyway.

It would appear that you should have said :

"My commuting costs fell to 30% of what they were previous (a drop of 70%) when I decided to take the bus instead of the London Underground"

That's just a little different.

Which goes to place your attack on my dear old mum (who, incidentally idolized Thatcher, and remains active in the service of the Conservative Party) into some perspective.

>>Pericles, I remember your old mum... It was the likes of me who were being financially violated to pay for your mums cheap bus fares.<<

"Financially violated", eh?

Since she did not live in leafy Buckinghamshire, I fail to see how her travel plans were subsidised by you. Let alone how you became "financially violated" by them.

So it was all just über-capitalist posturing, wasn't it.

Gilbert.. you still don’t get it do you?

“As well as being individuals, we are also a community.”

A “community” is merely a collective noun for a group of individuals

Its like suggesting something be denied an individual for the sake of the common good (a favoured excuse of the assorted collectivists by any name)

I can shake an individual by the hand, I can like or dislike him...

But

I have never met a “common good” and every time I try to ask who benefits from the rewards we heap upon it, the throngs of the “common good” can never be found.

To the words of a famous politician

“there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It's our duty to look after ourselves and then, also to look after our neighbour.”
“Communities” do nothing,

individuals combining together do everything

And I did not take your comment re bean counters as referring to me... but I do hold a brace of accounting credentials and was putting my own hand up as qualifying under that general definition :-)

Pelican...” black and white perspective”
my views are founded on strong beliefs, experiences and values.
If they were not, they would like be of a “greyer” hue.
“risks inherent in capitalism”
Looking at the disparity between communist party members and non-communist party members in USSR, like access to shops with produce in them.... it would seem ”disparity” is not something which gets eliminated by abandoning capitalism, indeed, quite the opposite

Pericles.. my starting position “My commuting costs fell to 30% of what they were previous (a drop of 70%)”

Was the PND12 a week versus PND35 – roughly 70% saving
As to policy.. the bus travel was barred by the monopoly operated by the rail network prior to Thatchers action
The last time I looked, the “London underground” was a system of railway conveyance and enjoyed the same / similar monopoly protections as British Rail.

Nope.

Does not compute, Stern.

>>the bus travel was barred by the monopoly operated by the rail network prior to Thatchers action<<

British Rail did not have a monopoly over bus travel.

Buses were organized under the National Bus Company umbrella. Some NBC companies did operate monopolistically over some routes, but these were invariably local. Chesham to Marylebone would not be considered local, by any definition.

Alder Valley did run some coach services into London, but these were from Reading, and didn't go past Chesham.

So, what are we left with? Not much, I'm afraid.

When the buses were finally fully deregulated with the Transport Act of 1985, the main complaint was that fares went up, not down. The result of withdrawal of local council subsidies, mainly.

All of which begs a couple of questions.

Whatever it was that caused you to shift your allegiance from the London Underground to a bus company, it was not the result of anything that Margaret Thatcher did. So what is it that persuades you otherwise?

And whatever your memory tells you, after all these years, British Rail never, at any time, had a "monopoly" on bus travel, of any kind.

So this was either a teensy little fib, or the product of an exceptionally unreliable memory.

>>the bus travel was barred by the monopoly operated by the rail network prior to Thatchers action<<

Which is it, I wonder.

"Looking at the disparity between communist party members and non-communist party members in USSR, like access to shops with produce in them.... it would seem ”disparity” is not something which gets eliminated by abandoning capitalism, indeed, quite the opposite"

I agree with you regarding disparity, but we are not talking about Communism nor would many I suspect aspire to a Communist state.

Capitalism is not perfect. This is borne out by your continual references to extreme forms of government instead of social democracies and ways we can improve on capitalism and ensure less disparity and as much as you don't like it, regulation is the only way.

The point comes down to who makes the decisions about regulation, enforcement and the balance between the individual and the collective.

Pushing forward the view that this means Communism avoids the elephant in the room and that is the free market under-regulated version of Capitalism is just as imperfect as Communism.

Pericles “Does not compute, Stern.’

What you think computes does not concern me

travel costs in about 1979/80 did….

Before Margaret Thatcher: there was a rail monopoly on commuter services into London… after she became prime minister…. She broke the monopoly, allowing private bus lines to compete with a previous “monopoly protected” nationalized industry

Pelican “I agree with you regarding disparity, but we are not talking about Communism nor would many I suspect aspire to a Communist state.”

The disparity was an undeniable fact of communist life. The worst sort of hypocrisy.

But your view that “this time it will be different”

Is always the excuse for every new version of collectivism, pelican

The maggot eventually turns into a fly

The same way a socialist state eventually progress and turns into a communist state

Like Lenin said

“The Goal of socialism is communism”

Maybe the same reason Britain returned to a “royalist” system, after experiencing the “joys” of Cromwell and his levelers.

No system is ever perfect…

capitalism has imperfections, hence my concerns to protect against abuses derived from an imbalance between a few large and well organized sellers and a lot of disorganized individual consumers

but those sorts of monopoly abuse is not the result of capitalism.

It happens in "socialist" systems too

The “two airline agreement” was a complete “con” on Australia’s air-flying consumers, instigated, promoted and protected by government.

So too the Australian telecomm system was protected for the benefit of its union backed employees, at the expense of its consumers.

And monopoly is "the system" of communist societies

Further, the method of “devolution of power”, into the hands of lots of smaller, interested individuals produces better outcomes than a “concentration of power”, administered by disinterested bureaucrats.

Capitalism presents fewer opportunities for “concentrated power” to be used and abused -

Capitalism, not perfect but the exact opposite to the “catastrophic imperfections”, which collectivist systems have repeatedly shown themselves to offer, as an irresistible opportunity, for the egocentric narcissists among us.

Severin.. you make alot of noise for someone who never says anything worth listening to..... boring

Severin.
Bully Blowhard warning! Bully Blowhard warning!
Proof positive "empty (capitalist)vassals DO make the most foul noises". Your (Kar)ma can run over his (Dog)ma. ;-)

Typical

>>What you think computes does not concern me<<

Caught out in a blatant porkie, you are as graceless as ever, Stern.

You really do believe that you can just make stuff up, and not be called out on it, don't you.

Pathetic, really.

Stern I think we are at cross purposes. What do you mean "this time it will be different".

You keep bringing the debate back to Communism - I am not supporting a Communist state merely saying that the idea of the collective good exists within social democracies within capitalism. We pay tax as a collective for collective services such as health, education, infrastructure and emergency services etal.

If you think I am a Communist there is probably not much more I can say on the matter other than you would be better arguing with honesty rather than misrepresenting others' views.

Down with collectivist extremists!

....and down with the idealogues of the cult of the individual too.

If we're talking about social structure, we can easily see that both extreme separateness (anarchy) and extreme connectedness (totalitarianism) are bad. A society searching for the ideal democracy, however, will look for a situation whereby the cohesiveness of the society and the freedom of the individual actually support and nourish one another.

The same is true for economics whereby the positive aspects of competition and the positive aspects of cooperation can be brought together in a balance that is something more than simply a cobination of the two.

I am suspicious that you just argue for the sake of it Stern.

Pericles… no porkies… my commuting costs dropped by 70% following breaking of the commuter rail monopoly. PND 12 after what was PND 35 before. As you saw, I admit my errors when they do occur, as in mixing a return fare of 40 years ago with a one way fare of today. But beyond that you are completely off the mark.


Pelican “Stern I think we are at cross purposes. What do you mean "this time it will be different".

Pelican you wrote “social democracies and ways we can improve on capitalism and ensure less disparity and as much as you don't like it, regulation is the only way.”

That is what I was referring to as your presumption that “this time it will be different”

Greece was a “social democracy”, now going down the toilet.

It will end up medium term:

Bale-Out by neighbours with a vested interest in maintaining their own national security

Economic Stagnation (the benign side of collectivism)

Civil war (the less benign option and one Greece adopted before)

Ultimately, however, the options change, when neighbours tire of the drain of their taxes

Then options become

Civil war, leading to revolution and disaster

or

Economic rationalism aka capitalism.

Having followed the collapse of the previous soviet empire, it remains a mystery how anyone can possibly think that “social democracy” is a “solution” to anything.

“social democracy” is an oxymoron of the shoe-horn approach which allows the mechanisms of central state control to be constructed in the name of the "common good" until some Stalin comes along and it is suddenly all too late.

We see senator Conroy trying to implement his internet censorship, put on the back-burner to appease the election machine.

We will see more cherry-picking super-taxes of the profitable and vibrant sectors of the business community (lenin identified “The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation”).

Banks will be next – and like mining, to hell with the superannuation benefits of the individuals who have invested for their pensions for the past 20-30 years.

Pelican “you would be better arguing with honesty rather than misrepresenting others' views.”

I do not believe you to be a communist but I do see and try (my best) to project the consequences of what I see as the mistakes in your reasoning – as you do with me.

You at least challenge my view, which I value.

We might disagree but I respect your right to your view and we manage to disagree without mutual name-calling

People like Severin seem to come here simply to criticize and Examinator comes here for reasons I cannot fathom.

I note, despite me inviting him to express a view (re my comment “I do notice you lack the courage to present a view, merely criticizing what others are prepared to present”

my comment, initiated by examinator’s admission “..no interest in proselytizing any solution simply because of the level of defensive galloping inertia that abounds here.”

However, from the nature of their posts, the arrogance, pomposity and acrimony of the likes of Severin and Examinator is worthy of nothing but the contempt I hold them in and which, likely, conveys in my posts


GilbertHolmes “The same is true for economics whereby the positive aspects of competition and the positive aspects of cooperation can be brought together in a balance that is something more than simply a cobination of the two.”

You describe basic “capitalism”.

Individuals cooperating to market their individual products, and both going away "enriched" by replacing what they held in abundance with what was, to each, a scarcity.

The point is… they do not need a government inspector taking a cut (tax) off each to justify the merit of their trade.

Capitalism is not “Extremist” under any definition, monopolies are extremist but I note monopolies are the tool as much of centrally controlled government as they are of mega-corporations

However, as happened in USA around 1900, the difference between a “mega corporation” and a “government”:

Laws can be passed to curb the power of a mega-corporations (eg US Anti-Trust Act) but not so “government” (as in USSR)

Are you sure, Stern?

>>Pericles… no porkies… my commuting costs dropped by 70% following breaking of the commuter rail monopoly.<<

What commuter rail monopoly was that?

This one?

>>the monopoly operated by the rail network prior to Thatchers action<<

Which rail network was that?

Sounds very much like serial fibbing to me. One quick change of story after another.

And you still haven't explained how...

>>It was the likes of me who were being financially violated to pay for your mums cheap bus fares.<<

How exactly, from your dormitory suburb in Buckinghamshire, were you "financially violated" by my mother's travel plans?

I am not an advocate of capitalism anymore than I am an advocate of communism.

I am an advocate of a balanced, middle way that takes the best from the ideological opposites of capitalism and communism and blends them together into something that is 'more than simply a combination of both'.

From that perspective, our current society is too capitalist.

Closer to people's homes, what i would like to see is a rich mosaic of cooperative enterprises and locally focussed, private businesses. Looking at society in the broader scale, I'd like to see government control of the major productive assets of the society with mechanisms in place that enables private investment in those assets.

For this to work, I advocate in favour of economic mechanisms that encourage people to purchase locally produced goods and services (and by local I mean down to the level of the neighbourhood) ahead of those that are imported. (As I said- Ricardo, with his theory of comparative advantage which leads to the idea of free trade, was only half right.)

Decentralizing the productive capacity of the society in this way will move us away from both megacorps and huge government monopolies. Not only will it reduce the need for the organization of production and distribution on the huge scale, it will also provide local competition against anything organized on the large scale.

Democratic governments are of course also essential in helping to maintain the stability of this 'balance'.

Pericles.. I am not sure what your motive is but I have answered your questions and see no point in repeating myself.

GilbertHolmes “From that perspective, our current society is too capitalist.”

If we are too “capitalist”: then we are too “free”

Maybe you can tell me what benefit is there in appointing a tax collector to gather revenue from my example traders?

What “Added Value” does that tax collector contribute to the value or quality of the trade?

I do recall Lenin did say

“Freedom is precious, so precious it must be rationed”

I further recall another politician suggesting

"Yet the basic fact remains: every regulation represents a restriction of liberty, every regulation has a cost. That is why, like marriage (in the Prayer Book's words), regulation should not 'be enterprised, nor taken in hand, unadvisedly, lightly, or wantonly'."

That politician would not have thought we were “too free” to undertake the capitalist endeavours of our own choice.

She said "To be free is better than to be unfree - always. Any politician who suggests the opposite should be treated as suspect."

“what i would like to see is a rich mosaic of cooperative enterprises and locally focussed, private businesses. Looking at society in the broader scale, I'd like to see government control of the major productive assets of the society with mechanisms in place that enables private investment in those assets”

government manipulating the market to appease Gilbert’s sense of “balance”

the market works fine by itself

in your version of “nirvana”

we use artificial constraints of support and subsidy,

Your attempts to make your “ideal” come true is akin to putting sand (in the form of taxes) into the wheel bearing of a smooth running machine so the slower engines- who get the subsidies, can try to keep up

All you are doing is reducing the net benefits to the whole community

That is the chronic problem with all collectivist “social engineering”...

it produces a less / fewer beneficial outcomes for all

when compared a free capitalist methodology

hasbeen was right...Gilbert, is trying to justify “tax collectors”

Motive, Stern?

>>Pericles.. I am not sure what your motive is but I have answered your questions and see no point in repeating myself.<<

It is true that you answered my questions on the topic of the cost of taking a bus, rather than a train.

In doing so, you exposed the creative fiction of your original assertion, that the reduction in your commuting costs was a result of Prime Minister Thatcher's policies.

If your imagination on these matters were not checked occasionally, we would soon be required to acknowledge that the Lady in question is wholly responsible for the sun rising each morning, bathing us in her righteous glow.

So indeed, there is no need to repeat yourself, nor did I ask you to.

On the other hand, the "motive" behind my question on the financial embarrassment caused you by my mother's profligate use of public transport some hundred miles or so from your country cottage, was to point out the mindlessness of your position.

It is one thing to believe that, as a matter of national policy, the aged should receive no financial assistance from any level of government. I think that it is shameful position to adopt, but that you have a right to your view.

It is entirely another to make utterly stupid statements like this:

>>It was the likes of me who were being financially violated to pay for your mums cheap bus fares.<<

There was never the slightest connection between the bus system that served your location, and my mother's. As you well know.

So, if you are searching for a motive that connects these two "corrections", it is to point out that you talk rubbish.

And not only do you talk rubbish, but you think you can get away with it by hiding behind a few weasel words.

Have a great day.

Incidentally, Stern, for all your blind adulation, Margaret Thatcher's politics were a delicate shade of pink, compared to your own.

She did little to ease the tax burden. In the twelve years from 1979 to 1989, the tax grab plummeted from 40.2% of GDP to... 39.9%. That was an additional £75 billion, extracted from the taxpayer. Despite, of course, the fact that she had sold a bunch of valuable assets belonging to the citizenry, to the private sector along the way...

...British Petroleum, British Aerospace, British Shipbuilders, British Sugar, Cable and Wireless, Britoil, Associated British Ports, Jaguar, British Telecom, the National Bus Company, British Gas, British Airways, the Royal Ordnance, Rolls-Royce, British Airports Authority, Rover, British Steel and the Regional Water Authorities...

You might be forgiven for thinking, might you not, that having flogged off all these badly-run, loss-making operations, she'd have a few bucks left over to put back into the taxpayer's pocket.

Or to tart up the Health System. Or Education.

Or something.

Instead of which, she eventually hung herself and her government when attempting to introduce, and justify, of one of the most unrealistic and unfair tax policies of all time and all geographies - the Poll Tax.

How is this not "akin to putting sand (in the form of taxes) into the wheel bearing of a smooth running machine"?

Since you are such an outspoken advocate of small-government and individual responsibility, Stern, you might like to spend a moment defending her Ladyship's position on the "community charge".

It is possible that you might have a spot of bother reconciling the above facts with your hagiographic lens on Saint Margaret.

"That is what I was referring to as your presumption that “this time it will be different”

Okay Stern, I misunderstood. I got the sense that you were pulling the argument back to a purist model and equally I do respect your right to disagree.

If we are to accept that no system is perfect, that implies Capitalism is not perfect - as you concede.

On that basis, what would you recommend within a capitalist system that would offset some of the faults. I cannot see it done without some form of regulation that ensures 'the greater good' and that will reduce to a minimum any inequitable concentrations of power or to ensure a more level playing field on many fronts.

Self-regulation has failed miserably, some sectors worse than others, even oversight bodies have failed on matters of anti-competition, price fixing, monopolies etc (probably because they do not really believe or have clearly defined as 'their role'). The extreme end of capitalism that perpetuates the myth of free markets fail to see how fragile this system is and how depending on fluctuations can disadvantage particular groups almost overnight whether it be small business, primary producers, workers or consumers. And I haven't even covered the impact of consumption/growth ideology on the environment which while regenerative cannot keep up with growthist policy.

There is no loss of face if we tweak capitalism and our economic mindset to better benefit communities. We should make it work for us not the other way around.

Mikk
Interesting link.

In a nutshell, the guy is saying that economic calculation comprehends only things exchanged against money, i.e. economic goods, but not other important things which are not economic goods, such as air, love, beauty etc.

Neither Mises nor I ever denied this; nor ever claimed that capitalist production is more ‘efficient’ in dealing with such so-called externalities. The claim is only that it’s more economical, i.e. in rationalizing the use of economic goods.

Neither that article nor you have shown how any alternative system would be in an better position.

The author says that prices ignore “real” costs, for example pollution, resource depletion etc. But those real costs themselves ignore the underlying values for which they are important, namely, whatever human purpose or value is being served by trying to do something. Those values are subjective. They are not *in* the air or the earth itself, any more than the value of gold is in the gold.

The fact that such values are outside economic calculation does not reduce the usefulness of economic calculation because people can value those things directly in themselves – love, beauty, one’s grandmother, and clean air. (Just because they don’t value them the way that author wants doesn’t mean they’re not valuing them, or they’re not valuing them according to their ‘real’ value, which is no more knowable to him than it is to them. It means they’re not valuing according to *his subjective values.*)

How is a socialist society going to know what those ‘non-economic’ values are, any better than a capitalist society? How is it going to bring them into account any better than is done under private ownership?

What does “workers' self-management within a framework of communal ownership” really mean? Who owns what? Who decides what is to be produced? How do they know who wants it? Why would anyone innovate? How are that in any better position to ensure equality than private owners? What if people don’t want to be part of a commune or a syndicate? And if equality is achieved why would human society exist?