Ludwig

“Oh, so because sustainability is not mentioned in the constitution, our government is not supposed to try and achieve it? Surely you are not suggesting this, Jardine.”

If I say government is supposed to provide free overseas surfing holidays, or free ice-cream, does that mean it’s supposed to?

If you’re not using the Constitution, your only escape is to fall back to arguing “It’s supposed to because it’s supposed to”.

You owe me more beer mate.

“your Herr Mises was as mad as a hatter!”

Why? You haven’t given any reason. What of that quote don’t you agree with?

“you’re all the same dude!!”

Peter Hume is my cousin’s sister’s husband’s brother’s friend.

Who’s Izzy?

“Maybe that it is an indication that I’m not the only one who didn’t understand it…”

You cannot insist that something is wrong if you admit that you don’t understand it.

I agree with you about GDP being a highly flawed indicator. But ordinary people don’t use it, do they? You don’t use GDP in making any personal or economic decisions, do you? And businesses don’t either: they use profit and loss – whether people are buying their stuff or not.

It’s government who uses it, because, being outside the market, they can’t get the information they need from consensual transactions, and are driven into this kind of misuse of statistics and aggregate measures.

“Where do you get this assertion that many environmentalists have hostility towards producing things at a profit?”

Umm… you? What you’re arguing is that population and sustainability policy are needed because businesses are rapacious of natural resources, and ever-ready to unwisely and unfairly deplete them, because they are motivated only by profit; and that profit should not be the basis on which resource-use decisions are made; and that’s why government should make them …. aren’t you?

If environmentalists were not hostile towards producing things at a profit, there’d be no need for environmental policy, would there?

“And how does this relate to your explanation of economic calculation?”

You have correctly understood the economic calculation problem as concerns private transactions.

Money can only be used to calculate values of things exchanged against money. It can’t be used to calculate values or things that are not exchanged for money. That’s why we can’t put a money value on our appreciation of the moon.

As for the public problems, imagine a state of *full socialism*. The state owns all the means of production. There is no market for capital goods, because the purpose of socialism is to abolish it.

Now prices are a market phenomenon. So this means there will be no prices for capital goods.

Take a concrete example. I’m replacing fences. A star picket costs $5; a fence-post made from recycled plastic costs $20; a strainer-post costs $35 if steel; $20 if timber; or I can cut one down for free, but it costs labour which has a money value. And so on. So out of all the different possible ways to use natural resources, I can *calculate* the most economical way to build a fence in terms of money prices, down to the exact dollar if I want.

Under *full* socialism, calculation in money prices like that would not be possible, because there wouldn’t be a market or prices for the capital goods – the fencing materials. Instead of a market, expressed in money prices, there would only *bureaucratic allocations* of *physical quantities* of *myriad different products* made by the state.

This means that the central planner, or panel of experts, in deciding what materials to use, will not be able to calculate the more economical way of building a fence or railway or whatever. They will be confronted only with myriad different possible ways of combining the *physical quantities* of myriad different materials. But whether to use a steel or wooden strainer post, whether to use labour to install them or machinery – they will have no way of *calculating* which way is more economical or wasteful in units of a lowest common denominator of value.

That’s the economic calculation problem in a nutshell.

It means that, under full socialism, the government *must* grossly waste economic and natural resources, because there’s no alternative possibility. And that’s exactly what happened in the countries that tried full socialism.

Now in reality, we don’t have full socialism. We have partial socialism – some things are provided by the market on the basis of profit and loss, and some things are provided by the state on the basis of political or bureaucratic decision-making. But the economic calculation problem remains to the extent of government ownership, because *the purpose of government ownership of things in general, and natural resources in particular, is to displace decision-making on the basis of private ownership and the operations of profit and loss*! Whether it’s education, roads, hospitals or sustainability.

This means that government’s only ability to calculate economically in a partial-socialism situation, like the western democracies, is because of the remaining spheres of private property and markets that have not been wiped out by the advance of governmental decision-making. And it’s why your concerns about sustainability, overwhelmingly concern resources in *public control*: water, the environment, infrastructure.

Thus in deciding natural resource use, government will have all the same limitations and human weaknesses as everyone else – ignorance, greed, corruption etc. -
PLUS it will have the additional enormous problem that it has no rational means of economic calculation, and will either
a) waste far more resources to achieve a given end, or
b) waste the current generations’ welfare impermissibly EVEN IN ITS OWN TERMS.

“We know what the most unsustainable aspects are and hence what needs to be addressed most urgently.”

No you don’t know, and you’ve already admitted it:

1.
<< How do you know how much of a depletable resource should be consumed now, versus conserved for the future? >>

“We DON’T know!”

2.
<< How would govt know whether it's robbing present or future humans in any given action? >>

It wouldn’t!

You cannot claim to know what is most unsustainable if you admit that you don’t know what is to be conserved, or how much.

VB thanks.

Peter, you need to improve your comprehension skills.

In an effort to assist Ludwig with further commentary on Mises I quoted two sections and referenced a footnote link from rational.wiki.org...

Hence the quotation marks and my observational "'bemused' take on von Mises" descriptor at the start.

Take up your criticism with them.

http://rationalwiki.org/wiki/Category:Debates

I didn't repeat their quote from Brad deLong [footnote 7 from "When Reactionary Goldbug Austrian Plumber-Economists Attack!!"]

"My view is that Money and Credit is very readable--compulsively readable, in fact: I have just spent two and a half hours telling myself "it's OK; I will just read one more page...". But it is only readable in a rhetorical-excess-train-wreck mode, for it is also totally bats--- insane."

Because I thought its tone intemperate.

Which is also why I left it to Ludwig to read Mises' letter to Rand less publicly than here because he says, "It is a devastating exposure of the “moral cannibals,” the “gigolos of science” and of the “academic prattle” of the makers of the “anti-industrial revolution.” You have the courage to tell the masses what no politician told them: you are inferior and all the improvements in your conditions which you simply take for granted you owe to the effort of men who are better than you."

Wm Trevor

You need to improve your comprehension skills.

“In an effort to assist Ludwig with further commentary on Mises I quoted two sections and referenced a footnote link from rational.wiki.org...”

Ludwig was having trouble understanding the argument from economic calculation. Nothing you cited provides any assistance in understanding it.

“Take up your criticism with them.”

You’re the one quoting it as an alleged assistance. I’ve shown why it’s wrong. Take it up with them yourself since you obviously mistakenly regarded them as an authority.

Or you can admit you’re wrong in quoting it as of any relevance; or provide a rational justification of your technique of reference to second-hand sources, misrepresentation, ad hominem, and circularity.

Or shall I use your technique and see whether it persuades you? Your beliefs are not “sane”. There. How about that? Does that persuade you of anything in issue about sustainability policy? Because that’s the intellectual level you’re operating at.

If sniveling ad hom and reference to irrelevance and absent non-authority were proof of anything but your own bad manners, you’d certainly be on to a winner.

However if you think you’re providing any refutation of Austrian methodology, or any sensible comment on the economic calculation argument, you’ll have to improve your logical faculties as well as your comprehension level.

Wm Trevor

>>Brad deLong said
>>"My view is ... insane."

So what?

> Mises ... says, "It is a devastating exposure ... better than you."

So what?

If you have any honest or intelligent or relevant comment to make, what is it?