Why socialism could not work even with virtuous men.

[The One and Only...]

Socialism, as argued by von Mises, could never work because "pricing systems in socialist economies were necessarily deficient because if government owned the means of production, then no prices could be obtained for capital goods as they were merely internal transfers of goods in a Socialist system and not "objects of exchange" (unlike final goods) - thus they were unpriced and hence the system would be necessarily inefficient."

There was later a critique of this argument, but von Hayek aptly defended Mises's argument.

For more info, look for the economic calculation debate, or click here. (http://cepa.newschool.edu/het/essays/paretian/social.htm)

[Evil Robot]

That reminds me of an anecdote I once heared about the manufacturing of soviet tanks many years ago. A bus was produced first, then transported to another factory where tanks were made. The diesel engine was then removed from the bus and installed into the tank. The brand new bus (minus one engine) was recycled.

The soviets were also the only people to ever produce a 20 pound stapler.

[Zhukov]

When I clicked that link and saw the Lenin/Rouble I knew it was dodgy.

You are going to have to be specific One, because I am tired and I don't see why there has to be pricing on goods that would be given away anway.
MAybe more will come soon.

[The One and Only...]

Essentially, without a pricing system, the value of capital goods could not be accurately determined. Hence, without an accurate value - as dictated in a market economy by interaction of supply and demand - resources would not be as efficiently allocated.

[Zhukov]

And so goods under todays Capitalist system are acuratly valued? A pair of Nike sneakers cost $200 while a bag of grain is like $10? But of course, we have to take the current environment into acount...

People know what they need and want. A price tag corrupts a persons want.

A kid wants an X box for Chrissie becasue it plays lots of games, not because it costs mum an arm and a leg.

And who says supply and demand isn't happening? People want bread - you make bread. People want Celine Dion - you make Celine Dion.

I was clear with what I was going to say a short time ago.

[KevinTheOmnivore]

I smell a sitcom!

[Helm]

:lol

[The One and Only...]

I don't even think you know what the efficient allocation of resources means.

People want bread, so you make the bread. Okay. But you make the bread through capital goods, which were not efficiently used. Hence, you do not optimize your production of all goods: perhaps bread was overproduced, and shoes underproduced.

A price system prevents such results.

[Sethomas]

Numero Uno dude, few people are left that still care about pure socialism or communism. They're anachronisms. The tried-and-true method of Europe has come to be social democracy, and the degree to which it lives up to the "social" bit is what remains to be contested. Attacking the absolute end of the spectrum, about which few people care, to advertise your opinions is puerile and stupid.

[AChimp]

I don't even think you know what the efficient allocation of resources means.

People want bread, so you make the bread. Okay. But you make the bread through capital goods, which were not efficiently used. Hence, you do not optimize your production of all goods: perhaps bread was overproduced, and shoes underproduced.

A price system prevents such results.
No it doesn't. You might have the best price in the world for the shittiest product, which you produced efficiently, and what are you left with? A warehouse full of it.

How has a price system prevented that overproduction?

[The_Rorschach]

You know, I've had an epiphony lately, and it has radically changed my world view point. . .So this might seem a little odd coming from me, but I have as much faith in Socialism as I do in Capitalism. Honestly, I do.

I think you're asking the the wrong question One and Only. Instead of asking yourself whether or not Socialism can work, ask yourself instead can anything work, and the inevitable answer you will come to if you are honest with yourself will be no. I think Helm would be better suited for explaining the cyclical, or spiral as he sees it, nature of political philosophy, so I will leave it to him if he wishes to take up any part of this discussion, but while pertinant, it is not the point I wish to elaborate on immediately.

See, for too long, I have concerned myself with how would the people best be governed. In my frustration I've raged at them for being apathetical and unconcerned. . .Without realizing all this time I have been stripping them of their dignity as individuals and disregarding their silently spoken accord. Politics is probably the least important of all things, power is only an illusion after all - a temporary one at that - its the people themselves that truly matter. Endeavouring to work towards the benefit of our fellow man, it is the only thing that truly matters. Capitalism, Democracy, National Socialism, Communism, nothing. Look at the inner city and see what comes of progress without heart, love is everything. If everyone that voted in America did so out of love for another, trying to improve the world, just think about what a beautiful nation this would be.

[AChimp]

So, you finally show your red underside. Get out of this thread, you Commie! >:

[Carnivore]

I echo Sethomas's sentiments. If you were better people, you would too >:

[Zhukov]

I took the time to look into this and what OAO states as the downfall of socialism is a non existant problem.

the main flaw of the whole von Misses argument is that prices are not determined by exchange in the market place (though they are affected by that) but in the last instance (though in a distorted way) do reflect value which is determined by the amount of socially necessary labour time to produce it.

if you take for instance a large multinational which controls the production of one type of goods completely from the beginning of the chain to the end, and furthermore produces its own capital goods, then you have the same situation as described by von Misses. however this offers no problem to the multinational. though the products are not priced at the different steps of the production chain, they are still accounted in the general accounting of the company.

It is a non existent problem.

the other point about von Misses is that he was criticising bureaucratic planning assuming this was the ONLY type of central planning possible, and even though it was from the 20'S, it more acuratley fits in with Stalinist beuracracy - in which case it is not a socialised economy anyway.

few people are left that still care about pure socialism or communism. They're anachronisms.

Anachronisms of the future perhaps? No, wait, fuck you Sethomas. Maybe not on this board, but worlwide there would be many. What are you again? Socialist Democrat? Demcratic Socialist?

If Vince Zeb is still sayin' what needs to be said, then I urge him to join this lively discussion.

[ranxer]

i too, agree with sethomas.
pure capitalism is insanity just as pure socialism.
focus on the extreems is dangerous for it seems to me it leads to fundamentalism which throws out reasoning and allows for hate to take over.

[Zhukov]

And what is pure Socialism ranxer? And why is it insane?

[mburbank]

Here's an example of why what you call your socio economic system is a lot less meaningful than how it actually functions work;

A highly placed government offical, lets call him Chick Dainey, favors privitization of work usually done by the militray.

He then retires and becomes the CEO of a large corporation, lets call it Ballihurton, to which he has already stered lucrative contracts.

He then retires as CEO, returns to government and continues funnelling work to his old company in which he still owns large quantities of stock and from which he still recieves 'deffered compensation' the government awards his old company even more contracts, this time without bidding them out and offering them a 'cost plus' deal which gaurantees profit and offers a profit based incentive to overcharge, something his company has done to the government before.

There is no competition, the price is not set, profits are gauranteed, incentive is given to increase prices and privitization has occured only in that a handful of people control the governments conract award system and the same people profit from the 'private' sector companies getting the no bid contracts.

Is Ballihurton a part of the government? Is the Government a subsidiary of all Balllihurton? Is Chick Dainey a civil servant, a Ceo, an Employee or just a revolting, power mad war profiteer?

[Zhukov]

Of course Ballihurton is seperate from state! That would be fascist!


I think Chick is just a capitalist.

[mburbank]

Actually, I think Chick is moving the militray industrial complex toward a soviet collective style.

Here's a cautionary quote. Anybody want to hazard a guess who said it WITHOUT using a search engine?

"In the Councils of government, we must guard against the acquisition of unwarranted influence, wether sought or unsought, by the military industrial complex. The potential for the disasterous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted."

[ranxer]

um, well zukhov, i didn't mean to imply that there is a 'pure' socialism.
my view of socialism isnt going to be the same as your view of socialism etc.
i meant that if we take one idea of government to it's extreem we won't have a sane system no matter what the idea is. the only hope i have for peace is compromise.. there is no 'perfect' system, any system set up has to have room to grow or evolve.

i took oao's arguements to lean toward witch burning of anything that could be construed as socialist leaning. americans jump on this too often and it's spooky.. in many circles if someone says there's some good points to communism(or socialism) the audience starts to go insane with bloodlust screaming 'he's a communist! evil! banish the evil one!' throwing all reasoning out the window.

i found it just nuts that when i was out protesting the start of military action against iraq at least 6% of the passers by and pro-war group called us communists! it was funny at the time but sometimes it's a nightmare :/

[El Blanco]

Actually, I think Chick is moving the militray industrial complex toward a soviet collective style.

Here's a cautionary quote. Anybody want to hazard a guess who said it WITHOUT using a search engine?

"In the Councils of government, we must guard against the acquisition of unwarranted influence, wether sought or unsought, by the military industrial complex. The potential for the disasterous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted."

I'm going to take a stab and say Ike.

[mburbank]

Your stab is quite correct, sir. It was indeed Ike.

Unless you meant Ike Turner, in which case you're wrong.

[El Blanco]

"Ida May, you best be watching out for that Military Industrial Complex. Otherwise, I'ma beat you stupid."

[The One and Only...]

I took the time to look into this and what OAO states as the downfall of socialism is a non existant problem.

the main flaw of the whole von Misses argument is that prices are not determined by exchange in the market place (though they are affected by that) but in the last instance (though in a distorted way) do reflect value which is determined by the amount of socially necessary labour time to produce it.

Prices are determined by the interaction of supply and demand, outside of monopolies (which the state essentially is and/or helps create). That is basic economic knowledge that most of us were taught by our 7th grade teachers. Obviously, other factors contribute, such as inflation, labor resources, etc. Listing all the factors would be arbitrary. The point is, a products value is not determined by the necessary labor time to create it. If it tooke me three hours to create a hammer, and three hours to create a computer program, would they be worth the same? No. Thus, the most efficient system to determine value is the pricing system.

if you take for instance a large multinational which controls the production of one type of goods completely from the beginning of the chain to the end, and furthermore produces its own capital goods, then you have the same situation as described by von Misses. however this offers no problem to the multinational. though the products are not priced at the different steps of the production chain, they are still accounted in the general accounting of the company.

The problem is that what their determined value is cannot be as accurate as that in a market system. Centralized planning has never been able to flex itself to changes in demand, supply, labor, etc.

It is a non existent problem.

Hardly.

the other point about von Misses is that he was criticising bureaucratic planning assuming this was the ONLY type of central planning possible, and even though it was from the 20'S, it more acuratley fits in with Stalinist beuracracy - in which case it is not a socialised economy anyway.

A command economy has always been inferior to the free market from an efficiency standpoint. The argument has been that some inefficiency can be tolerated so as to improve the status of the workers, although I maintain otherwise.

If you want to argue guild socialism rather than state socialism, go ahead. I'll just come out with different arguments.

[The One and Only...]

Here's an example of why what you call your socio economic system is a lot less meaningful than how it actually functions work;

A highly placed government offical, lets call him Chick Dainey, favors privitization of work usually done by the militray.

He then retires and becomes the CEO of a large corporation, lets call it Ballihurton, to which he has already stered lucrative contracts.

He then retires as CEO, returns to government and continues funnelling work to his old company in which he still owns large quantities of stock and from which he still recieves 'deffered compensation' the government awards his old company even more contracts, this time without bidding them out and offering them a 'cost plus' deal which gaurantees profit and offers a profit based incentive to overcharge, something his company has done to the government before.

There is no competition, the price is not set, profits are gauranteed, incentive is given to increase prices and privitization has occured only in that a handful of people control the governments conract award system and the same people profit from the 'private' sector companies getting the no bid contracts.

Is Ballihurton a part of the government? Is the Government a subsidiary of all Balllihurton? Is Chick Dainey a civil servant, a Ceo, an Employee or just a revolting, power mad war profiteer?

So you are critiquing bureacracy, and advocating more of it? Doesn't seem to make much sense to me.

[kahljorn]

Prices on things don't mean anything, despite... Okay, I actually have no idea where that idea came from.

Most supply is noted when people buy things, this is true, but it isn't them that buys it that makes the noted supply so noted. Moreover, it's the fact that one day there is a loaf of bread, and the next there isn't. All that is required is a book keeper that knows that 10-7 leaves you with three, so instead of ordering 10 you should only order 7. Price plays no part.
Price only indicates profit and loss, in a socialist enviroment "Profit" is not regarded as a necessary component. Though the confusing aspect would be in regards to how 'trade' would function, it would be like two seperate economies. An international economy and a national.

We could all learn from star trek!

[Abcdxxxx]

Anyone who needs a placard to identify how they feel about social issues, or who blankets their opinions tailored towards one specific ideaology in this day and age is a fool. Just as you can't go into a voting booth with your union mailer and poke a vote for every democrat, you sure as hell shouldn't be walking around calling yourself a socialist and thinking that means the same thing to any two people. There are good and bad aspects to every political ideaology...and I'd think it's a given that the important thing is how it's practiced. I thnk the negative connotations behind being a "socialist" or "communist" come from how these words are practiced, not just how they're feared.

[glowbelly]

i would just like to step in here and say that ror made a really nice post back there and i applaud him for that.

[mburbank]

"So you are critiquing bureacracy, and advocating more of it? Doesn't seem to make much sense to me."

Because you miss my point. I am saying tht the name you give a system, in my 'hypothetical' case Democrtic Capitalism, is pretty meaningless. Call your form of government anything you like, it's the way it's practiced that has some meaning.

And I agree with Ror. Government is corrupted by peoples desire for power. This is why I favor heavy, reinforced checks and balances. It's why I think the sytematic attempt to remove these checks and balances is dangerous. I don't care what 'ism' youre under.

[kellychaos]

There are good and bad aspects to every political ideaology...and I'd think it's a given that the important thing is how it's practiced. I thnk the negative connotations behind being a "socialist" or "communist" come from how these words are practiced, not just how they're feared.

"God made the master plan but the Devil's in the details."

[The One and Only...]

"So you are critiquing bureacracy, and advocating more of it? Doesn't seem to make much sense to me."

Because you miss my point. I am saying tht the name you give a system, in my 'hypothetical' case Democrtic Capitalism, is pretty meaningless. Call your form of government anything you like, it's the way it's practiced that has some meaning.

And I agree with Ror. Government is corrupted by peoples desire for power. This is why I favor heavy, reinforced checks and balances. It's why I think the sytematic attempt to remove these checks and balances is dangerous. I don't care what 'ism' youre under.

I disagree with your assumption. This war was not done for Cheney. It happened because we've had Gulf War vets in the Pentagon itchin' to oust Saddam for a long time, Bush needed an outlet to spend money, and, as I'm sure he thought finding WMDs would not be difficult, would help foreign relations. I'm sure he thought he would get some votes, too.

Kahljorn, what you just wrote made no sense. I didn't even see demand mentioned. Who knows how much to supply if they don't know the demand? In a market economy, prices are constantly adjusting to such fluctuations. Moreover, the market rewards more efficient means of production, which socialism does not.

[kellychaos]

I disagree with your assumption. This war was not done for Cheney. It happened because we've had Gulf War vets in the Pentagon itchin' to oust Saddam for a long time,

I never worked in the Pentagon but I'm a Gulf War vet and I would have preferred that no one ever had to go fight in that stank ass place for any reason other than the direct threat upon our nation which still has not been proven or justified. In fact, it looked pretty poorly manufactured.

[Zhukov]

Sorry for a late post or whatever, I am sick.

Hayek/Von Misses take on look at the early SU and come to a conclusion: that central planning was impossible and inefficient. The reasons for this, they said are, that, on the one hand there is an information problem. It is impossible to know all the necessary information and make all the necessary calculations in an economy involving millions of consumers, producers and commodities.

Second argument was that prices are determined by markets and that these are the one who determine investment and production decissions. Without the market sending signals to producers and consumers they would never be able to fix the right prices for things and therefore the wrong investment decissions would be made.

One main factor I must state again is that these economists were criticising the shortcomings of "war communism". That was really a war economy in which there was no democratic planning at all. The civil war conditions compelled the Soviet leadership to make very harsh decissions and to use force to get them implemented. Thus for instance many agricultural producers were simply expropiated of their crops in order to feed the army of the workers in the city, without them getting very much in exchange. The main aim was to win the war and all necessary means for that were taken. That was not therefore a model of democratic planning of the economy in normal conditions at all. Also the Misses/Hayek school (and you OAO) identify central planning with command economy, command economy is a bourgeois concept which is basically designed to imply that there cannot be democracy and planning at the same time.

The main flaw of these arguments is that prices of commodities are not determined by the market (that is demand and offer), but rather by the amount of socially necessary labour time needed to produce them (this is Marx's labour theory of value). Therefore, even without the existence of the market there is an objective way of fixing the prices of products, that is by measuring the amount of necessary labour time to produce them. I am repeating myself here, I know, but if One and Only does not agree with this with this (in common with most bourgeois economists) then we have a problem because we are starting from so different points of view that the whole discussion becames irrelevant.

Now, even Adam Smith recognised that the prices of commodities could vary, go up and down, but tended to gravitate towards what he called "natural prices" which were determined by the costs of production. Do you think that offer and demand determine the price of commodities? Offer and demand can modify the prices of things, up and down, create low and high prices, but notice that "low" and "high" prices imply that there is a "normal" price. And how is this determined? By the amount of labour that goes into producing this commodity. This is so obvious.

In fact your example doesn't make sense, I don't know how long it takes to make a computer, but if it took the same amount of labour as making a hammer takes then I think we would either have lots of easily made computers, or not many hammers, either scenario would change both products value :rolleyes

Maybe you should read Wage Labour and Capital (http://www.marxists.org/archive/marx/works/1847/wage-labour/index.htm) and Value, Price and Profit (http://www.marxists.org/archive/marx/works/1865/value-price-profit/index.htm)

Oh, and if you say things like "Planned economys are inneficient", well, I may have to point out that even with beuracratic missmanagment and bungling, the SU still managed to be a world superpower in a fraction of the time it took the USA or any other big capitalists in Europe. If you want to argue the efficiency of the SU compared to a system that keeps half the population in poverty but at the same time has hundreds of millions of unemployed, then start another thread. :rolleyes

Abcdxxx does not want me to call myself Socialist, so, what is the model of socialist economy that I are proposing? It is one in which there is no private property of the means of production and also in which all decissions related to the economy are taken democratically by the workers themselves. How are these decissions taken? There is a central plan of the economy which determines the main priorities (new fields of investment, industries to be developed, etc These decissions would be taken democratically with the participation of the workers through their representative bodies. Other decissions would be taken at different levels of the economy (national, regional, local, neighbourhood, etc) also in a democratic way.

In fact, today, with the advances of information technology, socialist planning would be made much easier.

The argument has been that some inefficiency can be tolerated so as to improve the status of the workers, although I maintain otherwise.
Gee, you are such a nice person One and Only :rolleyes

Another thing: I understood what Kahljorn said :rolleyes

Max Burbank, you may be speaking in a different context to what I am thinking, but could you please explain why it is an example of a collective, I don't see it.

[The One and Only...]

If you actually look up your information, you'll find that they critized the theory, not just the SU. Especially left-anarchism.

Have you ever read some of the criticisms of Marx's labour theory of value? Have you ever thought about its implications? Let me take an example:

It takes me 4 hours to kill a deer. It takes another 4 hours to kill two deer.

Under Marx's theory, I should be able to trade in my one deer for his two.

Can you see the flawed logic yet?

The determining factors of the value of goods is the interaction between supply and demand; no more, no less. If all demand for a good went to zero, than its value would be zero as well, regardless of how long it took to make it.

The only thing the amount of labour required to make a good might be used to explain, as far as prices, is how it can affect the supply. If a good is easier to make, its supply might increase, making it cheaper. That does not mean that the amount of labor directly determines prices.

Of course Adam Smith supported the idea, for he is the one to develop the theory. I quote:

"IN that early and rude state of society which precedes both
the accumulation of stock and the appropriation of land, the
proportion between the quantities of labour necessary for
acquiring different objects seems to be the only circumstance
which can afford any rule for exchanging them for one another. If
among a nation of hunters, for example, it usually costs twice
the labour to kill a beaver which it does to kill a deer, one
beaver should naturally exchange for or be worth two deer. It is
natural that what is usually the produce of two days' or two
hours' labour, should be worth double of what is usually the
produce of one day's or one hour's labour."

On the other hand, the fact that virtually no modern economist uses the theory to explain anything should tip you off.

A critique of democratic decision making has been made before. First and foremost, the basis of all voting within a such a firm would be stock shares. Most workers would sell off most of their stock so that their portfolio would be diverse. Ultimately, only a small group of stockholders would hold any real leverage in decision making, and these would essentially be the new capitalists.

In a socialist context without stock, we lose all efficiency because bad decision-making does not lead to any losses for the firm.

Even if we took the first system and simply enforced all votes to be made on a one-per-person basis rather than that of stock, the only acheivements would be a less efficient firm. Why less efficient? The most obvious reason is that the majority of workers are not businessmen; they do not understand economics or what sort of actions need to be taken. Futhermore, democratic decision making takes time - time that could be better served by working. Finally, all basis of profit would be based on stock, rather than value to the firm (and in a socialist economy, all work is considered equal, which furthers inefficiency as well).

[kellychaos]

The determining factors of the value of goods is the interaction between supply and demand; no more, no less. If all demand for a good went to zero, than its value would be zero as well, regardless of how long it took to make it.



My basic opinion is that a free market republic is about as close as one can ever come to matching basic human nature and, consequently, works whether it's liberally or conservatively bent. Communism is a nice idea in theory but contains a rather idealistic view of the human race. That's not to say that you can't pull some useful ideas out of the attempts that have been made toward a communistic end. After all, it does work pretty well on a small scale.

[Zhukov]

If you actually look up your information, you'll find that they critized the theory, not just the SU.
Holy shit! The theory of the Soviet Union no doubt! I can tell because you use words like "Command Economy". Shove your command economy up your arse.

Congradulations, you have one of the examples where labour theory doesn't apply. There are a few more - you could probably find them at Libertarian.com :eek

On the other hand, the fact that virtually no modern economist uses the theory to explain anything should tip you off.

Uh oh guys! Cpaitalist Economists don't aprove! Best cancel the Fourth Internationale toot sweet!

Do you know why the price of a prescription pill is cheaper in Mexico? Because it costs less to produce, since labour is cheaper in Mexico! Or is it because there is too much offer of pills in Mexico or because there is less demand of pills? (this is what your theory would argue!). (another factor is the monopoly position of pharmaceutical companies, but let's leave that aside for the moment since that is a violation of the market). Let's take tin. Yes, if all of a sudden tin reserves around the world exhausted and they had to get it from deeper mines (thus implying more labour) then it is clear that the prices of tin would go up (it would cost more to produce). Why is steel from China cheaper that US steel? Is it because there is less demand in China? Is it because there is not enough offer in the US? NO, it is because it COSTS LESS to produce steel in China. Let's take the argument further, why is labour cheaper in Mexico or China? Is it because there is more workers around? No, it is because it costs less to produce labour in Mexico. The socially necessary amount of labour time required to keep a worker alive for a month in Mexico is less that the socially necessary amount of labour time needed to keep a worker alive in the US.

Some values have changed (people paying inflated prices for Michael Jordans name on a pair of shoes for example), some stay the same.

(and in a socialist economy, all work is considered equal, which furthers inefficiency as well).
Who feeds you such shit?

I have no interest in arguing with you over Democracy... shareholders and stock????

My basic opinion is that a free market republic is about as close as one can ever come to matching basic human nature and, consequently, works whether it's liberally or conservatively bent. Communism is a nice idea in theory but contains a rather idealistic view of the human race. That's not to say that you can't pull some useful ideas out of the attempts that have been made toward a communistic end. After all, it does work pretty well on a small scale.
:maul What is this "basic human nature" that you speak of? Communist theory isn't hasn't got an idealist view of the human race, it is a materialist view. Socialism doesn't work on a small scale, that's anarchism or stalinism! Kill yourself Kellychaos.

[The One and Only...]

Holy shit! The theory of the Soviet Union no doubt! I can tell because you use words like "Command Economy". Shove your command economy up your arse.

Congradulations, you have one of the examples where labour theory doesn't apply. There are a few more - you could probably find them at Libertarian.com :eek

A command economy is any economy run by the state. Unless you are talking guild socialism, which you are not, that is what communist theory calls for.

There is no proof that the labour theory applies to anything.

Uh oh guys! Cpaitalist Economists don't aprove! Best cancel the Fourth Internationale toot sweet!

You think ever modern economist is capitalist? Please. The only laissez-faire capitalist economists out there anymore are the Austrian school's.

Do you know why the price of a prescription pill is cheaper in Mexico? Because it costs less to produce, since labour is cheaper in Mexico! Or is it because there is too much offer of pills in Mexico or because there is less demand of pills? (this is what your theory would argue!). (another factor is the monopoly position of pharmaceutical companies, but let's leave that aside for the moment since that is a violation of the market). Let's take tin. Yes, if all of a sudden tin reserves around the world exhausted and they had to get it from deeper mines (thus implying more labour) then it is clear that the prices of tin would go up (it would cost more to produce). Why is steel from China cheaper that US steel? Is it because there is less demand in China? Is it because there is not enough offer in the US? NO, it is because it COSTS LESS to produce steel in China. Let's take the argument further, why is labour cheaper in Mexico or China? Is it because there is more workers around? No, it is because it costs less to produce labour in Mexico. The socially necessary amount of labour time required to keep a worker alive for a month in Mexico is less that the socially necessary amount of labour time needed to keep a worker alive in the US.

Don't make me laugh. Perscription drugs are cheaper in Mexico for several reasons. For one, we have an advantagous exchange rate. Furthermore, you are ignoring Mexico's drug regulation policy. The FDA raises the price of drugs in America (indirectly). They also don't have Medicare, etc. You are drawing conclusions without looking at the entire situation. The same applies with tin.

You are correct that the workers are paid less, and that, therefore, prices can be lower because production can be increased (oh look, an increase in supply!!!)*; however, that has absolutely nothing to do with the theory. For the theory merely addresses the time needed to produce a good, not how much it costs to produce it. If it took the same amount of time for a worker in the U.S. to produce a good as it did in Mexico, wouldn't the good cost the same? The theory you hold so highly maintains that it would, which is simply not the case.

Who feeds you such shit?

I could be asking you the same thing.

*Prices may also be lowered by the company even without an increase in production, but this is usually not the optimum. Generally, lower wages means more employment, and therefore a greater supply. This is especially true if the firm is trying to undercut competitors, essentially increase the demand for their product without changing the aggregate.

[Zhukov]

Ahem.

A command economy is any economy run by the state. Unless you are talking guild socialism, which you are not, that is what communist theory calls for.
If you can find in any marxist theory a call for "command economy", I will eat my hat. It is not what 'communist theory calls for'. Is that simple enough for you to understand the second time around, or do I have to break out the pictionary?

Von misses/hayek were clearly venting off against 'war communism', the SU had prices didn't it? It participated in the world market, right?

Shutup about "guild socialism", too.

For one, we have an advantagous exchange rate. Furthermore, you are ignoring Mexico's drug regulation policy. The FDA raises the price of drugs in America (indirectly). They also don't have Medicare, etc. You are drawing conclusions without looking at the entire situation.
But an 'advantageos exchange rate' isn't the determining factor for a products value, is it? The main determining factor in somethings value is the amount of effort put into producing it. I am not skimming over things, I included how things can drive a price up and down. Su[pply and demand? The apparently random fluctuations in price given by supply and demand no more contradict the role of value as the central regulator of the system than the movement of waves up and down on the surface denies the concept of sea level - which does go up and down according to the pull of the tides.

The FDA raises the price of drugs...
prices can be lower...
When people talk of "high" prices and "low "prices", they are clearly relating to high and low in relation to something. In relation to a price that more closely expresses the value of the thing.

You think ever modern economist is capitalist? Please. The only laissez-faire capitalist economists out there anymore are the Austrian school's.
The Economists arent Capitalists themselves, but of course they dont relate to the LTV - what would you say if I said something like "nine out of ten soviet economists recomend the Labour theory of value." Oh, and I don't care if they are laissez-faire or not, they are obviously not marxists. Wait, aren't you pleased that there are suposedly not many laissez-faire capitalists anymore?

Regarding the pill... If the said pill is made by a factory in Mexico and then sold at higher than value prices in the US, then what happens is that the factory owner is taking advantadge of the fact that "socially necessary labour" to make them in the US is higher and therefore he can sell them higher. But in a perfect market what would eventually happen is that all the other pill producers will move their operations to Mexico and competition would eventually drive prices down to a level close to its real value. The problem is that perfect markets do not exist. The case is that the Big 5 pharmaceutical companies have a monopoly control over the market and can fix the prices that they want, and people in the US are forced to pay extorsionate prices for their pills.

Marx gives a good example for LTV with diamonds:

"Diamonds are of very rare occurrence on the earth's surface, and hence their discovery costs, on an average, a great deal of labour-time. Consequently much labour is represented in a small compass. Jacob doubts whether gold has ever been paid for at its full value. This applies still more to diamonds. According to Eschwege, the total produce of the Brazilian diamond mines for the eighty years, ending in 1823, had not realised the price of one and-a-half years' average produce of the sugar and coffee plantations of the same country, although the diamonds cost much more labour, and therefore represented more value. With richer mines, the same quantity of labour would embody itself in more diamonds, and their value would fall. If we could succeed at a small expenditure of labour, in converting carbon into diamonds, their value might fall below that of bricks. In general, the greater the productiveness of labour, the less is the labour-time required for the production of an article, the less is the amount of labour crystallised in that article, and the less is its value; and vice versâ, the less the productiveness of labour, the greater is the labour-time required for the production of an article, and the greater is its value. The value of a commodity, therefore, varies directly as the quantity, and inversely as the productiveness, of the labour incorporated in it."

I could be asking you the same thing.
No, seriously, I gave you my sources, I would be inteested to see where you got your 'communist theory' from. The dictionary perhaps?

“The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities.

“The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What everything is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people.”
WEALTH OF NATIONS, CHAPTER 5 (http://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch05.htm)

“What everything is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself”

I'm happy with this. If ou don't think Labour has anyhting to do with value, oh well. BTW, the "socialist calculation debate" continued into the 90's with Allin Cottrell and Paul Cockshott. I haven't read their books ("Calculation, Complexity and Planning: The Socialist Calculation Debate Once Again", "Information and Economics: A Critique of Hayek", "Socialist Planning after the Collapse of the Soviet Union" and "Value, Markets and Socialism"), but thanks for including their (as yet not-disproven) stance in your original post.

[kellychaos]

:maul What is this "basic human nature" that you speak of?


This basic ideology of "supply and demand", the american spirit of "if you work hard enough, long enough, ect" (i.e. the american dream concept) combined with basic Darwinism all relates to "basic human nature". The basic motto of communism "From each according to their ability, to each according to their needs" and all the altruistic values that go along with it are not, no matter how much we want them to be, human nature.


Communist theory isn't hasn't got an idealist view of the human race, it is a materialist view. Socialism doesn't work on a small scale, that's anarchism or stalinism! Kill yourself Kellychaos.

True communism, as in the small scale communes popularized in the U.S. during the 1960's DO work and are most certainly NOT materialistic. They are the opposite. How can you be materialistic when everything belongs to everybody?! But ... ah ... there's the rub. The system is not materialistic ... people are. As much as it would be nice that a system like communism would work, people are simply not that altruistic. Stalinism is just communism turned into a dictarship due people's trust and intense nationalism. Countries that support a communist or socialist party are often prone to this. Look what happened to Germany's Labor Party prior to WWII.

[The One and Only...]

Prove to me that the labour theory of value holds any meaning. It cannot be done except by the application of theory. Theory holds that an exchange between a man who spends 2 hours killing 2 rabbits and a man who spends 2 hours killing 1 rabbit will result in a trade of 2 rabbits for 1 rabbit. If we assume any moderate amount of intelligence, that will not happen.

I do not find Marx's example to be accurate. The diamond's price would fall because of the increase in supply, not because the value of laboring for diamonds fell. On the contrary, the productive value of labor went up, because the business that found such an area full of diamonds would surely use the price fluctuation to their advantage (i.e. more profit, out compete other diamond quarries, etc.).

I'll look up on the new entrances in the socialist calculation debate, but I imagine that someone else already continued it from the Austrian perspective.

[Zhukov]

So, Kelly, surely you aren't saying that "Supply and Demand" and the 'american spirit' are hard-coded into the human genome? Right?

It would be a bit hard for people during the feudal ages to live up to these desires.

True communism, as in the small scale communes popularized in the U.S. during the 1960's DO work and are most certainly NOT materialistic. They are the opposite. How can you be materialistic when everything belongs to everybody?!
Does anybody know when we made the leap from Socialism to Communism? Oh well. Sure they work - if you like living like a wildman. Hippies living like cavemen can be likenend to primitive communism (the social system that we humans lived under for 99% of our existance), but when someone uses the phrase 'true communism', they generaly aren't thinking of dread-locked layabouts. Communism isn't about running off into the forest and finding enlightment and being at peace with your fellow man, it is about taking our own futures into our own hands.

The basic motto of communism "From each according to their ability, to each according to their needs" and all the altruistic values that go along with it are not, no matter how much we want them to be, human nature.
I agree with you. But for my own despicable ends I feel I should explain something: "For each according to need" means according to need, not "for each what barely keeps one alive". It means that when the overall economic situation is taken into account, sharing of this wealth is based on need. So if there are enough TVs, everyone would have two. Or if there isn't enough cars, they're given to those who most need them. And of course no person is allowed to for example take all the produced diabetics medicines if he's healthy.

The system is not materialistic
The system is based on the means of production - how can that not be considered materialist? I am sorry though, my original sentence should have read:"Communist theory hasn't got an Idealist view of the human race, it is a Materialist view."

As much as it would be nice that a system like communism would work, people are simply not that altruistic.
What about people that are that altruistic? Are they not human? People where I live are generaly nice people who are willing to help etc, this may not be the case in the US or other places, but it doesn't have to be like this.

Stalinism is just communism turned into a dictarship due people's trust and intense nationalism.
Gaining peoples trust and nationalism are just some of the ways they stay in power, but it is not how they came into power - the stalinites are more than this. I am fine with "just communism turned into a dictatorship", for the moment though.

Countries that support a communist or socialist party are often prone to this.
Chile? Nicaragua? Argentina? Angola? Cuba? Venazuela? etc... The countries are also prone to imperialist interference.

Look what happened to Germany's Labor Party prior to WWII.
Which one? What happenend?

Theory holds that an exchange between a man who spends 2 hours killing 2 rabbits and a man who spends 2 hours killing 1 rabbit will result in a trade of 2 rabbits for 1 rabbit. If we assume any moderate amount of intelligence, that will not happen.
You are repeating yourself. I already said that it doesn't apply to your hunting scenario - LTV is mainly about 'traditional labour' - mining, factory production etc, things that can be mass produced.

I do not find Marx's example to be accurate. The diamond's price would fall because of the increase in supply, not because the value of laboring for diamonds fell.
I find Marxs example to be acurate. The daimonds price would fall because the price of labouring for diamonds fell, not because of an increase in supply. Oh wait we are both repeating ourselves.

You are happy with your side, I am happy with mine.

Sorry if I have been overly harsh in my posts.

[kellychaos]

So, Kelly, surely you aren't saying that "Supply and Demand" and the 'american spirit' are hard-coded into the human genome? Right?

It would be a bit hard for people during the feudal ages to live up to these desires.


All I'm saying is to take into account that there is much sociology involved in the stock market and the economic trends of a given country as there is knowledge of finance and mathematics and that the characteristics of a "free market society" more closely follow human nature. I'm not saying this as an absolute but just generally speaking. The "feudal ages" are much closer to a free market society than either communism or socialism. He who has the army and resources wins. That being so, these winners surely must have been under God's grace ... or so they believed.


Communism isn't about running off into the forest and finding enlightment and being at peace with your fellow man, it is about taking our own futures into our own hands.


The problem isn't in the theory but with the bureacratic machine that is sure to follow and become corrupt. Of course, the same can be said of most forms of government.


What about people that are that altruistic? Are they not human? People where I live are generaly nice people who are willing to help etc, this may not be the case in the US or other places, but it doesn't have to be like this.


In general, I meant.


Gaining peoples trust and nationalism are just some of the ways they stay in power, but it is not how they came into power - the stalinites are more than this. I am fine with "just communism turned into a dictatorship", for the moment though.


I'm saying that government's like communism are, when combined with a heavy nationalistic bent, more susceptible to dictactorship. Control the resources and media and you make mass brainwash an easy option especially when the general public is isolated from outside influence. It's how cults work as well.


Which one? What happenend?


German Worker's Party was initially socialist. Hitler was a member of that party when he made chancellor.

[kahljorn]

Long arguments make you smarter!

[The One and Only...]

You are repeating yourself. I already said that it doesn't apply to your hunting scenario - LTV is mainly about 'traditional labour' - mining, factory production etc, things that can be mass produced.

Therefore, the theory is wrong. The theory, as written, applies to all form so labour. Any one example that goes against a theory proves it wrong. I don't know what LTV your thinking of, but the one I see clearly has no exceptions.

I find Marxs example to be acurate. The daimonds price would fall because the price of labouring for diamonds fell, not because of an increase in supply. Oh wait we are both repeating ourselves.

Are you claiming that if a great reserve of diamonds was found, then worker's wages would do down? That is, after all, the price of labour.

What basis do you have for your theory, anyway? What makes you accept it?

[kellychaos]

Long arguments make you smarter!

Uh-huh. :)

[Zhukov]

All I'm saying is to take into account that there is much sociology involved in the stock market and the economic trends of a given country as there is knowledge of finance and mathematics and that the characteristics of a "free market society" more closely follow human nature. I'm not saying this as an absolute but just generally speaking. The "feudal ages" are much closer to a free market society than either communism or socialism. He who has the army and resources wins. That being so, these winners surely must have been under God's grace ... or so they believed.
Humans lived for thousands and thousands of years in communes. There is no all powerful human nature that dictates what people do or how they live. You can argue that there is human nature depending on the environment and social system, but there is no ' basichuman nature' that flows through all of us.

The problem isn't in the theory but with the bureacratic machine that is sure to follow and become corrupt. Of course, the same can be said of most forms of government.
No it is not sure to follow, can you telll me why it is sure to follow?

In general, I meant.
In general people are 'nice' where I live, in general people are 'mean' where you live. Maybe it has nothing to do with human nature at all?

I'm saying that government's like communism are, when combined with a heavy nationalistic bent, more susceptible to dictactorship. Control the resources and media and you make mass brainwash an easy option especially when the general public is isolated from outside influence.
The revolution wasn't built on nationalism.

German Worker's Party was initially socialist. Hitler was a member of that party when he made chancellor.
Come to think of it, I am not sure if they were Socialist or not, but Hitlers rise is only connected to a 'communist dictatorship' becasue of Stalins help in his rise. (through pitting the various Socialists against each other, when they should have joined)

Therefore, the theory is wrong. The theory, as written, applies to all form so labour. Any one example that goes against a theory proves it wrong. I don't know what LTV your thinking of, but the one I see clearly has no exceptions.
No, the theory, as written, applies to advanced Capitalist modes of production. Many people say that “Marx’s theory of value is out of date” by which one can presume is meant “value is no longer determined by the quantity of labour-time required for its production”, for Marx only claimed to describe the dynamics of social relations of the bourgeois society of his day, not to have constructed an eternal scientific theory. Is labour-time now irrelevant to value determination? Have things changed? What has changed is the nature of human needs, which in this 'postmodern' world, are very different from what those of the world in which life hinged more around food, warmth and security than brand and image. Oh, regarding the deer, it is not the difference between individual 'economic actors' (this is how von misses refers to people) killing deer. You and I may take different amounts of time to kill a deer, but Marx was clear in that he was looking at the socially necessary amount of labour time - a big social average. Marx is looking at society as a whole, whereas others look at individual differences.

This is the LTV I am thinking of, which one did you read?

I find Marxs example to be acurate. The daimonds price would fall because the price of labouring for diamonds fell, not because of an increase in supply. Oh wait we are both repeating ourselves.

Are you claiming that if a great reserve of diamonds was found, then worker's wages would do down? That is, after all, the price of labour.
Actualy, if you look closely, you will notice that I just switched around the words from your original sentence - I didn't mean anything other than 'I wont accept your points, you wont accept mine.'

What basis do you have for your theory, anyway? What makes you accept it?
What I understand seem right. Although I have trouble understanding alot of it. If you havent already noticed, I am not the goldstandard marxist economist.