Some example of the economic calculation problem in practice (using the Soviet Union as an example): - Soviet television sets were manufactured so poorly they tended to explode.1* By one estimate, sixty percent of all apartment fires in Moscow were blamed on exploding television sets. - The construction process suffered from chronically long delays.2* A Soviet source in 1975 reported that the average length of time it takes for construction projects to be built was double the planned norm, and the planned norm was itself double the length of time it takes for construction projects to be completed in other countries. A Soviet critic by the name of Ivanov said of the construction process that “the preparation of the project takes 2-3 years, construction 5-7 years, and the so-called osvoyenie [making it operational] 3-5 years and more. Therefore the new basic capital becomes fully operational 10-15 years after it has been projected, i.e. often the machines are already obsolete” - The workers who unloaded bricks from a lorry were careless in the process and many of the bricks were smashed, because the planned norm that applied in this case made it more profitable to unload the bricks as quick as possible even if this meant smashing them.3* - There was an enormous amount of waste in the production process.4* One Soviet critic talks of gas in the production process being "wasted or burnt off", metals being lost during enrichment and processing, and timber being "rotting or burnt and almost unutilized as materials". People in the Soviet Union even had a name for the heaps of unused materials lying around factories and mines: "ores lying on the surface". - There were widespread shortages of consumer goods. In a survey it was found that about 50% of Soviet citizens surveyed were “very dissatisfied” with the availability of consumer goods.*5 - There were no rational prices for agricultural goods like grain and cotton.6* Even when a team of experts under Stalin's leadership were charged with coming up with prices for agricultural goods they could not come up with anything sensible and their proposal was rejected. There are anecdotes by Gorbachev of pigs being fed bread instead of grain because there were no rational prices for these goods. All these economic inefficiencies translate into lower living standards. An example of this would be in housing: According to an estimate from the book "The Strange World of Ivan Ivanov," published in 1969, 66 percent of urban households lacked running water, 69 percent lacked plumbing, 78 percent lacked central heating, 84 percent lacked gas, 91 lacked a bath, and 98 percent lacked hot water.*7 Sources: 1* Globalsecurity.org, "Soviet TV Set Production" 2* Alec Nove, "The Soviet Economic System", pages 157-158 3* Alec Nove, "The Soviet Economic System", page 107 4* Alec Nove, "The Soviet Economic System", pages 76-77 5* The Free Library, "Money demand and quantity constraints: evidence from the Soviet interview project" 6* Allin Cottrell and Paul Cockshot, "Computers and Economic Democracy", page 4-5 7* G. Warren Nutter, "The Strange World of Ivan Ivanov", as cited by the article "A Much Needed Reminder About Life in the Soviet Union" in the American Institute for Economic Research

Here we go again, i watch this presentation every year, still a relevant topic as ever was 100 years ago... Ps. Don´t take that as a criticism but as a compliment :) ...

@grraadd

4 жыл бұрын

It's getting better :-)

@avppr3451

4 жыл бұрын

@@grraadd Agreed!

@hitreset0291

4 жыл бұрын

In order to eradicate 'socialism' from our society, would it not also be prudent to remove all forms of reference to the word "social" as well??? Isn't it a threat to capitalism longer term to retain "social" but eradicate the "ism" in the word "socialism" ???

Wow. This is the most clear critique of socialism I have ever seen. Well done!

@kunallobo4136

4 жыл бұрын

Bohm Bewerk is even better -- check him out

@kimobrien.

3 ай бұрын

@@kunallobo4136 Hiding behind every price is the value in labor time and quality. So a single number can never be descriptive of two or more qualities. Some problems can not be calculated in a reasonable amount of time. How do these problems prove the superiority of a pricing system? Since capitalism itself tends towards monopoly and centralization? You see we even have a world government at the UN, the IMF, the world bank and WEF meets in Davos.

@kunallobo4136

3 ай бұрын

@@kimobrien. the price system isn't perfect but it's far better than a centralized value determiner, like the centralized governments.

@kimobrien.

3 ай бұрын

@@kunallobo4136 You already took people as labor out of the market with the end of slavery and feudalism. And you have already centralized all kinds of trade and production including world banking capital. In fact you've gone so far as to create world systems that you can't easily back out from. You think we think in terms of only taking one country at a time and not the whole world? You think you can escape the law of value and just assign any price you like and still make a profit? Your whole problem is the belief in the magic of markets solving all problems. Calculation is definitely a problem. Which is exactly why you entrust the government with road building. AT&T was created as a monopoly because the bosses didn't think the could raise enough private capital for long distance service without it. Public Roads were built because Henry Ford wanted to sell cars and Standard Oil gasoline. When the system was crashing in 2008 did you follow the advice of the free marketers like Friedman had preached since the great depression? Or did you decide to just bail yourselves out as an alternative. Punishment of the market is suppose to be good for the soul. .

@kimobrien.

3 ай бұрын

@@kunallobo4136 As usual I'm being censored. The price system does not escape the overall need for centralization and plans. You needed to destroy most of the industrial world to become the world greatest Empire following World War two. Now your back in a situation that rivals the Great Depression in nature. The so called calculation problem is one that can't necessarily be overcome by markets. Retail can not assign prices for labor time to put objects on the shelve. No one wants to privately invest in roads because there is no way to guarantee a return without government intervention. .

God, I love Mises. I wish I was there. At MisesU. Such brilliance and elucidation on the the issue of Socialism.

@Jekyll_Island_Creatures

4 жыл бұрын

Start a gofundme and go! :)

9:23 According to *Karl Marx* himself, it is unscientific to try to speed up the arrival of socialism.

@tedarcher9120

4 жыл бұрын

Yeah, so by Marx's ideology marxist parties should be promoting freedom of business and capitalism as hard as they can, because the more developed capitalism becomes, the sooner socialism arises

@shanerooney7288

4 жыл бұрын

Pffft, but that is just Karl Marx, what does he know about "real" socialism.

@gJonii

5 ай бұрын

This is kinda why Marx was disliked even by socialists. The idea that your grandchildren might see the promise of communism as you and your family starves.

A timely and excellent explanation!

Money is a great way to value production, but this won't be of any matter to a socialist who wants to abolish money. They do not care what the "cost" of that production is, and will simply make people produce, and divide equally. Or at least their goal is to do that. Their goal is to ignore the costs of production and just produce, and then dole out the results whatever they are.

@VIKDR1

4 жыл бұрын

@Rabble Repository I find your comments hard to read. I would respond but I would have to know what you are attempting to say.

13:00 Read 'Meltdown! Inside the Soviet economy' for a glimpse of the insanity of an economy under socialism. In summary, you could only produce your state quota by buying on the black market, which is illegal. Therefore you're automatically an enemy of the state in fulfilling your production quota. Beautiful checks and balances already build into the system to eliminate anybody at will, "legally".

Who do you use for your Christmas cards FedEx and UPS or USPS?

Where from is his accent? P.S ah, New Jersey

@tedarcher9120

4 жыл бұрын

@Alter Kater whadya mean?

26:42 In Soviet Union, vacation takes you!

Salerno is wrong about prefabricated houses being more expensive than houses built on site in cities. Houses built on site are just the consumer preference.

@kokofan50

4 жыл бұрын

yabon banania, all other things being equal or unequal to a degree.

This is always a great talk, but I wish he would get a bit more detailed and spend more time discussing modern rebuttals. I'd especially like to see some time dedicated to rebutting the argument that assumes that the calculation problem can be solved with increased computing power. I haven't finished this one yet so maybe he does, but I doubt it.

@frederick3467

4 жыл бұрын

Agreed, I'm interested in refuting high powered computer modelling as a solution, nice to hear Joe has he is the expert.

@roymarshall_

4 жыл бұрын

@@frederick3467 I mean its pretty easy to refute but I've never heard him really discuss it. His discussions don't tend to move past the mid 20th century.

@comando293

4 жыл бұрын

How would a computer invent new things? How would it know that the things it invents might be wanted by people?

@roymarshall_

4 жыл бұрын

@@comando293 1. An AI. 2. Surveys

@acTioNFLp

4 жыл бұрын

That has been answered by austrians and others. The main problem with the whole computing power solution is that it ignores epistemological aspects of the market and of the price system. In socialism, those aspects are destroyed by the absence of private property of the means of production. What that means is that the necessary information to make the economic calculation is not only impossible to compute: it doesn't even exist in socialism.

The problem is that some problems can not be calculated and therefore determined in a reasonable time. So in those case any choice made can turn out to be god or bad later on. So it doesn't demonstrate the superiority of the pricing system who problems stem from the inability to correctly determine labor value in both time and quality at any given time. One number will always be less descriptive for two or more different measures. This is why people like to look at things like fruit and vegetables before purchase and want regulation of gasoline production.

AOC, the modern day Fourier.

@grraadd

4 жыл бұрын

she's taking marching orders from islamist omar (marx?)... but another islamist (lenin?) is plotting to dethrone omar - catfight (revolutionary dialectic?).

@annyer262

4 жыл бұрын

@Natty Fatty Powerlifting Watch the video at 2:15. Charles Fourier is mentioned. Is it the same bloke? I will research and find out.

@DsantosGE4PA

4 жыл бұрын

@@annyer262 Not the same guy. Jean-Baptiste Joseph Fourier created the transform

Imagine if this theory was applied for intra company organisation. Organisations are socialist internally so a lot of misallocation of resources happens

If all commies were on a mailing list, I'd send this to it. GREAT video!!!

I wanna have Solerno's accent.

I'm getting no sound. Figures.

Here in Brazil, my home, there are some people who argue that Mises and his theory were destroyed by a school from Poland. A Brazilian Marxist called Elias Jabbour claims that it is possible to calculate all economies using an AI. But as we know, it's impossible to figure out the necessity of millions of people and their peculiarities just using A.I. or another similar method.

@YouLoveMrFriendly

Жыл бұрын

The problem: which decisions and plans go into action, and when they do, what rationing system is used? Capitalism solves that problem with private property rights and Entrepreneurs. Socialism/Collectivism cannot solve that problem.

@vraeleragon7211

11 ай бұрын

AI requires data to work, and data means invasion into people's lives and behaviours. Which means people will be giving up their freedom and privacy to do that. We'll be running into freedom vs convenience problem again. And who will own those data, the government? No, thank you. Google, KZread, Facebook, to name a few, are already giving people advertisements by listening to our conversation. Sadly people would give up their freedom and privacy for more convenience.

On top of that, socialism is anti-ethical (vide Hoppe's Argumentative Ethics).

I love this talk but I'd suggest a lozenge beforehand and hydrating because the cottonmouth sound really was offputting.

I don't believe a bureaucracy can efficiently do anything, and will always continuously add increasing cost, and this is the actual problem with any implementation of socialism, aside from the problem of the original socialist problem of effort vs reward "If you shall not work, you shall not eat" as cited by John Smith in Jamestown. I'm fairly well against socialism, but I can't stand this man's rhetoric. You can't strawman your opponents and expect the weakest arguments they have to simply evaporate before your awesomeness.

@TJackson736

4 жыл бұрын

He didnt strawman his opponents up until the 25 minute mark. Socialists have whacky beliefs. If you dont know what the calculation problem is, Murphy has a good article on it. mises.org/wire/socialism-calculation-problem-not-knowledge-problem-0

@christianlibertarian5488

4 жыл бұрын

I agree with you wholeheartedly re: bureaucracies. Socialism may be bad economics, but bureaucracies are an entirely separate category of crappy. Large, inefficient bureaucracies can easily be as inefficient as socialism.

@shinHis3

4 жыл бұрын

Where's the strawman in 'you can't calculate actual price if there is no actual market'? Can you explain what he's strawmanning? If you don't that just means you're the one strawmanning here.

These examples are all easily solves le with a responsive government and better information flow. Not saying we are there yet, but information flow is getting us closer

In 2024 we will get it, bad.

Man is not a bee.

Even if we speculate that this new socialist man will exist... How can this new socialist man know what is needed most without a free market price system?

7:00 Lets all drink the Kool-Aid!

Non thinking crowd going nowhere fast. Hurry and get there.

If you want to see what socialism will look like , visit Venezuela .

*smacks lips* Get our boy a pop filter next time, please.

I turned it off when it went into ad hominem. This dilapidated building is what's socialism would look like? Why? Done!

This lecture is taking place in Alabama, 46th out of 50 in US educational rankings ... enough said.

@bartoma2

4 жыл бұрын

Yes, enough said - if you are a complete moron...

@r.blakehole932

4 жыл бұрын

Hit Reset Button Wow! Brilliant refutation of the contents of the talk! A great testament to our modern educational system.

Lol, by people who know little to nothing about computation.

anti-Mises: in capitalism, how would you know, what to produce without beautiful central planning? Do you really would produce what customers want the most? More vodka? So capitalism is impossible.

@krishnanunnimadathil8142

2 жыл бұрын

😂

@DieselpunkMachine

2 жыл бұрын

@@krishnanunnimadathil8142 no -isms really, only good and evil. Evil is on top today, tomorrow is theirs last day. Russia will smash fascists... As always.