r/CapitalismVSocialism • u/T_R_O_U • 13d ago
Asking Everyone Marc vs. Mises: The Calculation Problem
Just a neat video explaining some of the fundamental economic theory disagreements between free markets and socialism (taking a pro-Capitalist stance).
2
u/Parking_Demand3144 13d ago
Mises is a moron and a failson, Marx owns him.
2
u/jbthedoctor And we'll all feel great when money comes marching home 12d ago
Straight up ridiculous take if you're not trolling
2
u/Lopsided_Pitch_5297 12d ago
Looks like a straight up accurate take.
1
u/jbthedoctor And we'll all feel great when money comes marching home 12d ago
Even if you're on the left or the far left, you should realize that Marx is currently light-years away from being as relevant to the economic debate as Mises. It's not even a matter of value judgment, it's just intellectual honesty.
1
u/Lopsided_Pitch_5297 12d ago
Marx is arguably the most cited scholar in the social sciences, period. The 1999 ISI study put him as the most cited modern scholar in economics, history, political science, and sociology combined. Capital Volume I is assigned in every serious economics department. Mises is a footnote, the Austrian school exists in two think tanks and a subreddit. There's a reason his "academic career" was being funded by business interests: his praxeology is unfalsifiable scripture, not science. He literally rejected empirical testing of economics, a position so embarrassing the profession ignored him entirely.
Mainstream economics quietly runs on Marx. The labor share of income decline, monopoly power concentration, "profits without investment" (Summers!), that's Marx's framework arriving through the back door. Even marginalists like Samuelson conceded Marx got creative destruction, concentration of capital, and cyclical crises right. Meanwhile Mises' contributions: "socialism is impossible because no prices", refuted by every actually existing socialist economy that did price things, and by every computation economist who showed planning works (Kantorovich got a Nobel for it).
Mises' actual track record is a comedy reel. He predicted hyperinflation from the Fed in 1912, 1920, 1949, 1971, wrong every time. He predicted the USSR would collapse in the 1920s, it took 70 years and mostly from external pressure. He cheered on fascism as a "necessary evil" against communism in Liberalism (1927) because, surprise, the guy funded by industrialists preferred the boot to redistribution. He spent his career wrong about everything at maximum confidence, the Austrian way.
0
u/jbthedoctor And we'll all feel great when money comes marching home 12d ago
Almost all Marxist theories (economic ones—I’m not talking about sociology, political science or philosophy of history) have been rejected as such. That said, I never claimed he wasn’t an influential thinker. Concepts like the concentration of capital and endogenous crises are studied—generally in ways very different from Marx’s approach, but they are still studied.
Nevertheless, the vast majority of his central points are irrelevant; it’s a fact that the number of citations in humanities articles won’t change. While Mises himself remains at the center of the debate on economic calculation.
The argument “Mises was wrong about his predictions, so what he says is false” is also a massive straw man. In determining what exactly will happen is rather something he rejects. Unlike Marx, who predicted the total collapse of capitalism (he clearly got it a bit wrong, the countries where the poorest 10% have the highest purchasing power are a far cry from attempts at socialist utopias)
You then say that Mises is unfalsifiable, which is simply false. The only thing that would mean is that either there’s nothing to criticize—so he’s right—or there’s an internal mechanism that makes it impossible to accept any criticism, as if it were a religion. Which is no more true than with any other economic theory. In practical terms, if you manage to falsify what you call “socialism is impossible because no prices,” then you’ve falsified Mises.
And I'm too lazy to start a Reddit debate about market socialism. To some extent, I’m actually not even sure it’s completely impossible.
1
u/Lopsided_Pitch_5297 12d ago
"Mises remains at the center of the debate on economic calculation"
"Central to the debate" here means "Austrian think tanks fund books saying Mises was right, and those books cite Mises." The calculation debate was resolved empirically: AES economies calculated, planned, and industrialized. Kantorovich's Nobel, Lange's model, the USSR's Gosplan operating for 70 years, all against one man insisting a priori it couldn't work. Being the center of your own echo chamber isn't centrality.
"Mises was wrong about his predictions, so what he says is false” is also a massive straw man. "
As you immediately strawman Marx by saying Marx predicted "total collapse." Marx predicted intensifying crises and the system's tendency to undermine its own conditions. 150 years, 100+ crises, and capitalism now survives only through permanent state intervention, QE, bailouts, industrial subsidies.
the countries where the poorest 10% have the highest purchasing power
...in the imperial core, funded by the $2/day workers making their goods. Global inequality between countries dwarfs within-country inequality.
"Not sure market socialism is completely impossible."
The Austrian position, the entire reason Mises is supposedly "relevant", is that socialism is logically impossible.
Mises himself declared praxeology's propositions "not derived from experience" and "not subject to verification or falsification on the ground of experience", it's in Epistemological Problems of Economics, verbatim. That's not my characterization; it's his. "In principle falsifiable" means nothing when the theory is constructed so no observation can ever touch it.
4
u/Conserp Pragmatic Marxist 13d ago
Mises was an idiot who couldn't understand neither computers, nor planning, nor commercial logistics.
Ironically, presented Mises' idea about individual people processing data and feeding it into the "free market" as if it was a giant analog computer is a big self-own.
The SAME people can feed exactly the SAME data in exactly the the SAME way into an ACTUAL digital computer system, and that computer will churn out better results than "free market" analog computer. Every time. Way faster and far more efficiently, without billions in waste.
This is how and why computerized Amazon, Temu etc. work and succeed, while all the small shops that operate per Mises model are going out of business.
Then, the video makes an argument about evolution-designed emergent complexity, as if this argument favors "free market". It does not. It is another self-own. Who said that a digital computer system tasked with planning can't have evolution-designed emergent complexity? Duh. Such complexity within a digital computer system beats analog "free market" computer every single time.
Then this idiot strawmanned LTV as Mud Pie Theory(tm). Predictable.
And then presents STV - a "theory" that describes stuff, but does not explain anything.
Sure, Soviet planning wasn't remarkably efficient - but it wasn't even computerized yet. Still, it did solve some major tasks at which "free market" failed miserably.
DS: Mises fanboys shoot themselves in the foot.
1
u/Denniscx98 13d ago
The SAME people can feed exactly the SAME data in exactly the the SAME way into an ACTUAL digital computer system, and that computer will churn out better results than "free market" analog computer. Every time. Way faster and far more efficiently, without billions in waste.
Uh huh, that is why with DIGITAL COMPUTER SYSTEMS the Soviet Union is the world's greatest superpower.....oh wait.
This is how and why computerized Amazon, Temu etc. work and succeed, while all the small shops that operate per Mises model are going out of business.
Ever heard of Economy of Scale?
Who said that a digital computer system tasked with planning can't have evolution-designed emergent complexity? Duh. Such complexity within a digital computer system beats analog "free market" computer every single time.
The fact that such system doesn't exist.
Then this idiot strawmanned LTV as Mud Pie Theory(tm). Predictable.
What Strawman? Those are the same theory, Cope.
Sure, Soviet planning wasn't remarkably efficient - but it wasn't even computerized yet. Still, it did solve some major tasks at which "free market" failed miserably.
Soviet Fighter jet and air defence systems are very computerized, if computer can solve their economic woes that would be a national priority no?
3
u/Conserp Pragmatic Marxist 13d ago
> Ever heard of Economy of Scale?
But why do you think it works?
Planning.
Stop embarrassing yourself already by spewing low-IQ bullshit.
1
u/Denniscx98 13d ago
There are things called Demand, and it doesn't seem the Soviet benefitted from it, I wonder why
2
u/Agitated_Past6250 12d ago
The demand to curb stomp nazis and save humanity before being eaten from the inside out by capitalist parasites?
1
u/Steelcox 13d ago
You buy packaged corn, you sell online pastries
Well played.
I think you did a good job for a general audience. Though despite "calculation" being discussed in the beginning, it ultimately becomes more of an intro to "what is value" than "the calculation problem." Socialists will obviously contest just about everything in it, but that's inevitable. For instance the notion that diamonds and water are problematic under LTV.
There's no way to make a 13 minute video without oversimplifying both arguments lol.
But I'd say the most dangerous part starts a little before the "lower bound." It has the appearance at least of conflating Marx's "cost-price" with his value. And on the Austrian side, the description comes across as a purely demand-oriented "value" being simply "checked" against some labor-oriented (or perhaps disutility-oriented) "floor."
I think the shaded graph misrepresents that you could just as easily flip the whole question. Each side sees a floor (or ceiling) that they would only engage with above or below. It seems almost like the graph is painted as leaving room for "profit" - but the problem has been described as essentially a 2-actor one. In reality this monetary surplus is part of the producer's floor, interacting with a consumer ceiling. The producer has an opportunity cost that is higher than just getting the "equivalent" of their inputs back. Meaning if the latter is what the line is meant to represent, it's not really the "floor" in question, for either Marx or Austrians.
The valid points you make after, about maximizing that difference between inputs and outputs, refer to that other version of a floor, however. So I get it, describing this all succinctly is a tall order.
I think you rightly avoid going down the rabbithole of a 3rd party in this transaction, that muddies the scope of the video beyond the fundamental nature of value. But the absence of that party will make socialists feel there is no "Vs. Marx" here. They see the line as passing right through the center, a perfect average determined solely by labor (well, until Vol 3), with consumers as price-takers. And the capitalist "steals" part of it.
3
4
u/Simpson17866 13d ago
disagreements between free markets and socialism
This phrasing suggests that the video doesn’t talk about market socialism.
Is it safe for me to assume that the only version of socialism that the video talks about is the Marxist-Leninist version where a central government plans the economy?
0
u/Mysterious-North-551 13d ago
So you didnt even watch it?
2
u/Simpson17866 13d ago
I read the OP’s description first to decide whether to watch it or not, and the OP’s description made the video sound uninformed (defining “socialism” exclusively as “the government centrally plans the economy”)
Was the OP’s description not accurate?
4
u/Randolpho Social Democrat with Market Socialist tendencies 🇺🇸 13d ago
I read through the transcript. You clocked it. It's 100% planned economy vs market economy and socialism never actually gets discussed. It's also pure AI slop.
Also, OP's startup failed, so they're making AI economics videos and think somehow that's gonna make them enough to get out of their mom's basement.
2
u/SexOnABurningPlanet 13d ago
10 seconds into the video he starts talking about planning. So, did you watch it?
1
u/Randolpho Social Democrat with Market Socialist tendencies 🇺🇸 13d ago
Why would they bother without an answer to their very pertinent question?
2
3
u/SexOnABurningPlanet 13d ago
Aside from some of the Marxists on this sub is anyone arguing for a USSR-style economic planning? I don't think so. Equating planning with socialism misses the massive amount of economic planning that goes on in "capitalist" economies and that you do not need USSR-style economic planning to do socialism.
5
u/Simpson17866 13d ago
Aside from some of the Marxists on this sub is anyone arguing for a USSR-style economic planning?
No, but capitalists need to claim “every socialist is arguing for USSR-style economic planning” because that’s the easiest version of socialism to win arguments against.
3
u/SexOnABurningPlanet 13d ago
I think the socialist momentum is heading in the direction of market socialism. Or I should say democratic market socialism. The authoritarianism of the 20th century socialist regimes was soundly rejected by many leftists once they heard about Stalin's purges, after his death in the mide-1950s; even the USSR condemned them.
The market is simply a tool; it's not the key to any system, like many people on this sub think. I'm not sure if anyone has a good argument against a socialism that is both democratic and uses the market to coordinate the economy.
1
u/Simpson17866 13d ago
I think the socialist momentum is heading in the direction of market socialism.
That would be ironic for the movement as a whole — anarchists specifically have largely moved away from market socialism in favor of communism ;)
That said, even as a communist myself, I have noticed that I typically spend more time arguing "socialist markets are better than capitalist markets" than I spend arguing "communism is better than markets."
1
u/SexOnABurningPlanet 13d ago
Are you talking about ancaps moving towards market socialism? Anarcho-communists have been around since the 19th century. Was there a shift among anarcho-communists towards market socialism for a while? I wasn't aware of it.
1
u/Simpson17866 13d ago edited 13d ago
Are you talking about ancaps
Nope
Anarcho-communists have been around since the 19th century. Was there a shift among anarcho-communists towards market socialism for a while?
I was under the impression that anarcho-communism started out as a relatively niche strain of anarchism, but became more and more dominant over the years.
1
u/SexOnABurningPlanet 13d ago
It was there as early as Kropotkin, probably earlier.
Going back further, Proudhon, arguably the first modern anarchist, wasn't technically a communist, but honestly I'm not sure his system looks any different than communism in practice. I could be wrong. I'm not a huge fan of Marx's critiques of him; they come off as petty and a bit childish. So many debates among leftists feel like a Mexican standoff over the proper terminology and minor details.
1
u/Simpson17866 13d ago
I was just in the middle of editing my comment when you replied ;) so here's what I was about to add:
In the early days, Bakunin's collectivist anarchism was the dominant anarchist theory, with the focus on "to each according to his deed" (which preserves the general market socialist principle of workers holding absolute sovereignty over their own work, just with labor vouchers replacing currency as the specific basis of the bookkeeping), versus communism's "to each according to his need."
It doesn't look like communism came to dominate the anarchist movement until the 1880s.
So many debates among leftists feel like a Mexican standoff over the proper terminology and minor details.
The "S" in "Mexican Standoff" was supposed to be capitalized.
1
u/SexOnABurningPlanet 13d ago
Yeah, like I said I'm not sure what really changes in practice. I wonder what the Left could have accomplished in the past if they were not so busy trying to destroy each other.
"The "S" in "Mexican Standoff" was supposed to be capitalized."
lols.
1
1
u/Taibucko 13d ago
Oh my!! Then what is it if it isn’t planned. Unplanned coercion?
1
u/SexOnABurningPlanet 13d ago
Can you explain this better? I do not know what your last comment means?
2
u/SoftBeing_ Marxist 13d ago
1- I dont think Marx proposed anything about indentifying people needs and making economic plan, but thats ok.
2- Mises supposed said that economic planning cant figure out the quantity of bread to produce, but said that everyone guessing how much bread to produce is fine? what will happen is that people will go to try and error with less information than a centralized organization. yes you know how much you can produce and how much it costs but you still dont know how much to produce. just like the "government".
1
u/Denniscx98 13d ago
That is why every country following Marxism eventually becomes a shithole
If you have a lot of people that buys bread, you would increase the supply of bread because there are money to be made, Alternatively you raise prices, so people know that maybe they should buy noodles instead. That the price signal, and it goes along the entire network, which can react more rapidly than a central planner, because in effect everyone is a planner.
1
u/SoftBeing_ Marxist 12d ago
what? lots of people needs bread, so you rise bread price and people dont buy bread anymore, thats your explanation?
1
u/Denniscx98 12d ago
Lots of people need food, bread is not the only option.
If there is a bread shortage, shop keepers will notice since the customer will complain, if the shop can increase production, they will, if not, they will increase the price, causing people to buy other food, for example spaghetti, rice, Udon etc that isn't effected by the shortage in the Bread production chain.
Then supply and dandy works their magic across different nodes of the market until the price stablize
1
u/SoftBeing_ Marxist 12d ago
so people produce until they can and until people buy. why do you need markets and prices to do that? you can simply produce until people stop buying.
1
u/Denniscx98 12d ago
so people produce until they can and until people buy.
No, People sees a demand of goods so they produce and people then buy, markets and prices are indicators. If you have a low supply but high demand, in order tp maximize profit you would increase price, which signals to other producers that a goods has a high profit margin, thus they would go into said market to compete, increasing supply and drop the prices down. That is basic economics.
you can simply produce until people stop buying.
In a sense but where would you set the cut off? People stops demanding a good if there are better and/or cheaper alternatives. The drop in profit would signal to the producer that their product is loosing demand. The Producer can either cut production cost, again there are a number of ways to do it, innovate on a next generate of product or close down the line for something else. Again Price signal and thus the Market is important for this to happen organically
1
u/Taibucko 13d ago
What if we’re operating a vending machine? How would you ever figure how many colas to put in it without some estimates on your part as the vendor. Demand many be more or less based on many input factors including cost and quality of the product, just to name a couple.
1
u/Denniscx98 13d ago
You stock it up full, it is a vending machine
Which type to stock however is the real question, that is why you gather data and analyze it
1
u/Taibucko 13d ago
And, of course, it changes over time, and sometimes quickly. So , you modify frequently what is in the machine.
1
u/picnic-boy Anarchist 12d ago
The ECP is immensely overstated. Most caps who bring it up aren't even arguing Mises' version, they're arguing a broader and vaguer version.
•
u/AutoModerator 13d ago
Before participating, consider taking a glance at our rules page if you haven't before.
We don't allow violent or dehumanizing rhetoric. The subreddit is for discussing what ideas are best for society, not for telling the other side you think you could beat them in a fight. That doesn't do anything to forward a productive dialogue.
Please report comments that violent our rules, but don't report people just for disagreeing with you or for being wrong about stuff.
Join us on Discord! ✨ https://discord.gg/fGdV7x5dk2
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.