Economic Calculation Problem: Refuting Hakim Part 2

Following on with the argument on the Economic Calculation Problem, Hakim makes his main critique claiming that evidence proves Ludwig Von Mises has been refuted.Show more

Contrary to his argument, he hasn't actually provided any credible evidence, even his claims on Morrell regarding efficiency of the Soviet Union are outlandish and far off the truth it is laughable. Like I have argued, a country can have a high level of productivity, but that doesn't mean to say that the goods it was producing was met by the demands of the consumer. If one were to contrast the United States of similar size to the USSR, one can see the clear difference. The Soviet Union was far from anything efficient.

Like the book that has been read a billion times over, Hakim uses up the same tired argument that has been refuted time and time again regarding technology. He cites William Paul Cockshott, a man who clearly illustrated he doesn't understand the Economic Calculation Problem himself as he tried claiming one of the quotes provided relative to the copper and cement had nothing to do with the ECP. This proves he doesn't understand what he is talking about and to think this was once a Glasgow University professor says everything about Universities.

The issue socialists can't comprehend is the fact that prices are signals and that the signals is information consumers are telling the market what they want and don't want. They fail to comprehend that as soon as you destroy the information of prices driven by consumer demand, you're effectively opposing the consumer and destroying the information of their demand.

Given how sporadic consumer demand is and ever changing throughout the year, as well as unpredictable, it is impossible to centrally plan for. Thinking the computer technology can simply solve this issue in the absence of market-driven prices is delusional at best.

The only reason companies like Amazon or Walmart are able to gather such information on production is from price information signals driven by consumer demand, without the price signals there is no information to tell the market out of millions of products what is in greater demand over whatever other given products and at what time. There are no signals to tell the market what type of cheese, yoghurt, butter, ice cream is in greater demand over whatever other kind, that's the purpose of price signals, it conveys such information.

Therefore, price signals is more than just simply calculation and that is the issue socialists fail to comprehend. Eliminating price signals, therefore and from his argument about planning prices internally relative to labour time is just more Labour Theory of Value nonsense from Marxists who have no sense of the real world around them. There is no guarantee consumers will buy the goods at the prices they determine internally and with millions of other prices, how then do they know what to fix? This was the very problem the Soviet Union was faced with and is precisely what led to the Economic Calculation Problem to begin with.

Computer technology would not hold the information of these signals relative to time preference as there is no money or price signals to convey the information, which is why the argument by Kontorovich is irrational. William Paul Cockshott's wild assumption that energy resource is somehow exceptional to the rest of goods, as if it can be simply excused from the Economic Calculation Problem in of itself is ignorance of history given the evidence we've seen time and time again illustrating what happens when price ceilings were imposed and resources are misallocated. We saw this during the shortage at the pump in the 1970s both in Great Britain and the United States.

Thomas Sowell's argument in his book _'Basic Economics'_ illustrates this beautifully with the central office in Texas explaining how they wouldn't know what type of petrol to allocate where to hundreds of petrol stations, at what time, never let alone by how much. Again, the sporadic change of traffic from each and every single petrol station across the length and breadth of the country means it is impossible.

00:00 - Introduction
00:10 - Planning
06:02 - Technology Claim
12:09 - Socialist Inefficiency
16:55 - Cockshott Argument
24:16 - Prices Argument

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