Economic Calculation Problem: Economic Calculation in the Socialist Commonwealth

Having explained the economic calculation problem in two previous part videos on profits and losses and on the variety of options, there was a lot of information I had left out. I thought the argument was suffice to explain in clear English the problem with the economic calculation in the socialist commonwealth.

I recently had two video responses from @Mouthy Infidel and @Viki 1999 who responded with their own arguments. @Viki 1999 seems to be under the impression that this only pertains to the central planning problem, however, Mises argument on socialism was directed towards the real world of socialism we know of, rather than the theoretical perspective. However, his argument on the economic calculation problem wasn't saying that the failure was solely confined to central planning, he was saying that in the absence of market-driven prices it is impossible to calculate production and determine resource allocation.

In other words, @Viki 1999 doesn't understand that all mixed economies are faced with the economic calculation problem and that the primary cause for the problem is in relation to government price controls. However, as I've argued in this video, even if socialists were to argue for a moneyless based economy there is no price information signals and I have explained extensively in this video on the importance the role prices play in the economy.

@Mouthy Infidel turns to William Paul Cockshott, surprise, surprise, having done a little research he's a University professor at Glasgow University, by Christ will Adam Smith be rolling about in his grave. This embarrassment of a lecturer somehow believes that via mathematical equations using supercomputers, they can somehow finally solve this problem.

As I have explained in this video and is important for me to reiterate this point here; supercomputers cannot calculate production without the information of prices and if price information signals do not exist, there is no information there to calculate for production. Collective decision-making as I have explained is faced with various problems, but never mind that fact, 70-million people can't all talk to one another at the same time and if you are to plan for such a large scale economy like Great Britain, you require the main central planner as I mentioned previously.

When that central planner has to collect information and even theoretically speaking gathers such information from individual communes (if they argue this, which wouldn't be the case,) by people telling the central planner what they want and how much, it doesn't provide enough information never mind accurate information to calculate rationally.

A free market through market-driven prices understands the information of how much to produce and where resources are allocated because price information signals enable such calculation and efficiency, but if you took prices away, simply telling a central planner what you want and how much isn't going to provide accurate information, again, there's no information of prices for a central supercomputer to rationally calculate production.

Furthermore, to base an economy on consumers determining what they want isn't socialism. The biggest fatal flaw, however, is that money only comes from 2 places; (1) the private sector (2) the printing press. If not financing the economy to pay for all their socialism through the private sector, their only option is the printing press and this would drive the country into hyperinflation.

As Kevin D. Williamson explains:

“There are 115 million households in the United States, if we imagine a weekly milk consumption budget for each of them, that’s 5.98 billion household weeks to plan for, adding in a fairly restrictive list of variables, call it 0 to 20 quartz a week, 4 levels of fat content; organic, non-organic; soy, dairy and 3 flavour options, you end up with around 6 trillion options to choose from.

These are the choices facing our committee of central planners and let’s just assume that our central planners are the best and brightest that our world has to offer with the temperaments of angels totally unswayed by the quotidian concerns of politics or the influence of the various competing dairy lobbies, for instance; let’s assume they are not human beings as we know them to exist and that they have at their exposle a vast array of top-flight supercomputers, if they took just one second to consider each of these options, it would take them 190,128 years just to run through the possibilities of 1 years milk consumption in the United States.”

You can find my other two arguments on the economic calculation problem here:

• profits and losses: https://www.youtube.com/watch?v=mVbbFVKWdhI
• Variety of Options: https://www.youtube.com/watch?v=bFoqXD_o6Wc