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x-posting my thoughts as well: As much as I hate the Austrians they did do one good thing: and that is to definitively prove a planned economy (whether coming from the fascist angle or the communist angle) can never be as efficient as a market-driven system. Hayek didn't win a Nobel because he was a hack, he provided an effective counter to the prevailing wisdom of the 50s that even market-based economies could just use government tools to fix every problem under the sun. I spent some time trying to find the original article but failed to do so as it was written almost half a century ago. I did find a paper that follows up on a lot of it by trying to define "how much more inefficient is it?" while also providing some background: https://www.jstor.org/stable/1061243?seq=1 Intro & History of the command vs market debate   In this section they detail the mathematical model they use to measure efficiency by using production possibility frontiers, which is a pretty solid way of going about doing things. If you'd like to know more about production possibility frontiers read here: https://en.wikipedia.org/wiki/Production%E2%80%93possibility_frontier In summary, its basically a graph that looks like this:  Their paper/equation is attempting to define how large this curve is.    Okay, so what did they find when they plugged in actual data?    They showed empirically that the countries using command-style economies were, on the whole, only using their resources about 76% as efficiently as non-communist countries. Of course, classical capitalism only cares about market efficiency and nothing about equality so you need some mechanisms in place to ensure that. It pisses off the ideologues to no end, but the "best" (i.e system that most effectively balances economic efficiency against preferred societal outcomes like equality) economic system is some mixture of command and market economy...kind of like what most of the world practices. 100% market and 100% command economies really don't exist anymore. The main quibble these days is how do you best balance things which gets into a whole discussion of the inherent value of things and Trolley Problems and what not. tl;dr: pure communism is doomed to failure just like pure capitalism because it they are too pure and highly "pure" economic systems end up not optimizing for things we care about (efficiency vs equality to be simplistic)
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May 2, 2021 21:27
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Stickman posted:I've always disliked this argument because they specifically choose a definition of "efficiency" that makes the "efficiency" of their spherical-cow markets tautological but is pretty much useless for any of the things that we might actually want out of an "efficiency" measure. The obvious question is "efficient for who and for what" and the Austrians say "well efficient weighted by market control (and under conditions that would never exist in the real world)!" This is not at all what this paper is saying. Production possibility frontiers are not "spherical cow markets", they're a very well-understood way of defining how much stuff an economy can make (and the distribution of it). Also the authors of that paper aren't even Austrian economists, they're very much in the mainstream. Ardennes posted:I would say a direct comparison between productive in Western Europe and Eastern Europe during the 1950s is ahistorical and not academically useful for very obvious reasons. Considering I posted an entire econ paper to back up my argument, do you have anything to support this other than you asserting it? edit: re-reading they also only use data from 78, 79 and 80 so this doesn't even have anything to do with the 1950s. It says it in four different places and is in the header of the tables axeil fucked around with this message at 03:57 on May 3, 2021 |
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May 3, 2021 03:41
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Jaxyon posted:So the school of economic thought that rejects empiricism managed to empirically prove something? Considering the paper was written by non-Austrians it isn't odd at all.
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May 3, 2021 19:40
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Orange Devil posted:Planned economies worked very well for the UK and the US during WW2. Also the Austrians are dumb as poo poo to a man. And yet they were right about this one thing: command economies generally suck at being productive compared to market economies. And they argued it with math and then other non-Austrians went and confirmed the math with empirical observation. Sorry that you hate the Austrians (I do too), but even people you hate can be right sometimes. Re: WW2 yet again, someone here asserts something without providing any backing. It's really not that hard to make sourced arguments. I'd be willing to accept it as a counter but you just assert it without providing proof they "did well". Since defining "did well" is actually pretty important to this discussion we can't just accept it as true.
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May 4, 2021 14:57
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icantfindaname posted:I mean, basically every single one of the most miraculous expansions of production in history, in WW2 US, UK and USSR, in postwar France and East Asia, all made heavy use of central planning and state direction. Meanwhile basically every case of neoliberalization after the 1980s has not just been a disaster from a social perspective but from the very GDP growth perspective you claim is better served by Hayekian market liberalism. Most (all?) of Latin America’s growth performance was clearly better before neoliberalism and marketization than after. It’s just not empirically true that liberal market economies are more productive than planning, probably actually the opposite. I literally posted a paper that proved the opposite of what you're arguing. Do you have any actual citations/research to back up your assertions?
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May 4, 2021 16:08
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