Showing posts with label ECP. Show all posts
Showing posts with label ECP. Show all posts
Thursday, April 5, 2018
Thursday, December 5, 2013
Dr. Zeitgeist or: How I Learned to Stop Worrying and Love the Robot.
Dr. Zeitgeist or: How I Learned to Stop Worrying and Love the Robot.
Responding to Peter Joseph's Economic Calculation Problem Lecture.
I initially had no plans to make this for 4 reasons:
1. Peter Joseph Merola, the leader (yes, he is the leader) of The Zeitgeist Movement is an incoherent, ignorant, megalomaniacal prick. He's not too shy to send me bogus legal threats and he did (probably still does) think I'm James Kush because Jim is short for James and we both oppose TZM. When he's not out trying to knuckle anti-TZM websites out of existence, he's constructing an epic tower of fail at the word salad bar.
2. TZM is a 'dead' 'movement.' Though it was hardly alive in it's heyday in 2009-2010, it was so fringe even then it made anarcho-capitalists seems like a viable political outfit. Attendance at their events like Z-Day and The Zeitgeist Media Festival since have been steadily declining after the split with TVP. The views and subscriptions to TZM's Culture in Decline series have been pretty dismal too if you discount the obvious view bot activity that happened around April of this year.
3. I don't subscribe to the ECP anymore but there's a few things you must consider about the argument that stands well. While it doesn't show that socialism is impossible, it does point out the importance of the price system, trade, and private ownership has in an economy. It's the only reason I keep that video and blog post up. Even if the conclusion is faulty, the reasoning does illustrate how money and trade works. Needless to say, the socialist responses to ECP have always been terribly bad, factually inaccurate, and logically inconsistent. It has always amused me how much mental gymnastics a collectivist can do to disprove an incorrect theory.
4. The idea that having to work in a market economy to make a living is comparable to chattel slavery is beyond the pale. I'm sorry your McBoss is a jerk, but he doesn't beat you, kill you, and rape your female family members. The wage slave argument, as I've illustrated before, is intellectually bankrupt. I take it less seriously than Marx's Labor Theory of Value or Reverend Moon's claim of divinity. When I heard him make this direct comparison, I turned the video off in disgust. He's devaluing the horrors of chattel slavery to serve his ideological position. It's disgusting when PETA does it, it's no less disgusting when Merola does it.
However curiosity got the better of me and I jumped to Part 3 of the video where he tries to address the ECP. Before that I did take some notes from what I did see of Part 1.
He talks about resource consumption and reproduction. Shows a study that said if we keep business as usual we'll overshoot this balance and start running out of resources.
Problem is it ignores the price mechanic. Supply goes down, prices go up making it more advantageous to extract in harder to extract locations, develop new methods of creating said resource, or seek and develop alternatives. The world was sure we couldn't sustain wale oil to light everyone's home until kerosene came along. Now we don't even use kerosene, we use tungsten, neon gas, and LEDs. So "business as usual" wouldn't happen because of the price mechanic because both consumers and producers would be restrained financially to do so.
On the contrary. Take for example bluefin tuna. As the Chinese people are moving away from poverty they are developing a taste for sushi. Tuna, being one of the most popular fish used for sushi, are becoming threatened by this new demand. It's driving entrepreneurs to find sustainable fishing and farming methods to fulfill this demand including more efficient ways to feed them that would alleviate the threat on overpopulation in their eco-systems. Now tuna was pretty abundant when this all started to become noticeable and these alternatives were being explored. Entrepreneurs on a market want to create abundance to serve the demand, sustainability to preserve their business model, and efficiency to keep costs of production and price of final goods down. The only business that would be OK with holding back good from the market are those with a state-protected monopoly because if you know you can have competition you can't survive hiding back goods for higher prices. It's not just tuna, not just farming in general either, it applies across the board. If you go into any market. Let's say milk. How long do you think your business survive if you decide to only sell 300 gallons a month for 20 bucks a gallon (SPOILER: One month)
This is factually and empirically false. If you look at the data from the whole world from the dawn of man to today, you will see a decline in violence. Wars are fought less frequently, less brutally, and with less deaths. There's less violent crimes. The reasons for this are a system of law, women's suffrage, cosmopolitanism, education, and (get ready for this) commerce.
So on to part 3.
Zeitgeisters want to have a huge robot army that will bash people over the head with a recyclable aluminum T-ball bat to anyone who asks for something even remotely luxurious as an iPad because there's not enough to go around. Good luck getting A Zeitgeister to admit this.
See how smarmy this is? No, that's not how a market works. It's not even possible in a market economy because of the possibility of competition that makes such a business model unsustainable without explicit state-sanction monopolization of an industry.
The RBE, RBEM, NLRBE, or whatever the new buzz word is this year for technocratic communism is not a centrally planned system because, according to Merola, it's a "Collaborative Design System" that allows for public feedback into a open source system. I hate to burst your bubble, Dear Leader, but that's not what TZM has been advocating all this time. TZM, when it was still partnered with TVP, has said there will be scientists and engineers from the world's nations and universities who will come together and construct a new state and cities and transition into a totally cybernetic system. You concurred. You concurred for long after the split. Only now you want to change it because you don't like the term "central planning." If you didn't have a problem with that term, you would have never bothered working in the CDS in your movement.
Or like TZM's moody global coordinators and moderators too? Didn't think so.
No, no. No. No, no, no. No, no. No. Prices communicate resource scarcity, production costs, and value. There's more to production than just "labor energy." You have capital goods, supporting infrastructure, research and development, logistics, advertisement...etc. Prices also reflect, and this is really, really, really, really, important, perceived value.
Let's say that collectively, we all agree that a pile of iron ore, some buckets rubber sap, a barrel of crude oil, and some copper water is worth 100 utils. That means that we agree that the utility of this stuff to us is worth "100" as they are. Now let's say we whip it up into a car and we spent 200 utils doing so. Buying tools, paying people..etc. total price to build 300 utils. But a car has more utility as a car than the raw resources, and we are willing to pay 900 utils. That means they we created 600 units of utility. Now let's say we whipped up the same stuff into a shit moped that just sits there and looks ugly because the crappy eco-friendly recyclable engine sucks 200 utils. Now people will only want to pay 50 utils for it. Now we just wasted 250 utils and we're all poorer. Now without the units of utils we won't know, according to ECP, that we've created value or wasted resources.
Do you see how Merola has no idea what the fuck he's talking about now?
Now we get a scientific sounding formula:
Design Efficiency > Production Efficiency > Distribution Efficiency > Recycling Efficiency = Utopia.
But no comment on it yet. ...ok.
Merola throwing this "steady state" economic idea around without understanding what it means ever since the ECP was becoming a thorn in his side. This was because Mises himself described an scenario where the ECP wouldn't apply. The Steady State Economy. Which is the bogus idea that everyone would just make the exact same economic decisions at steady and predictable times. Imagine eating the same thing, using the same technology every day, and doing the exact same thing for leisure every day for the rest of your life. That's the steady state economy. It was an absurdity that Merola picked up on without even bothering to think about.
He then goes into the needs versus wants shit. Let me be clear; there's no such thing as objective human needs. There's concepts of what humans require to stay alive and healthy both mentally and physically, but there's no "needs." People willingly commit suicide (and no, it's not mostly about money they do this.) People actively join services like the military, police force, snow crab fishing..etc which they know their lives could end. Living is a sliding scale desire. Some desire it more than others for a plethora of different reasons. Food, is a basket of goods. You can have tasteless gruel that can be mass produced, or you could have French truffles and wild Russian caviar which can not. Shelter is the same. You can have a bunk on a rotating bed or a small studio apartment or you could have a mansion made of marble. So again with all these sliding scales of desires, there will have to be subjective decisions on what to make. They have to be subjective whims because they're subjective values. Given the hundreds of trillions of different ways to manage all the resources involved in producing them into food and shelter, You'll need all the information that prices provide (more on that later) to forecast those decisions, and you'll need a measuring stick to see if you're creating value or destroying it.
The idea that capital goods are going to be consumer goods is just absurd. What will the 3D printer 'ink' come from? Another 3D printer? No, it will have to be extracted. By a 3D printer? No, by producer capital goods. There's going to be a need for a quarry to get rock and lime to make your cement, iron ore and refinery tools and machines for the metal, and oil and refineries for the plastics.
Again, Merola doesn't know what he's talking about.
He says we can get rid of waste by printing things where we need it instead of shipping it. Only you'll need to ship the "ink" to the printer. What of you have a Montana situation were like a handful people live in the whole state over a large spread? Or a situation like New York which can't sustain it's own local resources for production?
Now we get a scientific sounding formula again:
Design Efficiency > Production Efficiency > Distribution Efficiency > Recycling Efficiency = Utopia.
But no comment on it yet. ...OK.
More stupid nonsense about capitalism. You're only choice is what corporations give you. Ignoring the fact there is open source options and the ability to design your own an compete. The people who know how to design phones most efficiently work for said companies. Us vs. Them nonsense. *yawn*
The military is not totally socialist nor are they efficient. They outsource most of their production and R&D to contractors like Lockheed Martin, Boeing, Beechcraft, ..etc. and they do compete for contracts. They also buy up Hummers, tanks, ships, and aircraft that are gas guzzlers at over inflated prices. Only in Merolaville is the military efficient.
Now for the Design Efficiency, there's no need for a lot of this stuff. For one, if we're going to recycle it, why do we need modular systems? Just recycle it and get a new one with the features you want? Why make it durable when the recycling process will break it down anyway? You're giving it a head start. Why would you have both totally custom 3D printed goods and standardization? Why not have trade-offs?
Now what I've said totally undermines his new NLRBEMCSDEOC ...thing. but here's where I'll make this clear:
Heterogeneous Value Assessment can not work. Why? 3 Reasons:
1. It assumes resources are resources for certain things based on what we know now and how much we have of it. Sure we can know the conductivity of something like copper back in the 50's for making telephone wire, now we use sand which isn't even conductive. Now we mostly use radio waves. Tomorrow who knows what we'll use. A resource is only a resource once we know how to use it and it's only viable once we know if it creates value rather than destroys it. While price will give you a real-time reflection of these production costs and values, the system would need new software upgrades to account for the emergent demand and the recycling of the old. Which, typically comes with development time and some bugs.
Bugs are fine and all if you're going to run a website, but to manage all of the earth's resources... I'm going to pass on that.
2. This new system does not calculate all production costs (costs not in money, but of capital goods extending generations back.) To have plastic, you must have crude oil, which needs to be extracted, refined and shipped all by various machines which is made of a host of other raw resources which were made of other machines made of various resources, which were made from other machines and so on and so on. Prices give you all of that information. 'Heterogeneous Value Assessment' makes no mention of this.
3. A network (even with various local or 'genre' nodes) still will have problems with mètis knowledge. That is (in case you forgot) knowledge that can not be communicated or understood to people not entrenched in it.
I initially had no plans to make this for 4 reasons:
1. Peter Joseph Merola, the leader (yes, he is the leader) of The Zeitgeist Movement is an incoherent, ignorant, megalomaniacal prick. He's not too shy to send me bogus legal threats and he did (probably still does) think I'm James Kush because Jim is short for James and we both oppose TZM. When he's not out trying to knuckle anti-TZM websites out of existence, he's constructing an epic tower of fail at the word salad bar.
2. TZM is a 'dead' 'movement.' Though it was hardly alive in it's heyday in 2009-2010, it was so fringe even then it made anarcho-capitalists seems like a viable political outfit. Attendance at their events like Z-Day and The Zeitgeist Media Festival since have been steadily declining after the split with TVP. The views and subscriptions to TZM's Culture in Decline series have been pretty dismal too if you discount the obvious view bot activity that happened around April of this year.
3. I don't subscribe to the ECP anymore but there's a few things you must consider about the argument that stands well. While it doesn't show that socialism is impossible, it does point out the importance of the price system, trade, and private ownership has in an economy. It's the only reason I keep that video and blog post up. Even if the conclusion is faulty, the reasoning does illustrate how money and trade works. Needless to say, the socialist responses to ECP have always been terribly bad, factually inaccurate, and logically inconsistent. It has always amused me how much mental gymnastics a collectivist can do to disprove an incorrect theory.
4. The idea that having to work in a market economy to make a living is comparable to chattel slavery is beyond the pale. I'm sorry your McBoss is a jerk, but he doesn't beat you, kill you, and rape your female family members. The wage slave argument, as I've illustrated before, is intellectually bankrupt. I take it less seriously than Marx's Labor Theory of Value or Reverend Moon's claim of divinity. When I heard him make this direct comparison, I turned the video off in disgust. He's devaluing the horrors of chattel slavery to serve his ideological position. It's disgusting when PETA does it, it's no less disgusting when Merola does it.
However curiosity got the better of me and I jumped to Part 3 of the video where he tries to address the ECP. Before that I did take some notes from what I did see of Part 1.
He talks about resource consumption and reproduction. Shows a study that said if we keep business as usual we'll overshoot this balance and start running out of resources.
Problem is it ignores the price mechanic. Supply goes down, prices go up making it more advantageous to extract in harder to extract locations, develop new methods of creating said resource, or seek and develop alternatives. The world was sure we couldn't sustain wale oil to light everyone's home until kerosene came along. Now we don't even use kerosene, we use tungsten, neon gas, and LEDs. So "business as usual" wouldn't happen because of the price mechanic because both consumers and producers would be restrained financially to do so.
"Abundance, sustainability, and efficiency are the enemies of profit"
On the contrary. Take for example bluefin tuna. As the Chinese people are moving away from poverty they are developing a taste for sushi. Tuna, being one of the most popular fish used for sushi, are becoming threatened by this new demand. It's driving entrepreneurs to find sustainable fishing and farming methods to fulfill this demand including more efficient ways to feed them that would alleviate the threat on overpopulation in their eco-systems. Now tuna was pretty abundant when this all started to become noticeable and these alternatives were being explored. Entrepreneurs on a market want to create abundance to serve the demand, sustainability to preserve their business model, and efficiency to keep costs of production and price of final goods down. The only business that would be OK with holding back good from the market are those with a state-protected monopoly because if you know you can have competition you can't survive hiding back goods for higher prices. It's not just tuna, not just farming in general either, it applies across the board. If you go into any market. Let's say milk. How long do you think your business survive if you decide to only sell 300 gallons a month for 20 bucks a gallon (SPOILER: One month)
"...market capitalism is, indeed, empirically socially destabilizing"
This is factually and empirically false. If you look at the data from the whole world from the dawn of man to today, you will see a decline in violence. Wars are fought less frequently, less brutally, and with less deaths. There's less violent crimes. The reasons for this are a system of law, women's suffrage, cosmopolitanism, education, and (get ready for this) commerce.
So on to part 3.
Market Capitalism's structural goal is growth and maintaining rates of consumption high enough to keep people employed at any given time; employment requires a culture of real or perceived inefficiency and that essentially means the preservation of scarcity in one form or another.
[...]
...and good luck getting a market economist to admit that.
Zeitgeisters want to have a huge robot army that will bash people over the head with a recyclable aluminum T-ball bat to anyone who asks for something even remotely luxurious as an iPad because there's not enough to go around. Good luck getting A Zeitgeister to admit this.
See how smarmy this is? No, that's not how a market works. It's not even possible in a market economy because of the possibility of competition that makes such a business model unsustainable without explicit state-sanction monopolization of an industry.
The RBE, RBEM, NLRBE, or whatever the new buzz word is this year for technocratic communism is not a centrally planned system because, according to Merola, it's a "Collaborative Design System" that allows for public feedback into a open source system. I hate to burst your bubble, Dear Leader, but that's not what TZM has been advocating all this time. TZM, when it was still partnered with TVP, has said there will be scientists and engineers from the world's nations and universities who will come together and construct a new state and cities and transition into a totally cybernetic system. You concurred. You concurred for long after the split. Only now you want to change it because you don't like the term "central planning." If you didn't have a problem with that term, you would have never bothered working in the CDS in your movement.
This all sounds fine and dandy when you're going to be implementing software to run an encyclopedia or operating systems for geeks who know what's going on, but not for running an economy. When you talk about having a system that allocates literally all of the world's resources, this becomes a target for sociopaths. If a line in Wikipedia about JFK going to the moon and getting punched by Buzz Aldrin is on Wikipedia for a day, a few people chuckle and it gets fixed. No harm done. If this happens for something like all the world's conflict metals, everyone is fucked for a long time. Sure you could have people monitoring the system and try and correct, but if you get an attack by a group like LulzSec... God, I don't even want to think about it.
Look, open source is great. I love it. I use Linux off and on. I prefer to use free community maintained software as much as the next nerd. To think that just making something open source makes it better and near-perfect is not even remotely accurate. Take the open source Second Life viewer. It's a total piece of shit, all of them. They all run like crap on virtually every computer I've ever used it on. Sure you can point to something like BitCoin which if hacked or exploited, the system can just revert the money back to the rightful owner by a software fix which wouldn't be possible if you just ordered the destruction of a good amount of the world's lithium.
Either way, it's not exactly horizontal planning system as we'll see later on. If the computer network (though decentralized in structure) comprises of a centralized AI system that decides what can be made and what may not be made.
Look, open source is great. I love it. I use Linux off and on. I prefer to use free community maintained software as much as the next nerd. To think that just making something open source makes it better and near-perfect is not even remotely accurate. Take the open source Second Life viewer. It's a total piece of shit, all of them. They all run like crap on virtually every computer I've ever used it on. Sure you can point to something like BitCoin which if hacked or exploited, the system can just revert the money back to the rightful owner by a software fix which wouldn't be possible if you just ordered the destruction of a good amount of the world's lithium.
Either way, it's not exactly horizontal planning system as we'll see later on. If the computer network (though decentralized in structure) comprises of a centralized AI system that decides what can be made and what may not be made.
...like Wikipedia without the moody administrators.
Or like TZM's moody global coordinators and moderators too? Didn't think so.
Price, property [sic] and money translate subjective demand preferences into semi-objective exchange values.Sigh. No. Prices translate production costs too. This is important, you can't leave this out. You also just can't say, objectively, that because you don't think something has much value than you think it should for technical reasons that it's just some cultural bugaboo. Dude, you're using a Mac. Technically, it's overpriced hardware with a closed source OS. You could, technically speaking, have a much faster, more reliable PC laptop with an open source OS like any of the Linux distros. Cheaper too! But who am I to say it doesn't have more value to you than it does me? I guess I don't understand the value of being a hipster. :/
...prices embrace, very crudely, relates to resource scarcity and labor energy.
No, no. No. No, no, no. No, no. No. Prices communicate resource scarcity, production costs, and value. There's more to production than just "labor energy." You have capital goods, supporting infrastructure, research and development, logistics, advertisement...etc. Prices also reflect, and this is really, really, really, really, important, perceived value.
Let's say that collectively, we all agree that a pile of iron ore, some buckets rubber sap, a barrel of crude oil, and some copper water is worth 100 utils. That means that we agree that the utility of this stuff to us is worth "100" as they are. Now let's say we whip it up into a car and we spent 200 utils doing so. Buying tools, paying people..etc. total price to build 300 utils. But a car has more utility as a car than the raw resources, and we are willing to pay 900 utils. That means they we created 600 units of utility. Now let's say we whipped up the same stuff into a shit moped that just sits there and looks ugly because the crappy eco-friendly recyclable engine sucks 200 utils. Now people will only want to pay 50 utils for it. Now we just wasted 250 utils and we're all poorer. Now without the units of utils we won't know, according to ECP, that we've created value or wasted resources.
Do you see how Merola has no idea what the fuck he's talking about now?
Now we get a scientific sounding formula:
Design Efficiency > Production Efficiency > Distribution Efficiency > Recycling Efficiency = Utopia.
But no comment on it yet. ...ok.
Merola throwing this "steady state" economic idea around without understanding what it means ever since the ECP was becoming a thorn in his side. This was because Mises himself described an scenario where the ECP wouldn't apply. The Steady State Economy. Which is the bogus idea that everyone would just make the exact same economic decisions at steady and predictable times. Imagine eating the same thing, using the same technology every day, and doing the exact same thing for leisure every day for the rest of your life. That's the steady state economy. It was an absurdity that Merola picked up on without even bothering to think about.
He then goes into the needs versus wants shit. Let me be clear; there's no such thing as objective human needs. There's concepts of what humans require to stay alive and healthy both mentally and physically, but there's no "needs." People willingly commit suicide (and no, it's not mostly about money they do this.) People actively join services like the military, police force, snow crab fishing..etc which they know their lives could end. Living is a sliding scale desire. Some desire it more than others for a plethora of different reasons. Food, is a basket of goods. You can have tasteless gruel that can be mass produced, or you could have French truffles and wild Russian caviar which can not. Shelter is the same. You can have a bunk on a rotating bed or a small studio apartment or you could have a mansion made of marble. So again with all these sliding scales of desires, there will have to be subjective decisions on what to make. They have to be subjective whims because they're subjective values. Given the hundreds of trillions of different ways to manage all the resources involved in producing them into food and shelter, You'll need all the information that prices provide (more on that later) to forecast those decisions, and you'll need a measuring stick to see if you're creating value or destroying it.
The idea that capital goods are going to be consumer goods is just absurd. What will the 3D printer 'ink' come from? Another 3D printer? No, it will have to be extracted. By a 3D printer? No, by producer capital goods. There's going to be a need for a quarry to get rock and lime to make your cement, iron ore and refinery tools and machines for the metal, and oil and refineries for the plastics.
Again, Merola doesn't know what he's talking about.
He says we can get rid of waste by printing things where we need it instead of shipping it. Only you'll need to ship the "ink" to the printer. What of you have a Montana situation were like a handful people live in the whole state over a large spread? Or a situation like New York which can't sustain it's own local resources for production?
Now we get a scientific sounding formula again:
Design Efficiency > Production Efficiency > Distribution Efficiency > Recycling Efficiency = Utopia.
But no comment on it yet. ...OK.
More stupid nonsense about capitalism. You're only choice is what corporations give you. Ignoring the fact there is open source options and the ability to design your own an compete. The people who know how to design phones most efficiently work for said companies. Us vs. Them nonsense. *yawn*
The military is not totally socialist nor are they efficient. They outsource most of their production and R&D to contractors like Lockheed Martin, Boeing, Beechcraft, ..etc. and they do compete for contracts. They also buy up Hummers, tanks, ships, and aircraft that are gas guzzlers at over inflated prices. Only in Merolaville is the military efficient.
Now for the Design Efficiency, there's no need for a lot of this stuff. For one, if we're going to recycle it, why do we need modular systems? Just recycle it and get a new one with the features you want? Why make it durable when the recycling process will break it down anyway? You're giving it a head start. Why would you have both totally custom 3D printed goods and standardization? Why not have trade-offs?
Now what I've said totally undermines his new NLRBEMCSDEOC ...thing. but here's where I'll make this clear:
Heterogeneous Value Assessment can not work. Why? 3 Reasons:
1. It assumes resources are resources for certain things based on what we know now and how much we have of it. Sure we can know the conductivity of something like copper back in the 50's for making telephone wire, now we use sand which isn't even conductive. Now we mostly use radio waves. Tomorrow who knows what we'll use. A resource is only a resource once we know how to use it and it's only viable once we know if it creates value rather than destroys it. While price will give you a real-time reflection of these production costs and values, the system would need new software upgrades to account for the emergent demand and the recycling of the old. Which, typically comes with development time and some bugs.
Bugs are fine and all if you're going to run a website, but to manage all of the earth's resources... I'm going to pass on that.
2. This new system does not calculate all production costs (costs not in money, but of capital goods extending generations back.) To have plastic, you must have crude oil, which needs to be extracted, refined and shipped all by various machines which is made of a host of other raw resources which were made of other machines made of various resources, which were made from other machines and so on and so on. Prices give you all of that information. 'Heterogeneous Value Assessment' makes no mention of this.
3. A network (even with various local or 'genre' nodes) still will have problems with mètis knowledge. That is (in case you forgot) knowledge that can not be communicated or understood to people not entrenched in it.
Mètis, with the premium it places on practical knowledge, experience, and stochastic reasoning, is of course not merely the now-superseded precursor of scientific knowledge. It is the mode of reasoning most appropriate to complex material and social tasks where the uncertainties are so daunting that we must trust our (experienced) intuition and feel our way. Albert Howard's description of water management in Japan offers an instructive example: "Erosion control in Japan is like a game of chess. The forest engineer, after studying his eroding valley, makes his first move, locating and building one or more check dams. He waits to see what Nature's response is. This determines the forest engineer's next move, which may be another dam or two, an increase in the former dam, or the construction of side retaining walls. Another pause for observation, the next move is made, and so on, until erosion is checkmated. The operations of natural forces, such as sedimentation and re-vegetation, are guided and used to the best advantage to keep down costs and to obtain practical results. No more is attempted than Nature has already done in the region." The engineer in Howard's account recognizes implicitly that he is dealing with "an art of one valley." Each prudent, small step, based on prior experience, yields new and not completely predictable effects that become the point of departure for the next step. Virtually any complex task involving many variables whose values and interactions cannot be accurately forecast belongs to this genre: building a house, repairing a car, perfecting a new jet engine, surgically repairing a knee, or farming a plot of land. Where the interactions involve not just the material environment but social interaction as well-building and peopling new villages or cities, organizing a revolutionary seizure of power, or collectivizing agriculture-the mind boggles at the multitude of interactions and uncertainties (as distinct from calculable risks)
- Professor James C. Scott - Seeing Like A State. 1998. 0-300-07016-0Merola, if you're reading this (and you probably are as you're typing up another bogus legal threat to me) learn what the fuck you're talking about before you comment on it. I don't even adhere to the ECP anymore and the whole time I could help but caress my forehead as you make some of the most eloquent but blatantly retarded statements. Sure, this will pacify your fans who are clueless about the ECP but you won't win any of the people who adhere to the ECP argument, because to them; you're just an ignorant fool who speaks before they listen.
I rest my case.
Tuesday, November 12, 2013
Monday, August 30, 2010
Venus Needs Some Austrians
During my trip to Haiti, I got into a discussion with my fellow volunteers about the financial crisis. Things were going quite well as we all agreed that the rich investment bankers deserved no taxpayer bailout. However, my hopes were dashed when one of the more intellectual guys suddenly declared the problem was capitalism, and that a "resource-based economy" would relieve the world of scarcity.
Apparently this idea is catching on; a reader emailed me the grandiose description of "the Venus Project." Although the people involved are admirably doing what they can to rid the world of injustice, they lack basic knowledge of economics. In the present article, I'll run over some of the biggest gaps in their proposal.
The Venus Project
According to the website,
The Venus Project is an organization that proposes a feasible plan of action for social change, one that works towards a peaceful and sustainable global civilization. It outlines an alternative to strive toward where human rights are no longer paper proclamations but a way of life.
We operate out of a 21.5-acre Research Center located in Venus, Florida.
Resource-Based Economy
For our purposes in this article, the website's section on a "Resource-Based Economy" is much more interesting:
The term and meaning of a Resource-Based Economy was originated by Jacque Fresco. It is a system in which all goods and services are available without the use of money, credits, barter or any other system of debt or servitude. All resources become the common heritage of all of the inhabitants, not just a select few. The premise upon which this system is based is that the Earth is abundant with plentiful resources; our practice of rationing resources through monetary methods is irrelevant and counter productive to our survival.
I am going to be quite critical of the Resource-Based Economy (RBE) in the remainder of this article, so I want to start off on a positive note: I don't believe that these thinkers are wrong in their visions of what life on Earth could be like. Their website is filled with beautiful visions of sea colonies and pollution-free technology, and I agree with them that the world could easily look like this in a few decades.
However, these idealists are wrong to blame our current, dysfunctional world on capitalism or money per se. On the contrary, if everyone respected each other's property rights — meaning there would be no more petty crime, but also no more taxation, military conscription, or drug prohibition — then humanity would become fantastically wealthy, in material terms. (I give just a taste of the potential bounty in this article.)
In fact, in a truly free world, in which billions of people grew up never knowing of theft — let alone of mass murder — the productivity of labor and corresponding standard of living could be so high that, by our present standards, people would seem to be living in a "postscarcity" condition.
Now of course, this technically wouldn't be true, so long as the laws of physics were the same, and so long as the human mind created ever more desires. But consider someone in our real world right now, who goes from living on the streets in Calcutta to being adopted by a middle-class family in suburban America.
When this person goes with his new family into a Costco or a Sam's Club, he enjoys the air conditioning that relieves him from the outside heat. If he has to go to the bathroom, he can do so. He can get a drink of water at the fountain and then he can go throughout the store, eating samples of delectable food. At the end, his adoptive parents might leave the store without having purchased anything. The former beggar from Calcutta would be astounded at all the "free" goods and services he just enjoyed, and he might understandably conclude that America is a land of abundance, whereas India is a land of want.
What I am arguing, then, is that in a truly free world, where we all respected each other's property, the rise in living standards would be analogous to our hypothetical boy who moves from the streets of Calcutta to the suburbs of Maine. In that fantastic world, giving someone a "free" heart surgery might be as cheap as giving someone a piece of gum in our current society.
If such a world really is technologically possible, we should cut the socialist dreamers some slack. Their fault lies not with their vision, but with their plans for achieving it.
Did World War II Disprove the Existence of Scarcity?
The website gives an odd historical illustration of its principles:
A resource-based economy would utilize existing resources from the land and sea, physical equipment, industrial plants, etc. to enhance the lives of the total population. In an economy based on resources rather than money, we could easily produce all of the necessities of life and provide a high standard of living for all.
Consider the following examples: At the beginning of World War II the US had a mere 600 or so first-class fighting aircraft. We rapidly overcame this short supply by turning out more than 90,000 planes a year. The question at the start of World War II was: Do we have enough funds to produce the required implements of war? The answer was no, we did not have enough money, nor did we have enough gold; but we did have more than enough resources. It was the available resources that enabled the US to achieve the high production and efficiency required to win the war. Unfortunately this is only considered in times of war.
Let's think about what the writers mean by saying the United States at the start of World War II "did not have enough money" to pay for the war effort. Presumably, they mean that the American public would never have consented to the explicit taxation (and government borrowing) that would have been necessary for Uncle Sam to persuade resource owners to voluntarily hand over their items to the government.
So what did the federal government do to overcome this "lack of money"? Why, it simply forced American citizens to scale back their own consumption, in order to free up scarce resources and redirect them into war production. Specifically, the Federal Reserve created money out of thin air to lend to the government:
At the same time, the government physically threatened anyone who dared to raise prices above the permissible limits. The result was that the fraction of total output going to the private sector drastically fell during the war years:
Before leaving this section, I should point out that the above chart misleadingly gives the impression that total output went up during the war years. Yet as Bob Higgs points out, this is a statistical artifact of massive government expenditures coupled with price controls. Simply put, the Fed and banking system flooded the economy with new money, raising the "numerator," while the government made it illegal for merchants to raise prices, thus holding down the "denominator." Therefore, "real GDP" figures show a huge burst during the war years, but these numbers are meaningless.
Contrary to the claims of the RBE website, World War II did not illustrate the productive powers of mankind. On the contrary, it showed how incredibly wasteful and monstrous human affairs can become when property rights are systematically violated.
Ignoring the Lessons of the Calculation Debate
Our writers offer little explanation of where this newfound abundance will come from, but they do say this:
As we outgrow the need for professions based on the monetary system, for instance lawyers, bankers, insurance agents, marketing and advertising personnel, salespersons, and stockbrokers, a considerable amount of waste will be eliminated.
This view demonstrates either that the writers have never heard of the socialist-calculation debate or that they failed to learn its lessons.
Ludwig von Mises showed that money prices are not arbitrary; it really means something when a firm suffers a loss. Specifically, when a firm loses money it means that customers are not willing to pay as much for the finished product (or service) as the firm had to spend acquiring inputs. Loosely speaking, then, a firm that loses money is one that takes valuable resources and turns them into something that society values less.
Mises put his finger on the fundamental problem with socialism. If the state owns all the resources, then there can be no market prices for the tractors, kilowatt-hours, barrels of oil, and other things necessary for production. Looking at the various productive enterprises in operation at any moment, the central planners won't have a common denominator for all of the different combinations of inputs going into each one. The planners won't know if a particular car factory "makes sense," because they will just have an enormous stream of data describing the various resources going into the factory, and the amount of finished cars coming out of the factory. These brute facts alone don't tell the planners if they are efficiently using the resources being consumed in the factory.
Returning to the quotation above, our RBE writers don't realize that their world would still require the services of bankers, insurance agents, and advertising personnel. Whether conducted at the individual level, or by "society" through a group of representatives, people would still need to decide how much of their resources to save, and how much to invest in various enterprises. They would also need to decide how to deal with the possibility that key workers could drop dead of a heart attack, upsetting their production plans. Furthermore, even in the RBE utopia, there would still be constant product innovation. Citizens would need to be informed of the new options, so that production decisions could change to reflect the public's desires. Thus we see that even the RBE would require some form of bankers, advertisers, etc.
Competition as a Discovery Procedure
Our writers overlook one of the key insights of Friedrich Hayek when they claim,
Considerable amounts of energy would also be saved by eliminating the duplication of competitive products such as tools, eating utensils, pots, pans and vacuum cleaners. Choice is good. But instead of hundreds of different manufacturing plants and all the paperwork and personnel required to turn out similar products, only a few of the highest quality would be needed to serve the entire population. Our only shortage is the lack of creative thought and intelligence in ourselves and our elected leaders to solve these problems.
Yet as Hayek pointed out decades ago, it is not a given fact what the "highest quality" products are, nor how to create them in the most economical way. Download PDF. Our society currently enjoys very high-quality tools, eating utensils, pots, etc., precisely because entrepreneurs are in constant rivalry with each other, striving to "steal" customers away from each other, through offering better products at lower prices.
Conclusion
Our present world is manifestly unjust. In addition to wars and genocides, there are also pockets of shocking poverty that could be quickly eradicated if only the right social institutions were in place.
Those championing the Resource-Based Economy recoil in horror from our present world, and understandably so. Yet because they have obviously not studied Austrian economics, they have misdiagnosed the problem.
Abolishing money will not solve the world's problems, because money is an indispensable tool to aid in economic calculation. Rather, the way to raise the material standard of living around the world is to foster a universal respect for property rights.
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