Economic calculation problem - how serious is it?

[rotting bones]

so, basically..."You there, serf, go laze about and don't finish your daily chores. I crave getting paid by people who crave inefficiency!"

Demand only arises in an inefficient system. If your marble blocks are sitting at the bottom of a mine shaft, you can create jobs to have the poor pull them up to the Acropolis. If the marble blocks are neatly arranged into a temple for the Olympians, this particular job doesn't exist in the economy.

so, a task/job ceases to exist, once it was done once? you're underestimating the percieved need to add expansions/extensions onto the Acropolis/temple, build new temples, etc.

or to just have plenty of extra marble on hand so its easier to access for other projects.

so yeah, I don't see how "yay, we finished our assigned task!" is inefficient.

Bad news if you are a landless worker with sinewy arms.

If you have sinewy arms, you probably aren't being employed anywhere near the marble at any location; you might be charged with feeding the workers, though.

Even if you have enough production to feed everyone, it's an illusion. If you distribute that food to the masses, then that production will no longer be there.

Of course not - it will be among the masses, most likely getting eaten.

So its not really an illusion...unless "production" is a deliberately shifted goalpost.

You are wrong. You don't understand the economy as a dynamic system. Lots of people don't, smart people, professional economists, even Marxists. I didn't around 2016. Like problems in dynamics, the branches of physics, it's very difficult to explain it to someone who doesn't understand it. I'm not sure I have the time right now.

[rotting bones]

Still not going to wipe out all life. Not even going to hit 90%

We are if we keep experimenting for all eternity.

[Ares Land]

They just didn't listen. If you think there's something wrong with my theoretical foundations, that's a real problem unlike a general admonition to take things slowly.

I think what's wrong is overconfidence in your theoretical foundations. I find your ideas interesting, but they have not been tested. Until then, I don't know if they work or not.

And I mean, this is fine! We have to try and do things. But your insistence that your specific ideas are the one and correct answer is a bit surprising.

Even more so is your notion that implementing these will be easy. There is absolutely no way you can turn the US from a market capitalist economy into a socialist economy with everything nationalized and resources allocated by referendum, all that in the four years of a presidential term. Even with full support of firing squads, secret police and labor camps you couldn't.

Testing the idea on a limited scale? Now that's possible. Anticlimatic, I know.

[Travis B.]

They just didn't listen. If you think there's something wrong with my theoretical foundations, that's a real problem unlike a general admonition to take things slowly.

I think what's wrong is overconfidence in your theoretical foundations. I find your ideas interesting, but they have not been tested. Until then, I don't know if they work or not.

And I mean, this is fine! We have to try and do things. But your insistence that your specific ideas are the one and correct answer is a bit surprising.

Even more so is your notion that implementing these will be easy. There is absolutely no way you can turn the US from a market capitalist economy into a socialist economy with everything nationalized and resources allocated by referendum, all that in the four years of a presidential term. Even with full support of firing squads, secret police and labor camps you couldn't.

Testing the idea on a limited scale? Now that's possible. Anticlimatic, I know.

A much more feasible thing would be to deliberately tip the scales towards the formation of worker-owned-and-managed enterprises -- e.g. deliberately unbalance things like government contracting, funding, and taxes to favor worker and worker-consumer cooperatives and punish private capitalists by requiring enterprises seeking government largess to be democratic -- i.e. either worker or worker-and-consumer owned and managed. With enough carrots and sticks, enterprises may willingly become worker or worker-consumer cooperatives.

[WeepingElf]

Maybe such technologies as 3D printing or decentralized renewable energy will usher in a transition to a "prosumer economy" with a renaissance of small-scale businesses. Of course, that needs appropriate political framework decisions.

[rotting bones]

I think what's wrong is overconfidence in your theoretical foundations. I find your ideas interesting, but they have not been tested. Until then, I don't know if they work or not.

These books are based on papers justified by empirical data. I sent you links to some when we first started talking about this.

And I mean, this is fine! We have to try and do things. But your insistence that your specific ideas are the one and correct answer is a bit surprising.

I'm not confident that other ideas are impossible. I only mean to claim that I know the specific alternatives being floated are wrong for the reasons I've been trying to explain. This is because these alternatives don't achieve the same effect as my idea, whereas my idea is chosen to have its effect because of the specific problem it's trying to solve.

I can come up with a different idea right now: Use an AI to anticipate more jobs the electorate will want based on their votes. Personally, I don't trust trust AI tech that much, so I think it's worse at this point in time.

Even more so is your notion that implementing these will be easy. There is absolutely no way you can turn the US from a market capitalist economy into a socialist economy with everything nationalized and resources allocated by referendum

Again, I don't want to convert the economy into a fully non-capitalist system. I want people to have the option to create jobs by vote, to be paid for by government money provided quality checks succeed, etc. I just said so to both you and zompist:

That's what I have been saying I want for years. At one point, I posted a list like this and people still didn't get it.

If you look at my big posts, you will find me saying that I want capitalist activity in the economy too:

I'm not against all capitalism either. I bear no ill will towards whatever markets survive the democratization of the economy, though having them be associated with the state sounds like a bad idea to me.

I want there to be an economic equilibrium between production based on monetary profit and popular acclamation.

, all that in the four years of a presidential term.

I don't think we will succeed in the first iteration. But that doesn't mean we won't achieve something concrete. Project 2025 hasn't fully succeeded by all metrics. That's not to say it hasn't made material gains.

I just think when we have a correct idea, we should try to implement it. We will get enough pushback from the right. We don't need to do their job for them.

Even with full support of firing squads, secret police and labor camps you couldn't.

No human rights violations can be tolerated. Plastering cities with posters of Trump eating dog poo doesn't count as a human rights violation.

Testing the idea on a limited scale? Now that's possible. Anticlimatic, I know.

Because the economy is a board game (abstract system) invented by humans, you can probably reason through most of the effects by thinking about it. I have even posted about some negative effects I anticipate in the Capitalism thread. There might be other, behavioralist consequences that will be revealed by testing.

[rotting bones]

A much more feasible thing would be to deliberately tip the scales towards the formation of worker-owned-and-managed enterprises -- e.g. deliberately unbalance things like government contracting, funding, and taxes to favor worker and worker-consumer cooperatives and punish private capitalists by requiring enterprises seeking government largess to be democratic -- i.e. either worker or worker-and-consumer owned and managed. With enough carrots and sticks, enterprises may willingly become worker or worker-consumer cooperatives.

Doesn't solve the problem:

But they stop hiring employees after a point. Mondragon hired temp workers and exploited them instead. They have to do this to survive. It's the market mechanism that's at the root of the issue.

[Raphael]

Since the discussion, now, seems to be at least partly about the frustrating political ineffectiveness of all too many left-wing movements, and whether anything can be done about it, I think I'll post, tangentially related, one of my favorite Orwell quotes. It's from the last part of The Lion and the Unicorn, and while I like the quote a lot, my main quibble with it is that Orwell apparently thought he was describing a situation typical for 1930s Britain, but I think the quote can be applied to a number of other times and places, too:

A Socialist Party which genuinely wished to achieve anything would have started by facing several facts which to this day are considered unmentionable in left-wing circles. It would have recognized that England is more united than most countries, that the British workers have a great deal to lose besides their chains, and that the differences in outlook and habits between class and class are rapidly diminishing. In general, it would have recognized that the old-fashioned ‘proletarian revolution’ is an impossibility. But all through the between-war years no Socialist programme that was both revolutionary and workable ever appeared; basically, no doubt, because no one genuinely wanted any major change to happen. The Labour leaders wanted to go on and on, drawing their salaries and periodically swapping jobs with the Conservatives. The Communists wanted to go on and on, suffering a comfortable martyrdom, meeting with endless defeats and afterwards putting the blame on other people. The left-wing intelligentsia wanted to go on and on, sniggering at the Blimps [militaristic squares], sapping away at middle-class morale, but still keeping their favoured position as hangers-on of the dividend-drawers. Labour Party politics had become a variant of Conservatism, ‘revolutionary’ politics had become a game of make-believe.

Sound familiar?

[Travis B.]

A much more feasible thing would be to deliberately tip the scales towards the formation of worker-owned-and-managed enterprises -- e.g. deliberately unbalance things like government contracting, funding, and taxes to favor worker and worker-consumer cooperatives and punish private capitalists by requiring enterprises seeking government largess to be democratic -- i.e. either worker or worker-and-consumer owned and managed. With enough carrots and sticks, enterprises may willingly become worker or worker-consumer cooperatives.

Doesn't solve the problem:

But they stop hiring employees after a point. Mondragon hired temp workers and exploited them instead. They have to do this to survive. It's the market mechanism that's at the root of the issue.

Simple solution to the Mondragon problem -- disqualify companies that hire beyond a certain small proportion of temp workers from being counted as 'democratic'.

Anyways, the whole point of tipping the scales to defeat the market mechanism by deliberately punishing private enterprises and favoring democratic ones. If private enterprises cannot get government contracts, tax breaks, and like they will be disfavored regardless of what teh market says. If that doesn't work by itself, tip the scales even further by introducing steep taxes that only private enterprises are required to pay.

[rotting bones]

Simple solution to the Mondragon problem -- disqualify companies that hire beyond a certain small proportion of temp workers from being counted as 'democratic'.

Anyways, the whole point of tipping the scales to defeat the market mechanism by deliberately punishing private enterprises and favoring democratic ones. If private enterprises cannot get government contracts, tax breaks, and like they will be disfavored regardless of what teh market says. If that doesn't work by itself, tip the scales even further by introducing steep taxes that only private enterprises are required to pay.

1. Why punish anyone (except Trump and his cronies)? Why not just provide an alternative if that's sufficient to overcome the problem?

2. As long as your economy provides no alternative to production by monetary profit, you will be subject to the overproduction problem. The economy will be unable to reduce scarcity because the controllers of the production cycle will be terrified of producing more money than they can sell.

[rotting bones]

Maybe such technologies as 3D printing or decentralized renewable energy will usher in a transition to a "prosumer economy" with a renaissance of small-scale businesses. Of course, that needs appropriate political framework decisions.

The current "left"'s support for small business makes me nervous. Small business owners tend to support fascism as a class: https://www.youtube.com/watch?v=RqESHNvmP20 Of course, they can be convinced to support other politics too, but maybe they shouldn't be your primary base of support.

[Raphael]

2. As long as your economy provides no alternative to production by monetary profit, you will be subject to the overproduction problem.

Is there any actual evidence - as opposed to "our Theory says so" assertion - that the overproduction problem exists, or ever existed?

[rotting bones]

Since the discussion, now, seems to be at least partly about the frustrating political ineffectiveness of all too many left-wing movements, and whether anything can be done about it, I think I'll post, tangentially related, one of my favorite Orwell quotes. It's from the last part of The Lion and the Unicorn, and while I like the quote a lot, my main quibble with it is that Orwell apparently thought he was describing a situation typical for 1930s Britain, but I think the quote can be applied to a number of other times and places, too:

A Socialist Party which genuinely wished to achieve anything would have started by facing several facts which to this day are considered unmentionable in left-wing circles. It would have recognized that England is more united than most countries, that the British workers have a great deal to lose besides their chains, and that the differences in outlook and habits between class and class are rapidly diminishing. In general, it would have recognized that the old-fashioned ‘proletarian revolution’ is an impossibility. But all through the between-war years no Socialist programme that was both revolutionary and workable ever appeared; basically, no doubt, because no one genuinely wanted any major change to happen. The Labour leaders wanted to go on and on, drawing their salaries and periodically swapping jobs with the Conservatives. The Communists wanted to go on and on, suffering a comfortable martyrdom, meeting with endless defeats and afterwards putting the blame on other people. The left-wing intelligentsia wanted to go on and on, sniggering at the Blimps [militaristic squares], sapping away at middle-class morale, but still keeping their favoured position as hangers-on of the dividend-drawers. Labour Party politics had become a variant of Conservatism, ‘revolutionary’ politics had become a game of make-believe.

Sound familiar?

The situation wouldn't look quite so hopeless if it weren't the case that, “The best lack all conviction, while the worst are full of passionate intensity.” - W.B. Yeats.

Since when do we have to conduct experiments about what effects giving options to the poor will have on a social level? The rich have no compunctions about taking everything they can.

[Raphael]

Since when do we have to conduct experiments about what effects giving options to the poor will have on a social level? The rich have no compunctions about taking everything they can.

Not sure whom you're addressing there. I'm all for giving options to the poor.

[rotting bones]

Is there any actual evidence - as opposed to "our Theory says so" assertion - that the overproduction problem exists, or ever existed?

You mean other than common sense, the fact that business majors are taught to limit production and the observed fact that literally everyone waits to sell until prices rise on literally everything that can be sold, from articles to shares? Other than that, it's a standard topic in economics accepted by Keynes: https://en.wikipedia.org/wiki/Overprodu ... vitability

Some non-Marxist papers that might be interesting:

Abstract starts with "Overproduction reduces cost of goods sold": https://papers.ssrn.com/sol3/papers.cfm ... id=3054282 Apparently, firms might sometimes deliberately overproduce to lower prices. The tables are after the references.

Overproduction moderates the positive association between aggregate earnings growth and one-quarter-ahead GDP growth in countries: https://papers.ssrn.com/sol3/papers.cfm ... id=3003388

[rotting bones]

Not sure whom you're addressing there. I'm all for giving options to the poor.

Commiserating?

[Raphael]

Other than that, it's a standard topic in economics accepted by Keynes: https://en.wikipedia.org/wiki/Overprodu ... vitability

Some non-Marxist papers that might be interesting:

Abstract starts with "Overproduction reduces cost of goods sold": https://papers.ssrn.com/sol3/papers.cfm ... id=3054282 Apparently, firms might sometimes deliberately overproduce to lower prices. The tables are after the references.

Overproduction moderates the positive association between aggregate earnings growth and one-quarter-ahead GDP growth in countries: https://papers.ssrn.com/sol3/papers.cfm ... id=3003388

Thank you.

[rotting bones]

Thank you.

I think the term "overproduction" suggests we're doing something naughty. But under capitalism, it only means you are producing too much to earn a monetary profit. It doesn't mean more articles are being produced than what's required to satisfy demand in materialist terms.

[Raphael]

But under capitalism, it only means you are producing too much to earn a monetary profit. It doesn't mean more articles are being produced than what's required to satisfy demand in materialist terms.

Ah, that clarifies it. I found it hard to imagine the economy producing more than the people in it can consume.

[rotting bones]

But under capitalism, it only means you are producing too much to earn a monetary profit. It doesn't mean more articles are being produced than what's required to satisfy demand in materialist terms.

Ah, that clarifies it. I found it hard to imagine the economy producing more than the people in it can consume.

If you combine this with the profit motive's determination to keep more money with the company than it pays out to employees, you get the classic Marxist crisis where employees in aggregate don't have enough cash to buy the goods they produced. This explains why even the center-left is desperate to get more money into the hands of the poor. This is what I mean when I talk about raising demand: https://en.wikipedia.org/wiki/Effective_demand