Just trying to ungrunch this thread a bit (aka I'm procrastinating). I think its funny when people start making blanket statements about the anti-establishment of austrian economics. I just finished reading the first volume of man economy and state this morning and I thought it was a terrible waste of time because it covered practically everything that my economics program ever taught me about microeconomics. There is a ton within austrian economics that is accepted by the mainstream, including the main purpose of markets. Is their disagreement between austrian economics and macro economics? Yes of course, but thats because there is very little agreement between macro economists on the important issues that austrians comment on.

The austrians are not very rigourous, but they have a lot less to apologize for than many other forms of non-mainstream economic theorists.

Just awful. Completely misunderstanding the posts ITT. You're terrorizing a straw man.

There are no known theoretical limits of central planning.

I have never said anything remotely close to this.

Why do you think even one human entrepreneur's future prediction activity is 1) computable 2) actually computable by a central planner subject to the known laws of physics?

I think everything humans can do (and can be done period) is computable. This is a very, very natural conjecture from math and widely believed to be true. But even if that is not true, I see no justification for any markets are magic type conjectures.

I have no idea what this even means.

So you're quite aware that even a subset of what you've dismissively asserted as fact, several times, is simply conjecture, and that you know you're incapable of proving it. Thanks for letting us know before now.

I see no markets are magic type conjectures ITT.

Heisenberg. How would a central planner "copy" a human precisely enough to see what the human would do, even if what the human itself does is computable?

Any serious person talking about this subject would know these results and what is conjectured based on the theorems. It's again back to why Rothbard et al are not intellectuals, they don't even mention the actual math relevant to the central thesis of papers they write (Why X is not computable by technique Y) because they are simply ignorant of them. It is not because he understands these objections but has counter arguments or thinks that they are not relevant, it's that he is just not a serious author knowledgable on the subjects he is talking about.

Rothbard makes them.

Very confused for multiple reasons. Central planners won't have to do this since free markets can't perfectly simulate another free market to begin with, so it is not an actual requirement of central planning.

And human brains likely don't have any quantum mechanical properties (memories and computations are carried out be classical objects) so any non cloning theorems will likely be evaded. Granted, I am not sure that will make sense to you since why quantum states can't be cloned is different from "Heisenberg".

This thread is incredibly ironic.

Max Raker simultaneously champions "mainstream" economics while also insisting that central planning is possible.

Under a worthless definition of "in principle", perhaps.

In fact, the very same "general equilbrium" models that Rothbard argues against in that article are the ones that economists use to support the thesis "markets are good".

Mainstream economics (if you can really use that term) honestly aren't that different from Austrian economics. Keynesians get a lot of focus but not all mainstream economists are Keynesians.

I remember in my first econ class the professor invoked Austrian Business Cycle Theory by blaming the housing bubble on the Fed's low interest rates.

"There are no known theoretical limits to central planning" but you've never said "anything remotely close" to "central planning can emulate markets"? Dont these two statements contradict each other, wouldnt they suggest that there is either a limit to central planning or central planning can emulate markets?

I would also like to know what economic papers you are referring to when you state there are no theoretical limits to central planning. Has this been proven somewhere that I am not aware of?

As I stated in the last thread, its not a problem of individual calculation, its a problem of calculating over disparate data points. You cannot calculate when you are missing a large majority of the information. Did you read the Hayek essay I left you with in the last thread?

Even assuming that we could emulate a human brain on a computer, that individual central computer planner would have limited access to information within the economy. We dont even need an AI, in current research computational power is not really a problem, its the inability to access all data at all points in time. Suggesting that there are theoretical limits to central planning that markets can over come, the problem is that they are not computational problems and so you dont really appreciate them.

Regarding markets:
Markets are pretty good at lots of things. They are not very good at some things. That they are generally efficient in the vernacular sense but almost never in the economic (Pareto) sense causes more confusion around here than one would think possible.

Regarding Austrians agreeing with mainstream economics:
A distinction should be drawn between mises.org and whatever actual economists there are out there who call themselves Austrians. There's a great deal of evidence that mises.org is stuck in the 1950's -- see, for example, any discussion on this forum. No one should try to learn economics from that site.

Max,

There's probably something very simple I'm missing but in the absence of a market how can a central planner know how much of a good to produce? No matter how sophisticated it is? People have an incentive not to reveal their true preferences and it is my understanding (limited) that it takes the price system to get them to do so. Of course even with the price system there are problems with people not revealing their preferences (see market failure threads) but it at least works somewhat as compared to asking them. Surely even the fastest computer possible can't decide if I should be making ipods or fax machines without market mechanisms?

Which, if the conjecture is wrong, or not applicable, is irrelevant. You really have no idea what the central thesis of his paper is about (the central planner has no way to get the information), which becomes more obvious with every post. Try this one: LEADING INTELLECTUAL ACADEMIC SOCIALISTS HAVE AGREED THAT CENTRAL PLANNING LEADS TO ARBITRARY INVESTMENT DIRECTED BY THE POLITICAL ELITE.



Not that you've quoted from that paper.



Huh?

LOLWUT? You're way off in la-la land here.

If I'm not mistaken, don't large companies, say Fortune 500 companies, represent a larger overall economy than any 'Central Planned' Commie style economy besides the old Soviet Union and China? And if I am mistaken, it's not by much.

Large companies are typically more 'Centrally Planned' than even the worst of the worst old Soviet satellite basket cases. Notice I said more 'centrally planned', and not equivalent in every way... the Commie economy destabilizes for a whole lot of more important reasons than simple planning mistakes.

The point is 'Central Planning' is not caused by governmental interference, governmental interference only exasperates it. The 'Central Planning Defect' is caused by too few people being involved in the planning process, period. Both capitalism and Communism suffer from this defect, it's just a matter of degree. We have just been trained to ignore the 'Central Planning Defect' in the so-called private sector.

The 'Central Planning Defect' is caused by Hierarchy Alone. Focusing on things like governmental interference and/or the old tired "left" vs "right" idiocy is focusing on the complications of the disease, and not the disease of hierarchy itself.

Damn internet just ate my post, lol

To sum, we tried in the last thread to show this to him. What his argument is, is that it has been proven (whatever that means) that algorithms can emulate any calculation problem that is done by humans and since the market is a process of human calculation algorithms should be able to emulate this too. What max fails to understand is that the market is not a process of directed human calculation. It is a process that is a result of human action and not directed human thought. Each individual makes their local calculations but the entire system is not calculated or solved in any mathematical sense. Like evolution we cannot predict the path the economy will take but simply model it and nudge it one way or another through policy, economic models are simply historical descriptions and are not capable of solving all consumer demands at all times.

I would really like at some point for Max to describe to us why he believes we use markets at all if the market problem is solvable by central planners

Nice job using quotes but leaving out words. The real quote was "But to say that modern central planning can emulate markets" which is not remotely close to anything I have said.

There is no known theoretical limit for the shortest amount of proper time it can take for a trip from Earth to Alpha Centauri. That is not remotely close to claiming that modern rockets can get us to Alpha Centauri at all.


Lolz.... if no papers exist clearly showing the limits of central planning exist I am also correct. DUCY?

Mainstream economists will all agree with me that Rothbard's arguments for why central planning is impossible is fallacious. Even if they think central planning is not possible.

Or the only one

Never said markets aren't good. Evolution is good also, but that does not mean that any system that tries to artificially solve some or all of the same problems will not be as good or even better.

I remember having a churro once in Disney Land. It was quite good.

Do I need to go back and quote you in the other thread? You ended up agreeing with me, that "central planning" (for most reasonable definitions) is possible. Granted you seem to have forgot or not really understood what that meant in the first place...

There is no such thing as "local calculations". Whatever these people are doing, they are not gaining anything be being "separate" people or being in a different physical location.

Proof by assertion? None of this has any reason to be true, other than you seem to want it to be.

Lol? I would hope you could atleast figure this out for yourself.

Sorry I wasnt trying to selevtively quote you into a strawman. Does this mean that you believe modern central planning cannot emulate markets? Thats all I'm trying to argue here, I have no interest arguing theoretical future AI planners in this thread.

These papers do exist, along with mathematical proofs. I just dont have time to to dig into a mini research project to prove the limitiations of central planning. Did you read Hayek yet? Its a good place to start and if you really want me to I can dig up mainstream mathematical proofs of market efficiency once I'm done school next week.

It is the duty of a serious author to flesh this out in the paper itself and why Rothbard is not a serious author.

Still not sure if you have read and understood the paper. Can't really go forward here at all until you do. There is a long SMP thread, by the end everybody (who actually read the paper) had accepted that Rothbard was wrong, it was whether or not I was wrong as well about other things.


Which popscience book did you read and assume was what everybody actually thinks on this subject?

For most definitions of "modern central planning" we have alot of empirical evidence it doesn't work that well. The whole subject of this thread is not what can presently be done, but Rothbard's argument that central planning is simply not possible at all.


I did read the Hayek piece. I didn't comment on it yet because it was hard for me to understand as he doesn't seem to make clear and concise claims. I was planning on reading it again before I could make any claims to agreeing or disagreeing with it.

Take your time on posting the links, but I would be interested in reading them (and very surprised) if they are able to do what you say in a mathematical sense.

I agreed with you given an absurd amount caveats that could only be possible in some theoretical future. Ie AIs exist, they can produce infinite entrepenuer AI, they are still neccessary in a post scarcity world, they can psychically determine the true demands of people (getting around the problem of self reporting) and they can measure subjective utility preferences between people.

I have no interest really discussing that anymore because its essentially unprovable until we have entrepenuer AIs. I thought that in this thread we were talking about the current state of technology which is why I came back in. I grunched because I thought this thread was about Adios' amazement and so skipped it for the longest time.

But if something is possible in theory but is not being implemented in practice then there is something lacking in the theory. You can cite as many Turing theorems as you want it doesnt change the fact that we dont have strong AIs in the real world which means you cant apply economic laws from some theoretical future to present day economics.

But to measure their behaviour you actually have to be separate from a vast majority of the phenomenon that you are trying to explain. Thats why economists model and thats why macro economic models are usually completely terrible at making any kind of predictions. There is a system that helps us overcome this measurement problem and thats the price system. It not directed or understood by anyone individual and yet is able to coordinate large groups of people.

If it doesnt work in practice why are you so concerned whether it will work at all ever and for all time? At this point you agreed with the point I was making so I'm not going to continue and argue about something that is not observable.

That was the subject of the paper Rothbard wrote and everybody (but you) were discussing.

As a mathematician, I am very concerned with theoretical limits and some of the deepest results (halting problem) and conjectures (P<>Np) are about what can be done for all time, not just right now. What can be done right now is a relatively mundane question that involves looking up specs.

Pro Tip: If what is being talked out in a thread isn't something you want to discuss, don't post there.

Except the topic is much broader than whatever Rothbard wrote. Focusing on what some marginalized author thinks isnt giving the topic a fair shake even if it was brought up by those that support the marginallized author. Trying to frame the calculation debate as being Rothbard versus the world is pretty disingenuous which is why I felt the need to comment.