that was probably the best and most succinct clarification on the pivotal flaw of a truly socialist economy.
just like pure capitalism is unsustainable,socialism is bound to fall on its own assumptions and hubris.
*promote!

Promoting this video and sending it back into the queue for one more try; last queued Wednesday, July 21st, 2010 4:00pm PDT - promote requested by enoch.

This seems like a shaky argument to me. Just because a central authority does not know all the facts about society - I'm reading that as population demographics and needs - does not mean that it cannot attempt to satisfy those areas of need of which it does have knowledge.

His argument seems to rest on the counterpoint that capitalism does know all the facts about a society, by which it gathers this wealth of information through the profit motive. However, may not a central authority also gather feedback from a changing population much like how profit levels works for a corporation? Does a government not change based on the whims of the population?

"Socialism is NOT the problem, not even on the radar. Socialism is what rich people scream if anything threatens their profit." (from the Daily KOS)

How true.

There is no socialism in America.

And the only thing that corporatists fear most about socialism is its success, not its failure.

The notion that nothing in the world will work unless a handful of people profit handsomely at the expense of everybody else...has to be one of the most perverted concepts ever devised.

***

(From the site) What is the human development index (HDI)?

http://hdr.undp.org/en/statistics/faq/question,68,en.html

The HDI – human development index – is a summary composite index that measures a country's average achievements in three basic aspects of human development: health, knowledge, and a decent standard of living. Health is measured by life expectancy at birth; knowledge is measured by a combination of the adult literacy rate and the combined primary, secondary, and tertiary gross enrolment ratio; and standard of living by GDP per capita (PPP US$). For details on how to calculate the HDI, see Technical note 1 HDR 2007/2008 [5,680 KB]and also the interactive HDI calculator and the Excel tool Calculating the indices [61 KB] - interactive tools that help understand the calculation of the HDI.

Website of the UN Human Development Index, Human Development Report 2009 - HDI rankings: http://hdr.undp.org/en/statistics/

***


Invariably it's the democratic socialist countries that are at the very top of the 20 annual UN HDI reports--while Somalia is probably the country closest to a laisse faire, or "Austrian" (failed) state.

Oh snap.

It is possible that they are not talking about America. This may shock, but sometimes people are not talking about America when they talk.

>> ^rougy:

"Socialism is NOT the problem, not even on the radar. Socialism is what rich people scream if anything threatens their profit." (from the Daily KOS)
How true.
There is no socialism in America.
And the only thing that corporatists fear most about socialism is its success, not its failure.
The notion that nothing in the world will work unless a handful of people profit handsomely at the expense of everybody else...has to be one of the most perverted concepts ever devised.

"...profit is the signal which tells us what we must do in order to serve people whom we do not know..."

So only through data from profit, economic success, can we determine the success of something. A doctor that makes money is a good doctor even his patients aren't healed. Or a farmer that makes money is a good farmer even if he grows unhealthy food.

But wait, it's people we do not know. A so called “extended society" where “... we all working for people we do not know and are being supported by people we do not know...”. Who are these people we do not know? Are they off the census or do they live underground in the sewers? How many people don't know their boss, or the company they where they work? I can trace almost anything I buy. Sellers, distributors, transporters, manufacturers, and even the farmers and miners are findable. Look at the lot numbers on an object and you can trace it's history with some work.

I understand that Hayek is taking the epistemological limits and applying them to economics and his “people we don't know” is a representation of the unknown beyond limits of human knowledge. But his fundamental basis is false. An economy is not beyond human understanding. It is not divine power that provides by magic our wants and needs. They economy is made of real people and real stuff.

Maybe later I'll deconstruct Hayek's assertion that “... socialism assumes that all available knowledge can be used by a single central authority.”

>> ^zombieater:

This seems like a shaky argument to me. Just because a central authority does not know all the facts about society - I'm reading that as population demographics and needs - does not mean that it cannot attempt to satisfy those areas of need of which it does have knowledge.
His argument seems to rest on the counterpoint that capitalism does know all the facts about a society, by which it gathers this wealth of information through the profit motive. However, may not a central authority also gather feedback from a changing population much like how profit levels works for a corporation? Does a government not change based on the whims of the population?


To give blankfist a heart attack, I'm going to defend Hayek for a second.

He means that a central authority can never know what everyone's preferences are going to be, in advance. Think of meals. If someone told you that you needed to write down on Jan 1st of each year the exact type and amount of foodstuffs you would want to consume in the coming year, you almost certainly couldn't do it without at some point in that year having to eat something because it was all you had, or not eat something because you'd exhausted your supply of it early.

In theory a totally planned economy would need you to do that with everything you would today spend money on, submit it to the central authority, and then the central authority would allocate resources towards meeting the needed supplies to match those demands for goods and services.

Ultimately though, I agree with the gist of your criticism of his criticism. All his criticism really means is that central planning has a severe information deficiency compared to markets. Not that it's impossible to overcome them, not that markets are perfect at this, not that whatever distribution of resources that result from markets is a just distribution, and certainly not that profit is always an indication of activity that's beneficial to society!

I see one extreme criticizing another here. Like other vices, socialism and capitalism are best when used in moderation.

>> ^kymbos:

It is possible that they are not talking about America. This may shock, but sometimes people are not talking about America when they talk.
>> ^rougy:
"Socialism is NOT the problem, not even on the radar. Socialism is what rich people scream if anything threatens their profit." (from the Daily KOS)
How true.
There is no socialism in America.
And the only thing that corporatists fear most about socialism is its success, not its failure.
The notion that nothing in the world will work unless a handful of people profit handsomely at the expense of everybody else...has to be one of the most perverted concepts ever devised.



Who said he was? Me? Where did I say that?

What he's saying is that socialism doesn't work, period.

He's saying that nothing can work unless there is a profit motive.

The profits in capitalist countries are--to a large degree--controlled by, and funneled to, a small percentage of the population.

To claim that nothing can get done unless those people make a profit is just...not realistic.

It's dogmatic.

EDIT: All right, it did sound like I was just talking about America, but I meant it in a bigger sense. Why, I may have even meant places as grandiose and wonderful as say, Australia.

Nah....

I've read his book, From Freedom to Fascism. In that book, Hayek claims that governments are the best (only) entity which can construct an efficient network of roads; and that governments ought to protect the populace from their own ignorance, and guarantee the people a certain standard of living, and more. So in my estimation, he's a card carrying communist. He doesn't take his concepts to the necessary conclusions.

>> ^zombieater:

This seems like a shaky argument to me. Just because a central authority does not know all the facts about society - I'm reading that as population demographics and needs - does not mean that it cannot attempt to satisfy those areas of need of which it does have knowledge.
His argument seems to rest on the counterpoint that capitalism does know all the facts about a society, by which it gathers this wealth of information through the profit motive. However, may not a central authority also gather feedback from a changing population much like how profit levels works for a corporation? Does a government not change based on the whims of the population?


his main point is the central flaw for a socialist society.just like capitalism and communism have their respective flaws, a truly socialist society will eventually break down due to the weight of its own inadequacies concerning growth,prosperity and innovation.

it is the "selfish quotient" he is referring to."profit" does not always have to represent money but it does represent a singular advantage for one person by means of a beneficial transaction.this is the impetus that will give a person the drive to do work for someone he does not know and therefore does not actually "care" about.he does it for the simple fact he and those he cares about will benefit.so his argument does not exclusively refer to capitalism,his points could just as easily refer to a bartering system.

i am with DFT on this one.no one economic system is without its flaws and if taken to their extremes are all bound to fail predicated on their respective inadequacies.yet if balanced together using their strengths i believe a strong,fair and fruitful society can emerge.

a socialist structure for the basic necessities of human life i.e:education,health and safety while allowing a capitalistic structure for commerce where competition and desire for profit drive innovation and expansion.
of course we will have to get rid if the central banking system due to the fact that they produce nothing,create nothing and are..by definition..a parasitic entity.
so..we execute all the bankers and the lawyers who work for them and re-install the line "for the good of the people" in the corporate charter and look to the stars to colonize the galaxy.
and by law the first starship captain muct be renamed "james tiberious kirk".

thats my take on it anyways.
good night..and good luck.

It's a good segment. Socialists (many videosifters included, such as @ChaosEngine & @enoch) seem to be convinced that either they themselves know all the facts (i.e., narcissism?) or that the "rulers" know all the facts, or that the "majority of the people" know all the facts.

While it may be true that the masses, as a collective of course, are even more intelligent than any individual on his or her own, it is true only when individuals among the masses are acting and thinking independently of one another (i.e., pursuing their own interests as best that they themselves know how to do) and not when they are under the sway of one form of demagoguery or central planning or another.

Political democracy shows the masses in all their foolishness, while market democracy (i.e., anarchy) shows them in all their wisdom. I think it is this distinction that illuminates the discrepancy between the theory of democracy and the practice of democracy.

(Moreover, it seems that, when listening to Hayek -- or Milton Friedman or Rory Sutherland -- one gets the impression that one is listening to a highly intelligent individual. This is quite different from listening to someone like, say, Paul Krugman and other so-called "economists," who are in truth would-be pundits and polemicists and not at all cognizant of the underlying postulates that support their arguments.)

@Trancecoach
once again you call me out on an old and dusty post.
this time to accuse me and (@ChaosEngine this time) of being socialists, narcissists AND knowitalls.when i have been very open and honest with you that economics is not my strong suit.

now why would you do that?
was it that we had the audacity to disagree with you?
the thing that tickles me is that i actually agree with a fairly large percentage of what you post.
my issue is with YOU,personally.

i have attempted to speak as humanly as possible with you.
and what have i gotten in return?
ridicule,accusations,harrassment.
a barrage of passive aggressive swipes at my integrity and intellect.

your childish and rather crude attempts to engage with people who have already made it quite clear you have lost their attention due to your own petulance is really what i find most interesting.

your attentions towards me have become more and more rude and spiteful,yet no apology has been forthcoming.

is this because you are unaware of your own callousness?
or that my feelings are irrelevant?
is it because this is this the internet so who cares?
is it possible i offended you in the past,because if that is the case i am totally unaware of any slight i may have directed towards you and will be happy to make amends.

i know that i have made myself quite clear in regards to how your commentary is perceived by me.so there should be no confusion.

i will not apologize for not giving your words the weight that you may possible feel they deserve for the simple fact you have been exposed on multiple occasions plagiarizing the works of others and attempted to pawn them off as your own.

so if that is the reason...well..sorry...but you are responsible for that perception.has nothing to do with me.

i find it interesting you accuse people of using tactics you,yourself use often.

but to me,in my world..it is the WHY of things that i always find most interesting.

why do you continue to keep calling me out when you obviously find me to be an inferior specimen to discuss your passions?

i may find economics moderately interesting but it is most certainly not a passion of mine.

i have never tagged you in a discussion on the Epistemology and theosophy of the radical jesus and subsequent resurrection mythologies.

no apology for rudeness and passive aggressive swipes at my character,yet you consistently tag me in posts to ridicule and berate.

this is what i find most interesting.

or am i being narcissistic?