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Tags socialism , worker cooperatives

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Old 27th August 2017, 04:54 PM   #121
HansMustermann
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But here's an even scarier thought: the free market is one big genetic optimization algorithm.

People look at what works (be it products, organization schemes, wages, etc) and try to do what works. Obviously. Nobody goes into business to LOSE money. They try to do what looks profitable, and that has a lot to do with learning from the mistakes and successes of others before them. But they end up with their own ideas and flaws in copying that, so they make dozens of slight variations of what worked before. Some will work better. Most will work worse. The worse variations die out, the better ones thrive.

Then the next wave of entrepreneurs try to copy THOSE, and make their variations of THOSE. Again, the better ones win, the worse ones are discarded.

Repeat.

That's a genetic optimization algorithm without computers.

But the thing is, we're getting VERY good at doing genetic algorithms WITH computers. In fact, computers can do them many orders of magnitude faster. And often better than just calculating an optimal result.

It's not even a new thing. You may have heard of the first computers and Konrad Zuse. Well, that's what his computer was doing. Optimizing airplane wings by trying out minute variations.

Now look at what a big problem of the USSR was, and predicted by the west from the start: calculating prices. The west argued that you can't just guess without a free market how many kopeiks to pay for a bundle of pelts. Lenin argued that you can just calculate it or copy the prices from the west. He was awfully wrong. When dealing with thousands of products and hundreds of millions of people on two continents, no, you couldn't really calculate it.

The best the eastern block could do was essentially fix some arbitrary prices, rather than calculate the right ones. And fixing prices never works.

But throw in a super-computer and enough data, plus the ability to react and adjust its model when things don't sell as planned, and you could probably hit a better target than the free market ever could. We're getting there.

Not saying it's a good thing, nor that it's an optimistic thought, but we're getting there one way or another. At some point, that's what will happen no matter if it's owned privately or by a central planning committee. People will eventually figure out that they can just run a better market simulation, rather than guess and react, when it comes to planning production and prices.
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Old 28th August 2017, 02:01 AM   #122
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Originally Posted by JJM 777 View Post
Hmm, if you want to suggest that morality does not exist at all, then it makes sense to be annoyed when someone makes any comment whatsoever regarding morality.
What I mean by braindead moralizing is that your "analysis" has no intellectual substance.

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Marx taught that the bourgeoisie are morally corrupt, but the working class is morally noble, so all we need is a violent revolution to take power from the bourgeoisie.
He did no such thing. He wasn't braindead, after all.
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Old 28th August 2017, 02:11 AM   #123
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Originally Posted by HansMustermann View Post
But throw in a super-computer and enough data, plus the ability to react and adjust its model when things don't sell as planned, and you could probably hit a better target than the free market ever could. We're getting there.
A modern day smartphone would do to calculate prices for the Soviet economy in real time.

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Not saying it's a good thing, nor that it's an optimistic thought, but we're getting there one way or another. At some point, that's what will happen no matter if it's owned privately or by a central planning committee. People will eventually figure out that they can just run a better market simulation, rather than guess and react, when it comes to planning production and prices.
Why on Earth would you want to run a market simulation? The point about socialism is to optimize the economy so as to efficiently fulfill needs, not to efficiently pander to monied interests as a "free market" does.
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Old 28th August 2017, 02:30 AM   #124
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It's still the same genetic algorithm and on the same space, you know?
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Old 28th August 2017, 02:45 AM   #125
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Originally Posted by HansMustermann View Post
It's still the same genetic algorithm and on the same space, you know?
With a significantly different objective function. For example, under socialism, a homeless person without money would be considered to have needs for shelter and food, whereas under a free market a homeless person with no money is considered not to have any needs.

The similarity is superficial, based on the use of the same word (need) which means completely different things under socialism or a free market. Under socialism needs are intrinsic to people (more aligned with how we'd normally understand the word "need") such as everyone needing food and shelter, whereas under a free market if you have no money then you have no needs. It's why you see people going homeless or even starve in free market economies, having no money they have no needs and hence don't appear on the receiving end of a free market distribution of food and shelter. Whereas in a socialist economy you don't see this (there was no homelessness in the USSR) because a person is still considered to need shelter even if they don't have money.
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Old 28th August 2017, 03:12 AM   #126
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I will grant that the objective function can be different. But that's nothing new for optimization algorithms, and makes no real difference for a genetic algorithm anyway.

So basically you are, of course, right. It just makes no difference for what I was saying.
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Old 28th August 2017, 03:32 AM   #127
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Originally Posted by caveman1917 View Post
> ... just run a better market simulation, rather than guess and react, when it comes to planning production and prices.

Why on Earth would you want to run a market simulation? The point about socialism is to optimize the economy so as to efficiently fulfill needs, not to efficiently pander to monied interests as a "free market" does.
Market simulation, with prices (or other measuring units for materials, energy and working time "cost") helps to calculate the total sum of what is possible to produce. Divide that with the population, you get the average possible production per person. Then people can stop daydreaming about a standard of living which is not achievable, and we can plan what is possible to do. Then we can do it.

Even if you focus on people's "needs", it is possible that you cannot meet them. You need to calculate the materials, energy and working time. Unless you really want to believe in laissez-faire production: factories will produce _something_, and somehow without a careful plan the electricity in circulation will suffice, and the raw materials will suffice, and the working time of labour force will suffice.
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Old 28th August 2017, 03:39 AM   #128
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Originally Posted by HansMustermann View Post
I will grant that the objective function can be different. But that's nothing new for optimization algorithms, and makes no real difference for a genetic algorithm anyway.

So basically you are, of course, right. It just makes no difference for what I was saying.
But at some level you can view almost all human activity (not just economical) as a genetic algorithm for some objective function. Whereas a genetic algorithm is a really good general coarse parameter optimization method, I don't think it's very useful as a framework of understanding for the economy at large. For one, being parameter optimization, a genetic algorithm still requires a model (with some free parameters) to work with.
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Old 28th August 2017, 03:48 AM   #129
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Originally Posted by JJM 777 View Post
Market simulation, with prices (or other measuring units for materials, energy and working time "cost") helps to calculate the total sum of what is possible to produce. Divide that with the population, you get the average possible production per person. Then people can stop daydreaming about a standard of living which is not achievable, and we can plan what is possible to do. Then we can do it.

Even if you focus on people's "needs", it is possible that you cannot meet them. You need to calculate the materials, energy and working time. Unless you really want to believe in laissez-faire production: factories will produce _something_, and somehow without a careful plan the electricity in circulation will suffice, and the raw materials will suffice, and the working time of labour force will suffice.
There's more than enough being produced to fulfill everyone's basic needs (food, shelter, electricity, water, ...). People seem to have this weird idea about a so-called "free market" being "good" as a distribution mechanism. But the only reason a free market can be considered to efficiently fulfill needs is by some highly misleading use of the term "need" - much more accurate would be to say that a free market distributes goods so as to efficiently pander to monied interests.

Hence why a house will get distributed as a second or third home to some rich person while another person is still homeless without even a first home. As far as the free market is concerned the rich person does have a need for that second home (because they back up their demand with money) whereas the homeless person has no need for a home (no money implies no need). That's not how people normally understand the term "need".
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Old 28th August 2017, 04:06 AM   #130
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Originally Posted by caveman1917 View Post
But at some level you can view almost all human activity (not just economical) as a genetic algorithm for some objective function. Whereas a genetic algorithm is a really good general coarse parameter optimization method, I don't think it's very useful as a framework of understanding for the economy at large. For one, being parameter optimization, a genetic algorithm still requires a model (with some free parameters) to work with.
Well, I never said that it doesn't need a model, nor that it was the model. Just that once you have a model and some data, the algorithm can tell you how many people you need to dig up coal, or whether you should allocate more to car production or to furniture production. At which point the problem of planned economies vanishes.
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Old 28th August 2017, 04:15 AM   #131
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Originally Posted by JJM 777 View Post
It wasn't well known to Karl Marx. If the working class all humans formed a universal collective, which is managed with direct democracy, then individual interests would get cancelled out, and the collective would serve "general interest". But such collectives don't exist.
I didn't refer to a universal collective, but to the general interest of members of a trade union or a political party. Such bodies do in fact exist, and can pursue policies based on collective decisions. I am saying that this is, at least in theory, more democratic than personal decisions made by powerful individuals. That is not the same as "all humans forming a universal collective".
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Marx taught that the bourgeoisie are morally corrupt, but the working class is morally noble
Can you illustrate this teaching of Marx by citing the words from his writings that you have in mind?
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Old 28th August 2017, 04:18 AM   #132
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Originally Posted by HansMustermann View Post
I will grant that the objective function can be different. But that's nothing new for optimization algorithms, and makes no real difference for a genetic algorithm anyway.

So basically you are, of course, right. It just makes no difference for what I was saying.
In terms of what is possible no but in terms of what we want the output to be yes.

For most of us i.e. those that do not own the capital today don't want profit to be the end goal because of course that only will affect us as a by-product of the system, we might get lucky we might not. If we don't have our "needs" as the goal of optimisation than all that will happen is the few rich become richer and their numbers decrease.

Don't agree much with caveman1917 but on this he is right, the "free market" serves those that currently hold capital not those that don't.

Trickle down economics is exactly that - the non capital holding population have to exist on a trickle!
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Old 28th August 2017, 04:36 AM   #133
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Originally Posted by HansMustermann View Post
Well, I never said that it doesn't need a model, nor that it was the model. Just that once you have a model and some data, the algorithm can tell you how many people you need to dig up coal, or whether you should allocate more to car production or to furniture production.
There are already algorithms for that, it's called linear programming, you don't need genetic algorithms for that.

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At which point the problem of planned economies vanishes.
There never was a "problem of planned economies". Well, there are obviously problems with pretty much everything, but not a specific problem of a planned economy wrt a free market economy. The planned economy of the USSR is only less efficient than a free market economy by a capitalist measure[*] of "efficiency" - by a socialist measure[**] of efficiency they were much more efficient than the free market economies.

* ie how profitable the entire operation is to the richest layer of society. Letting 100 people go homeless so that a rich guy can have his third massive mansion is considered "efficient" by a capitalist measure.

** ie how well the entire operation succeeds in fulfilling everyone's needs. In the USSR there was no homelessness, poverty, unemployment, etc. This was considered "efficient" by a socialist measure.
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Old 28th August 2017, 04:37 AM   #134
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Originally Posted by caveman1917 View Post
A modern day smartphone would do to calculate prices for the Soviet economy in real time.
Given 12 million variables (in 1983 the USSR had just that) and a thousand, or more, locations to consider, a mere smartphone might not be sufficient.

Cosma Shalizi wrote a nice peace about this over at Crooked Timber: In Soviet Union, Optimization Problem Solves You

Originally Posted by Shalizi
A thousand locations would be very conservative, but even that factor would get us into the regime where it would take us a thousand years to work through a single plan. With 12 million kinds of goods and only a thousand locations, to have the plan ready in less than a year would need computers a thousand times faster.



Computing optimal prices turns out to have the same complexity as computing the optimal plan itself. It is (so far as I know) conceivable that there is some short-cut to computing prices alone, but we have no tractable way of doing that yet. Anyone who wants to advocate this needs to show that it is possible, not just hope piously.
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Old 28th August 2017, 04:46 AM   #135
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Originally Posted by lupus_in_fabula View Post
Given 12 million variables (in 1983 the USSR had just that) and a thousand, or more, locations to consider, a mere smartphone might not be sufficient.

Cosma Shalizi wrote a nice peace about this over at Crooked Timber: In Soviet Union, Optimization Problem Solves You
I know, I read it. It's erroneous in its inclusion of locations and time as required factors in the primary planning mechanism. Locations and time can be decided as a second, more precise, step in the planning process. When the plan spits out, say, demand for 100 tractors and a bunch of stuff so as to produce the tractors, then the people at the tractor factories can arrange among themselves for the specific plan of supplies to be delivered from the people at the tractor-supplies factories. A smartphone would do for the 80's USSR.
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Old 28th August 2017, 04:50 AM   #136
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Originally Posted by Darat View Post
For most of us i.e. those that do not own the capital today don't want profit to be the end goal because of course that only will affect us as a by-product of the system, we might get lucky we might not. If we don't have our "needs" as the goal of optimisation than all that will happen is the few rich become richer and their numbers decrease.

Don't agree much with caveman1917 but on this he is right, the "free market" serves those that currently hold capital not those that don't.

Trickle down economics is exactly that - the non capital holding population have to exist on a trickle!
Indeed. From a planning perspective "profit" does not seem like a sensible objective function, especially when measured in money… which essentially is claims on economic resources.
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Old 28th August 2017, 05:11 AM   #137
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Originally Posted by caveman1917 View Post
I know, I read it. It's erroneous in its inclusion of locations and time as required factors in the primary planning mechanism. Locations and time can be decided as a second, more precise, step in the planning process. When the plan spits out, say, demand for 100 tractors and a bunch of stuff so as to produce the tractors, then the people at the tractor factories can arrange among themselves for the specific plan of supplies to be delivered from the people at the tractor-supplies factories. A smartphone would do for the 80's USSR.
Wouldn't that still mean a new round of calculations for all industries in relation to the transportation sector? And thus, a new round of calculations for anything relating to industries relating to the transportation sector… and so forth (considering the whole input-output matrix).

So, what does "optimal prices" mean if they give rise to (real/physical) bottlenecks in production and deliveries?

I'm not sure prices even are a sensible target for optimization in a planned economy?
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Old 28th August 2017, 05:28 AM   #138
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Originally Posted by lupus_in_fabula View Post
Wouldn't that still mean a new round of calculations for all industries in relation to the transportation sector? And thus, a new round of calculations for anything relating to industries relating to the transportation sector… and so forth (considering the whole input-output matrix).
Yes and no. The central plan is for gross production targets, including transportation. So the plan could spit out a need for trains and trucks (and fuel etc).

Those new rounds of calculations would be for assigning the production targets to specific factories and specific transportation requirements. Those are mostly independent subproblems, the tractor factory only needs to concern itself with the few factories that provide its own inputs. It's really no different from a factory now needing supplies, contacting the supply factory, and contacting the transportation company to get those supplies to them. The calculations don't cascade, they're not calculations on the production matrix, they don't change production - they merely assign it to specific factories and transportation providers.

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So, what does "optimal prices" mean if they give rise to (real/physical) bottlenecks in production and deliveries?
There will always be bottlenecks in any production chain, since a bottleneck is just the element in the chain with the least throughput capacity - there will always be such an element.

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I'm not sure prices even are a sensible target for optimization in a planned economy?
I'd expect a socialist planned economy to minimize labour time as an optimization target.
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Old 28th August 2017, 06:10 AM   #139
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@Darat
Well, as I was saying, I'm just saying that it's possible, not that it has to have the same objective function. The goal of any optimization algorithm is to maximize (or minimize, same idea) SOMETHING. That something is given as a function. You want a different thing maximized, you use another function there.

I'm not particularly fixated on the free market (though I kinda like it). It's more like its proponents make it sound like some magical thing without which nothing works. Kinda like the divine Logos (word) in John. Well, I'm saying it's just a genetic algorithm without computers. We're quickly approaching the point were we can do the same optimization in software. Or, yes, optimize for a completely other objective, if that's more your thing.

@caveman1917
Well, I never said that genetic algorithms were necessarily the best for a given problem. Just that ultimately that's what the free market is: a rather inefficient genetic algorithm, using people instead of transistors. So even in the worst case scenario, we can do just that with a computer.

But, of course, there's nothing to say you can't apply another optimization method instead, if you have a better one.

The point I was trying to make -- apparently not very clearly or successfully -- is not "genetic optimization is teh bestest!!!111eleventeen" not "free market is the bestest!!!111eleventeen", but rather just that the free market (or any other market) is not as special and unique as some proponents make it sound. It's just a way to optimize a certain thing by trial and error. And, worst case scenario, we can just run the same algorithm on a computer.
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Old 28th August 2017, 06:25 AM   #140
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Originally Posted by HansMustermann View Post
I'm not particularly fixated on the free market (though I kinda like it).
I like the idea but only if everyone starts off relatively equally (ie with equal money). Because that seems to me the only way to bring its definition of "need" in line with what I'd consider the term "need" to mean.

It's inherently a good method of resource distribution, since it is based on self-reported needs. The problem is its use of presented money as a substitute for self-reported need. If a homeless guy has 1$ and presents it saying "I need shelter" and a rich guy has 1 million $ and presents it saying "I need a 10th house" then the house will go to the rich guy, because it is more efficient to fulfill a 1 million $ need than a 1$ need with the same resources - he needs it 999,999$ more after all.

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But, of course, there's nothing to say you can't apply another optimization method instead, if you have a better one.

The point I was trying to make -- apparently not very clearly or successfully -- is not "genetic optimization is teh bestest!!!111eleventeen" not "free market is the bestest!!!111eleventeen", but rather just that the free market (or any other market) is not as special and unique as some proponents make it sound. It's just a way to optimize a certain thing by trial and error. And, worst case scenario, we can just run the same algorithm on a computer.
If I were to design such a planning program I'd use GA as well, with a lower-dimensional LP as a "sanity check", so it's not a bad idea. My point was mostly that there was already research into this and methods developed through it.
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Old 28th August 2017, 11:05 AM   #141
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Well, economists talk about "demand" rather than "need". But otherwise I'm not particularly in disagreement with you.
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Old 28th August 2017, 11:19 AM   #142
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Originally Posted by lupus_in_fabula View Post
So, what does "optimal prices" mean if they give rise to (real/physical) bottlenecks in production and deliveries?
Well, to my mind, essentially the optimal prices are the ones that don't.

It's not even a matter of communism vs capitalism. Essentially you have two curves:
- price at which you could produce them, for a given production volume (it's cheaper per unit to produce a million shoes a year than 1000 shoes per year)
- price at which you can sell a certain production volume (most people would buy less shoes if they were much more expensive)

Ideally you want to be somewhere around the point where the two intersect. And obviously within the constraints of how many CAN you produce, etc.

If your price creates a bottleneck, as in you can't actually produce and/or diustribute as many as you'd sell at that price, then obviously you're nowhere near that optimal point. And possibly not even within the constraint space.

So it can't be an optimum, is all I'm saying.
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Old 28th August 2017, 01:58 PM   #143
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Originally Posted by caveman1917 View Post
There's more than enough being produced to fulfill everyone's basic needs (food, shelter, electricity, water, ...). People seem to have this weird idea about a so-called "free market" being "good" as a distribution mechanism. But the only reason a free market can be considered to efficiently fulfill needs is by some highly misleading use of the term "need" - much more accurate would be to say that a free market distributes goods so as to efficiently pander to monied interests.
There is no free market, because there is no free market in money. Therefore, it doesn't make sense to blame the unjust accumulation of wealth on so-called "free markets", but rather on the corruption of money itself.

Quote:

Hence why a house will get distributed as a second or third home to some rich person while another person is still homeless without even a first home. As far as the free market is concerned the rich person does have a need for that second home (because they back up their demand with money) whereas the homeless person has no need for a home (no money implies no need). That's not how people normally understand the term "need".
I agree, demand is described in monetary terms, and does nothing to address real human needs. But as long as you allow elites to create money out of nothing, they will buy all of the real estate with it, and keep you a rent-paying serf. Blaming the phantom of free markets or capitalism does nothing to solve this problem, which is the fundamental mistake of all collectivists.
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Old 28th August 2017, 02:04 PM   #144
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Originally Posted by caveman1917 View Post
** ie how well the entire operation succeeds in fulfilling everyone's needs. In the USSR there was no homelessness, poverty, unemployment, etc. This was considered "efficient" by a socialist measure.
What you failed to mention, is that over a hundred million people were murdered under communism, and the USSR definition of "poverty" was subjective, based on the fact that everyone was equally poor and miserable, rather than objective.

It's pretty easy to get rid of homelessness when you simply murder the homeless, as communists have shown throughout history.
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Old 28th August 2017, 02:49 PM   #145
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Originally Posted by Tippit View Post
What you failed to mention, is that over a hundred million people were murdered under communism, and the USSR definition of "poverty" was subjective, based on the fact that everyone was equally poor and miserable, rather than objective.
Many people were murdered in the USSR, particularly in the thirties, but how many is in dispute. Not everyone was equally poor in the USSR. That is not true at all. Far from it.
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It's pretty easy to get rid of homelessness when you simply murder the homeless, as communists have shown throughout history.
That's not true either. Very poor housing conditions, and gross overcrowding, were extremely common. It is simply not the case that homeless people were murdered to improve the housing statistics. Again, far from it. Crowded communal dwellings were common, or even normal, in the cities; if homeless people had simply been bumped off, the housing conditions of the survivors would have been much better than they in fact were.
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Old 28th August 2017, 04:51 PM   #146
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The overcrowding was there before communism, and in fact was one of the CAUSES of the bolshevik uprising.

Industrialization was kinda concentrated in the biggest cities like Moskow and Petersburg, but the infrastructure and housing kinda didn't follow. Presumably also BECAUSE most of those workers were too dirt poor to buy a home, so *ta-da* almost nobody built homes for them.

Apartments in Moskow averaged almost 9 people per apartment, down from almost 10 in 1882. By way of comparison, around the same 1910's time frame, Berlin averaged about 3.6 people per apartment, Vienna 4.2, and Paris had 2.7.

And those were averages. The well off lived less crowded, while the poor, well, IIRC there are documented instances of 16 workers sharing an apartment. At that point it's not even as much living there, it's hot-bunking in a glorified dorm.

And don't think these were luxury residences either. About a quarter had no running water. Those who had, well, even in Moskow it was a health hazard, and in St Petersburg, well, God help you if you drank the municipal water. Epidemics were common. Moskow averaged around one epidemic of smallpox, typhus or cholera per year between 1883 and 1917. Yeah, in a city with running water in the 20'th century, you could die of bloody cholera from drinking the running water. Infant mortality averaged about 30% (!!!) in Moskow and St Petersburg. And before someone blames it on the times, that's more than double the worst you could find in other western nations.

Again, there was only so much money you could make selling water to those guys, so the infrastructure lagged behind severely.

Again, if anyone missed it, I'm talking about BEFORE the bolshevik revolution.

Now I'm not saying all this to justify Lenin and much less Stalin. I'm just saying that

A) that's not something that communism created, and

B) use your head, man. If anyone started shooting all those excess people to improve housing statistics, the city populations would have IMPLODED and any industry there would instantly stall. For whatever faults the bolshevism had -- and it had plenty -- such losing 2/3 to 3/4 of the city population in one year is NOT recorded anywhere. Even the worst propaganda against them never accused them of outright depopulating Moskow and St Petersburg.
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Old 28th August 2017, 05:59 PM   #147
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Originally Posted by Tippit View Post
What you failed to mention, is that over a hundred million people were murdered under communism
No, no, it was a billion trillion and Lenin and Stalin murdered them all with their bare hands.
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Old 29th August 2017, 12:37 AM   #148
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Originally Posted by HansMustermann View Post
Well, to my mind, essentially the optimal prices are the ones that don't.

It's not even a matter of communism vs capitalism. Essentially you have two curves:
- price at which you could produce them, for a given production volume (it's cheaper per unit to produce a million shoes a year than 1000 shoes per year)
- price at which you can sell a certain production volume (most people would buy less shoes if they were much more expensive)


Ideally you want to be somewhere around the point where the two intersect. And obviously within the constraints of how many CAN you produce, etc.

If your price creates a bottleneck, as in you can't actually produce and/or diustribute as many as you'd sell at that price, then obviously you're nowhere near that optimal point. And possibly not even within the constraint space.

So it can't be an optimum, is all I'm saying.
Yet I think you're talking about two (different) sets of prices, which makes the notion of a single optimum somewhat vague.

It might be easy to calculate some kind of equilibrium price vector for a given set of products – i.e., end-products in the consumer market. That is, you simply find a price vector that solves a given bundle of simultaneous equations (demand equations on one side and supply equations on the other).

But that's only assuming the analysis is about a given set of commodities already produced. It's another ballgame to also include a responding production system, where most products aren't end products in that kind of sense. Many products (some proportion of a single sector's output) are thus sold as inputs to some other production sector. Changing the rate of physical output (as a response to some supply-demand signal) in one sector will change the proportions of that sectors physical surplus vis-à-vis surpluses in other sectors… changing the (relative) prices of production as well.

In short: even though we might find some "optimum" for a given set in the consumer market, it might not be optimal anymore once the whole production matrix is included. It's not necessarily given that we're able to find an optimal solution that satisfies both sets – one set might not satisfy the convexity condition.

That's also one of the reasons mainstream (neoclassical) macroeconomic analysis abstracts away from the whole process of production and simply starts out with a market place where economic agents are assumed to be endowed with products to sell (including a "well-behaved" aggregate production function).
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Old 29th August 2017, 02:16 AM   #149
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Originally Posted by lupus_in_fabula View Post
Yet I think you're talking about two (different) sets of prices, which makes the notion of a single optimum somewhat vague.
The two you highlighter are two CURVES. The optimum is where the two intersect, or around it.

It's not even something I'm proposing, either. It's really basic economics. As in the basics of supply and demand. See for example here http://www.investopedia.com/universi...economics3.asp

Mind you, in real life the two are not straight lines, but i guess straight lines are ok to illustrate it at a 101 kinda level.

Anyway, a planned economy SHOULD also try to match supply and demand. The difference may be that it tries to have the demand more closely follow needs, but it's still basic economics. If you fail even that, you fail epically, no matter if you're planned or not.
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Old 29th August 2017, 03:31 AM   #150
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Originally Posted by Craig B View Post
I didn't refer to a universal collective, but to the general interest of members of a trade union or a political party. Such bodies do in fact exist, and can pursue policies based on collective decisions.
Right. Labour unions of medical doctors fiercely defend the elitistic salaries of their own. Any labour union fiercely negotiates a position as good as possible for their own, trampling the workers of other profesions underfoot if necessary.

The labour union movement was originally supposed to be Leftist, but thanks to its fractioned nature, each for his own good rather than all together for the common good, labour unions have turned out to be fierce enemies of equality between all humans.
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Old 29th August 2017, 03:32 AM   #151
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Originally Posted by caveman1917 View Post
There's more than enough being produced to fulfill everyone's basic needs (food, shelter, electricity, water, ...).
Aha, if "more than enough" is produced, that means we are WASTING energy and resources, so we should optimize the production a bit.

Originally Posted by caveman1917 View Post
People seem to have this weird idea about a so-called "free market" being "good" as a distribution mechanism.
Me, me!

Originally Posted by caveman1917 View Post
But the only reason a free market can be considered to efficiently fulfill needs is by some highly misleading use of the term "need"
I would rather argue that your definition of "need" is vague and misleading.

Ehh, what is your definition of "need", by the way?


Originally Posted by caveman1917 View Post
a free market distributes goods so as to efficiently pander to monied interests.
Or monied needs. Which makes various otherwise uncomparable needs easily comparable and statistically calculable.


Originally Posted by caveman1917 View Post
Hence why a house will get distributed as a second or third home to some rich person while another person is still homeless without even a first home.
Let me rephrase that, to help you understand why it is a good idea to calculate "need" as money:

> Hence why a house will get distributed as a second or third home to PERSON A while PERSON B is still homeless without even a first home.

Assume that money exists, and free market pricing mechanisms exist, but salaries of people have been equalized. PERSON A is not "rich", neither is PERSON B poor. They have the same salary. But they have different personalities, different hobbies, different interests. Hence they have different needs.

PERSON A loves houses. He wants to spend most of his income on houses. Let him do so, as much as is possible with his equalized salary.

PERSON B loves travelling. He wants to spend most of his income on visiting Paris, New York, Rio de Janeiro, Cape Town, Shanghai. He doesn't want a house, if he gets the chance to exchange his house for flight tickets around the world, he will do so. Let him do so, as much as is possible with his equalized salary.

Needs of people with different personalities are so diverse, and so uncomparable with each other, that I cannot imagine any better tool for comparing them than free market pricing mechanisms.
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Old 29th August 2017, 03:37 AM   #152
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Originally Posted by caveman1917 View Post
No, no, it was a billion trillion and Lenin and Stalin murdered them all with their bare hands.
No, that isn't true. What it would be more interesting to know is what you do think happened in the USSR.

It is generally agreed that there was a famine that caused some millions of deaths in 1932-33, resulting from Stalin's agricultural policies. (Not that he necessarily killed any victims personally.) The number of millions is not certain, and the statisticians who analysed the results of the subsequent census were put to death, and their findings suppressed. But certainly some millions died.

Are you saying that you don't accept that? Or are you saying that the famine had some cause which was not the responsibility of the Soviet government?

It is interesting that this should arise in the discussion of a "worker owned and managed economy". On the eve of collectivisation in the USSR, the average peasant selling grain was to all intents and purposes the owner of the land, as well as the worker on it. The bigger estates had been partitioned among the peasants in 1917-18, and by 1928 many previously landless farm workers had received a share of land, however small. So the average grain-selling peasant neither employed labourers nor was employed himself or herself by a landowner.

The effect of collectivisation was to remove ownership and management from these working peasants, and hand it over to state or quasi-state agencies. The peasants lost control of their land and its products and thereafter received wages, largely in kind, in proportion to the annual number of days they worked on a collective farm.

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Old 29th August 2017, 03:40 AM   #153
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Originally Posted by HansMustermann View Post
The two you highlighter are two CURVES. The optimum is where the two intersect, or around it.

It's not even something I'm proposing, either. It's really basic economics. As in the basics of supply and demand. See for example here http://www.investopedia.com/universi...economics3.asp

Mind you, in real life the two are not straight lines, but i guess straight lines are ok to illustrate it at a 101 kinda level.

Anyway, a planned economy SHOULD also try to match supply and demand. The difference may be that it tries to have the demand more closely follow needs, but it's still basic economics. If you fail even that, you fail epically, no matter if you're planned or not.
I guess what I'm trying to say is that, from a macroplanner's point of view, there might not be any practical way of doing that on an aggregate level.

So, you find the equilibrium price for one commodity (#1). Now, what if another commodity (#2) also has an equilibrium price level but which, if effected, would mean that in order to produce that exact volume the production price of #1 would have to change… thus moving the price of #1 away from its equilibrium level?

I was under the impression that by finding the optimal price you imply equilibrium prices for all commodities at the same time, i.e., a kind of general equilibrium. But then one has to ask: What does the supply curve and demand curve in the aggregate sense stand for (supply of what, demand of what exactly)? National net product?
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Old 29th August 2017, 03:41 AM   #154
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Originally Posted by lupus_in_fabula View Post
I'm not sure prices even are a sensible target for optimization in a planned economy?
Prices do matter. No country ever was happy with a zillion percent annual inflation.

Originally Posted by caveman1917 View Post
I'd expect a socialist planned economy to minimize labour time as an optimization target.
Expectations, expectations...

Well, if you were offered a shorter work day or a higher salary (or lower prices in shops have the same effect), which of these would you choose?

A collective of humans would decide one way or the other, if they are stupid enough to allow the majority to decide over the minority. If they are smarter, the people who opt for a shorter work day get what they want, and the people who opt for higher income work longer and get a higher income.

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Old 29th August 2017, 04:11 AM   #155
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Originally Posted by HansMustermann View Post
The two you highlighter are two CURVES. The optimum is where the two intersect, or around it.
Not necessarily, depends on how you define "optimum".
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Old 29th August 2017, 04:14 AM   #156
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Originally Posted by JJM 777 View Post
Needs of people with different personalities are so diverse, and so uncomparable with each other, that I cannot imagine any better tool for comparing them than free market pricing mechanisms.
How unsurprising. Here's your homework: think of and present at least one such system which doesn't use free market pricing mechanisms.
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Old 29th August 2017, 04:20 AM   #157
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Originally Posted by Craig B View Post
No, that isn't true.
No kidding.

Quote:
What it would be more interesting to know is what you do think happened in the USSR.
Feel free to start a thread or continue in that other thread, if you have some claim to make regarding it, and don't forget to have some evidence for it this time.

Quote:
It is generally agreed that
God exists.
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Old 29th August 2017, 04:38 AM   #158
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Originally Posted by caveman1917 View Post
No kidding.



Feel free to start a thread or continue in that other thread, if you have some claim to make regarding it, and don't forget to have some evidence for it this time.



God exists.
You are trolling again. Do try to avoid the repetition methodology this time. No, I don't intend to start a thread on the subject of what you think. I have no claims to make on that topic. And on reflection, having looked at your linked pic, I believe you're wise not to reveal your thoughts either.
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Old 29th August 2017, 04:52 AM   #159
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Originally Posted by Craig B View Post
You are trolling again. Do try to avoid the repetition methodology this time. No, I don't intend to start a thread on the subject of what you think. I have no claims to make on that topic. And on reflection, having looked at your linked pic, I believe you're wise not to reveal your thoughts either.
Yeah, the difference being, in these discussions with you about that, that I don't have "thoughts" - I have conclusions based on evidence. And I also have no interest whatsoever in your "thoughts" if you keep failing to back them up with evidence. So I'm glad we figured this out, and can now get on with the actual topic at hand. And the topic is not the anti-communist ravings of the next right-wing CT nut.
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Old 29th August 2017, 05:07 AM   #160
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Originally Posted by lupus_in_fabula View Post
I guess what I'm trying to say is that, from a macroplanner's point of view, there might not be any practical way of doing that on an aggregate level.

So, you find the equilibrium price for one commodity (#1). Now, what if another commodity (#2) also has an equilibrium price level but which, if effected, would mean that in order to produce that exact volume the production price of #1 would have to change… thus moving the price of #1 away from its equilibrium level?

I was under the impression that by finding the optimal price you imply equilibrium prices for all commodities at the same time, i.e., a kind of general equilibrium. But then one has to ask: What does the supply curve and demand curve in the aggregate sense stand for (supply of what, demand of what exactly)? National net product?
Well, yes, ideally you'd aim for an across-the-board equilibrium. In fact, you kinda must. If you're off in one direction, you have overproduction and fill your warehouses with goods that people can't actually buy, and in the other direction you create a black market and all sorts of corruption.

Same as happens in an ideal free market, really.

When you move to several products that need the same resource (be it steel, or transport capacity, or shelf space, etc), now essentially you have the same two curves for each of those resources. The guys producing steel also need to find an equilibrium point for THEIR production, and so must the guys providing trucks, and so on.

This in turn affects the supply curves of the products that use them. If the price of steel is higher, the supply-side curve for cars also goes up accordingly.

And basically at this point you see why I said you NEED a computer, and why I was willing to throw in the towel and just use a genetic algorithm. Because basically you have to solve a system of a few thousand such equations. There was no way any USSR committee could even theoretically do it by hand.

Easy? No. As you correctly noticed.

But I'm willing to be that we'll get there one way or another. It doesn't need to be a communist revolution or anything. Sooner or later a few major corporations will figure out how to own the market with such simulations, and just react to each other's moves in real time.
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