How do Socialists respond to the Austrian School's "economic calculation problem" criticism?

[noob]

i think an invisible hand is scratching my crotch

[Not Rocket Science]

no clue, don't know any socialists, but if you know anything about politics or economics, you would realize that all pure systems fail, and that Austrian school emphasizes only half of a healthy economy.
If you think you are going to rely on Austrian OPINION to create a healthy working economy, you'll just keep supporting agendas that lead us to where we are now.... an economy with the working class having no money to spend while the people with the money can't pay it out because they don't need people to build anything.

[- nokilleye -]

Capitalist theorists refer to 'prices' in this argument as if they are organically occurring elements of a product, independent of human thought or action; as if 'price' is something that randomly occurs and is beyond the ability of human to determine. The argument assumes that the fundamental ‘theory of subjective value’ applies without contest and as in all other cases, the capitalist argument or theory is always fatally dependent on this flawed premise.

Value is NOT subjective - Value is objective and this is material fact discovered through scientific methodology. The value of gravity is objectively discovered and measured - Gravity does not apply to each individual in independently interpreted subjective values. The capitalist operation measures and knows its costs, measures and knows its revenues then determines its profits and losses - These are all easily determinable material facts about ‘values’ discovered through scientific objectivity yet capitalist theory asserts that the ‘value’ of ‘price’ is exempt from scientific objectivity. In fact, capitalist theorists have always openly asserted (correctly) that economics in entirety is not a natural science (and therefore exempt from the standards of objective scientific review).

If eight subjects conclude the value of the apple is something other than one apple, does that prove the value of the apple is subjective or does it prove those eight subjects are idiots? The scientist will always discover by objective measurement that the value of the apple is equal to one apple and will disregard the arbitrary superstitious beliefs of random idiots encountered along the way, while the capitalist theorist concludes proof from the arbitrary beliefs of random idiots then claims exemption from scientific methodology and objectivity. Perhaps the objective scientific conclusion of the capitalist theorist is that most humans are random idiots and deserve to be treated as such but only one other discipline of which this author is aware claims that kind of exemption from scientific objectivity. In any event, ‘the theory of subjective value’ is true ONLY in the cloistered and closed context of capitalist theory, while demonstrably and factually FALSE in the actual realm of material reality.

THIS socialist responds to the ‘Economic Calculation Problem’ argument the same way this socialist responds to all superstitious belief: with scientific objectivity.
This socialist calls ‘capital goods’ and ‘objects of exchange’, “the material product of constructive labor action”.
This socialist calls ‘internal transfers’, “distribution of material benefit” and this socialist calls ‘profit’, “material benefit disproportionate to contributory effort”.
This socialist defines ‘coercion’ as something broader in scope and far more complex than mere brute physical force and this socialist defines ‘physical force’ as something that applies to price and wage in equal measure as it may apply to taxation: with scientific objectivity and without arbitrary superstitious exemptions for sentimental favorites.

‘Capital goods’, ‘internal transfers’, ‘objects of exchange’ and ‘subjective values’ are not scientifically discoverable and measurable material facts; they are a series of beliefs dependent on internalized contextualization and protective isolation from external scientific review; they are uncontested assumptions and flawed premises; they are arbitrary superstitious beliefs, and this socialist never argues with esoteric jargon in superstitious contexts; this socialist contests flawed premises and unsupported assumptions with the objective methodology of science.

The ‘Economic Calculation Problem’ is neither a ‘criticism’ nor an ‘argument’, it is a sermon, it is an incantation and a superstitious religious belief, because capitalism in all its mystic and mythological glory is ultimately simply a religion (a violent, tyrannical and punitive religion) just like any other religion that asserts religion is a matter of pure faith and therefore exempt from objective scientific review.

This is the history of economic debate in a nutshell - We may as well be arguing about whether Gandalf in ‘Lord of the Rings’ might just as easily have flown an eagle directly to Mount Doom, cast the ring into the fire and thus avoided the elaborate and unnecessarily complicated story that otherwise spans three volumes of fiction. As long as we maintain context, we can actually engage in relatively substantive arguments but at the end of the day, these arguments and determinations have no relevance with our material reality… unless of course we are stupid or insane enough to model an entire civilization and social order on a work of fiction… which evidently, WE ARE! -but I don’t expect that ought to last forever… just like human sacrifice and the Spanish Inquisition did not last forever…


For JP, Excellent and good fun. My response:
(Quote from your text) “… the "idiots" have vastly miscalculated the actual worth of diamonds and are being duped by their own superstitions.” Dead on the money, you are! -and here is the objective reality with which we will all probably contend one day in the not too distant future: When we are all down to our last gallon of water, for what quantity of diamonds will we trade it? When we run out of water, will we drink diamonds? At a hypothetical point in time at which survival is in question due to low supplies of water, objective material reality proves to us that water possesses the value of survival while diamonds possess a negative value (that value being the effort to collect them precisely because they are rare… in fact, at that time, we will consider dog turds of greater value than diamonds because they are plentiful and easy to find right at our feet). These objective universal values will occur in spite of our most wishful subjective interpretations, and this is, and has always been, our true material reality. Indulging each others’ wishful fantasies in convenient times of plenty does not reality confirm. We can just as surely enforce a very real prohibition on golden rings in our actual material reality because we believe we cannot trust each other with the awesome magical powers of golden rings but this will never prove golden rings actually possess awesome magical powers, it will always only prove that we are delusional idiots. Everything material possesses definable measurable material values, they are objective and beyond subjective interpretation. When I individually interpret the value of the apple as that of two apples, I am not determining the value of the apple, I am simply demonstrably and factually INCORRECT. This is not a circular argument - This is not a cynical, opportunistic or manipulative argument. THIS IS PRECISELY WHAT 'SUBJECTIVE VALUE' MEANS. Don't blame me for the ludicrous context - My context is ludicrous because the ludicrous theory supports it.

For Joe S, (I say this having read only your first paragraph so far): I HAVE demonstrated understanding of the subject matter and this is my understanding: The theories and formulas proposed by von Mises and the like are relevant and applicable ONLY for so long as confined within the esoteric context of capitalist theory and otherwise have no relationship to scientifically observable and measurable material reality.


(P.S. Brilliantly provocative question by Marvin by the way. It's a shame the questioner can't get thumbs up.)

[SammyCal]

Because Socialists think the Austrian School is that place in Vienna with the white horseys.

[Sowcratees]

Joe,

You are funny. You don't feel the absurdity of bragging that you've read Marx, but "obviously" don't accept him? Do you claim to be an expert on Marx after one reading? I think you appear to be a pretentious boob who likes to take shots at Intelligent people in the hopes of appearing to be intelligent yourself. The long speeches don't work on me, my memory is so short I forget what you are discussing before you get to the end. I said you appear to be, so take it easy on me in reply. I am defending my friend on a subjective emotional level. Since you place so high a value on subjectivity, I expect you to praise my reasoning in this case.

Addition to Joe,
Stop, stop, you had me at reasonable. :-)
I was hoping you might notice the tension between arguing subjectivity and its value and expecting you to praise me for reasoning subjectively. You then make my case for me by pointing out that subjectivity and reasoning seem, at least, to be "out of tune", or not in accord. Take a breath now and then and ask a question. I still would wish for you to shorten your answers.
You missed the point that was arrogant in your evaluation of Mr. Marx. You were so lengthy in all else, but here you just read Marx and "didn't agree." That is laughable to me. Kind of like saying, I read Kant and didn't find him convincing. You are probably a much better reader than I am, however. Also, please elaborate on what my "personal attacks" on you were? You are a pretentious boob? At least it is a short sentence.