Hayek On Socialism

atomicdogg34
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Hayek On Socialism

the main reason why socialism, or any centrally planned economic system, cannot work:

 

 

 

 

Proof FDR was a tyrant and a POS: Executive Order 9066

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I feel like I've been Rick

I feel like I've been Rick Rolled.  Sad

 

 

Everything makes more sense now that I've stopped believing.


atomicdogg34
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mellestad wrote:I feel like

mellestad wrote:

I feel like I've been Rick Rolled.  Sad

 

 

 

LOL

 

damn sorry

 

maybe im too much of an econ geek, when someone says hayek the first thing that comes to mind is FA hayek

Proof FDR was a tyrant and a POS: Executive Order 9066

Our country's founders cherished liberty, not democracy.
-Ron Paul


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I tend to agree with you

I tend to agree with you mellestad.

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Never ever did I say enything about free, I said "free."

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atomicdogg34 wrote:the main

atomicdogg34 wrote:

the main reason why socialism, or any centrally planned economic system, cannot work:

Hayek's criticism is directed not against socialism, but against centralized planning. Centralized corporate power has time and time again demonstrated it's destructive power exactly through centralized planning, following much the same doctrines as the most centralized socialist systems of the past - control of legislative bodies for the gain of the few regardless of the external costs for the society. This is not surprising, because after all corporations are state endorsed entities, often founded on governmental research, subsidized and promoted by the government.

While detailed planning is impossible, the argument that you can have NO manner of planning is absurd. Guidelines and goals are a sort of a plan and are very valid social constructs that must be respected more than profit. Why? Because we don't want to have tens of thousands of tons of oil spill into the Mexican gulf on account of profit optimization. We don't want to have the world's largest prison population on account of profit optimization. We don't want to endorse slavery on account of profit optimization. We don't want to fight eternal wars on account of profit optimization. Simply said - we don't want to allow rampant destruction of long-term for the benefit of the short-term and we want a certain quality of life maintained - even if it costs us the iPhone.

Sustainability in a complex environment is not zero growth always, but is sure as hell isn't constant growth either. A simple look at complex problem domain search algorithms will give you a quick picture of why a simple solution like "free market" economic system is completely unsustainable.

Logic is a systematic method of coming to the wrong conclusion with confidence.


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I don't disagree with Hayek,

I don't disagree with Hayek, but I don't think many advocates of the modern permutations of socialism would disagree with him either.  As far as I know there aren't many people/nations that advocate a pure socialist system anymore.  Even China has free market elements and some private property rights.

 

So yea, back before pure socialism had been shown to be faulty in the real world he had a good point to make.

 

Edit:  But I'm not an econ geek, so maybe his argument is still applicable.  I know when I talk to hard right conservatives (on other boards) they tend tol think that anything involving socialism must involve the iron boot heel of government crushing free enterprise (and apple pie).

Everything makes more sense now that I've stopped believing.


ZuS
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mellestad wrote:Edit:  But

mellestad wrote:

Edit:  But I'm not an econ geek, so maybe his argument is still applicable.  I know when I talk to hard right conservatives (on other boards) they tend tol think that anything involving socialism must involve the iron boot heel of government crushing free enterprise (and apple pie).

Look, what he said in that video is that the economic landscape is COMPLEX and that perfect navigation in a complex landscape can not be determined beforehand. Well, that's not that spacey - there is actually such a thing as Complexity Theory - YEA BABY a starting point for study right there.

How confused and mindfucked you get from listening to Complex Theory bufs depends on their approach to the theory. I think that the most top-view, understandable and straight forward approach is presented by the computational problem-solvers, aka computer scientists.

Let me give you ten lines that will change your "duh" expression forever when talking about complex problems. Essentially there are three (3) types of problems in general - Mount Fuji, Rugged and Dynamic Landscape (complex) problems. Let's take all three in turn:

1) Mount Fuji - ever seen it? It's a bigass mountain with a single peak. This is a metaphore for a very special type of problems, which are retardedly simple to solve. All you have to do is go up, until there is no more up and stop there. Example: what is the optimal size of a shovel in terms of amount of coal a worker can move in 8 hours? Solution: a shovel containing around 22lbs - a smaller showel will waste some coal in each movement, while a larger one will make movement slow and unstable. Drawn in a graph the solution is a single peak - Mount Fuji problem. Frederick Taylor loved those kinds of problems and I hate his legacy.

2) Rugged Landscape problems are sort of like Rocky Mountains - a lot of peaks and a lot of possible best solutions (highest peaks). Now this type of a problem given time can be solved by a brute force algorithm, but you will have to cover the whole solution space, which might take a few seconds or a few millenia, depending on the problem. Example: what is the minimal combination of genes/regions of DNA responsible for at least 99% of height attribute in humans - this is a static problem with so huge a solution space that going at it brute force is pretty crazy. Instad we might use heuristics - which we will talk about in our next segment!

3) Dynamic Landscape (Complex) problems are basically constantly changing problems. Complex theory bufs will give you a more exhaustive definition, but let's keep it simple here. These problems can not be solved by brute force algorithms at all, unless you can reduce them to either Rugged or Mount Fuji by some mathematical insight. Just to give you an idea of what these problems are like, consider an airline that wants to determine prices for tickets on all their rutes. They hire the best technicians, engineers and air control experts and lock them away for 6 months to figure the perfect prices based on competition, technical specs, etc. They come out of the room 6 months later with the perfect plan for disaster, because during those 6 months the landscape is changed completely. Anyone that works in the air travel business knows that what your competition does has huge effect on your actions and this can not be planned in any sensible manner. Solution: HEURISTICS!

One metaheuristic that will give you a sense of how those work in general is Simulated Annealing. The main idea is to not always go up the hill, as you would in a Mount Fuji type of problem, but go downhill on purpose some times. This way you might avoid staying on a local peak and move to something a bit higher just in the neighborhood. Combined with random jumps to different parts of solution space, this method makes sure that you do not get stuck on a low local peak.

So what has this got to do with economics? A lot. Think about the consequences for Hayek's theory: his argument of impossibility of planing does not consider that we can place guidelines for what kind of results we want from our little economic heuristic - we indeed can define what kind of solutions we are looking for. Our type of economic heuristic aimed solely at optimization of profit, the so-called "free market system", seems to be extremely proficient at providing us with iPhones, social inequality, short term profit for few and long term disaster for everyone.

Think about other implications and posibilities. What if the way we calculate GDP is damaging our economy, because it ignores so many external costs and detrimental factors that in some cases it is completely meaningless? Can we do anything about it? If yes, how?

Logic is a systematic method of coming to the wrong conclusion with confidence.


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Interesting, thanks. Was he

Interesting, thanks.

 

Was he really advocating a totally free system though?  I heard him say total central control is a bad idea, but I didn't see where he advocated for a perfectly free system.

Or does(did?) he advocate a totally free system in general, just not specifically in that video?  Alternately, I don't even remember if I finished the video now, so maybe he did.

Everything makes more sense now that I've stopped believing.


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mellestad wrote:Interesting,

mellestad wrote:

Interesting, thanks.

 

Was he really advocating a totally free system though?  I heard him say total central control is a bad idea, but I didn't see where he advocated for a perfectly free system.

Or does(did?) he advocate a totally free system in general, just not specifically in that video?  Alternately, I don't even remember if I finished the video now, so maybe he did.

Hayek is a classical liberal: freedom for the individual, minimal state intervention, invisible hand, spontaneous order - all that jive. The problem with classical liberalism is that it is at odds with both our experience of economics for the past few hundred years (at least) and some of the recent research in complexity theory. Let's take each in turn:

1) our experience tells us that people organize into interest groups and are prone to creating centralization - the hidden hand might be there, but it isn't what the classical liberalism predict it to be. These interest groups very often prefere short term gain (as is evident from our addiction to growth), which in turn creates whole societal structures geared towards short term consumption. To understand why this is a problem, all you have to do is understand what ANY steady % growth of consumtion of finite resources means in basic mathematics - it means unsustainability which we will not see coming towards us until it is far too late for most of us.

2) complexity theory does indeed show that spontaneous order does occur (check out segragation agent experiments for example), but that the results of this spontaneous order are so often undesireable that we, thinking humans, are compelled to change them

Verdict is not in yet on whether intelligence is a good evolutionary strategy, but we humans don't have the benefit of choosing - we must do better than we have done so far, or experience hardship like never before as we face dwindling resources, overpopulation, our inability to produce food without oil, lack of fresh water etc. We will inevitably get new economic theories and structures - whether we plan and execute it, or have reality execute it for us. Whatever Hayek may think of the former, the latter is a dire prospect.

Logic is a systematic method of coming to the wrong conclusion with confidence.


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He points out that socialism

He points out that socialism will fail because there is no correlation between economic production/non-production and individual reward/punishment. Most socialists seek to eliminate individual reward/failure, thus eliminating all motivation to get ahead economically. Impossible in a world where we compete for survival, resources, sex and transmission of our genetic code.

The problem with planning by a central government are the morons that assume that some politician is "looking out for their interests" just because he promised so to get elected. We're all self serving so this is impossible as well. High levels of accountability and punishments for failure is the only way government can effectively operate.

 

“Religion is regarded by the common people as true, by the wise as false, and by the rulers as useful.” Seneca