Why socialism could not work even with virtuous men.

[The One and Only...]

Originally Posted by Zhukov

I took the time to look into this and what OAO states as the downfall of socialism is a non existant problem.

the main flaw of the whole von Misses argument is that prices are not determined by exchange in the market place (though they are affected by that) but in the last instance (though in a distorted way) do reflect value which is determined by the amount of socially necessary labour time to produce it.

Prices are determined by the interaction of supply and demand, outside of monopolies (which the state essentially is and/or helps create). That is basic economic knowledge that most of us were taught by our 7th grade teachers. Obviously, other factors contribute, such as inflation, labor resources, etc. Listing all the factors would be arbitrary. The point is, a products value is not determined by the necessary labor time to create it. If it tooke me three hours to create a hammer, and three hours to create a computer program, would they be worth the same? No. Thus, the most efficient system to determine value is the pricing system.

if you take for instance a large multinational which controls the production of one type of goods completely from the beginning of the chain to the end, and furthermore produces its own capital goods, then you have the same situation as described by von Misses. however this offers no problem to the multinational. though the products are not priced at the different steps of the production chain, they are still accounted in the general accounting of the company.

The problem is that what their determined value is cannot be as accurate as that in a market system. Centralized planning has never been able to flex itself to changes in demand, supply, labor, etc.

It is a non existent problem.

Hardly.

the other point about von Misses is that he was criticising bureaucratic planning assuming this was the ONLY type of central planning possible, and even though it was from the 20'S, it more acuratley fits in with Stalinist beuracracy - in which case it is not a socialised economy anyway.

A command economy has always been inferior to the free market from an efficiency standpoint. The argument has been that some inefficiency can be tolerated so as to improve the status of the workers, although I maintain otherwise.

If you want to argue guild socialism rather than state socialism, go ahead. I'll just come out with different arguments.