Hayek on Socialism

Friedrich Hayek talks about socialism.

For all major works on economic calculation see here
https://sites.google.com/site/malthus0splace/home/socialist-calculation

For a deeper understanding of Hayek's argument on socialist calculation and the knowledge problem see Individualism and the Economic Order in PDF at

http://mises.org/book/individualismandeconomicorder.pdf

Also of interest is the book that inspired Hayek arguments: Socialism by Ludwig von Mises in PDF
at

http://mises.org/books/socialism.pdf

Although a shorter introduction to Mises arguement can be found in Economic Calculation in the Socialist Commonwealth

here as PDF

http://mises.org/pdf/econcalc.pdf

here as you tube video

http://www.youtube.com/user/economicsinonelesson#p/c/85636622A24A114F/0/kuy0F...

As a side note; any viewers who have the objection that what Hayek is talking about is not 'socialism' read pages 33, 34 & 35 of the Road to Serfdom for Hayeks clarification of his use of the term.

Click link for audio of those pages -

http://www.youtube.com/watch?v=Gle2qTOzrpc

This is an excerpt from a longer interview which can be found here

http://www.vimeo.com/4063439

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[UDSS]

Socialism is not about central planning. In fact it is about decentralize planning were people in cities and towns are electing people in workers councils. Beside this interview is very old, pre-1990 I think. In a time when there was no Internet and no social networks.

The old style centralized planned economies did not work, because people had no participation rights. The bureaucratic state decided and people were forced to do what the state wanted them to do. That was not socialism at all.

[Malthus0]

@UDSS Hayek's critique while focusing on central planning was fundamentally about what GR Steele calls non factor market socialism. Central planning was not originally an end in itself but a means of bringing about a society with no exchangeable property rights in production. This is the goal of the socialism Hayek is discussing. If the socialist wants this end & to avoid central planning he must find a way of discovering relative scarcities without market exchange ratio's offering a guide.

[fbonnefoy91]

All he is pointing out is that perfect central planning does not work because there is no information on what to produce. If the authority had all the information available then there would be perfect planning, and that would bring the same outcome of markets under perfect competition. He is just talking in absolutes and that there is no way of achieving a perfect system in reality. That is why we must steer away from extreme ideals (a perfect free market) that are not achievable in reality.

[Malthus0]

@fbonnefoy91 One slightly pedantic correction. You say "If the authority had all the information available". Hayek's point is that some of the information will not be available at all due to its tacit & non articulatable nature, & as he points out in 'Competition as a Discoverty Procedure' may not even exist due to the knowlege of relative scacities being generated by the competitive process itself. Perfect competition is a false standard its assumptions are not just impractical but impossible.

[pawlo881012]

@pawlo881012 also, china is a "statist" country. it will often be disowned by many capitalists and socialists a like. for example, it may have elections but you are only able to choose from one party. and let us not fall to the fallacy of assuming that it is a pleasant society. chinese from all-over the world would choose to do business even in poor countries over staying in their own country.

[sotirisp16]

Hayek is the Jesus of economics.

[Bleakfacts]

@fbonnefoy91 A gov planning at all is an extreme, because it's not just a lack info but contempt of it. Info being the collective thought of everybody. Business's try to follow people's demands and provide best product possible indicated by profit, but government is like stupid people don't know what's best for themselves.

[Bleakfacts]

@UDSS Elections are centralization. Little more than half or less get decide who is elected to a few positions and they are not constantly held 24/7. In a free society leaders are elected unanimously 24/7 through the buying of products. The value of a leader depends on the number of people who recognizes the value of his/her product for themselves.

[pawlo881012]

@pawlo881012 african countries whose primary income is cotton. therefore, they are unable to compete. Another thing why I am against protectionism is that it is obviously needs a centralized system to impose coercive economic policies. For example, tariffs require coercive entities to be done. and then we go back to hayek's arguments against it. :)

[pawlo881012]

@pawlo881012 government spending and that will most likely mean an increase in tax. that in turn would create a disincentive for firms to hire people from your country and even build factories in your country. That maybe one of the reasons why firms turn to out sourcing and why many firms build factories in china and hire chinese people. 2. it provides 'unfair competition". For example the cotton industry in the US is heavily subsidized that it can be sold at a price a lot lower than that of..

[pawlo881012]

@pawlo881012 .. they too can be cause harm to society. also, they too can be coercive. as I pointed out earlier in my comments. Also, I am still not convinced that protectionism is really good in the long run. for the reasons that people are paying more than they have to. and can shelter poorly manged firms and perhaps co-ops from competition. the other problem is subsidies. Although, it might look desirable it has ill effects both on the country and in other countries. 1. it promotes more...

[pawlo881012]

@pawlo881012 ..false to assume that japan or even africa will be better off if they internalized. the poorest countries are countries with little investment from foreign business. And I think your point regarding "competition and cooperation" is very misleading. Since cooperation co-exist with competition, (tire company is obviously not competing with the automobile company), the real issue is monopoly vs competition. about the unions. again, I am not against them, I just pointed out that..

[pawlo881012]

@pawlo881012 in poor country myself(philippines). although I admit that our economy must not depend primarily on outsourcing and we must mobilize our own industries. And I do agree with the assertion that there are a lot of countries that would be better of if they remain internalized. Countries who are doing great nowadays are countries that export many kinds of things that have a good demand. For example, can we assume that singapore will be better off if they remain internalized. it is also..

[pawlo881012]

@radroatch Sorry because I am quite confused about your assertions about outsourcing. Since you did not draw clear causal connections about outsourcing and effects like currency imbalances, wage disproportions and increased rights(?). plus I am quite frustrated that you have ignored my points about outsourcing, that it gave even the citizens of poor countries the money to purchase things other than food and thus help stimulate the global economy. I am experiencing this first hand since i live...