 Okay, this morning, good morning, everyone, first of all. This morning I'm gonna be talking about socialism, which is a hot topic in today's world. But I'll be talking about the reasons why socialism cannot work, cannot become a viable system of production in a highly developed industrial economy. And this argument that socialism cannot calculate and therefore cannot rationally plan production really is the brainchild of Ludwig von Mises, okay? So Mises published an article in 1920, which we've republished as a pamphlet with, there's an epilogue highly recommended by a notable contemporary Austrian comment on this. So I recommend you read that. But in that, what Mises did was to destroy the intellectual foundations of the case for socialism in a very simple and definitive way. And, but beyond that, he actually set the tone for modern Austrian economics. His article is really a breakthrough in the understanding of the functioning of the price system and allocating resources, okay? So it was much, his contribution was much broader than just destroying the case for socialism. In doing so, he gave us a much deeper understanding of why the price system is so important. So let me start from the beginning, because before Mises, you weren't allowed from the time of Marx's writing to Mises' article, you weren't really allowed to talk about socialism and how socialism would work without being branded as unscientific. How did that happen? Well, the first socialists were utopian socialists. There were a few French individuals involved, Charles Fourier, Henri Saint-Simon, and a Scottish guy, Robert Owen. I mean, there were many others. I mean, socialism was sort of a crazy scheme and each person developed their own vision for the future. Then the scientific socialists were led by Marx. They came by later and Marx's whole view was that the utopian socialism's socialists had to be ignored, okay? Utopian socialism was just crazy and it was refuted by the classical economists and Marx wanted to save socialism from the utopian. So let me just give you an idea of what the utopians said and what their views were. We'll take Fourier. I mean, you can tell this guy is up to no good just by looking at him, okay? That's Charles Fourier. So what Fourier believed in was that every all society should be organized into a phallon stares, the French word. It's based on the Greek military formation of phallons. It was very symmetrical and very disciplined and as you'll see, symmetry is sort of a mania for the socialists. They like everything to be symmetrical. So each resident will be able to purchase accommodations according to his or her tastes, okay? So there was not going to be seizing of incomes, but there would be, everybody would be a stockholder in the city. There would be collective production. What would share meals in a communal kitchen? Okay, so he had everything worked out, okay, to the tea. Dirty work would be shared. He even sketched out the phallons there where everybody would live in the city. The 1600 people would live. Notice the symmetry there, okay? It's perfectly symmetrical. He built them or someone built a model of it, okay? So that's a model and you can see, let's see if I have that. Well, it's kind of hard to see. But it's symmetrical, okay? Over here is the common kitchen and then bedrooms and then it comes back out. So it's very symmetrical. So that was the vision of this socialist city. And this is the reality. That's not too far from my house in New Jersey, okay? That is an abandoned phallons there. There was one built, there were a few built in the United States, okay? But let's go on and look at some of Fourier's ramblings and why they so embarrassed Karl Marx. So he said, well, he focused on France. He said the 19th century France was in the fifth stage of advancement, okay? So it passed through different stages, confusion, savagery, patriarchism and barbarity. After passing through two more stages unnamed, it would approach the upward slope of harmony and that was the final stage of utter bliss and that would last for 8,000 years. But then history would reverse itself and it would run back, okay? How did he know this stuff? Well, these socialists in a broad sense were Gnostics. They all believed they had a secret source of special knowledge that no one else shared and that they were gonna share with the world and transform the world according to this knowledge. But it got crazier, okay? So this was a stage of harmony which would last for 8,000 years, okay? The six new moons would replace the one in existence. A halo would surround the North Pole and shower dew on the earth. The seas would turn to Kool-Aid. He used some kind of a juice that was then popular, wasn't Kool-Aid. All violent, I like this, all violent or repulsive beasts would be replaced by their opposites. There would be an anti-lion which would offer itself to be ridden by human beings. There would be anti-chickens which would roast themselves and fly into the mouths of human beings, okay? The human lifespan in this harmonic stage would stretch 144 years, no, exactly 144 years, right? Again, the gnosis, this secret source of knowledge that they harbor in themselves, okay? Five, six of this time would be devoted to unrestrained pursuit of sexual love. So a lot of these early socialists, I mean, their plans were a way of getting women, basically. I mean, they always had free love, okay? It was always part of the schemes, okay? Now what was the response of the classical economists who made great contributions? They weren't Austrians, but they saw some of the problems. So basically, the classical economists pointed out the incentive problem which was phrased as who's going to take out the garbage? Who's going to go down into the mines, risk lung disease and cave-ins, and do the dirty work of mining coal? Who's going to get up at four o'clock in the morning and pick up people's, you know, smelly garbage? Who's going to tend to the sick who may be contagious? How do you get people to do this? Well, the classical economists said, you know, under socialism, there would be no way to produce the right amounts of different goods. You need a price system. That provides a needed incentives, okay? So higher wages would draw people into being coal miners. Higher profits would draw people into building hospitals and so on. Losses would discourage people from producing goods that weren't wanted. The socialists had an answer. They said, well, you know, there'll be a new socialist man that's going to come about, you know, with all these anti-lions and six moons and so on. So human beings will change too, and they'll now no longer work for profit or for monetary income, but they'll work for the good of society. Unfortunately, both sides, the classical economists and the socialists, implicitly assumed that socialism would be, if you get rid of the incentive problem, right? If you get people to do the dirty jobs and so on and to do the jobs that had a stigma to them like being a garbage man or whatever, if you get them to do that, you would be as productive as a capitalist economy. There was no other problem except getting people to do the right things. The question was never asked, what are the right things to do? Okay, and that's where Mises comes in. Now, Marx had a brilliant ploy. Marx realized that no one's gonna take this stuff seriously. He was enough of an economist to see that the classical economists had smashed the utopian socialists. So he said, from now on, he put forth a doctrine of scientific socialism in which no one was to evermore talk about socialism and how it was gonna come about. He said it's gonna come about by the inexorable laws of history, okay? Just as night follows day and day follows night and the sun rises, socialism will grow out of previous systems. So you had classical slave societies out of which grew feudalism, out of which grew commercial capitalism, out of which came industrial capitalism, out of which will come socialism and then sort of final stage of bliss, the stage of communism, and he never really, he said, we can't talk about how they're gonna come about or what they will look like. If you do that, you're unscientific. So he shut up the utopian socialists. He shut up the crazy schemers like Fourier, okay? And they sort of disappeared from the scene. I mean, it was brilliant. You know, it was a brilliant polemical ploy, okay? Brilliant way of making an argument to shut your opponents up, okay? And by the way, you'll note that Marx's great work, he only finished one volume of it, but the three volumes were called, were titled Das Kapital Capital. He only wrote about capitalism and how it was going to collapse. Never talked about socialism and how it was going to work, okay? So what was Mises thesis? Mises thesis was that in a developed industrial, well, first of all, before I even read that, what Mises did then was to challenge this implicit assumption that if you could get people to do the dislikeable jobs or unlikable jobs, you could have a system that was as productive as capitalism. Socialism wouldn't be as productive as capitalism. So he challenged that assumption. And so his thesis was that in a developed industrial economy where there were many complicated production processes and many different kinds of capital goods, the rational allocation of resources is impossible without economic calculation based on real market prices, okay? So he asserted that a socialist economy is impossible because it cannot generate prices for capital goods and natural resources, okay? And he used the word impossible in German and not just impractical or highly unlikely, he said impossible and he meant impossible. Now, some of his followers sort of backed off a little from that and said, well, theoretically it could be possible if we could collect all the knowledge that entrepreneurs possess at any given point in time. And for example, Friedrich Hayek argued in that way but Mises would make another argument. I mean, the knowledge argument is a strong argument but that's not the argument for the impossibility of socialism. So here was Mises' argument. It was direct, it was simple, and it was definitive. He said socialism abolishes private property in the means of production. It was a great book written by a kind of a quasi-socialist named Albert Scheffler who was a German. It's in English, it's called the Quintessence of Socialism. It was written in the 1860s and he wanted to know if you boil down all the writings about socialism, what did they all have in common? What they all had in common was that private property in the means of production, in the non-human means of production would be abolished, okay? So Mises took that as the definition of socialism. He had a good reason for doing that. Now, since the socialist state will become the owner of all these non-human means of production, they can no longer be exchanged, okay? Because you can't exchange with yourself. You have to have people with different values, different expectations of the future in order to have exchanges, right? One person can't set up a game where they exchange with themselves but without exchange, of course, exchange can be done with market prices. And therefore, with no market prices, the state would be unable to calculate the cost of production. They wouldn't know what the cost of producing any particular item would be, okay? Or building any factory or setting up any farm, okay? They wouldn't know the cost. What are they, are they giving up something that's more valuable? But without calculation of profit and loss, socialist planners cannot know the most valuable uses of scarce resources. And therefore, in the strict sense, a socialist economy where you economize resources, remember what economy means, you use resources only in their most valuable or urgent uses, okay? But without calculation of profits and losses, there is no way to determine what are the most urgent and valuable uses, okay? So Mises challenged that implicit assumption that if you could get people to do the dirty jobs, well, then we already know what people should do. He said, no, we don't know what people should do, okay? You need capitalism to understand what the most valuable uses of the different factors of production are, okay? So what is the essence of socialism? It's not a lack of knowledge, okay? The essence of social, the essential mark of socialism, I'm quoting from Mises here, is that one will alone acts. It is immaterial whose will it is. The main thing is that the employment of all factors of production is directed by one agency only. So when he says one will, he doesn't mean necessarily one person. He means possibly a group of people, the central planning board, acting in unison, okay? One will alone chooses the sides, directs, acts, gives orders. The distinctive mark of socialism is the oneness and indivisibility of the will directing all production activities within the whole social system. Why does he insist on that? He insists on that because where there's one will, there can't be exchange. There has to be two wills, driven by two different minds, at least, okay? So notice, not a word about a lack of knowledge or knowledge being dispersed among many people in society and the difficulty of conveying that, collecting that knowledge and conveying it to the central planning agency or what Mises sometimes calls the director, okay? So the preconditions of economic calculation is first that there has to be private property in all stages of production, including capital goods of every kind. Every piece of land has to be owned, all different capital goods have to be owned, okay? And there has to be a freedom to exchange all kinds of goods in all stages of production, okay? Because without that freedom to exchange, prices cannot be determined, prices will not be formed. And there has to be a sound money, a money which holds its value so that people are willing to give and receive it, okay? And hold it for periods of time. But socialism abolishes all of these preconditions and prerequisites of economic calculation. It nullifies economic calculation, okay? So let's take an example. Let's say the director, in Mises's terms, wants to build or is deciding whether or not to build a BMW, okay? Let's say a 500 series BMW, very expensive, popular and high-performance car. He knows how to do it because he had, and Mises says, Mises supposes and grants that the director has access to the best scientific minds, the best engineers, okay? The best technical people. And the director knows all of the resources and their locations and their productivities, okay? Mises grants all of that. So it's not a question of knowledge. He says, well, he certainly knows the production function which is economics, that's a recipe for producing that car, okay? He needs tons of steel, Q hours of machine time, R hours of unskilled labor, it's a number of hours of engineering labor, factory space, kilowatt hour. So he knows all the complicated technical steps to take, okay? And it will be carried out for him by the engineers, by the supervisors and the managers. But the problem is, how can we calculate the cost of producing that car under socialism? Is it worth producing that car? So in the market, all resources, even as I speak, steel engineering services, electricity, factory space, anything that you can conceive of has a price right now at this minute. That price may be different in an hour or maybe even in 10 minutes from now. But right now in this minute, every single productive factor has a price. And therefore, an entrepreneur can calculate the cost of any conceivable project that he or she wishes to carry out, all right? Now, those things don't exist under socialism. There are no prices, there's one will. With one mind, you cannot form prices, all right? So we know that the entrepreneur, if he forecasts that the price of this car, and let's say, there's a two-year production process in coming up with a prototype and eventually producing it, that in two years, he forecasts that the price of this car will be $60,000. Now, he has experience with prices of luxury cars in the past, and he knows what their prices are today, but he has to make a judgment based on what he thinks is going to change between now and when he brings the car to the market in two years, he has to make a judgment about what the price will be two years from now. He knows the cost of production today, okay? Let's say it's 50, I think I'm right here, $50,000, okay? Because all of these inputs have prices, all right? If he believes the car is going to be $60,000, then there's a $10,000 pure profit, okay? We're including all implicit costs in that $50,000, okay? And he will produce the car. If he believes that the price of the car because of the competitors will have reached the mark with other performance cars by then, will be only $45,000, the entrepreneur will decide not to produce that car. Now let's say he produces the car, turns out the price, because he thinks the price will be $60,000, that's he makes that judgment, but it turns out the price is only $40,000. Well, I mean, you know, socialists can say, well, entrepreneurs can make mistakes, look at that. This is a waste, it's a waste of resources. He produced something that's worth to consumers $50,000 in other uses because those resources could have been, you know, had a total price tag of $50,000, so they could have been used to produce goods worth 50,000 to consumers. And yet this entrepreneur took those resources, combined them and produced a good that was worth only $40,000, right? Yes, but we're not saying that that can't happen. The future's uncertain. Capitalism and socialism are on all fours with that, okay? They all can make the entrepreneurs as well as the director can make mistakes about forecasting the future. The point is though that the prices are what guide the entrepreneur. The entrepreneur then knows that he has made a mistake. He'll reevaluate, okay? So we're not saying that there's no uncertainty that capitalism somehow mysteriously or magically abolishes uncertainty. What we're saying is that the entrepreneur knows how to estimate the most urgent wants of consumers, okay? Given the cost of resources, the money prices of resources that he can calculate. Okay, and also, you know, what kind of, take one part of the code, what kind of bumper do you put on the car? Do you use titanium? Okay, well, titanium will save you on costs if the car is in an accident. It won't dent, it's extremely strong material. Or do we use steel? We used to have steel bumpers, okay? And now we have fiberglass bumpers. The fiberglass bumpers crack and they're very expensive to replace. Yet overall, the entrepreneurs can get a higher price for the car with fiberglass bumpers, okay? Or at a higher profit with fiberglass bumpers than with steel bumpers. And that's why they change from steel bumpers to fiberglass bumpers. Who would have thought that it's more economical to use fiberglass for a bumper than steel? Would a socialist director come up with that? It's counter-intuitive. But in fact, the most valuable use of the steel is not as a bumper for the car, but elsewhere, okay? How do we know that? We know that because entrepreneurs can calculate, okay? So I had a friend who I grew up with and she married a literal cowboy in Montana. Has a ranch and they have cattle drives. They still do have cattle drives. And there was some oil on the land. And so one day she called me up and we were talking and she said, I got a new house. I said, really, you moved off the ranch? She said, no, no, no. And she says, we had the house brought to the ranch. I said, what are you talking about? She said, well, we disassembled our other house and then we got a much bigger house. So I still was confused. She said, well, here in the brand, she lives in Montana. So she was here in Montana. Well, first of all, you know Montana is like 12 people, right? So labor is very scarce and has a very high price. So it's actually much cheaper to build your house if you live in Montana in Omaha, Nebraska. The habit built in a factory in Omaha, Nebraska in modular pieces and then trucked on those wide load trucks. That was my friend's house. Trucked up to Montana. So in other words, to use a lot more capital rather than labor to build the house. So to use these machines and this huge factory and they went down and they sold it, the house being built in pieces and then they shipped them up there and only have a few laborers put them together with a lot of machinery. That's not the way you build houses in New Jersey and in Northeast. I mean, that's crazy. Now, would a socialist planner ever figure that out that it's better to build the house 687 miles away from the site where it's going to be located? Course not, okay? But this was figured out because of calculation. They knew the transportation costs. Someone came up with the idea that if you build the factory, it would cost a certain amount of money and they knew how much it would cost and how much the price of the machinery would be to install in that factory, so on and so forth, okay? So that is something that a planner could not figure out but yet this is economizing on resources, producing goods in the cheapest way possible. Now Mises never said and we're not saying that in a very simple economy, you need money prices. You don't, okay? So let's say Graves and Crusoe and let's say he has 12 hours of labor to allocate so and really he's on this island alone and there's an abundance of fish and mushrooms and coconuts and so on. So he just really has to know how to allocate his labor and he can easily do that by simply valuing without prices what's the most valuable use of his labor? So he ranks two fish above three pounds of wild mushrooms and eight coconuts and one sack of berries. So he uses those 12 hours and allocates them to the most important uses, all right? So let's say he wants to know the cost of producing a rabbit. He can know the cost of producing a rabbit which might take six hours to produce, all right? What would he do? He value the rabbit on his value scale, okay? So he compare that to the lowest ranked alternative uses of those six hours, eight coconuts and one sack of berries and he compare them and if the rabbit had a higher value then a better use of that six hours of labor is to produce the rabbit, to hunt the rabbit rather than to gather the coconuts and sack of berries, okay? But that's not the case in a complicated industrial economy, all right? You don't have a few simple production processes that you can engage in that you can compare, all right? So Mises never denied that in certain types of Robertson Crusoe or household economies. Economies, primitive peoples, North American Indians and so on that they could have an economy and economize without prices. Though he does say at one point in human action he says though they would not, they would not economize in the same way as a man who was able to calculate wood. So even if you were alone on an island it would be better to have cardinal numbers, it would be better to have prices, okay? So let's talk a little bit about some criticism, some early criticisms of Mises. Well actually before that, let me just talk a few minutes about the production in the former USSR and how it took place to compare it to the Crusoe economy, okay? Okay, so in the former USSR there was gross output planning. The planning agency was called Ghost Plan. There were real problems, okay? Basically the ministers of the various parts of the economy would give, specify qualities and quantities of goods to the industries and then the commissar of that industry would tell each of the individual firms in that industry what their quotas were, okay? And then they would have to produce, meet their quota. Now this encouraged a system of mutual lying, right? Because you wanted to come close to meeting your quota or just meet it, okay? But you didn't wanna go over it. You don't wanna go under it too much because you got a vacation in Siberia if you didn't meet the quota, okay? But if you went over it by too much, yes, you got a bonus. But then next year, what do you think they would do? The planners would then say, hey, he gave us an underestimate of how much his plant can produce. We're gonna raise that. And of course now, the managers, this is a game theory problem, the managers know that. So of course they lower the projections. They keep them as low as possible. We can only produce 10,000 tons of nails or whatever it might be, okay? And the planner would say, well now you have to produce 15,000. And maybe they could produce 60 to 17,000. So they would meet the 15,000 and get their bonus and whatever. But there was always this pressure to lie, okay? That was the first problem. But it's very difficult to convey, first of all, it's very difficult to convey you don't just want quality, you want quality. It's difficult to convey the many dimensions of quality in a product, even in nails. So for example, you would find under these plans put forth by the central planning agency. And it came to a head in the 1970s and 80s, there would be a lot of houses built and almost complete, but they wouldn't have any roofs on them, okay? Why wouldn't they have roofs on them? Because small building, small roofing nails wouldn't be produced. The reason was that the quota was stated in terms of tons of nails. And it's easy to produce a given ton of a larger nail than his small nails. So what you would have is a lot of large nails but no roofing nails. And so this is a famous Soviet cartoon which it took me years and years to find, I'd heard about it. So he's telling the commas are, comrade, I fill my quote, production quota, made one huge nail, I mean this is in Pravda. There were other problems with this process where they tried to produce without monetary calculation. For example, during the famine in 1980s, there were pictures of tractors rusting in fields of unharvested grain. There were tractors there that had gasoline in them. There was unharvested grain. Where the workers were in the steel mills producing steel to make more tractors, which were not being manned and people were starving. So you had all of these kinds of weird paradoxes going on. Large women did very well in the Soviet Union because everybody had to meet their quota of yards of clothing, of apparel was in the yard. So they didn't make small children's clothing. They didn't make petite women's clothing because it was much easier to meet the quota by just making huge sizes, same thing with shoes. There was a famous story at a Politburo meeting where Khrushchev, when Khrushchev was the head of the party, he berated the chandelier industry. So the Westerners were confused about this. What was happening was that the chandelier industry were making very, very heavy chandeliers because their quotas were in tons, of course, and they were falling down from the doshes, the vacation homes of the comrades and killing some of them. Okay. So all of this weird, another example is when Khrushchev was at the UN, there was a famous moment when he banged his shoe on the table, took over his shoe and banged it on the table. And this is a Ukrainian peasant, mind you. So the shoe may have been really smelly. Smashing it on the table and saying, we will bury you. He meant economic, we will bury the West. So Soviet economists leaned over to some of their Western counterparts and said, we'll bury you, but we're gonna leave Hong Kong, okay? Hong Kong will not go socialist because we need prices. We need to copy the prices, okay? And there's stories of China in the 1950s and 1960s ordering a lot of Sears catalogs just to get an idea of what prices were like. Okay, so then the criticism comes. So the criticism was, look, the Soviet Union left for over 75 years. They had to be doing something right, okay? But as Mises pointed out when he wrote the article in 1920, he says, a single socialist economy, and the Soviet Union already existed, a single socialist economy is like the post office in a sea of capitalist firms. That is the post office isn't completely inefficient. Doesn't completely break down because they can copy capitalist prices and use capitalist technology. So Mises pointed that out. Now, a huge country like the Soviet Union can last for many decades copying Western prices, but those prices are not the exact true prices, right? Those aren't the prices that really give you an idea of the true scarcity of resources and how to use those resources. But eventually the Soviet Union did break down because those prices though they were crude, they could not do the job for allowing the Soviet Union to feed all of its people and to change and use new technology. The only true, and by the way, they also engage in foreign trade. So there was prices, they sold electricity to Eastern Europe, they sold oil, they sold diamonds, they sold gold. So they had some prices that they could use. They also, the only true socialist economy was the economy of war communism, which existed from 1917 to 1921. And their Lenin decreed that no prices would be used, there'd be no accounting in money whatsoever. And what that led to was a breakdown of the entire economy. Workers were stealing parts of machinery, wood and so on to take home to keep warm, to burn. Eventually people in the cities began burning their furniture and then their homes to keep warm. And then they scattered out into the countryside, okay? And they became roving bands of predators on the countryside, just looking for scavenging for animals and berries and so on. So socialism can allow you to run that type of an economy, a very primitive household economy, but it cannot support an industrial economy. And you can see with Pol Pot, the bloody Cambodian regime, they moved people out of the cities onto the land. So now let me just say a word or two about the intellectual division of labor and how that works, okay? So Mises call this the social appraisement process. That's a fancy term, but he also called the intellectual division of labor. And that is the interaction of entrepreneurs, of laborers, of consumers, of producers, everyone interacting, different minds interacting to form a price structure, okay? All of us together form this social price structure and anyone can use this price structure to determine the cost of producing any particular good. And that's how it works. Entrepreneurs are at the center, okay? Entrepreneurs, based on their experience of past prices and of current prices, then make judgments about how supply and demand will change in the future, in the next six months or one year or however long the production process is. And then based on those prices, the prices they think they can get for these products, they then bid for, so the entrepreneurs look forward, look into the future, okay, yeah, there it is. Why isn't it showing on there? Okay, so they look into the future, to the future price of consumer goods and then based on those projections of theirs, some of which are wrong, because they're fallible human beings, they then bid against one another for all the resources in the economy. And the price structure reappears again and again. Every minute we have prices, the use of which allows entrepreneurs to figure out the profits and losses and to run production. We are all involved in this. And that is the intellectual division of labor. Everyone is involved in generating the price structure, consumers, capitalists, entrepreneurs, and laborers, all these different minds, okay? And prices then are a genuine social phenomenon. That word is misused quite a bit, what does social mean? Social usually means what someone wants, that is like the word community. If someone is lobbying for a higher tariffs to keep out foreign steel, because they'll say, well it contributes to social welfare because homemade steel will serve us well if there's a war. Okay, they used to make that argument, the sugar industry made that argument during World War II or before World War II, if we're preparing for a war, we have to keep out foreign sugar because we need sugar and candy bars to give energy to the soldiers. They made a stupid argument. I guess it was right after World War II. They made an argument like that. Now that the Cold War was dawning, they were saying, well, we need sugar for, and so Americans to this day pay three to four times the world price of sugar. And that's why we have bad tasting corn syrup in our soda pop and in candy bars, okay? So, as I said before, the price system or the price structure allows entrepreneurs to compute money costs of any conceivable production process, okay? And compare those costs to the anticipated prices. And they tend, now entrepreneurs tend to be right about things at any given time. There are a few that are making mistakes because there's a selective process. The ones that continually make mistakes are weeded out. All right, so let's just say a few words. I guess I got about five more minutes about some of the Marxist responses, okay? So in Germany, there were some naive socialists that tried to respond to Mises in the 1920s. The first one, one of the first responses, well, why do we need money prices? We can calculate in kind, okay? And the person that advanced this argument was the fanatical Marxist Otto Neurot. And he said, look, we just have to add up resources in their natural units, tons of steel, kilowatts of electricity, gallons of paint. This guy didn't go to elementary school. You can't add apples and oranges. There's no common denominator, okay? So that was one of the responses. Second response was, well, we can calculate with labor hours, labor hours are homogeneous, okay? Well, no, they're not genius, okay? It ignores the differences in quality of labor. For example, McDonald's cashiers are not the same quality workers as software engineers who are not the same quality as brain surgeons. LeBron James is not the same quality basketball player as a 12th man on the bench. So the hours themselves of these different people's labor are not homogeneous. They can't be added together. Plus, this argument leaves out the fact that capital and land resources are also scarce. So how do you account for land or capital goods, okay? Because the more capital goods that workers work with, the more productive they will be. So their hours will be more productive than the hours of identical workers working with fewer machines. Workers working with tractors will be more productive. Their labor hours will be more productive than workers working with horse-drawn plows, okay? And then, assuming the more sophisticated one was, let's just simply do this. What we'll do is we'll tell the capitalist manager, the capitalist managers of the firms that have just been socialized. We'll tell them, do what you did today, tomorrow, when socialism starts, first day of socialism, do exactly what you did the day before. This worked the same way. But that assumes the economy is what? Complete stationary, complete static, doesn't change over time. There's no changes in technology or available resources. There's no change in people's tastes for different goods. The whole point of having, yes, you could have a socialist economy filled with robots, okay? But the whole point of having an economy is to continually adjust production to changes that are going on, okay? I'm gonna stop here. There's some sophisticated arguments that I could have gotten into, but we'll stop here. Thank you very much.