 So let me just start with pointing out that one of the greatest articles written in the 20th century was written by Ludwig von Mises And it's entitled economic calculation of socialist commonwealth was written in 1920 In German it was translated in the 30s and this art we do have this Article available in a pamphlet form. I recommend that everyone read it Especially there's an epilogue by a modern Austrian economist So that's also worth reading but basically Mises completely destroyed in one fell swoop the intellectual foundations of socialism but he also Indicated what the the actual the important function of the price system Economists up to that point hadn't understood understood that the the the price system or or or the structure of prices or Market prices in general were necessary for economic calculation that without prices there could be no economic calculation So this was the primary function of of the price system. It wasn't to give people incentives to do things people who might you know to have higher prices for doing things that might not be as As Attractive to do as as we'll talk about okay, so the incentive is an incentive function but but the most important function was that of of Economic calculation, so let me just start introduce it very Briefly with the difference between scientific and utopian socialism utopian socialism was the first type of social socialism It was These are some of the individuals who were important utopian socialists They all had their own visions of the future and how the future was unfold on foot would unfold and they all had specific ideas of Precisely what their own socialist utopia would look like and that's why they were called the utopian socialists There was Charles Charles Fourier Henri San Simone two Frenchmen and a Scottish Individual Robert Owen Carl Marx was the one who named them the utopian socialist He on the other hand said we are not utopians and I don't see why himself and his Person who his donor and patron Frederick Engels and and also co-author They they considered themselves to be scientific socialists, okay So let's just take a look at what the utopian socialist said very briefly and we'll focus on Charles Fourier Just looking at him, you know, he's up to no good Right. I mean he's anti-human So that's Charles Fourier he had a very interesting Model of what our future would look like what the future of the world or in his case, France Would look like as a socialist nation Everyone would live in garden cities where there were 15 to 1600 people. I mean he had very specific things But these aren't what what is most interesting? What was most interesting is he actually had it It laid out in his mind every how everyone would live in what was called a Fallon stare Which is based on a Greek military formation. Okay, so he this drawing here is Is the quarters that everyone would live in there would be a common kitchen people would eat together But there were would be hotel rooms in there and this is what it looked like he built a model of it Okay Now there were actually some people who followed him In the US in particular that tried to Build this model or tried to live according to Fourier's model and that's what it looks like So this is this is the the utopia the vision. This is the reality It's actually not too far from my home in New Jersey in mom. It's New Jersey. Okay It's ugly. It's dilapidated and no one lives there now. Of course the whole experiment failed but more importantly he had some Very visionary ideas about what the world would look like He said that 19th century France was allegedly the fifth stage of advancement in human history It had passed through the stages of confusion savagery Patriarchism and barbarity now after passing through two more stages. It would approach the upward slope of harmony That's the final stage where there'd be utter bliss for everyone which would last for 8,000 years You knew it would last for 8,000 years Then history would reverse itself and run backwards all the way to the first stage. Okay So what were some of the Features of of of this stage of utter bliss Which he called harmony the six new moons would replace the one in existence A halo showering gentle dew would circle a north pole The seas would turn to Kool-Aid or some some kind of a juice that they had in in France at the time All violent or repulsive beasts would be replaced by their opposites There would be anti lions which would offer themselves to be ridden by human beings and to be roasted anti chickens This is I mean this is in his writings that would fly fully roasted into people's mouths The human lifespan in this harmonic stage would stretch to 144 years and five six of the time Of course, they were all They were they were all obsessed with free love would be devoted to the unrestrained pursuit of sexual love. Okay five six No more no less um Now how did he know this Every single one of these utopian socialists had something that's called a gnosis Uh, which is a greek word for a secret source of knowledge that only they were privy to No one else could really know it. They had to take His word for it Fourier or saucimo and and these other people now. This was embarrassing to the socialist because the Classical economists even though they weren't we didn't have the Austrian economists yet at this point nearly 19th century Just simply destroyed this whole construction They said basically who's going to take out the garbage under socialism They're still going to be dirty and difficult jobs to do who's going to go down in the mines And and and dig out the coal at great risk to themselves to their health and Risking a possible cave in and so on who's going to get up early in the morning and and take out the stinking garbage that that people have generated um, if everyone You know is is um compensated equally How how are you going to give people incentives to do all the things that are needed to be done? um The socialist and so so the classical economists focused on what we call the incentive problem There wouldn't be the right incentives to produce the right goods that were needed under socialism The socialist said well a new socialist man and woman Would? Eventuate okay, they would come into existence and they would work for the incentives of awards for Their their you know social mindedness for helping the community and and so on um, but both sides both the classical economists who focused on supply and demand That you needed to get the right amounts of goods and to get them in the right places Even though they were right about that They thought that socialism was merely a problem of incentives if the socialist could construct a system of incentives That was like the price system Then in fact the problem socialism would be just as productive as capitalism It was just a question of solving the problem who's going to take out the garbage okay as it was put Um and a socialist claim they could do that they could do that with different kinds of awards and and on um honors and um parades and things like that that honor People that did these things Maybe they were right. Maybe they were wrong about that But that wasn't the real problem Well, anyway, carl marx who was completely embarrassed by these Rantings of furie and and the other utopian socialists um Decided in a brilliant ploy a brilliant rhetorical ploy to call them utopians that these people Do not know anything about the future Okay The future was going to come about In an inexorably there were certain laws of history that were going to unfold and was going to take us into a Socialism and then eventually communism and if anyone tried to talk about what it would look like they were unscientific So everyone had to shut up about what it would look like But trust marx that there would be different stages that would occur And the final stage would be that of of communism a stage of bliss So he called them the inexorable laws of history And and it dictated that that communism would replace socialism. Just as socialism replaced capitalism Just as capitalism replaced feudalism And feudalism replaced Classical slavery the slave states of of of greece and rome So he said these things have happened in the past these stages will continue to unfold according to these laws of history And eventually we'll reach communism. We don't have to talk about communism because We know it's going to come about With according to inexorably according to the laws of history Okay, so this was brilliant because now the utopian socialists were were were just cast aside You know, he said look don't don't listen to them. He said we will have communism everyone will be equal We don't know exactly what it will look like and anyone who talks about it or tries to figure out what what it will look like Is unscientific So it was unscientific to speculate about the future Therefore if you look at marx's writings, none of them are about communism or socialism What was the name of his main work his main three volume work of which he only wrote one and his Patron who paid him was marx was kind of lazy Finished the other two works, you know and they were published posthumously But anyway, his great work was called dos copytoe capital He wrote about capitalism and the contradictions in capitalism that would cause it to collapse And socialism to emerge out of the ruins of capitalism Okay, so marx himself didn't really talk about what socialism would look like So that worked for a while People became fervent marxists They didn't have to accept all this nonsense about anti chickens and so on flying into their into their mouths. Okay They were now on the side of science We look and we see that there were these stages of um of society One that followed the next Which seemed to be inexorable and that this would continue into the future Now mesis challenged The idea that the only thing that differentiated capitalism from socialism at least up to that point was that socialism Had no way or has not had not shown any way of of solving the incentive problem. Okay so mesis Introduced what we call an impossibility thesis He said that look if we have a developed economy that has many complex and long Processes of production to produce different things even a pencil if you've read the the article eye pencil Um is the result the product of a very complex and long An intricate a process of production. He said we're we're such an economy exists um You have to have prices. Okay, you have to have Economic calculation, which is based on real market prices meaningful prices in which People who value something more than what they have the sum of money they're giving up make exchanges with other people who have reverse valuations Okay, without these real exchanges and real prices and markets There is no possibility of economic calculation So mesis conclusion was that a socialist economy is impossible and he used that word Because it cannot generate prices for capital goods and and natural resources Now i wrote an article in 1990 called um mesis as social rationalist and in it i said mesis When he used the word impossible he meant it um because the division of labor depends on on exchange and we'll talk a little bit about this later in the lecture um and i i sent it to marie rothbard and So he wrote back to me and he said even i who was steeped in mesis and a follower of mesis He says even me my my myself. He says i never he says down deep I didn't think mesis really meant that socialism was totally impossible um, he says but now you've convinced me that it is impossible and mesis argument Is definitive Socialism is impossible a socialist economy is impossible. That's not to say that you can't have someone taking over a group of people owning And um commanding the the various factories and land and so on allocating them on their own But you will not get economizing in menger's sense, which we talked about yesterday You you will not be able to have them allocated to the most urgent wants of consumers So what was mesis argument? It was simplicity itself He says socialism abolishes private property and capital goods and natural resources In fact, that is the definition of socialism There was a book written in the 1860s by uh an economist who was a quasi socialist and he says the one thing that All socialist schemes have had up to this point is that they wanted to get rid of private property And that private property in the not in consumers goods necessarily you could own your own clothing and and you could own some household items and so on But you you you weren't able to own the factories the raw materials the land all of that would be collectively owned It would be owned and controlled by one individual or one group of individuals. Let's just call them the central planners So mesis says if you have that situation if you abolish private property in what he called the means of production um Then the problem is that the socialist state becomes the sole owner of these factors of production And they can no longer be exchanged if one person owns all these things they can't exchange them They can't generate money prices Um without exchange therefore there can be no prices and under socialism therefore The state cannot calculate the cost of production of goods Okay, that it produces it doesn't know what the cost of a car is doesn't know what the cost of a bicycle is it doesn't know if it should produce um 20 condominiums or or or three detached houses Okay, because it can't compare the profitability um, and that is why socialist planners cannot know the most valuable uses of scarce resources Socialism is chaos Okay, in in planning what what to produce how to produce where to produce things and so on um, and therefore a socialist economy is impossible and i'll get into more detail about this But let me just this is a quote from mises that's extremely important and that many people have missed even There are many Austrian economists that don't think the central problem of socialism is calculation They think it's the fact that the planners can't have all the knowledge that they need to produce what people want Which isn't true mises assumed as we'll see in a moment That the planners had all the engineers all the scientists at their disposal They had people that would would tell them all the scientific Um formula they needed to produce goods Um, and and that they would have they'd be privy to all the knowledge About resources they would have lists of the resources Their productivities and where they were located mises assumed all that and still said Which is impossible it is impossible to have all that knowledge But even if you had it mises said it would still be impossible for a socialist system to plan socialism would would would would still um Just collapse into chaos So what mises said is the essential mark of socialism is that one will acts alone now it can be a collective will 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 One will alone chooses decides 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 now. Why is he? Why is he emphasizing that so much? Because we're one will acts And owns all the all all the productive resources. There can be no prices. There can be no markets Okay, so that that's the key. It's not that there's that the the minds that are controlling these things don't have enough knowledge Okay, something even more more important than that. There's an even bigger obstacle that they can't generate prices So what are the preconditions of economic calculation? They're threefold and they're very straightforward. There has to be private property not just in consumers goods with some communists and socialists will allow Um, but there has to be private property in all factors of production land labor raw materials all sorts of of capital goods and and tools and instruments Factories and so on all of these things must be privately owned And the people who own them must have the freedom to exchange them with other owners of goods And in that case we will have prices Prices of the factors of production which will allow us then to have a common denominator in which we add up and Summarize the costs of producing anything And we must also have sound money a money that's not controlled by politicians Because the extent to the extent that politicians control money and use it for political purposes use the money supply all through political purposes Um, you get distortions in prices, okay An increase in the money supply causes different prices to rise At at at different speeds and and to different levels. Okay. It isn't a smooth increase in prices Which distorts the price relationships between different goods and therefore It misleads entrepreneurs so Socialism cannot exist cannot allocate resources rationally Because it abolishes all three of these Preconditions and therefore nullifies economic calculation. Okay, so that that's basically his argument Now let's let me let me let me give you an example of what he's talking about here The socialist planners as well as as entrepreneurs in a market society Can consult engineers and scientists and so on come up with what we call a production function Which is simply a recipe recipe about for how to produce any given good So let's say there's a production function for this BMW Socialist planners know it. Okay Um Certain amount of tons of steel certain hours of machine time certain hours of unskilled labor hours of engineering labor Have to be combined together in a factory of a certain space There has to be a certain amount of like kilowatts of electricity And has to be gallons of paint Um And so on and so forth Okay What's what's the cost of producing that car? Well, we know the different resources Which are measured in different physical units, but we can't add up and find a single cost You need a market for that So how can we calculate the cost of producing this car under under socialism? We can't Because there are no prices because the state owns all of those materials It owns all the steel or the paint or the factory space But in a market economy Right now And at every moment in every second That that succeeds this this moment that I'm speaking right now. There are prices for every single Type of a factor of production no matter where they're located So that at any time any one of you if you had some idea about something to produce something you Would know what the cost of production are Okay, or you could make a good estimate of what they would be by the time you've got around to to purchasing these various items Okay You would also know What the the or or you would have to because because of uncertainty of the future you would have to estimate Against these costs what the price of the product would be so in this case of this car Um, we can assume that the cost of the car is $50,000. Okay The that is the sum of the money prices of all of those Um elements that enter into the production function. Okay that you need to produce the car Um, if the price is is going to be $60,000 Then that tells us that if of course you 50,000 to produce that consumers Value those goods in alternative uses at about $50,000 so that if you use those Various capital goods and and and hours of labor and so on and combine them into a this car And consumers willing to pay $60,000 you have taken those those Factors of production and allocated them from a lower valued use to a higher valued use You've benefited society You've taken things that that that will satisfy lower ranked wants And move them to areas where people value them more highly. Okay on the other hand if you Produce this automobile and then sold it ultimately for 45,000 while you spent 50,000 on the inputs Um, that would say that you wasted resources Now do entrepreneurs always Are they always successful? No, they're not always successful. Okay But they have two things one They have a feedback mechanism that tells them whether they're successful or not Whether they're producing the right things or not they earn profits. They have They have economized resources. They have used them for higher valued uses than they were previously Being used for or would have been used for if they didn't intervene and buy them and then produce a car with them Okay, but more than that It's uncertainty pervades both socialist and capitalist economies. Okay Even under uncertainty It's the uncertainty that causes the entrepreneurs to make any errors that they may make But they they they do know what they what they are doing They're allocating the resource to what they believe to be higher valued uses and they they may err in that Uh manner, but but that's certainly true of the the socialist planner too. There's also background uncertainty there Um, but the socialist planner has no way of knowing What may be even if it's uncertain in some sense what may be a better use of the resources He doesn't know whether to produce let's say, um, 10,000 of those cars or um 50 condominiums and and then uh 200,000 bicycles Okay, he has no idea Okay, because he doesn't know he doesn't know how what his costs are what his profits and losses are Okay, also calculation allows firms to determine what technologies lease costly. I mean Um, we could use titanium we could put titanium bumpers on cars and make them indestructible um But the cost of of doing that would be so high in terms of other things that we are giving up That it it pays to use fiberglass bumpers not even steel bumpers Because the extra weight in the steel bumper would cause more gasoline to be used for example, so it's not even though the steel bumper Maybe technologically is better for the car will will prevent that Better be better at preventing damage to the car if it gotten to an accident the fiberglass bumper um because of of of a knowledge of prices and costs and so on the fiberglass bumper is more economical more economical way of of um Protecting the car Okay, so now let me tell you a little story. Um, I had a friend who I grew up with who uh Female who um moved to montana and married a cowboy um Well, what was that laughter for I mean? But so she she she moved she moved to montana married a real cowboy like a yellowstone kind of guy They you cut I met him you're kind of scared of him just by you know, I mean He's menacing you know, anyway, um So one day she called me up and so she was on this big ranch And one day she called me up and she uh said I got a new house. I said, oh you moved off the ranch She said no, no, no She said we um, we bought a new house and we had it shipped in and I said, what are you talking about? Um, well, they bought a house so they lived in montana and they bought a house In nebraska. It was put together in a factory in nebraska In modular pieces. So it was built in modular pieces and then those pieces Um were then shipped. I think it was over 700 miles From from Omaha, nebraska to bittle montana where she lives, okay? So because in montana there's like 11 people So labor is very very scarce in montana and therefore Construction workers you have to pay them a high, you know, a very high salary. Okay, um So It's actually so so entrepreneurs found that it was cheaper that you could out compete On site construction like we have in the south here or we have in the northeast Where you have the workers and the machinery come to the site where the house is being built It was actually cheaper to build it 700 miles away in a factory Um in a city where there was more labor labor is cheaper And then to ship it that 700 miles and put the pieces together and and that isn't her that house that I just shown It's not her home, but it's something like that Okay, so that home is a modular home that was put together it's built in pieces and and put together Would a socialist planner ever figure that out? Is that intuitive? Is that something that people say? Yeah, let's build this 700 miles away and then we'll ship it in No, I mean everyone without without a knowledge of prices without entrepreneurs Appraising what people will pay for this house and then looking around and saying, you know what I can build it actually cheaper Uh in in another state, okay That is just an example of of how economic calculation Um leads to success in in economizing resources or allows us to even economize resources All right, we'll skip that All right, so What happened in the in the uh, soviet union? um How did they produce they had something called gross output planning? um and What that did was So so the there was a commas are that was in charge of each industry each industry was made up of a number of different firms They had different managers The industry was given a certain A gross output target a certain target in physical units Okay And then the uh The head of the industry would give each factory a a certain target um, and of course this is based on mutual lying because if It you would tell the commas are we we can only produce um, uh, you know Let's say, um 2,000 tons of nails this year. Okay. Um, that's all we we we were equipped for Um, and now the commas are would know that the manager is lying Because the manager wants to keep the target as low as possible so he can easily meet the target and get some bonus He doesn't want to go too much above the target because the next year, of course, what will the commas are do? He'll raise the target. Okay, so so you're walking a fine line here on the other hand The commas are knows he's lying so he makes the target higher But hopefully you've lied enough that even if he makes it higher You meet it so that you don't get sent to Siberia. So so the whole thing. All right, so that that was all um part of The system so the the planning agency was called called ghost pawn and um There's a lot there were a lot of problems with this system and Let me just let me just give you a few of them For example, um As I said, they set quantitative targets. They really couldn't set the the quality It was very difficult to to to convey what kind of quality of nails you wanted or women's clothing and so on um so There was a for a long time there there would be buildings that were built And they wouldn't have any roofs on them roofs on them Um, why wouldn't they have any roofs on them even though the buildings were completely built people couldn't move in because there was no covering because the nails Were were that you need for roofing nails. There's much smaller than normal nails and Because you were giving the plan to the nail industry in terms of tons of nails It was easier and cheaper and faster to make huge nails. So so there's a famous um cartoon Where the manager is telling the commas are Well comrade, I've met my my target for the year And he makes one so a lot of big nails were made and so so this led to tremendous um Misallocation of resources where these you couldn't utilize these structures that had been built um Then there was a famine during the 1980s. Um, which occurred because there were tractors Sitting, you know, they they were perfectly fine tractors. They had been built But they were sitting in fields rusting and these fields had weed in them. Okay But there wasn't enough gasoline or fuel and there wasn't enough workers to run the tractors To to harvest the weed so that the people could be fed Why because the people were were in other factories making more steel to make more tractors And and to make more gasoline Or or or or or or or more steel to make more tractors, which would then rust in fields where there was unharvested wheat So you had all these very weird Contradictions women continually complained about fashions because all women's clothing was extremely big Um because it was it was specified the target in terms of yards of clothing or apparel made Okay, so so they make only large sizes Okay um Also, there was a khrushchev who was the um Chairman of the of the um party of the communist party in the 50s and into the early 60s um and the and the dictator Of the ussr um in a famous talk to the pilot borough Bureau, which was the bureau of the top communists Um, he started suddenly berating the chandelier industry and the reason why he did that was because The chandelier industry was given its target in terms of pounds of chandeliers that it built And it turns out that in the dashes, which was the vacation homes of the party bigwigs Um, the chandeliers were so heavy. They were falling from the ceiling crushing the comrades So, I mean and of course there's the joke about um That uh the um Russian economists would tell western economists when they met at international conferences And they would say that with a smile we will bury you because that's what khrushchev said Socialism will become or communism is so productive that we will bury you economically. Okay, that's People thought they meant a nuclear war, but that's what he meant So the Russian economists would say we will bury you, but we'll leave hong kong so we can see the prices because And and and that leads us to to a criticism of mesas people criticized mesas because The so the union lasts for 75 years How how could that have been the case? How could have lasted for 75 years? If socialism was impossible But mesas pointed out in that article in 1920 um that that socialism True socialism would be world socialism A a small a small economy in the and the soviet union was a small economy Back when it first started compared to the rest of the west of the world um A small economy is like a post office the post office is tremendously inefficient And can be easily driven out of business if you allow competition But this post office can exist And operate because it uses prices Prices that are generated in the capitalist economy around it And that's what mesas said about the soviet union He he referred to the soviet union and he said no the soviet union is not a true socialist economy because it can use world capitalist prices Now these prices aren't exactly right because they don't apply accurately to all of these the the the goods that the soviet union is producing You know in a different area than than where these goods are being produced elsewhere um, but they're crude enough But they they give you enough room for calculate some rough calculation um, of course though the inefficiencies pile up and over time These these prices are are as as the soviet union grew and became Use more complicated production processes these prices became less and less useful Okay, and it's a famous story of the chinese communist party um writing away for hundreds and hundreds of Sears catalogs back in the 50s and 60s so they could they could use the prices And there was also as was pointed out much later um, the soviet union had black markets In which consumers goods were sold one sold jeans beetles records And so on and and also the managers of the different factories Would trade machinery and wood and so on with one another So there was a rough estimate of of or there was a movement of goods to higher valued uses The only true period of of of communism was war communism from 1917 to 1921 All prices were completely abolished um, there was no money and the planners try to allocate the resources themselves and what occurred during that period was that um The the the goods just stopped being produced and and and workers Would steal things and bring them home and and try to work at home and make things um After a while during the cold winters they would begin to burn their furniture then parts of their houses And eventually people moved out of the cities And just roamed the countryside to find food so that socialism can exist on that On that level with small bands of people Roaming the countryside just looking for you know very short production processes picking berries killing wild animals and so on Without prices. That's that's what what what you're more or less left with Okay, okay, so let me just talk a minute about the social because only you have a five minutes The social appraisement process. Okay. It's a fancy word that means is uses Um, it's the process by which the market economy Is which is driven by entrepreneurs determines the money prices of all resources. Okay Those risks those prices are used in economic calculation. Okay and calculating the course of production and here's a little um Chart that that shows what I mean here. So if you start the entrepreneurs the purple writing there in the middle The purple printing the middle The entrepreneurs look ahead They look into the uncertain future and they try to figure out what the price of consumer goods Will be and some of them are better than others at at at doing this. Okay So they appraise future prices based on present consumer prices They know what consumer prices for bread and and and automobiles and so on are Right now and so they make as they make educated guesses about what they will be a year from now two years from now and so on Or in the case of new products They may not have much of an idea at all steven jobs and and and and and The iphone. Okay But still as an entrepreneur, he's risking his own wealth. So he's making He he's he's coming up with some kind of an idea of what what the price of an iphone would be What people would be willing to pay for it And then what he does he and other entrepreneurs Then look at the the costs of of the various factors of production And what they do is that they based on the prices they believe they will get for their products They bid against one another So almost like a huge auction house. They bid for the labor the land the factory space the energy and so on And and in the process of this bidding you have your costs arising Okay, so based on their estimates of future prices That is imputed back to the costs that arise and those people who see The most valuable uses of those Various factors of production are the ones that bid them away from the other entrepreneurs Some of them will be correct and make profits others will be wrong and and and lose money But the important thing is that there is what means is called an intellectual division of labor All of us participate in it as consumers producers laborers resource landowners Entrepreneurs we are all bidding For different things all of our value scales That is our subjective values for the different things that we want Or for the things that we expect to be useful in the future that we're going to produce All of these people together Are bidding for these things at every moment of time And produce a price structure That is we right now we have a structure of prices for everything that can that can Everything that is bought and sold. Okay, so any entrepreneur can take an advantage of this and try to Earn profits by allocating resources from from the lower value uses to higher value uses Now there were a few social and I don't have much time here, but I'll just There were a few socialist responses to Mises in the 1920s. They and these were very naive. Um One of them was that well, you know what we can we can calculate in kind. Okay, we can use tons and and Kilowatts And so on and and and add the the things together like we were talking about with with the automobile Um, and this was put forth by a fanatical marxist. I don't know Neuroth was his name Neuroth Um, so we could add up resources in natural units tons of steel kilowatts of Electricity gallons of paint hours of labor, of course, that's any Any elementary school person knows that you can't add Oranges and apples so some of Mises dispose of that in his first article The second is that hey, we can calculate according to labor hours because all value comes from labor Okay, well labor is not homogeneous Okay, the labor of uh, you know a software engineer is not the same as the labor of of a ditch digger Which is not the same as the labor of a brain surgeon. Okay, so labor hours have different qualities And and different productivities Also, even in the same industry Um, let's say a basketball LeBron James Has an hour of his labor is on the basketball court is different from that of the the 12th man on the bench Who's you know a gawky guy that can barely move around? Okay, so um, and also it leaves out of account if you just take into account labor It leaves out of account the fact that labor is more or less productive If you have more capital goods or land working with it. Okay, if you have less capital goods of land, it's less productive and then finally there was a Some brilliant person came up the idea of let's just tell the capitalist that tomorrow on the first day of socialism They'll do the same things. We'll have the mat. We'll we'll get rid of the capitalist rather We'll have the man it will tell the managers now where your boss is just do what you were doing yesterday Okay, so we'll that's a static economy that assumes that nothing will ever change That consumer wants will never change that technology will never change that Resources will not run out and new ones be found. Okay, so it would work in a world where we're all robots Socialism, but it wouldn't work outside of that world Um, I will stop here. We have there are other more sophisticated responses. These were not very sophisticated, but um, Thank you very much for your attention