tag:blogger.com,1999:blog-11906042.post116577593290442908..comments2024-03-22T11:55:50.335+13:00Comments on Not PC: DHB strikes are an old socialist jokePeter Cresswellhttp://www.blogger.com/profile/10699845031503699181noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-11906042.post-1165898819607508432006-12-12T17:46:00.000+13:002006-12-12T17:46:00.000+13:00Eric, you said: "There are a few Austrian fellow-t...Eric, you said: <I>"There are a few Austrian fellow-travelers here at Canterbury..."</I><BR/><BR/>Great to hear. :-)<BR/><BR/>Feel free to guest-blog here any time. ;^)<BR/><BR/>In the meantime I look forward to getting to grips with your paper, and giving some thought to the discussions going on at Econlog.<BR/><BR/>Cheers,<BR/><BR/>PCPeter Cresswellhttps://www.blogger.com/profile/10699845031503699181noreply@blogger.comtag:blogger.com,1999:blog-11906042.post-1165895929185163992006-12-12T16:58:00.000+13:002006-12-12T16:58:00.000+13:00While I agree completely with Mises and Rothbard a...While I agree completely with Mises and Rothbard as to the impossibility of economic calculation under socialism, it isn't the calculation problem that caused Soviet collapse. Rather, it was the public choice problem of incentives. Strictly speaking, the calculation argument predicts an unbiased but high variance price vector: planners should err as frequently in overestimating prices as they do in underestimating them. We'd consequently expect as many instances of shortages as of surpluses at set prices, with planners then groping for equilibrium prices by changing prices after observing queue or stockpile. Instead, we tended to see more shortages at stated prices. David Levy first pointed this out; Andrei Shleifer discussed it further. Simply put, shortages allow lower level planners to extract rents from those in the queue. <BR/><BR/>Andrew Farrant and I elsewhere argue that, to the extent that the calculation argument is correct, it actually improves outcomes under socialism as compared to a situation where the planner remains self-interested but has the ability to set prices perfectly. In that case, the planner successfully and efficiently extracts all surplus from the citizenry. The working paper version of the article is available <A HREF="http://www.econ.canterbury.ac.nz/personal_pages/eric_crampton/Benevolence.pdf" REL="nofollow">here</A> ; further discussion of it is available at <A HREF="http://econlog.econlib.org/archives/2006/07/second_best_and.html" REL="nofollow">EconLog</A>.<BR/><BR/>There are a few Austrian fellow-travelers here at Canterbury...Anonymousnoreply@blogger.com