Multiple equilibria are irrelevant. The problem is a model that makes equilibrium a goal based on false premises. Hayek, like Marx, is great in part because he tried to capture the laws of motion of real economic systems, not axiomatic models with demonstrably false premises.
Lange's reply that they never tried what I advocated is ridiculously weak given what they did try produced every problem Hayek observed/predicted in spades. You can believe that pigs will fly if you like. I will continue to insist with Heyek that they have no wings.
Sent from my iPad
On Oct 12, 2012, at 7:39 AM, c b <cb31450 at gmail.com> wrote:
> Wojtek S wsoko52 at gmail.com
> Thu Oct 11 07:51:12 PDT 2012
>
> [WS:] The existence of the mythical equilibrium is a red herring here,
> since as Ormerod demonstrated in his book "Death of Economics"
> multiple equilibria can be calculated in sufficiently complex system.
> The crux of Lange's argument was that planners do not need to know
> more than private capitalists, as both in real life proceed through
> the process of trials and errors to adjust their prices. So that
> undercuts the supposed omniscience required in planning but not
> private capitalism - in fact neither requires it to improve
> efficienc
> Lange argued that both planning and capitalism are on equal footing in
> this respect. What makes planning superior is the planning ability to
> overcome constraints imposed by private ownership of property, which
> leads to either periodical crises or equilibria skewed away from
> optimum toward consumption of the rich. I do not think that this
> argument can be dismissed that easily.
>
> As far as the price mechanisms under planning postulated by Lange -
> they were either not implemented or if they were, they were later
> circumvented by political and social mechanisms (informal economy,
> etc.) So as Lange aptly observed, the reasons of the central planning
> "failure" lie not in planning but in sociology and politics.
>
> Alas, there is one thing that is not considered in these arguments -
> the capacity to externalize costs. That capacity is much greater in
> capitalism - under which private firms can not only dump costs on they
> public sector in their own countries, but also on other countries
> thanks to imperialism. In planning systems, the capacity for cost
> externalization was pretty much non-existent. First, the public
> ownership of the means of production meant that public sector would
> have to externalize to itself, which defeats the purpose. Second, the
> planned economies lacked the capacity to externalize on other
> countries because they were not imperialist (EE) or because their
> imperialism had strategic rather than economic nature - i.e. its goal
> was to maintain political influence against the west, rather than
> economic exploitation. In other words, while western imperialists
> externalized their costs on their satellites, Russian imperialists
> absorbed the costs of satellites to maintain their allegiance.
>
> -- Wojtek
>
> "An anarchist is a neoliberal without money."
>
> ^^^^^^^
> CB: I would to identify with Comrade Wojtek's remarks . Soviet Union
> far from an evil empire was an anti-imperialist system
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