Re: Re: Re: Re: Re: Re: Re: Re: summary of calculation debate

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Justin, I don't claim to be saying anything new.  Doug, Jim and I have mentioned that Hayek never really confronted the sort of questions about information that are commonplace in economics today.  I said that I am not hearing anything new from you.  I phrased my statement to allow for the possibility that it is because I am unable to hear it.

I stand by what I said that Hayek's approach is theological.  He only postulates that the entrepreneur will do well by society, even though I have never seen any evidence of that.  Maybe that's my theology.

The basic problem is that in the market decisions are interdependent.  Even intelligent entrepreneurs cannot determine what to do without knowing what others will do.  Most studies find that business just relies on rules of thumb, which creates some stability that allows some decisions to be made.

Also, you have to take into account the resources that are wasted by inferior entrepreneurs.  In our town, there are a couple of locations where restaurant after restaurant fails.  I could go on, but ....

JKSCHW@xxxxxxx wrote:

> Well, that's me, old discredit views. I am not hearing anything new from anyone except Jim, who is actually taking the Hayekean challenge seriously. I hope he does write his book. I think we are probably too far apart to collaberate effectively, but book of the sort that he is proposing would seem to me to be a genuinely major contribution.
>
> Btw thepoint about the entrepreneur is that Hayek is consistent about insisting on the dynamism of the markets; he does not rely mainly on static prices as sources of information.
>
> --jks
>
> In a message dated Thu, 20 Jul 2000 11:44:14 PM Eastern Daylight Time, Michael Perelman <michael@xxxxxxxxxxxxxxxxx> writes:
>
> << Justin, yes, he posits the entrepreneur, but since Hayek has written, economists
> have come to realize the difficulty with relying on entrepeneurs, even
> intellegent ones.  The problems of information in markets is a growth industry
> in economics.
>
> Just as a theologian could posit a god that makes an optimal world, Hayek posits
> the entrepreneur.  The only advantage that the entrepeneur has over the planner
> is that there are a lot of them rather than a single planner.
>
> Justin, you are welcome to your views, but, really, I am not hearing anything
> new from you.
>
> JKSCHW@xxxxxxx wrote:
>
> >
> > This misses H's point about the entrepreneur. The E doesn't just look at
> > prices. He goes out and gets information about what peiople want, what
> > resources there are, what concrete means exist to satisfy these needs. He
> > relies on price information,a nsd expects others to, because (the Hayeklian
> > point) no one can know as much about everything as he does about his little
> > bit. But H's system runs on entrepreneurial knowledge, not on price
> > crunching.  It is because markets encourage entrepreneurship that H is so
> > keen on them.
> >
> > --jks
>
> --
> Michael Perelman
> Economics Department
> California State University
> Chico, CA 95929
>
> Tel. 530-898-5321
> E-Mail michael@xxxxxxxxxxxxxxxxx
>
>  >>

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx