Re: summary of calculation debate

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

I regard Hayek's theory as theological.  He posits that a collection of entrepreneurs will create a collective, dynamic efficiency.  How they will coordinate their actions when they are investing in durable capital goods is never addressed.

You asked for specifics about how the plan would work, but Hayek never offers specifics except to make his assertion.  Has it ever worked in practice?  Has anyone actually investigated it?

Besides, Hayek sets up a straw man: a single planner manipulating the system.  No one here has advocated that.

I do not see this discussion going anywhere so long as it is revolving around the question as you put it.  Doug and Jim responded with questions about how the entrepeneur would resolve the information problems.  Ken Hanly provided some interesting information about Yugoslavia and about the Austrian school.  I can see some valuable dialogue coming out of such a
discussion, but not so long as were merely postulate an all-knowing collective of entrepreneurs.


JKSCHW@xxxxxxx wrote:

> OK, that's one way to get rid of an argument against your position. Accuse your opponent of "theology" and say that you already knew whatever grains of truth were in his claims and had taken account of them. OK, I'm done. I will continue off line with Jim on this, if he will continue with me, since everyone else has all the answers but won't sahre them with me. --jks
>
> In a message dated Fri, 21 Jul 2000 11:56:06 AM Eastern Daylight Time, Michael Perelman <michael@xxxxxxxxxxxxxxxxx> writes:
>
> << 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
>
>  >>

--

Michael Perelman
Economics Department
California State University
michael@xxxxxxxxxxxxxxxxx
Chico, CA 95929
530-898-5321
fax 530-898-5901