Just addressing your closing points.

” So in this world, the idea that price is always a result of voluntary exchanges is an illusion, a myth that makes one feel good. ”

Why is it a “myth”? What prevents price from being determined solely by voluntary exchange is government interventions of various kinds in the economy. Remove the government interventions and all we will have left is a free market where productivity improvements from technology and competition continuously force prices downwards.

” Pressure on the vulnerable and desperate is always laughably easy to exert. ”

Yes. It is easy to exert. But the key question is “Who finds it easy to exert and who actually exerts it?”. The answer is to both is “government”. The means to exert this pressure is all their interventions in the economy, interventions that distort the beneficial influence of the free market.

” Hence the perpetual popularity of “redistributional” approaches, without which many of us are left off the gravy train. ”

The word “popularity” always begs the question “popular among who and why?”. It also fails to address the important questions “Is that which is popular also necessarily good for those among whom it is popular and for others as well?” and “Is that which is popular implementable on a voluntary basis or does it require the initiation of force to expropriate from some for the benefit of the rest?”.

In simple terms “popular” and “doing the right thing” are not synonymous. Democracy per se is not a great thing. In fact, depending on how it is organised, it can be the ideal vehicle for the official sanction of tyranny. If you have any doubts, I welcome you to study India as a “shining” example of my statement above.

” Under the law propounded (I assume) by Mises back in 1922, the very best possible distribution of scarce resources is to always award them first to those who already have plenty ”

No one “awards” anything. Some take the resources and become rightful owners. It is all about property rights and voluntary contracts. You are guilty of misinterpreting the term “very best possible distribution”.

” and who don’t want to share ”

Why should they share? Why should they want to share? Is is wrong to refuse to share and keep one’s property to oneself? If so, by what standard do you judge it to be wrong? Please lay out the foundations of the ethical system that brings us to this conclusion.

Chanting, LSD, yoga and contemplating the wisdom in Bob Dylan’s lyrics from a postmodern
perspective. If this fails, hit your head against the nearest wall until an insight reveals itself.
It may help to look at a photo of North Korea at night. On the other hand, there are
rumors that graduation ceremonies for a doctorate in mainstream economics include a secret handshake in which the ideal price structure is revealed. At least, that’s the rumor…
I’ve taken an oath to say no more. Nudge, nudge, wink, wink.

There is no rational justification for sacrifice and thus its not a basis for the science of economics. Economics help guide the individual in his selfish moral right to his own life as an individual. You have sleazily sneaked in your morally depraved and bloody collectivism.

Thanks. It feels good to be appreciated, especially for me when it comes from you

The link you requested:

http://mises.org/pdf/econcalc.pdf

Thanks for making me feel like I am speaking to a wall. However, you have said enough to damn yourself and

” There are two ways to arrive at a price structure that best serves a society. ”

Firstly, as I said, the “price” of any good and, by extension the “price structure” is something that is “discovered” on the free market when individuals engage in voluntary exchange. When you say talk of “arriving at a price structure”, please remember that left to its devices, the market will throw up its own price structure. So, there is nothing that you need to do. Keeping your grubby hands off is all that is required.

If, on the other hand, you wish to have a situation where you or the gang of goons that has your (and the public’s) endorsement to “arrive” at the price structure, you need to first read Mises’ note “Economic Calculation in the Socialist Commonwealth”. Any links, anyone?

That apart, taking on another part of the sentence I have selected, when you say “the price that best serves a society”, what is the nature of such a price structure? How is anyone at all to define the characteristics of this “ideal” price structure? Could you define them please?

How do you distinguish the “market” from the “society”? If “society” represents the set of all people who live in a geographical area, since every one of these people is also a participant in the market, it is impossible to differentiate the “society” from the “market”. So, what is good for the participants in the “market” is good for the members of the “society”.

It is not so only if you wish to benefit certain members of the society irrespective of the harm that conferring such benefit on the select few (or many) brings upon the unfortunate many (or few). Going by your statements, that is what you wish to do. So, you are just a “wealth redistributionist” (just coining the term).

Then there is this

” The one, of course, is “how high can the market go?” Prices can be forced up until a maximum profit can be obtained by leaving out the bottom of your available market. ”

Ever heard of a concept called “competition” and how competition forces prices down? It almost sounds like you have suddenly landed up here from Wonderland.

However, this was the most hilarious one of all

” Increased use of the US corn crop for making corn ethanol forced a dislocation in world grain markets that pushed up all prices. And rice tripled in Haiti, where just a few years previously Haitian rice growers had been forced out of business by subsidised American imports under a Free Trade Agreement. ”

Pray tell me which of the two
1. Increased use of US corn syrup for making corn ethanol and
2. Haitian rice growers being forced out of business by subsidised American imports
is not an outcome of government action but an outcome of the operation of free-market forces?

With this one paragraph, you have openly identified an example that shows how government intervention in the market makes everyone worse off, especially the most vulnerable sections of society.

” The other, socialist approach would have been to also subsidise Haitian rice, so there remained a local alternative to buying from the only seller in town. ”

The third (since you have spoken of 2) is to withdraw US subsidies. I wonder why this simple solution fails to strike you.

Taking the main “punch line’ from your next paragraph

” Prospective employees, on the other hand, have a certain cost of living they have to meet. ”

Ahhh!!!! What drives the cost of living perpetually upwards? Is it not the non-stop money creation by the governments of these developing countries, governments that relentlessly incur deficits of gargantuan proportions in the name of running “welfare schemes” purportedly to benefit the weaker sections of society?

Just giving you an example from where I live. The Government of India is now running a make-work programme called the “National Rural Employment Guarantee Scheme” under which every person who wants to work can demand and get a minimum of 100 days of employment doing public works and get Rs. 100 per day for the same. They spend a measly Rs. 1 trillion on this scheme every year. A couple of years ago, the same Government of India announced a waiver of loans outstanding from farmers to the banking system, a waiver that amounts to around Rs. 600 billion (That’s a little around $5.5 billion). The Government of Tamil Nadu (the state of the Indian Union I live in) distributed TV sets free to around 20 million people. To make all this possible, the Reserve Bank of India and the banking system drove money supply up at a rate of over 22% per annum for the last 5+ years.

And you know what? Price inflation, especially of food products, has been running at around 15-17% for the last 2 years or so. And these are official figures. The reality on the streets is much worse. Prices have doubled or more in the last 3-4 years (clearly indicative of a rate of price rise well above the officially declared rates). Food is fast going beyond the reach of the ordinary person on the streets.

So much for your freaking governments and their benevolence!!!

What is it three months here? And this sums up nicely what he’s learned, Don and TT.

There are two ways to arrive at a price structure that best serves a society. The one, of course, is “how high can the market go?” Prices can be forced up until a maximum profit can be obtained by leaving out the bottom of your available market.

It works fine for the vendor to maximize profit by reliance on market mechanisms. That’s the way the price of rice tripled a couple of years back. Grain markets are known for having virtually no reserves. Typically at any moment we have less than a sixty day supply of grain on hand, so prices can become very volatile.

Increased use of the US corn crop for making corn ethanol forced a dislocation in world grain markets that pushed up all prices. And rice tripled in Haiti, where just a few years previously Haitian rice growers had been forced out of business by subsidised American imports under a Free Trade Agreement.

So rice became unaffordable, and people starved. It was a classic case of the price being set by the point where a willing buyer met a willing seller. Right? Only the seller was firm, while the buyer had no money.

The other, socialist approach would have been to also subsidise Haitian rice, so there remained a local alternative to buying from the only seller in town.

Here’s another example: labor. Around the world, companies offer jobs at a set rate that enhances their bottom line. Prospective employees, on the other hand, have a certain cost of living they have to meet. In the developing world, these two lines are normally very far apart. And even in this country we have a large proportion of working poor, who need access to credit just to be able to meet those basic living expenses their wages won’t pay for. Which is, of course, an unsustainable model.

So in this world, the idea that price is always a result of voluntary exchanges is an illusion, a myth that makes one feel good. Pressure on the vulnerable and desperate is always laughably easy to exert. Hence the perpetual popularity of “redistributional” approaches, without which many of us are left off the gravy train. Under the law propounded (I assume) by Mises back in 1922, the very best possible distribution of scarce resources is to always award them first to those who already have plenty… and who don’t want to share.

There is just so much of it, plenty to around, and I think a lot of people stopped reading him altogether. Jump right in, Bala.

” In the United States people pay a desk rent, for the privilege of doing business here. ”

so often, I am just unable to resist responding to it.

Only the owner of a property may seek rent from those who seek to use their property. Tax levied may be treated as “desk rent” paid for the privilege of doing business in the US ONLY if you say that the territory that is called US is the “property” of the USG. Are you saying it is? If not, treating it as rent does not seem appropriate.

So, your suggestion (fairly repeated and to many people) that they relocate to Macau or Brunei is utterly off-target and is fairly disgusting. It shows your arrogance that stems from being on the side of the “invincible” goons.

Incidentally, if you’d like to see the eventual outcome of your “desk rent”, you need look no farther than California. I saw it all the time when I lived there. Businesses are leaving in droves, and so are people, to the tune of a net exodus of 144,000. The taxes and regulations just kept racheting higher amid the state’s awesome prosperity for most of the 20th century. When I lived there, I was always hearing about some business pulling up stakes and heading to another state. Your unshakable faith in the US economy and the US dollar are based upon a world in which bad policy has immediate and drastic effects, but the reality is that the effects of a bad law passed this year may not become apparent to the public until years or decades have passed.

” Mises has decided unilaterally that he only assigns value to things to which one can put a market price. And that’s beyond dumb. ”

I am extremely surprised to see that no one else has yet picked on this statement of yours. It is very clear from this very statement that you are the one who is “beyond dumb”.

Mises did not say that he “assigns value” to things to which one “can” put a “market price”. He said that value is subjective, i.e., it is something assigned by each individual on his own based on the use he intends to put the object concerned to. He also said price is something that “emerges” or “is discovered” on a free market where people engage in voluntary exchange. His idea was that exchange happens because and only when both parties to the exchange see greater value in what they get than in what they give. For instance, if you and I have an exchange where I give 1 bag of rice and you give 2 bags of wheat. Mises’ point was simply that you accept the 1 bag of rice because it is of greater value than the 2 bags of wheat are while I accept the 2 bags of wheat because that is of greater value to me than the 1 bag of rice is.

Price, as I have understood Mises, is something that emerges out of a large number of such voluntary exchanges. Even in this isolated example I have taken, we can talk of price. The price of my bag of rice is 2 bags of wheat and the price of a bag of wheat is 1/2 a bag of rice. In effect, price is just the exchange ratio in the transaction. This price, however, has little bearing to the subjective “value” that both parties see in it except that it lies somewhere between the two.

So, it is not “value” that comes from “price” but “price” which comes out of the act of voluntary exchange which in turn is made possible by the difference in the subjective values ascribed to the same 2 products by the individuals involved in the exchange.

The conclusion is that you have it all backwards and have made a complete fool of yourself. Nothing new about that last bit, but just thought it would be helpful to mention it explicitly.

Unless, of course, the state owner of the road has taxed gasoline so heavily to pay for the road that driving a car is uneconomical for some people. You drop the context of the market as a whole and look at a part of it. That is socialism, not science. You evade the market’s structure of relative prices.

So the boss holds his third or fourth party, and everyone knows by now that they have to pay for it out of their bonuses. Don’t they appoint someone to have a little chat with the boss, giving him their position on it? I think they do. And what they tell him is if it’s all the same to you, why don’t you just give the money to us. And we’ll have the party.

So the boss says instead, wouldn’t you rather have a group health plan? How about free maternity leave for the women, and child care on the premises so you don’t have to keep the kids in day school?

When workers see the benefits coming back to them, and when they realize they have a chance to give input, they feel a lot better about the boss’s ideas. Because the business is being run democratically. This is, of course, analogous to our own system of sending elected representatives to Washington, to decide how the funds are to be allocated and the party paid for.

If you feel like your own tax dollars are being misappropriated, maybe you ought to think about starting your own country. That way you could run the place any way you choose. And not have to pay a dime to any of those welfare types who seem to need a helping hand. or, god forbid, retirees too old to work! You can just cut them all off the rope.

Just don’t think about doing that around here. Too many people are invested.

2. “Austrian economics predicts that on the whole, people will be worse off for having the choice of where to dispose of their income taken from them. Think about this common-sensibly and I think that you will recognize the truth in that.”

In the United States people pay a desk rent, for the privilege of doing business here. They have the freedom to decide it’s not worth it. But then, of course, they have to move. And pay desk rent somewhere else. I happen to prefer the benefits package offered by the good old USA. Even though writing that check sometimes comes along at an inconvenient time.

I find there’s no desk rent to do business in either Brunei or in Macau. It’s something to think about.

You might even say a road is …worth paying for?

Mises has decided unilaterally that he only assigns value to things to which one can put a market price.

I’ll try to clear things up for you with an analogy designed to appeal to your particular biases, because you’ve been quite persistent in your misinterpretation of the Austrian position.

Imagine showing up for the annual Christmas party thrown by your employer. The venue is fantastic, the musicians are nationally recognized and the food is delectable. You’re having a great time, but midway through, the company owner takes the stage to address the crowd. He thanks everyone for attending and then indicates that he has an important announcement. You see, the cost of the party, amounting to a few thousand dollars per person, was only possible because there would be no raises given out this year.

The first thing that you should realize about this scenario is that it is impossible to calculate whether the party is a net benefit or a net loss. Individually, some people might be angry at having been denied a raise, others might feel indifferent, and some (definitely those who wouldn’t have earned a raise) would be quite happy about it. Austrian economics predicts that on the whole, people will be worse off for having the choice of where to dispose of their income taken from them. Think about this common-sensibly and I think that you will recognize the truth in that.

Now, take away the announcement. Instead of telling people that the party is the cause, concoct some story about a downturn in demand or somesuch. Now, the employees only got to see the great party that they were thrown, without realizing that the funding from it was taken from their own future income. Like you and your praise for government funding of highways, wouldn’t they think that the party was a net benefit to them? This is what happens when the government taxes or borrows money from the private sector to fund its projects. We never get to see where the money would have gone and the lost opportunites that the government investment crowded out.

Turn the example around all you want. Maybe instead of a party, the employer decides to use the raise money to remodel a building or toi construct a new, larger and more functional employee parking lot. Again, despite the benefits of the new lot to employees, Austrian economics predicts that, on the whole, people would be better off having been given the choice of what to do with their income.

Indeed, you are an undisputed expert in things preposterous and pretentious.