See discussion question below from Professor Guinevere Liberty Nell.

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Show 1 Answer (Ryan Heerwagen's answer approved by Guinevere Liberty Nell)
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Bukharin (if I read him correctly) perceives the economic structure to flow from both the social structure and technological structure, and presumes that it merely reflects it's background conditions, where as Western economists(generally), while acknowledging technology, are less likely to treat as much of the economic structure as endogenous and will see a stronger possibility of regulation and legal change. Austrians are actually more likely to agree with Bukharin, except they do not perceive the market economy to rest on class relations, but rather on the management of information in a large/complicated economy. Bukharin also takes equilibrium for granted(from what I read) instead of needing to show a mechanism to bring it about, like Austrians and other Western economists care strongly about.

Bukharin represents a more status quo alternative according to the Mark Harrison, in that he believed that Stalin pushed too hard against the peasants and thus risked alienating them too much, and so Bukharin was likely to continue the NEP and proceed in a way more in line with maintaining quality of life through the transition. (Of course, Bukharin himself appears to be in favor of imposing suffering as the disruption of the old system is needed for socialism to form.)

As for the learning arguments, it's hard to say that the Soviet experiment can prove that economic experts are incapable of identifying remedies upon learning. It's just also hard to say that this is obvious as well. A lot more seems more likely to rest on the construction of intelligent systems/institutions than it does on economic expertise. There is insufficient evidence to refute Lenin, and to prove the Austrian case, although the Austrian case is given support by the evidence at hand, and the Lenin case is undermined by it.

I don't think the answer will hinge very much on the factors mentioned. Maybe somewhat on human nature, but even then making some elements of these systems work would require very bizarre modifications to human nature. The biggest factor will be the capability to accumulate and process large amounts of data, and implement technological solutions more than anything else. I do think it is hypothetically possible for an AI with more data than the NSA to plan an economy, simply because I'm less sure of a factor that it would necessarily leave out.(that being said, if such an AI existed, it may be in an age where humans are economically obsolete resources)

These debates on how to get the USSR's economy to work can bring up questions on the necessity of private enterprise to growth and economic function. While it's not clear on the threshold, it is plausible given this experience that there is a relationship between the degree of market control and economic efficiency.

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Very intelligent and reasonable response! ~ just a couple of follow-up thoughts:

You say that success in learning (or "identifying remedies") "seems more likely to rest on the construction of intelligent systems/institutions than it does on economic expertise" which I think is quite certain, and most economists of all stripes would agree (even Marxists although they would raise the issue of 'human nature' or 'class consciousness' -- however, these are meant to come with the change to public institutions), and I think most would point to trial-and-error as one possible approach, after all - this is one major aspect of what markets and decentralization offer that governments and monopoly cannot - and indeed this is also what Lenin suggests (to "pin-point the mistakes and suggest a remedy"), and one could quote FDR ("It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.") Do you think this "common sense" is right -- the Soviet experience cannot answer this, certainly not prove the negative, but perhaps it could be used as a case study to look at the kinds of issues that might come up in something like planning and whether it seems that trial and error, if even possible in a planned economy, is likely to make a lot of difference or whether other factors - the fundamentals of the system, or of human nature, etc - are critical and unaffected by trial and error. So, is socialism (and interventions of other sorts) produce results based on factors that are fundamental/universal/a priori OR are they improvable with learning, trial and error?

Austrians will tend to argue that basic economics and the institutions that will work best in an economy can be understood a priori, using theory not the evidence and learning of trial and error, and that no amount of trial and error within socialist institutions will matter -- it will still be impossible to calculate and therefore results will still suffer terribly -- yet you say that the important thing is "the capability to accumulate and process large amounts of data, and implement technological solutions." Does this mean that planning could work efficiently if only we could crunch through input-output tables and shadow-price based equilibrium models? Are you a believer in computational planning? If so, we might be there soon, if Moore's Law continues to hold... However, if as you say it is in an age where humans are economically obsolete (I assume this means that we no longer need to work) then this is an argument regarding the overcoming of scarcity -- which tends to be the one thing that all economists can agree upon::because it actually takes us outside the realm of economics!!


Guinevere Liberty Nell approved 1 year 9 months ago.
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