I will tell him that too


Seriously, the argument is totally flawed, because it goes against Say's law.  Say's law says that all beneficiaries of all the production factors of a product make exactly the amount of money necessary to buy up all of the production, if they want to.

Consider an extreme case, where industry is totally automatized and labor is worth zilch, because there is no labor needed any more.  According to your argument, in such a case, that industry wouldn't find any customers, because labor wage (macro) is zero.

Nothing is less true.  In fact, all the sales go in the pockets of the share holders, so THEY can buy the products.

In a totally automated industry, the industry will make products for the share holders, which will be their sole customers, and which will be totally served by all the fully automated  production.  Without one single dollar of wages.

I can now use the same strategy towards a worker.  I can say that in order for my products to become cheaper so that he can buy more of them, I propose that he works 20% more time for a slightly lower wage.  As such, my labor cost will be lower, and I can lower the price of my products more, so that he can  The logic is the same.  If the guy tells me: "hey, you propose me to work more and earn less ?" I will answer him: "but my dear, your benefit is that you have increased your output"

Then what was the purpose of all that internal communist propaganda concerning the common good ?

This is also such a crazy statement that comes back very often: one should pay its employees a lot of money, so that they can pay a lot of money for your products

The secret is that you don't want MONEY from your consumers, you want to get *goods and services* from others.  Money is just an intermediate thing.  You produce, because you want to get production from others, not money.  If you can get the production from your labourers for less, then by all means, that's what you should do.  

Imagine: I have material costs of 100.-, I pay 100.- wages, and I have then produced 100 products which I sell for 3.- each, so I make 100.- benefit.

What advantage would I have, by paying 160.- wages, and sell now 20 products more (namely, the 20 products that my employees can buy with their extra salary) ?  Because now, in fact, I have a cost also of 120.

In the end, I will now sell 120 products at 3 each, have a material cost of 120, and pay 160 wages.  My benefit is now 360 - 160 - 120 = 80.

I LOWERED my profit from 100 earlier on to only 80, by paying my workers more so that they come and consume my products and by selling more.

There is nothing to be won by increasing wages for people to consume more.  Because you have to pay the other production factors too (in our case, the "material costs")

If the world can't handle 2 billion Americans more, then this will not happen.  If it cannot happen, it won't happen.

Then don't give him a bowl of rice

Everybody is always with some or other ethics.  Ethics is the study of the concepts of "good" and "bad".

My ethics is this:  "good" is what is good for me, "bad" is what is bad for me.  This seems to be such a self-evident truth, that I don't even see how you could consider any other form of ethics, except in the frame of a religious conviction or so.

There is namely only one source of "good" and of "bad": that are my subjective experiences of "good feelings" and "bad feelings".  If I wouldn't have those feelings, all actions would be totally indifferent with respect to any "good" or "bad", wouldn't they ?

To a computer, nothing has a meaning of "good" or "bad" I would think.  A computer is ethically totally indifferent is my idea (unless you would consider a computer to be a sentient being).

But of course, I would like YOU to adhere to another kind of ethics.  I would like you to consider "good" MY advantage, and not YOURS.  I would like you to consider "bad" MY disadvantage, and not yours.  If I could talk you into such behaviour, I would consider that as good.

And that's the basis of "morality": morality is the behaviour I want others to have that is in my advantage.

I don't want others to steal me, I don't want others to cheat on me, I don't want others to be violent with me, I want others to be generous with me, I want others to be friendly with me ...

All these things is what we usually put into one or other morality.

So of course we are indoctrinated with "morality" from childhood onward.  Because others want us to have a moral behaviour.... to their advantage.

I never said that social systems can't work.  The confusion comes maybe because I said that most social engineering is based upon that misunderstanding.  Social engineering.  Wanting to transform the social relationships of humans, like communism or the like.  Wanting people to want other things than their own interest.

I call a monopoly, if it is freely established, and not a privilege of law, simply a way of doing business.  Certainly not corruption.
The only exploitation of labor is when there is slavery, that is, people are forced with the threat of violence, to work.  Any other free agreement to sell labor against something else is business.

If you starve to death, and I propose you a contract where you get one bowl of rice per week if you work 16 hours a day for me, then that's a business proposal.  You're probably better off with it, than without it.  Up to you to decide.  That's business.

Monetary influences on legislation is exactly corruption, because legislation is "supposed to be for the general interest" and clearly people with the privilege to make legislation and supposed to act that way, take personal advantage to adapt legislation to their "customers".
In other words, they're supposed to write law in the general interest, and that's why they got their privilege to write the law, and in fact they are setting up a commercial activity of selling their privilege to their customers who pay for it.  

I consider warlords in Africa as "states".  To me the state is the violence monopolist.  The one with the biggest gun.  If that happens to be a guy on a jeep with a big machine gun, then that guy is now locally "the state".  No matter what they think at the United Nations.  The one pointing a gun at you and telling you what to do, is the state.

No, not at all.  What is the central planning of all open source software ?
Open source software is open to competition.  Some is never used, others become great success stories.

You mean that WITHIN a single open source project, there is some kind of organisation ?  Sure.  Like within a company, there's some kind of organisation. 

But I'm not aware of any central authority that decides what are going to be the next open source projects on which volunteers are going to work, and forbid others to spend their voluntary effort on useless open source projects :-)
If you want to, you can start an open source project yourself, without getting an order from the Central Open Source Planning Center, you know !
Whether your project will be successful or not, will only depend on whether people start downloading it or not.

They are motivated by celebrity and by an over inflated ego.  So they would over-sell their invention.  The proof of the pudding is the eating.  There's no way to know (except in very stupid cases) whether an idea really works, in all the details, until you've done it.   Thinking that you can simulate an economic activity with all the details is an illusion.  You don't know if the guy you've paid to do the testing is going to do his job correctly.  You don't know if the machine you ordered will work exactly as promised on the contract.  Whether it will be delivered on time.  There are so many little details between an idea and an actual product on the shelves, that it is only when it is really done that you really know how much resources it used.  On the other hand, you can have inventions that are not completely understood by their inventors themselves, but they work.  They would not be able to convince you, but they believe in it.  They might be right or wrong.

The only way to make sure that what people claim, is true, is by making put them their money where their mouth is.

And then there's something that no central planning can ever achieve: the whimsicalness of people's desires.  What would sell like crazy today, would not interest any one any more tomorrow.   You see that with children: one day there's a buzz and everybody wants Pokemon monster cards.  A few years later, nobody wants them any more.  Nevertheless, on the moment itself, they are a source of immense satisfaction for the kids.   How is your central planning going to find that out ?


Of course.  Like nothing is ever truly in thermodynamic equilibrium.  But that's not a reason to say that, as anyway things are not in an equilibrium, I'm constructing my house on the top of a pin head, as equilibrium is in any case an illusion.

I differentiate between corruption and scam.  Corruption, for me, is claiming to work for the general good, while working for your personal advantage against the general good ; or, having received privileges for the general good, and using them for your personal advantage against the general good.  A public function gives power and public means to somebody who is supposed to use that power and those public means in the general interest.  If he uses it against the general interest, and for his personal advantage, then that is corruption for me.

I don't see how you can be corrupt in a free market where nobody received any privileges, any public means, and nobody is supposed to do anything else but to serve his own personal interest.

A scam is simply, and on purpose, not honouring a contract (because you put terms in it which you knew you couldn't or wouldn't honour). 

Selling you some pills that make you 20 years younger, is a scam, because you have no idea how to make such a pill, and no intention to give me one.  You give me something else, and so you don't honour your part of the contract.

I think I explained that in detail before.  
In a "repeated vote" system, you base the others' behavior on their strategy in the "previous" round (that's all you know) and you optimize the outcome for yourself by picking your own optimal strategy GIVEN the strategy of the others. 

If the strategies taken by everybody in the previous game is a Nash equilibrium, then everybody will take the SAME strategy again in the next round.  So everybody's strategy will remain stable throughout successive rounds.

You are somehow right that if there would not be any scarcity, then you could just as well centrally plan all the needs and desires, produce them, and send them off to who-ever wanted them. 

But the problem is the allocation of resources to those actions that respond best to consumer's demand, all while knowing that they cannot be satisfied all of them.  So the question is not only: "what do consumers want ?", but also "what demands of consumers can we satisfy by using a limited and shared amount of resources".  And that's where competition comes in: I may know a way to satisfy a consumer's demand by using 3 resources A and 5 resources B ; now someone might come up with the idea to satisfy that same demand (or a very similar one) by using 4 resources A and 3 resources C.
First of all, a centrally planned economy may not know that someone had this idea.  Next, we don't know if it is a good idea: is it better to consume 3 resources A and 5 resources B or rather 4 resources A and 3 resources C ?  That will depend on how those resources are solicited by OTHER needs and by OTHER ideas by other people to do this.
So without knowing all these things, there's no way to find a good deal.  Moreover, why would someone make any EFFORT to try to find another way of producing, if there's no personal gain to it ? 

So in the end, if you are going to centrally plan the rewards  to people finding new ways of producing (taking risks !  It might not work) equal to the gain they allow to make, then you could just as well let them do their business in a free market, no ?

And if not, then these people will not be motivated to find, and even to tell, their invention of a new way of transforming resources into products. 

Producers produce what they think (and try to find out) what consumers want to consume. 
The incentive to produce what consumers would desire is so large, that there's a continuous battle for the attention of consumers.  No central planning, who couldn't care less about the consumer's desires, can cope with the incentive of producers wanting to satisfy consumers in a new market.


The problem with voting is that it doesn't cost you much.  You might vote that you want the moon, and eat it too.
The "put your money where your mouth is" is a much more secure way of voting.


The main problem I see with central planning is that it will always be corrupt, and claim to work for the general good, while serving the interests of the central planners, or their cousins.

I'm not talking about free market, I'm talking about your logical error.

I say: "no social system can be stable if it is not a Nash equilibrium".

You answer: "there's no guarantee that you reach a Nash equilibrium, so let's go for a non-Nash equilibrium solution".

There's a logical error here, which I tried to point out with my colorful parachute example.

The logical error is this:

The statement "if a social system is stable, it needs to be a Nash equilibrium"
is not contradicted by a statement like "one might not reach a Nash equilibrium, or there may be many"
But that certainly doesn't imply: if it is NOT a Nash equilibrium, it might be stable.  Indeed, that last statement is forbidden by the theorem that has not been disproved.

It is not because a parachute might not work, that you can save your ass by jumping out of a plane without one.  It is not because a Nash equilibrium might not be reached, that you can find stable social systems which aren't Nash equilibrium.

This is somewhat akin to:

A: - If you want to jump from an air plane, the only way to have a possibility to reach the ground safely, is with a parachute

B: - Jumping with a parachute doesn't guarantee:
       1) that it will open
       2) that the ropes will not mangle
       3) that down under you will not fall into a lake and drown

now tell me why on earth I should use a parachute with an uncertain outcome ?  Let's jump without !

As a side note: MAD works indeed when you consider a rational cost function.  It becomes dangerous when self destruction implies getting 70 virgins to fuck in paradise

That's not what I'm saying.  I'm saying that if you do NOT have a Nash equilibrium, you will NOT stay there.  Any utopic system that is not a Nash equilibrium, will not remain utopic.


Central planning implies central planners.  Central planners play the game of optimising things for themselves.

If you were a central planner, and you have the choice between setting the algorithm such that everybody, you included, has 2 loaves of bread and a bottle of milk, or setting the algorithm so that most people have 1 loaf of bread and a bottle of water, and you and your kin have caviar and vodka, what algorithm are you going to implement as a central planner, you think ?
What is then, according to you, the "optimum solution" ?

The Nash equilibrium is also the strategy that is KEPT if the game is played over and over, when entities learn about others' strategies.  This is why it is called an equilibrium.  If the game is played over and over again, and you assume that the others' strategies are those they took in the last round, and everybody, using this information, updates his own strategy for maximum gain, only if a Nash equilibrium is reached, the strategies will remain the same from round to round.

Now of course that makes the hypothesis of steady state of all the game conditions, which is not true in the real world, and of course you can and will have evolution.  But we make the simplification of steady state game conditions.

The Nash equilibrium is to games, what thermodynamic equilibrium is to a physical system with many degrees of freedom.  Of course, if the external conditions change, the thermodynamic equilibrium will shift.  And if the dynamics is fast enough, you will be off the equilibrium.  

But we are considering here "models of society" which comes down to "sets of strategies adopted by individual entities".

If a whole set of individuals makes choices of strategies in a given context, some individuals will find that they gain, others will find that they will lose, and "the next round" people will adapt their strategies as a function of the observations of the previous round and previous people's strategies.  As such, the set of strategies will change at each round.... unless it reaches a Nash equilibrium.  At that point, every individual will find out, for himself, that he should adopt the same strategy as the previous round, because (assuming that others also act that way), any OTHER choice would bring him less advantage.

Simplistic example with Prisoners Dilemma:  Joe and Jack are interrogated.  Suppose Joe and Jack first don't betray each other.  Both of them are sentenced 1 year.  Joe now thinks "damn, I should have betrayed Jack, he didn't betray me, so I would have been free".  Jack now thinks the same.  Next time they are interrogated, they betray each other.  They both take 2 years.  And now Joe thinks: "ah, Jack betrayed me.  I have nothing to win by not betraying him.  Next time I'll betray him again".  And Jack thinks the same.  ---> Nash equilibrium reached !  If you play it over and over again, Joe and Jack will continue betraying each other.

It is very funny, because in the beginning, they were actually applying an Utopia Optimum (if I can call it that way).  But the Utopia Optimum (the lowest sentence for both) was not stable against "personal improvement" of each individual.  They ended up in a Nash equilibrium, that is below the Utopia Optimum, but there is no incentive any more for each of them to go away from it.

Life is worse in the Nash equilibrium than on the Utopia Optimum, but it wasn't stable against "egoistic optimisation" which turned out not to be one.

This is exactly the same problem of Communism and Socialism, btw.  If everybody would work together for the best of common good, then we would have a higher economic production than in a free market (where resources are "wasted" to competition).  Everybody would be happier and richer than in the case of competitive free markets.
If everybody works together to plant potatoes and elevate chickens to the best of his capacity, there would be a lot of food for everybody.
But the problem is that everybody can change strategy individually.  Joe, in his Colchoze, will find out that if HE lies in the sun while his fellow comrades plant potatoes, he will have about just as much food as before, and life is much nicer lying in the sun than planting potatoes.  Jack will think the same.  Mary too.  
And in the end, everybody lies in the sun, and then everybody is hungry.  But there's no reason for any of them to change strategy.  There's nothing personal to be won to be the only one NOT lying in the sun and planting potatoes for everybody.  So the Nash equilibrium of Communism is reached: everybody lies in the sun and does nothing, while everybody is hungry.
This is more or less the real story behind colchozes btw.  The 5% private land produced as much as the 95% communist land in the end.
In social democraties, you get a similar problem with social redistribution and things like unemployment payments and so on, if they are too generous.