What the hell is it with the Austrian Economists and their hatred of planning?

What the hell is it with the Austrian Economists and their hatred of planning?
Look at this clip from a propaganda video called "Its a Wonderful Loaf" where they say, a planner can't plan bread production because there is a zero sum for production. Also Austrian Economists always ignore war economies, under war economies logisticians have done what the video said is impossible and run the economy with the goal of winning a war where they have succeeded in their limited aim.

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It the religion of the free market

Holy fuck what a gigantic obnoxious strawman that is

All corporations practice planning internally.

and through the government with financial incentives and wage planning. We are already translating the economy to a planned model, unfortunately the plan is aimed at maximizing profit rather than satisfying socity's needs.

Don't forget they also imply planning by the day as if it is impossible to find patterns and have a yearly plan. It ignores producing based on the day of the week and time of year based on last years data.

That too

remember real life doesn't matter, only what you can derive from axioms.
also there is perhaps a point in this that socialists should take to heart here - what is he warning about, at it's root? disharmony and where does this disharmony arise? anger over political decisions
When the market decides the stores should only have brown bread left because I've done my shopping late and all the real bread has been bought, who can I get angry at? The shop? The other customers? Myself? In the end, the anger is diffused because I am powerless. My unfortunate situation has arisen as the result of several complex interactions that combine to a greater whole. But if the supply of bread was centrally planned, does the responsibility not eventually fall back to him? And if I am particularly angry about this (if I don't have bread I will legitimately be fuming btw) can I not then attempt to remove the central planner from his post by force, in a severe show of social disharmony?

But let us consider for a moment: Is this not a good thing? Should someone or something not coherently have a place where we can assign our problems and then have them resolved (via a system of feedback based planning, in this case) instead of having us simply lie down and accept that the complex market interactions have decided the dice aren't on our side today? Does this total lack of power over our own lives not dishearten and deaden the soul just as deeply as any level of Byzantine state planning for planning's sake? Perhaps I draw too far to assign all the social malaise of late capitalism on this single point, but some degree must be certain.

None of this is to argue in and of itself for or against planning, which succeeds amazingly and unambiguously in some areas (say, total war) and falls short in others (say, consumerist trinkets.), but considering the political implications of planning versus markets is fascinating. When the planner doesn't give me a private jet, that's a shortage, when the market won't give me a private jet it's because it's not effective demand (i.e. i don't actually have the money, and therefore my desire doesn't count.)

That's why real life is fascist, it obfuscates the class struggle.

Small shop in village of 200 people is "planning internally". How does she know how many breads to buy every day? How does the bakery knows how much bread to bake every day?

There are plenty of legitimate arguments against central planning, the austrian’s gripes are not among them.

it's worth noting that in their babble "Planning" as a pejorative is usually central planning
i'm sure there's a hayek or rothbard quote akin to "actually we love planning, planning is very important - but we think the planner should be the person closest to the activity being conducted, not hundreds of miles away in a moscow office"

gut instinct is that it was in the road to serfdom (highly disrecommended read btw.) and that it's phrased along the lines of "the question is not to have planning or no planning, but what sort of planning we ought to have…"
(an actual hayek quote on similar lines of planning good/central planning bad is "The more the state "plans" the more difficult planning becomes for the individual.")

I wonder what they thought about the decentralized (but non-market) economic coordination advocated by anarchists.

This ignores the issues war economies faced. The officers in the field didn't know or care what it took to keep their units well supplied, they would just send up the chain command a list of what they needed and wanted for planned battles. Higher up logisticans took feedback through the chain of command to draw up plans for what the entire military would need to consume for the overall war plan (and how to distribute it). Then those at the very top would take those plan and mix it in with consumption needed at the civilian end, then figure out a national production plan for the year.
The two world wars proved those in the field tend to have many other things to worry about then the entire production chain. Yet the same would be true about other large scale endeavors, if you planning to land men on the moon then you really don't want to be bothered about the production process of the rockets you are too busy planning the mission and trouble shooting equipment.

Central planning doesn't need to look like in USSR. Decentralized planning does not require markets.

I agree with this, who wouldn't? Central planning however do not require existence of state. Markets does.

They are too busy REEEing about muh private property to care.

For fucks sake, Central Planning is not about "someone in Moscow making decisions". That's a strawman.

Plans - as a very general concept - are created on top, and then sent to the branch offices, where those plans get developed and sent further - to factories, and then to groups of workers. Only after persons who are actually doing the activity approve of the plan, does it get sent back - getting assembled and re-clarified at factories, branch offices, until the whole massive of information reaches Moscow, where everything gets put together.

There is a lot of information exchange going, but nobody in Moscow decides how many bolts specific worker has to use.

How do they work then? AFAIK Centralism implies that decisions made by some authority (regardless of how this authority appeared - Democratic Centralism means democratic methods of creating such authority) are binding for all participants.

Don't Anarchists attribute to "Decentralized" some meaning that differs from "everyone decides for himself"? And doesn't this - regardless of wishful thinking - mean that participants are essentially free to return to exchange-based economy and are incentivised to return to it?

> Do Anarchists attribute to "Decentralized" some meaning that differs from "everyone decides for himself"? And if they don't, doesn't this - regardless of wishful thinking - mean that participants are essentially free to return to exchange-based economy and are incentivised to return to it?

They aren't using state in thw marxist way tho

An ad-hoc guess would be one of their weird escape hatches like "a roving gang of communists who ensure the bourgeoisie don't re-establish themselves are a state."

War economies are a specific case. (Indeed one could go so far as to argue that a distributed market system that made war impossible because the state lacked the centralized power to force citizens to contribute to the war effort is an argument for this anti-planning attitude.) Mostly ancaps/lolberts tend to deal with peacetime planning. The Road to Serfdom basically runs along the inverse line (i.e. the expectation that because planning worked in war, it should work in peacetime too, leading to stalinism and then 1984, and randomly shoehorned onto socdems nationalising the railways while leaving factories private.)

I think (though I'm on very loose ground here because i don't really engage with ancaps) they argue that decentralised planning (a) involves a central node which then serves the basic role of a central planner (i.e. if bread is planned locally, perhaps oil is allocated at a higher node - and the oil node rules all.) or (b) if a centralized node doesn't exist, one node can still leverage it's position into turning itself into the central node. (i.e. the bread planner in Rhodesia can have a huge surplus because of the good farmland there, letting him send bread to other nodes in exchange for making them increasingly dependant on his node for this key commodity, eventually leveraging command over all farm equipment for his node, etc.)

this may however just be my conception of what an ancap argument would look like, or me reading off Holla Forums nonsense like actual ancap intellectuals had thought of it. in fairness, "the road to serfdom" just reads like the work of a Holla Forums ancap with reasonable command of the English language. indeed my great fear is that this is because they actually do read a lot of [ancap] theory…

welcome to austrian economics
in fairness, this seems a rose-tinted view of planning. sometimes for various practical reasons their approval will be a matter of coercion or apathy instead of genuine enthusiasm, (i.e. workers approve a plan that involves too little resource transfer because they don't care if they produce too little output, with consequences for everyone depending on that output for their input.)

there are then two other things to note
1. since someone in moscow ultimately has the authority over the situation, you run into the political problem noted in
2. there were some interesting cases of overwrought planning in Britain that make for a fun anecdote. In one case, an entire committee meeting was dedicated to deciding whether to add a label for a single instrument in an airplane cockpit.

Which brings me to a type of planning that's quite interesting: Indicative planning. en.wikipedia.org/wiki/Indicative_planning
Firstly it's interesting because of the voluntary-plan nature of the thing, but secondly I think it could be quite useful even without a coherent plan just because it forces politicians to think of overall goals or strategies for national economic matters, rather than just deciding to let the economy creak along while they plan their re-election.

damn, do these people know how much tonnes of produce is wasted and thrown out everyday?

Yet prior to the Great War the major powers didn't have much central planning prior to war, the major powers leading up to war the bureaucracies were only concerned with their military industrial complexes and ignored civilian industry. Once the war planners realized the war wouldn't even by Christmas 1914 they realized they had to intervene to avoid being defeated by the enemy or by revolution.
Because the logistical hurtles armies solved to supply armies in the field (while dealing with the home front economy) was far more complex then firms dealt with during peace time. For example during WWI, the Hindenburg Line was a marvel in how fast it was built (at massive human cost) that was only possible by ensuring construction never stopped thus requiring constant supplies and organizing the army of workers for its construction. The idea of doing something similar at peacetime at a slower pace (to improve working conditions) is rational, since there is less obstacles and time pressures during peace (and if you can centrally plan one large project during peace then doing more is just a matter of ensuring the planning and oversight).

It simplistic representation. There are additional "checks and balances", like appointed inspectors (responsible directly to central authority) who travel around the factories and oversee the whole process to see if someone tries to get smart - and appropriate punishments (gulags, yes) for sabotage (which it is essentially is).

Supreme Soviet. I.e. general population ultimately has authority (DotP, yes).

And, frankly, the political problem you presented seems to be caused by immaturity - which will be causing problems all the time anyway.

Yes, but "holidays in Siberia" is not an occupational hazard for British bureaucrats. Soviets relied on Party/RabKrIn oversight to keep bureaucrats in check.

As long as "Stalinist purges" were a factor, system worked. As one might guess, removing this oversight was the real objective of "destalinization".

> Which brings me to a type of planning that's quite interesting: Indicative planning. en.wikipedia.org/wiki/Indicative_planning
Market Socialism.

I don't remember consenting to private property.

Lobbyism is still a factor. That's just big step towards State Capitalism. If economy is in trouble, you are risking ending up with National "Socialism" instead of Market "Socialism" due to centralization of power in hands of biggest Capitalists.

Why are they incentivized to return to the market? We haven't seen serfdom make a return under capitalism, why would there be a reversion to market exchange after it's abolition? In order to re-implement it you would need to establish monopolistic control over productive instruments, which would constitute armed counterrevolution.

These people should not be called Austrians, the original Austrian economics were extremely intelligent and intellectually honest, thinking that the theory of marginal utility was the way forward for political economy, current so-called Austrians ought to be called Misean economists, they share little with the founders of the tradition.

Even the mises institute admits that the economic calculation problem has been solved by linear optimization.

This video is terrible, but I cant help but think that marxist organizations need this sort of animation to reach the younger generation.

All major corporations do internal planning using calculation methods invented to plan the soviet economy, esp linear optimization.

Because private property had not been abolished. You need to have Planned economy going.

Once we get to second-stage Communism, we will not see return to Capitalism either.

Because there will be incentives to return to market. You will start with participants favouring some over the others, then you'll get them exchanging favours (prisoner's dilemma - if you do not participate, you are screwed), and then they will start quantifying those favours - getting you back to full market economy, with proper money.

If it is decentralized planning as I understand (so far there had not been an explanation of what exactly is meant) - there is decentralized ownership of MoP - and, consequently, no monopolistic control. Entities are independent from one another.

Why do workers taking control of their workplaces necessitate a planned economy?
At each step in the process of production, the workers determine how much input they are currently using and are likely to use in the near future, and how much they produce and are likely to produce in the near future. Each stage sends its use and expected use data to the prior stage, allowing them to set production targets and send data on, in turn, to the stage preceding them.

When has planning gone better than capitalism?

When has capitalism not itself involved planning?


how does that image relates to economic planning? I guess nodes depict enterprises but what about links? are they bilateral or unilateral?

anyway, decentralized planning is what we have now
each enterprise plans without synchronizing their own plans with plans of other enterprises
even if we're talking about supplier/recipient relationship, apple setting a tight deadline for foxconn without much consideration as to the actual capacity forces foxconn to "speed up the conveyor line" so to speak
this scenario in general is a major complaint of third world suppliers, some Bangladeshi textile bourg always has his "italian brands setting unrealistic deadlines and astronomical fines" scapegoat ready

plan can be decentrally drafted, but can't be decentrally enforced
it's a democratic centralist principle - freedom in discussion, unity in action
if some enterprise breaks its contract, thereby sabotaging the whole plan, it must be punished

I think Glushkov with his dialog consensus planning aka Displan really nailed it
Cockshott wants to disaggregate the whole input/output matrix when it is not really necessary
he is obsessed with perfect optimum just like soviet cabinet academicians were
on the other hand Glushkov argued that plan does't need to be perfectly optimal, it only needs to be optimal enough, and with the advancement of computer technology we can gradually disaggregate deeper and deeper, thereby constantly increasing precision of our plans
he argued that the specter of perfect market equilibrium haunts soviet economic science
plan needs to be only optimal enough to be preferable to market allocation because markets are not perfect in reality
also he emphasized that plan needs to be a rolling edge plan, where as Cockshott barely mentions planning horizon
he also deals with reality where people are divided into separate enterprise collectives, where as Cockshott deals with some homogeneous civitas
you need input into drafting process from these enterprises first and foremost, not from some all-people's congress
I would rephrase that enterprise is a basic unit of industrial society

There is no control in exchange-based economy. Saying "read Marx" is gauche, but you really should.

It's not about evil Capitalists, but the whole system that necessitates profit-oriented behaviour - which leads to accumulation of Capital, wage labour, and then - exploitation.

Doesn't explain anything. If workers are acting as one entity - it is Central Planning. If they are split into independent entities - that's co-ops, and Capitalism persists.

I should have said centrally planned rather than planned, sorry. What I don't get is why planning at the level of the workplace is considered central planning. It doesn't have more than a passing similarity to bureaucrats at a central office pouring over figures relating to the production of the entire region, as was the case with wartime planning in the United States and under Stalin in the USSR.

Why couldn't you just make more of what is selling and less of what isn't? How do they think the market solves this problem?


I think the difference between the planning inside a business corporation (or any company) and a national economy is the level of complexity of these two systems. A business is a relatively simple system compared to an entire economy of a region, and thus fares better under planning schemes. Large, complex systems tend to be very fragile and susceptible to catastrophic failure when controlled from the top down.

I'm not saying that all planning is bad, just that decentralised and distributed networks of centrally planned simple systems, organised from the bottom up, are much more resilient to unexpected failures than large top down ones

Do you have a good source for that juicy tidbit about corps using methods developed in the SU to plan production. That would be a fucking hole in one against anyone spouting this shit.

You really need to source these things my dude.

And remember, white collars are not the same as state bureaucracy. Because theyre private sector, so its completely different.

The advantage of central plans is coordinating the entire production chain. This is why war plans tend to include centralized economic plans when it goes into total war. You also have the advantage of shifting resources and manpower across the entire economy.

Top kek.

pls respond

google linear programming or applied linear programming

Because Austrians have an ideological belief that centralized government planning inevitably leads to totalitarianism.

Podcast related:

The whole point of rightwing theory in general is to engineer apologia for monstrous social practices, and that's all there is to it. Just check wikipedo to see how many of the Austrian school's "luminaires" were born in rich families. Altho every once in a while hey actually do say something relevant to economics, the vast majority of their work is not worth the time to read because they're not arguing in good faith to begin with.