http://mises.org/econcalc.asp

Economic Calculation in the Socialist Commonwealth
by Ludwig von Mises (1920)

In this essay Mises criticizes socialism (in short socialism is impossible because it does not provide means for rational economic calculation and decision making). In doing so, he has to talk about what socialism says. He makes a good attempt to give a fair and reasonable interpretation. One of the things he says is socialism differentiates between consumption goods and the means of production. If a socialist citizen wishes to trade his allotment of beer for his friend's allotment of concert tickets, that's allowed. But there can be no trade of the means of production because they are communally owned.

That makes sense because otherwise the planners have to know everyone's tastes so they know who to give beer to and who to give concert tickets to. (Or they can try a rather implausible scheme such as making everythign free for the taking and asking people to only take modestly.)

There is a problem here: this distinction rests on a naive and false conception of the kinds of goods that exist. It assumes household cleaners are for consuming and hammers are for producing and every good is is one type or the other. This is false. Consider the Macbook. This is a consumer product which people use to play games, but it's also a means of production for programmers, video game artists, people who need a spreedsheet program to manage a warehouse or factory, architects, and sales people who need to create presentations.

Even household cleaners can be used in production (to make drugs, for example) and hammers can certainly be used for either hobby work or professional work. Jewelry can be melted into gold or silver which can be used in production. Factories can be remodeled into living spaces. There can be no distinction between consumer and productive goods.

This is not Mises' problem. It is socialism's problem. If socialism wishes the factors of production to be communally owned, but for consumption goods to be privately owned, then it's socialism's problem to (impossibly) draw a distinction between the two.

My conclusion is that socialists have a choice:

1) Socialism is impossible.

2) Socialism must intrude into its citizens' entire lives: everything is communally owned and its use determined by the planners.

3) Socialism must make arbitrary declarations about which goods are to be communally owned and which not. Doing that will cause economic harm by preventing goods from switching categories even when doing so is efficient.

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What makes profit emerge is the fact that the entrepreneur who judges the future prices of the products more correctly than other people do buys some or all of the factors of production at prices which, seen from the point of view of the future state of the market, are too low. Thus the total costs of production — including interest on the capital invested — lag behind the prices which the entrepreneur receives for the product. This difference is entrepreneurial profit.

By Ludwig von Mises in Profit and Loss, p 8

I am making freely available the History of Greece by William Godwin as a PDF. This is a very rare book which could not be found online until today. Enjoy. There's a high resolution version too.

I wrote a guide to the iOS game Infinity Blade:

http://forums.epicgames.com/showthread.php?t=755093

Street musicians provide a public good. Anyone who wishes can be a free rider. There's no obligation to pay, and the majority of people do not pay.

They provide this public good without any help from the Government. Public goods can be provided without Government assisstance.

They also provide this public good without any ability to force anyone to pay. They do not wish such an ability.

Street musicians prefer to attract a crowd, even though they know that means they will have more free riders on the day. Free riders are harmless to them at worst, and actually can be positive (they add prestige and may perhaps tell someone about it later).

People fear that public goods cannot be provided because everyone will choose to be a free rider. But this is not what happens. In real life, everyone can be a free rider for street musicians, but people choose not to be. Some pay.

Enough pay that many street musicians go back the next day and do it again. Their actions reveal the pay is adequate and the profession preferable, for them, to any other.

How can it be that a profession can be viable when it provides nothing but a public good and everyone can have a free ride? This directly contradicts mainstream economic thinking on the matter. The only thing to do is conclude that those thinkers are mistaken (and to wonder why they failed to notice such a common place fact).

In some movies, a character in the movie gives advice which is very helpful and important, and the advice receiver's life is significantly changed for the better.

The advice is almost always very generic. It's so generic you could put it in a movie intended to appeal to millions of different people, and offend no one, and many of them could even think it's decent advice for themselves.

The advice is unoriginal. It's stuff you could get from a movie without needing anyone to advise you.

So, why does it work? How can advice that is available in movies be effective for anyone? Shouldn't the characters have heard it before, and if it's useful for them then already be doing it to the best of their abilities? Do the people in movies not themselves watch movies with advice?

There seems to be a theory that telling people what is already common knowledge can be life changing if you say it at the right moment, with the right emotions in your voice.

It's ridiculous. In real life (and so it should be in movies that hope for realism), everyone is already familiar with generic movie advice, and if they have problems despite already knowing that advice then something better will be required to solve them.

Maybe something like this.

Kant offered us the categorical imperative:

http://en.wikipedia.org/wiki/Categorical_imperative

Act only according to that maxim whereby you can, at the same time, will that it should become a universal law.

But all possible actions accord with infinitely many different universal laws.

For example suppose I want to rob someone. That is compatible with the law "rob everyone in sight". It is also compatible with the universal law consisting of "never rob anyone" plus specifying one exception. That law is universal since it covers all cases (that's what universal means).

It's also compatible with, "Commit the robbery. 500 years and N seconds later, if still alive, eat a carrot. Otherwise follow whim." As N ranges from 0 to infinity, we construct infinitely many universal moralities. And we can replace the robbery with anything else we like.

The categorical imperative is, contrary to its intent, compatible with all actions, and with all moral worldviews. Another simple way: take any moral worldview you already have which advocates what you want to do, then add "or if something is not specified, follow your whim" to make it universal.

The primary flaw is that the categorical imperative incorrectly assumes that actions only accord with one universal law each.