You're insisting on prices as the only useful economic signal while simultaneously dismissing the entire field of economics. That is a wholly nonsensical viewpoint to have and it is completely pointless to discuss anything you have to say here.
You do realize that company actually defaulted on the Russian collapse post-USSR, right? They weren't trying to price derivatives on a regulated and established exchange, which is what they were famous for and what their formulas are still used for. I'm not entirely sure you understand all of the completely disparate events and concepts you are stringing together to try and desperately make a point, because essentially none of them have anything to do with whether or not the Soviets could have reformed their economy and maintained their spot as a developed country post-WW2.
You do know how the reply function works, right?So Wall Street whiz kids getting wrecked in Russian bond markets 6+ years after the fall of communism is somehow a critique of the socialist calculation problem? I am seriously having a very hard time connecting the random intro to econ sidebars you are trying to draw a straight line between.
Largely not. The large-scale consensus, Soviet industrial output, GDP, GDP-per-head, and GNP had returned to pre-war levels by 1948. Soviet agriculture production had returned to pre-war levels by the early-50s. And the last economic damage, in the service sector, had been repaired by 1955. Of course, in some ways (such as demographically) the USSR never really recovered by WW2 and this had it's own distorting effect on it's economy, but to pretend that the USSR didn't grow at all from the pre-war level is downright farcical.
No, that's completely bogus. The Maginot Line was a huge waste that came at the expense of the rest of the French Army and extending it to the coast would have diverted so many resources as to leave the French army so weak that the Germans would have wrecked their face, line or no. The experience in WW2 showed that fixed fortifications by themselves are worthless. They need a large effective army to back them up. Of your examples, the Mannerheim line didn't exist in WW2 (that was WW1) and the German defense across the Italian peninsula were ad-hoc affairs relying mostly on field fortifications and terrain without the massive investment of fortress-like fixed fortifications akin to the Maginot Line and even there they were consistently (if slowly) pushed back. While there are examples of positions relying on fixed fortification holding out in WWII, those defenses usually relied on the attacker being at the end of their rope. Without that, the norm was for defenders to delay the attacker for a bit and then be defeated, usually taking heavier losses in the process as the attacker battered them down with firepower.
Even had the Germans attacked the Maginot IOTL head on, they probably would have punched through it and overrun the French frontier before exhausting themselves and bogging themselves against the increasing numbers of deploying French reserves on a rather narrow front over difficult terrain. It would still be a victory for them, just not the "knock France out in one-blow" victory that they needed.
The most successful defenses in WW2 were those which relied on aggressive maneuver by mobile forces supported by (and not the other way around) counter-penetration forces operating from quickly set-up field fortifications enhanced with obstacles like mines. Which is precisely the sort of defense the Soviets planned to mount in the eventuality they were ever attacked first.
What's more, the disposition of Soviet forces throughout the Cold War was actually much better suited to such a defense then their enemies. Soviet armies were echeloned in depth, actually gave them much greater defense-in-depth then that which existed on the NATO side of the border. NATO's commitment to forward defense makes little military sense unless they were to take the offensive and this formed much of the basis for Soviet justifications of fears of a sudden NATO surprise offensive. Not to say that the Soviets were in the right or anything, but to try and argue the Soviets perceived no threat from the West is boulder-dash, even before we factor in that they were at a disadvantage in the nuclear angle for the first half of the Cold War. The Cold War was very much a case of both sides having genuine mutual fears of the other, even if those fears do not necessarily justify their subsequent actions.
So Wall Street whiz kids getting wrecked in Russian bond markets 6+ years after the fall of communism is somehow a critique of the socialist calculation problem? I am seriously having a very hard time connecting the random intro to econ sidebars you are trying to draw a straight line between.
Hedge funds (like Long Term Capital Management) are not claiming to have complete calculability on their investments, nor is that what the Black-Scholes Pricing Models claims to have for derivatives investments. You cannot credibly claim the failures of hedge funds taking too much risk in financial instruments as proof against a planned economy in which most of those financial instruments would be and were wholly banned.What I am saying there is a pricing problem. Even in a capitalist economy like the US it is near impossible to get the price right days or weeks in advance for complex finances. All these economic models are just that, models. Which is why the price models the economists at Long Term tried to use failed. If they could get their price models right Long Term would be the biggest investment company on Wall Street right now.
The USSR was nothing but complex. It had hundreds of thousands of products from raw materials, to industrial goods to services. Considering the shortages and quality problems that were rampant in the Soviet Union I have serious doubts they got the prices right or that people looking back decades later can get the prices right. Between the GIGO factor and data overload it is hard to see how they can.
Hedge funds (like Long Term Capital Management) are not claiming to have complete calculability on their investments, nor is that what the Black-Scholes Pricing Models claims to have for derivatives investments. You cannot credibly claim the failures of hedge funds taking too much risk in financial instruments as proof against a planned economy in which most of those financial instruments would be and were wholly banned.
Good luck trying for convergence arbitrage on Soviet era lottery bonds.
Yes, the failures of Wall Street in risk management are clear evidence against a planned economy.If you can't have complete calculability on derivatives prices how can you have complete calculability of ALL prices on an entire economy? If you can't get it right on such a relatively small problem how can you get it right on a much, much bigger problem? How can I solve for A Sin(A^5)+Tan(B^3/C!)-ln(D+E^-5) = F if I can't even solve for A AB=C? The Soviet economy was much bigger and much more complex than an investment fund. A couple of the best economists in the world couldn't solve the relatively small problem of pricing Russian bonds right and yet the much, much more complex calculation of ALL prices of the entire Soviet economy can be?
Yes, the failures of Wall Street in risk management are clear evidence against a planned economy.
I'm honestly not sure what you even think you are arguing at this point.
I'll be the first one to admit I'm no economist - I'll defer to the experts here on this one.@Lillith @ObssesedNuker and others, here a question:
I saw on this Brazilian neoliberal page that the USSR growth until the 1960s wasn't really only growth, and most of the data show numbers from the post war reconstruction, thus as soon the damage was repaired the growth fell behind third world levels, is that true or not?
I don't really think this is true? "Under communism" also implies the USSR had reached communism, or considered itself communist - it did neither. The industrialization of the USSR was incredibly aggressive and it wouldn't have been as aggressive without the efforts under Stalin.They never really got close. Also, just to be clear, Russia would have industrialized much quicker and better in every way, including with regards to its military-industrial complex, without Communism. I'm not completely sure that's what you're saying, but a myth one sometimes hears is that the USSR/Russia would have been fucked in WWII if Stalin hadn't beefed up the heavy industry like crazy. That's not true.
I'll be the first one to admit I'm no economist - I'll defer to the experts here on this one.
I don't really think this is true? "Under communism" also implies the USSR had reached communism, or considered itself communist - it did neither. The industrialization of the USSR was incredibly aggressive and it wouldn't have been as aggressive without the efforts under Stalin.
You do not know what you are talking about here. Long Term Capital Management did not believe prices were perfectly calculable- their primary strategy of fixed income arbitrage would not work if prices were perfectly calculable, because if prices were perfectly calculable there would and could exist no opportunities for arbitrage. (If price was perfectly calculable there could never be more than one price). Black and Scholes were not part of the day to day operation of the fund nor was their Nobel Prize winning work (which to be clear, does not promise or even attempt perfect price calculability but is still widely used today) a major part of the fund's strategies. What Long Term Capital Management suffered was not a failure to calculate price correctly, what they failed to measure accurately was risk. (They actually obfuscated their portfolio's risk, possibly intentionally, by spreading their risky positions and leverage across multiple firms, which is part of why their collapse was so unexpected and spread so widely. No single risk department could see the whole picture.)Not risk management, pricing. The whole point is that they got the PRICES wrong. Is there some sort of magic that governments have that get the pricing right through the entire economy? Was the Soviet planning commission so wonderful that they could get every price right in an entire economy right when a couple Nobel Prize winners couldn't solve a much, much easier problem? The Soviet economy had massive shortages during its entire history, didn't prices have something to do with it? Such as setting the price so low for bread that the peasants were feeding it to their pigs? If you hadn't noticed my whole argument here is about pricing.
Marxism is old. It was developed before modern social science and placed way to much emphasis on economical factors. Marxism assumes that if you change the way the economy is organised the way people think, feel and act will adjust more or less automatically and they will become happy, well adjusted communist "new men" almost overnight.
Marxism should have incorporated elements from sociology and psicology in the early 1900s and evolved. Instead it infiltrated them to produce Marxist versions that followed Marxist logic more than reality. When people failed to change after the revolution communism was doomed.
Within 1850s knowledge Marxism was brilliant. But it's assumptions on the evolution of societies where based on speculation not science and too simplistic.