Mises sayeth: If the memory of all prices of the past were to fade away, the pricing process would become more troublesome, but *not impossible* as far as the mutual exchange ratios between various commodities are concerned. It would be harder for the entrepreneurs to adjust production to the demand of the public, but it could be done nonetheless. It would be necessary for them to assemble anew all the data they need as the basis of their operations. They would not avoid mistakes which they now evade on account of experience at their disposal. Price fluctuations would be more violent at the beginning, factors of production would be wasted, want-satisfaction would be impaired. But finally, having paid dearly, people would again have acquired the experience needed for a smooth working of the market process. I take this to mean its theoretically possible for an entrepreneur to forecast future prices even when there is not a money in place in society. For example in a barter society the day before money arises, someone could foresee this and try to predict future money prices of goods in terms of the coming money. But some of my friends are telling me no, that this is a goof by Mises, that it contradicts the regression theorem. I dont think so b/c I dont think the RT was ever meant to prove that money prices always necessarily depend on past prices, or that money has to arise as a commodity. I think prices are useufl in forecasting future prices, they are an accessory of appraisement, but they are neither necessary nor sufficient for successful forecasting; they are just one type of useful information the forecaster can rely on. (see on the accessory issue Salerno: “[t]he price system is not–and praxeologically cannot be–a mechanism for economizing and communicating the knowledge relevant to production plans. The realized prices of history are an accessory of appraisement” mises.org/journals/rae/pdf/rae4_1_2.pdf However this means that some statements like this of Guido Huelsmann is too broad: e.g.: ... Hülsmann argues (p. 47) that present prices “... are only the, if indispensable, starting point for our understanding of the future.” Considering the intervening changes of these conditions we form, by way of Vertehen, a judgment upon the prices of the future. Without the basis provided by present money prices, this procedure would be impossible. 63 mises.org/journals/rae/pdf/rae10_1_2.pdf Prices are useful but are they really indispensable? Is forecasting *impossible* without past prices, or just more difficult? If so, what is the proof of this? Does this contradict Misess comment? Does Misess comment contradict Misess own regression theorem? I collect some of these quotes here: stephankinsella/2009/07/knowledge-vs-calculation/ Im very curious as to what other Austrians think about this. Calling Robert Murphy, Jeffrey Tucker, Doug French, Paul Edwards, Michael Barnett, et al.
Posted on: Sat, 09 Nov 2013 22:00:59 +0000
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