[lucky]

I would not view the relationship between input work and output as a positive one, otherwise there is the problem mentioned by Lucky of workers expending energy into things just to make them more valuable. Perhaps it is better viewed as 'cost' based pricing?

If what you want is simply accounting of cost, then nobody is going to disagree: all firms already compute their costs. I wouldn't call that a "price", it already has a different name: "cost of revenue", which you will find in every financial report.

Correct me if I am wrong but I think Capitalism finds this process very difficult as well, investment in unproven ideas can often be considered as high risk?

Well duh. Speculative ventures are high risk. Are you saying that risk estimate is incorrect?

Capitalist markets don't really find it difficult to fund risky investments. Venture capital exists in capitalist economies, not so much in socialist ones.

Similarly to the argument of Pants-of-dog, we might view the level of investment in third world diseases like Ebola as a sign that Capitalism cannot correctly assess the value of some goods (a vaccine) to society, a Socialist central planner may very well do much better here (e.g. Cuban health workers).

So... do Cuban health workers have an Ebola vaccine?

Medical research (and other research) would indeed present a market failure absent a government involment. But... thank God, we know it, and thus we have government involvement. The US government spends $50 billion/year on medical research.

[Nunt]

So as long as socialists do not centralise the entire economy, the information problem is not really a problem.

Correct. The information problem refers to the issue that you cannot price capital goods. So you don't know the best way of producing stuff. As long as the majority of the economy is decentralized, you can use the prices generated by the decentralized part and still make a cost-benefit analysis. I'm not saying that government provision of goods is perfect and that it knows no problem. But the economic calculation is not a major issue.

because capitalism only responds to price information and can not access other information feedback mechanisms.

Not true. If we define capitalism as the mode of production in which people can make decisions about their own property and sell, trade or give it away, then there is no reason to assume people will only care about profit and only use prices in their calculation. You are ignoring an important part of capitalism: namely the non-profit sector. You got plenty of charities, churches, cooperatives, schools, hospitals, advocacy organizations etc. providing goods and services without pursuing profit.

[Pants-of-dog]

Correct. The information problem refers to the issue that you cannot price capital goods. So you don't know the best way of producing stuff. As long as the majority of the economy is decentralized, you can use the prices generated by the decentralized part and still make a cost-benefit analysis. I'm not saying that government provision of goods is perfect and that it knows no problem. But the economic calculation is not a major issue.

I think it depends on what good or service is being sold. Capitalism is good for chocolate bars and washing machines. Centralised economies are better at things like health care and defense.

Not true. If we define capitalism as the mode of production in which people can make decisions about their own property and sell, trade or give it away, then there is no reason to assume people will only care about profit and only use prices in their calculation. You are ignoring an important part of capitalism: namely the non-profit sector. You got plenty of charities, churches, cooperatives, schools, hospitals, advocacy organizations etc. providing goods and services without pursuing profit.

But none of those are capitalism or are even intrinsic to capitalism. All or most of these institutions exist in non-capitalist times and places.

[Typhoon]

If what you want is simply accounting of cost, then nobody is going to disagree: all firms already compute their costs. I wouldn't call that a "price", it already has a different name: "cost of revenue", which you will find in every financial report.

Then that's probably what I would go for but a complete a costing as possible as from what I have read the cost of revenue and cost of goods sold do not incorporate all costs such as indirect costs.

Are you saying that risk estimate is incorrect?

Not the practice but the outcome would appear to be in many cases.

So... do Cuban health workers have an Ebola vaccine?

No but the greater contribution of Cuba (taking into account the size of their economy) would suggest they have been able to assess the situation better. Even with government funding on medical research I would still say that the current system is clearly failing, especially with respect to global problems such as disease in the third world.