But why even talk about it since that's not what he was talking about? The economic calculation problem results any time you try to remove the price system. If you have a price system that is created by a market, then the problem does not apply. There are other problems, but not the economic calculation problem.
I happen to disagree, but I consider knowledge problems more pertinent than the price problem, though both are traceable to broader information problems, of course. But my point that Mises was not legitimately able to present an argument that socialism was impossible through his failure to adequately consider libertarian socialism (he considered syndicalism to be a form of "workers' capitalism") and incorporate its tenets into his analysis.
There are
several varieties of libertarian socialism that exist, however. Since market socialism does not technically abolish pricing, and since modern democratic market socialism has focused on the utilization of worker-owned enterprises and labor cooperatives to bypass Hayekian tacit and distributed knowledge problems (consider Theodore Burczak's work, for example), I'll focus on decentralized participatory economic planning. First, as to the price "problem," democratic network between producers and consumers can foster appropriation of use value depending on the amount of resources used in production, the labor value of the production, and the amount of benefits (or utility) that the finished product provides. Use value can easily be determined in a decentralized system through the estimates of direct consumers, whose input would actually matter, as direct democracy would be the system in place. Obviously, central planners are not the actual consumers and cannot make similar estimates. Mises’s argument fails to apply to libertarian socialism in this way. Cost is too often confused with price because of the interference of the market and the wage system, but
actual cost can be estimated based on the material resources used in production, the labor value of the production, (since beneficial social effects rather than strict remuneration is essential) and the utility of the finished product, as I mentioned above.
Next, as to knowledge problems, consider this quote:
[P]roduction and exchange represent an undertaking so complicated that the plans of the state socialists...would prove to be absolutely ineffective as soon as they were applied to life. No government would be able to organize production...for in all production there arise daily thousands of difficulties which no government can solve or foresee. It is certainly impossible to foresee everything. Only the efforts of thousand of intelligences working on the problems can cooperate in the development of a new social system and find the best solutions for the thousands of local needs.
This comment came not from Mises or Hayek, but from the anarcho-communist Peter Kropotkin in a comment that predated
Economic Calculation in the Socialist Commonwealth, thus being an example of the early and perpetual libertarian socialist objection to the prospect of central planning or a command economy. Libertarian socialism, by contrast, has always emphasized either markets (in terms of individualist minarchism and anarchism or Proudhonian mutualism) or decentralized economic planning when dealing with libertarian collectivism and communism. For example, Michael Albert and Robin Hahnel's "participatory economics" model is an example of libertarian collectivism, which is socialist collectivism (somewhat distinct from communism) compatible with either minarchism or anarchism. Consider
this review:
This is a model designed to yield Pareto optimal allocation through decentralized planning. It is an effort to overcome the commodity fetishism of markets, market-bias towards private goods at the expense of public goods, externalities, and market failures of all kinds. Additionally, their model attempts to go beyond the hierarchical decision-making inherent in central planning. It is in many respects a well thought-through effort to go beyond markets without succumbing to the domination of central planning.
The model relies on the existence of "consumer councils" organized geographically by neighborhood, municipality, state, and federal jurisdictions. They start out small and local, yet become aggregated until their plans combine into a national system. The "consumer councils" are assumed to be self-interested with each member assumed to act in her/his own individual interest. They are "rational maximizers" as is assumed in neoclassicism. The effective "check" on each unit is the fact that they exist within a network of other local consumer councils, who also want to maximize self-interest. Also, the self-interest of consumer councils is checked by the rational maximizing behavior of "worker councils" in production. "Worker councils" likewise seek to achieve the best working conditions and most income under conditions that are not competitive but that are collectively monitored by other competing workers' councils. The democratically run worker councils are grouped by industry and proceed from the shopfloor upwards to the federal level. Plans are drawn through an iterative process in which consumer councils articulate what they want to purchase and worker councils articulate what they want to produce. Each person, as both consumer and producer, gets to vote according to the extent to which she/he is affected by the decision.
Our focus on economic coordination between various decentralized and non-hierarchical levels of syndicates and syndical federations is obviously distinctive from the "state socialist" model (which always amounts to state
capitalism), and thus represents a challenge to the economic calculation problem that existed even before Mises's first commentary on the matter. As previously mentioned, democratic market socialism is much the same.
This depends highly on how you grade schools of economic thought.
If the goal is to maximize morality, I think the Austrian School is as good as it gets.
I think not, but then again, I'm a libertarian. It's necessary for me to oppose the authoritarian hierarchies that emerge in the capitalist economy both through the internal firm structure in the labor market and the consolidation of ownership and control of the means of production by a wealthy elite. :shrug:
If the goal is to maximize collective wealth, then yes, go with another school of thought and pray that a wise but benevolent dictator emerges so we can all live happily ever after.
This is another comment that illustrates why the Austrian school is not able to provide valid counters to socialists; they are incapable of comprehending the vibrancy of socialist political economy.
Since empiricism cannot prove the validity of any macroeconomic theory, there is no reason whatsoever to use it or to marginalize a school of thought simply because they ignore it.
So as a loyal Misesian, you'd agree that the tendency to exclaim that "Mises was right" after the dissolution of the USSR was inconsistent with Austrian principles, since the impossibility (or impracticality) of centrally planned command "socialism" should have been accepted based on the soundness of Mises, Hayek, Robbins et al.'s arguments rather than empirical observation of Soviet failure?
