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Source link: http://archive.mises.org/13585/socialist-calculation-2/

Socialist Calculation

August 16, 2010 by

If we are to judge aright, we must realize that the system under which we live, choked up with attempts at partial planning, is almost as far from capitalism as it is from any consistent system of planning. FULL ARTICLE by Friedrich A. Hayek

{ 37 comments }

Allen Weingarten August 16, 2010 at 12:21 pm

“The question as to which is the most appropriate permanent framework that will secure the smoothest and most efficient working of competition is of the greatest importance and one that, it must be admitted, has been sadly neglected by economists.”

Let anarchists note that Hayek seeks a common framework to permit competition, rather than different frameworks by competing legal systems.

Franklin August 16, 2010 at 2:46 pm

Two things:
(1) Whether Hayek saw it as a common framework, or not, is irrelevant. Anarchists don’t normally seek a Pope-like infallibility syndrome in anyone, including some of the greatest scholars in history;
(2) Competing legal systems do not necessarily imply competing frameworks.

Allen Weingarten August 17, 2010 at 5:25 am

Franklin, anarchists have generally advocated separate legal systems. For example, they reject Ayn Rand’s arguments about a conflict between those who accept the authority of government A, with those who accept the authority of government B. However, if anarchism accepts a common legal framework, and the use of force to protect it, then it concurs with our Constitution.

Do you really believe that a legal system wherein abortion constitutes murder, and where another views it as an inalienable right, “do not necessarily imply competing frameworks”?

contradictions August 16, 2010 at 12:49 pm

The Theory of Calculation Economic of Von Mises is limited and contradictory. According to Mises, outside the Capitalism not there Economy. In “Economic Policy: Thoughts for Today and Tomorrow” did not give a convincing explanation on Russia, arguing only that “russians are russians”.

Russ the Apostate August 16, 2010 at 12:58 pm

In my understanding, Mises did not say that there is no economy without a free market, only that there is no rational pricing mechanism. Obviously, the Soviets had an economy, albeit not a very good one. What they did not have was a rational pricing mechanism to allocate goods and services. Central planning was (and is) a very poor substitute.

planing is not economy August 16, 2010 at 2:25 pm

Mises said that planning “is not economy”. Want more?

Russ the Apostate August 16, 2010 at 5:03 pm

Where did he say this? Book, page and line, please.

planing is not economy August 16, 2010 at 5:29 pm

This is question of someone who never readed Mises. In many books, he sair this, and repeats.

Russ the Apostate August 16, 2010 at 5:46 pm

If he said this in many places, then you shouldn’t have any trouble producing a quote. Put up or shut up, tovarisch.

correcting August 16, 2010 at 5:35 pm

Where it is written “readed”, in true is “read”.

bob August 20, 2010 at 1:47 pm

economy is efficient production. planning is not.

Silas Barta August 16, 2010 at 2:40 pm

But … but … their GDP numbers were so great! They must have been satisfying actual wants! :-P

Jonathan M. F. Catalán August 16, 2010 at 1:04 pm

George Reisman, in Capitalism, claims that the Soviet Union survived for as long as it did largely because of subsidization by the west (in terms of food and other items).

Beefcake the Mighty August 16, 2010 at 1:12 pm

See Anthony Sutton’s work on this issue as well, on technology transfers from the West to the USSR.

Jonathan M. F. Catalán August 16, 2010 at 5:51 pm

His book on the Soviet Union’s technology looks really good. Unfortunately, the copy at Amazon.com is $200+. I wonder if a publisher can put the book back in print (it would seem like a good book for the Mises Institute, as well).

Beefcake the Mighty August 16, 2010 at 7:55 pm

This is unfortunate. However, his The Best Enemy Money Can Buy is a very useful synopsis of his findings, and can be acquired quite cheaply:

http://www.amazon.com/Best-Enemy-Money-Can-Buy/dp/0937765015/ref=sr_1_1?ie=UTF8&s=books&qid=1282006489&sr=8-1

Pure misrepresentation of History August 16, 2010 at 2:21 pm

Soviet Union after World War II, was blocked by the West. Was forced working alone. In this age, was first country to invent spaceflight.

Silas Barta August 16, 2010 at 2:41 pm

United States after World War II, was blocked by the East. Was forced working alone. In this age, was first country to put man on moon.

Collateral effects on grammar too.

planing is not economy August 16, 2010 at 4:59 pm

United States was not blocked by nobody, but unlike, te United States blocked Soviet Union. On “put man on moon”, there controversies. I know a friend that worked in NASA (unfortunately already is death) and said that put on moon is only false advertising and that photographs were only simulations, the true is that photographed another footprint that was not on the moon, because age of Cold War, the two powers it clashed, in a war politicy and ideological.

Inquisitor August 16, 2010 at 5:16 pm

Who cares? Shall we undertake a phallic size measurement of Bush and Putin and see who comes out on top? It’s about as relevant…

Russ the Apostate August 16, 2010 at 5:06 pm

“…was first country to invent spaceflight.”

Your name isn’t by chance Pavel Chekhov, is it?

Peter Surda August 16, 2010 at 5:15 pm

If it was Chekov, they would have “inwented” spaceflight.

Russ the Apostate August 16, 2010 at 5:05 pm

It’s my understanding that the Soviet Union also used the prices in the West as a guide for their planning. This is assinine, of course, since Western prices did not take into account Soviet conditions, but it probably also kept the Soviets from the worst possible mistakes in “planning”.

Daniel August 17, 2010 at 1:26 am

No, this is amusing

After all, if you need to mimic a market economy to have a functional economy, why not have a market economy in the first place?

michael August 17, 2010 at 2:07 am

It’s not just George Reisman. Every historian says it. The Soviet Union was saved on at least two occasions by American aid.

The first was during the period of War Communism, instituted at the end of the civil war. The Bolsheviks systematically destroyed all functioning government and production, leaving the country in chaos. Western aid, mostly American and coordinated by Herb Hoover, saved lives in the millions– a fact with which no historian disagrees.

http://en.wikipedia.org/wiki/Russian_famine_of_1921

The second instance was when Hitler was fought to a standstill at Stalingrad and Kursk. Soviet resources were utterly exhausted. American Lend-Lease, in the opinions of all Russians old enough to remember, saved them.

error August 17, 2010 at 1:23 pm

Forget some facts in História of Soviet Union:

1) until 1921, Soviet Union was attacked by more than 1 dozen countries (including powers western, France, United States…).

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

2) After Second World War, until 1980s, Soviet Union was blocked could not do exchanges with West. Search on Urengoy–Pomary–Uzhgorod pipeline and see how the United States attempted embargo soviet transaction with western Europe.

bob August 20, 2010 at 1:57 pm

i don’t see your point. even with the direct foreign aid and capitalist prices to use to plan production, the USSR still fell.

Inquisitor August 16, 2010 at 5:14 pm

Yada yada yada.

Provide an argument or go away.

relatin of exchage August 16, 2010 at 7:48 pm

Soviet Union not used the prices in the West. The relation with West was only of EXCHANGE (this only until the Second World War).

response August 16, 2010 at 9:03 pm

It really is amazing, but Mises repeats this foolishness. For example, in Human Action, Chapter on “The Impossibility of Economic Calculation under Socialism”, he said:

“The paradox of “planning” is that it cannot plan, because of the absence of economic calculation. What is called a planned economy is no economy at all.”

Old Mexican August 17, 2010 at 12:11 am

Re: Response,

He also says:

“What is called conscious planning is precisely the elimination of conscious purposive action.”

The foolishness rests in the planner’s presumption of being able to know everything.

Mises had already explained the importance of the price system for the allocation of resources, so why would you consider his conclusion “foolish” is something you will have to explain.

foolishness because... August 17, 2010 at 11:20 am

Foolishness because Mises believed that planning is not economy. Foolishness because he believed that outside capitalism not there Economy. Foolishness because their Theory is contradictory and did not know explain on Soviet experience, saying ony that “russians are russians”.

error August 17, 2010 at 11:21 am

Which reads “ony”, is “only”.

michael August 18, 2010 at 8:22 am

Mex: It would be a rare planner who claimed that he knew “everything”. I think they all understand that if you wait until you know everything, you’ll never get around to executing a plan. And that there comes a time for action, so that ready or not, when that time comes you have to do the best with whatever you’ve got.

That carries over into our own lives. Do you actually have no plan? Do you go into every new day just on a wing and a prayer, ready to be surprised by anything that crops up along your way? Or does your life have some overall design to it, some directionality?

Daniel August 17, 2010 at 1:27 am

Get out of here, STALKER

vc August 17, 2010 at 6:53 am

@Allen
That is a fair question. However, would you consider a system in which the whim of the majority of only 9 people out of 300 million can change abortion from an unalienable right into murder (or vice versa) a framework at all?
Or is it simply an appeal to arbitrary authority based on a monopoly of force?

Allen Weingarten August 17, 2010 at 9:43 am

VC, I submit that that the government, and in particular the Supreme Court, was never given the delegated powers to impose their moral view. I do not deny, but affirm the corruption of our interventionist government. My position is opposed to arbitrary authority, and also to anarchism. Rather I hold to the Declaration of Independence, where the proper role of government is to defend our rights.

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