The Origins of the Socialist ‘Calculus’ Debate

There is a strange fact in the history of political and social thought of this century, that is, the two most powerful dominating theoretical and rational systems of social understanding, on the one hand, are Classical liberal individualists and collectivists on the other hand, very rarely directly confront each other in the realm of scientific inquiry.

Despite their enormous volume, articles in these social philosophies are rarely written in a way that allows definitive solutions to the wide range of problems they pose: instead, they appear as great architectural works, with many different artistic levels, standing next to each other, not on the same piece of land. Like the housewives of Glaswegia, the tendons of the neck rise, arguing from both sides of the street, The individualist and the collectivist always seem to argue from two different sets of premises. As Nobel laureate in Economic Sciences George Stigler once said, the debates between socialists’ and ‘capitalists’ are ‘unjoined’. .

However, this deviation, according to Stigler, is entirely due to the failure of both sides to evaluate the practical results of their respective arguments. In a typical ‘positivist’ fashion, he claims that only ‘evidence’ can resolve disagreements between ideologies. the debates between socialists’ and ‘capitalists’ are ‘unjoined’.

However, this deviation, according to Stigler, is entirely due to the failure of both sides to evaluate the practical results of their respective arguments. In a typical ‘positivist’ fashion, he claims that only ‘evidence’ can resolve disagreements between ideologies. the debates between socialists’ and ‘capitalists’ are ‘unjoined’. [4] However, this deviation, according to Stigler, is entirely due to the failure of both sides to evaluate the practical results of their respective arguments. In a typical ‘positivist’ fashion, he claims that only ‘evidence’ can resolve disagreements between ideologies.

Contrary to the above view, it must be emphasized that empirical statements on their own can never be decisive in philosophical arguments about politics and society. This is partly because social data is complex, uncontrollable, transient, and messy. Clearly, the apparent failures of central planning to maximize socialist goals did not change even the experimentally minded collectivists, despite the This defeat certainly disappoints him. He can always attribute them to unfavorable situations, which are obviously inevitable, and not to some intrinsic flaw in his theory.

But, more importantly, all positivist arguments in the social sciences are parasitic on some general theory, requiring a more philosophical basis. The question raised and answered by the individualist is why such obvious failures of collectivism have occurred: only then can he speak freely. believe that these failures are in fact irreparable features of the castle of socialist economics.

This is, of course, an extremely difficult question: whether the controversies in social philosophy can be brought together in some way, but not empirically (and therefore only locally related) or not, this question in itself is bound to remain an object of constant disagreement. However, there was a debate in the history of economic thought, the famous “computation debate” between socialist and capitalist economists in the 1920s and 1930s, which in In that debate the participants do not stand arguing on different grounds, but seem to be within the same general theoretical framework.

In addition, not only do they not argue about “practice”, but on the contrary, none of them are jostled by any real phenomenon. From the point of view of the history of economic thought, this debate has already been carefully studied by economists. Indeed, until recently, there was a consensus among professional economists that, in some abstract or theoretical sense, the socialist economists “won”. [5] (Despite the obvious moral, political, and practical issues, which can still make opposition to socialist planning definitive). The purpose of this article is to show that this conclusion is wrong from the point of view of economic theory. However, it is well known that the calculus debate is not solely about economics; it also deals with broader issues of social philosophy,

The historical origin leads to a relatively simple argument. [6] It took place between, on the one hand, key figures of the Austrian School of Political Economy[7], mainly Ludwig von Mises (1881-1973) and Friedrich von Hayek (born 1899), on the other are followers of the orthodox general equilibrium approach, most notably HD Dickinson (1899-1968), Fred M. Taylor (1855-1932), Oscar Lange (1904-1965) and, on later, Abba P. Lerner (1903-1982). The debate was opened in 1920 with the publication of Mises’ famous paper, ‘Economic Calculus in the Socialist Commonwealth’ in which he argued that if Without a market for consumer goods and factors of production, economic values ​​(not only the prices of consumer goods, but all rents, wages and interest rates) cannot be calculated, but will have to be decided arbitrarily by a central government. If a socialist system eliminates the market, it also removes the rational organization of an economy.

The above-named socialist economists now took Mises’ criticisms very seriously (which may be one reason why they are rarely mentioned in historical books). standards of socialist thought written by scientists and political theorists) but they think that the answers to Mises’ questions can be found within the mainstream of economic theory.

This system did provide a way of calculating value, ultimately based on subjective preferences, but did not necessarily come to the conclusion that the economic system should include capitalist institutions. typically with private ownership and ‘firms’. It was Hayek who defended and developed Mises’ premises by openly attacking the orthodox view of economic calculation. However, The nature of the Mises-Hayek critique was never fully understood at the time, mainly because Austrian economics was never clearly delineated as a distinct kind of economic theory from traditional competitive market theory, and the debate seemed to have ended in the late 1930s with the socialists won.

After 1920, Mises continued to attack socialism, but his criticism tended to slip away from psychological and sociological studies directed against socialists and socialists. ten] . Interestingly, even Hayek turned from purely economic theory to a general social philosophy and developed a complex theory of methodology and epistemology, which now looks at again, directly related to the original debate. His interpretation of the nature of economic knowledge, if true, completely eliminates the calculation put forward by socialists in the 1930s. Economic theory is no longer a neutral instrument. serve any given economic form, but only in a philosophical conceptual framework that seeks to fully grasp the essence of social life.