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"Economic Calculation in the Socialist Commonwealth" is an article by Austrian School economist Ludwig von Mises. Its critique against economic calculation in a planned economy triggered the decades-long economic calculation debate.
The article was first published 1920 in German under the title Die Wirtschaftsrechnung im sozialistischen Gemeinwesen and based on a lecture Mises gave in 1919 as a response to a book by Otto Neurath, arguing for the feasibility of central planning. Mises argued that no prices for capital goods could be obtained in a socialist economy if the government owned the means of production since all exchanges would be internal transfers, rather than "objects of exchange", setting the price mechanism out of order.
Two years later, the essay was incorporated into Mises's book Socialism: An Economic and Sociological Analysis.
The Mises Institute has a free online copy available.
Criticisms
Marxist computer programmer Paul Cockshott argues that economic calculation is possible within a socialist state as long as computational devices are used. In "Towards a New Socialism's "Information and Economics: A Critique of Hayek" and "Against Mises", he argues that central planning is simplified by the use of computers, and that it economic calculation grants central planning the ability to sustain itself.
References
- Hacohen, Malachi Haim (2002). Karl Popper – The Formative Years, 1902-1945: Politics and Philosophy in Interwar Vienna (reprint ed.). Cambridge University Press. p. 477. ISBN 978-0-521-89055-7.
- "Economic Calculation in the Socialist Commonwealth". Mises Institute. Retrieved 27 April 2010.
- ^ Huerta de Soto, Jesús (2010). Socialism, Economic Calculation and Entrepreneurship. Edward Elgar Publishing. pp. 103–104. ISBN 978-1-84980-065-5.
- Cockshott, Paul (1993). Towards a New Socialism. Coronet Books.