Technical or political? The socialist economic calculation debate

Abstract

The paper presents both the key arguments and the historical context of the socialist economic calculation debate. I argue that Oskar Lange presented the most developed strategy to deal with bourgeois economics, decisively helping to create the scientific consensus that rational economic calculation under socialism is possible. Lange’s arguments based on standard economic theory reveal that the most ardent defenders of capitalism cannot reject socialism on technical terms and that, as a consequence, the Austrian School was left with no choice but to diverge from mainstream economics in its search to develop a framework that could support its political position. This shows that Mises’ challenge from 1920 was solved and has been replaced by a political posture developed by Hayek and leading Austrians economists, who have been struggling since the 1980s to revise the standard interpretation of the socialist economic calculation debate. I argue that this revision should not be uncritically accepted and conclude that socialism cannot be scientifically rejected; it can only be politically rejected, by those whose economic interests it opposes.

Comment on ‘In complexity we trust: learning from the socialist calculation debate for ecosystem management’

“…First, we should abandon the idea that the dissolution of the USSR-an idiosyncratic historical event that unfolded under an immensely complex constellation of sociocultural, economic, and geopolitical circumstances-is attributable to, or offers definitive conclusions for, an academic debate about the theoretical (im)possibility of rational economic planning [86,87]. Many economists considered the debate closed before the Cold War even began; the premise that the Austrians were proved 'right' is controversial among economic historians; both the Marxian and Austrian schools made major concessions; and both are now considered heterodox [2,3,86].…”

“…In their recent article (henceforth 'the Perspective'), Salliou and Stritih [1] consider (socio-)ecological systems better when they are less fragile, more efficient, and more productive. Using the socialist calculation debate as a metaphor [2,3], they advocate for a highly localized, hands-off approach to ecosystem management, trusting the combined effect of many independent choices to generate something like the spontaneous order described by the free-market economist Friedrich Hayek. The metaphor suggests that scientists should redirect their energy away from 'large-scale top-down solutions' to the global sustainability crisis, and focus instead on small-scale processes (p 3).…”

Is socialism back? A review of contemporary economic literature

“…Lopes (2021) counters some of the main standpoints of the “revisionist” version. He argues that it was Lange's successful endeavor to defend socialism within a neoclassical theoretical framework (the same as Mises's) that pushed the Austrian school out of the mainstream and explains the change of strategy by Hayek.…”

“…He argues that it was Lange's successful endeavor to defend socialism within a neoclassical theoretical framework (the same as Mises's) that pushed the Austrian school out of the mainstream and explains the change of strategy by Hayek. According to Camarinha Lopes, the popularity of Lavoie's reading of the controversy has very much to do with “the rise of neoliberalism,” which has seen the socialist economic calculation debate “being fought with renewed vigor” and the “very history of the debate itself [being] weaponised” (Camarinha Lopes, 2021, p. 787).…”

Socialismo digital y cibercomunismo en la Cuarta Revolución Industrial

“…Según él, la abolición del libre mercado y el subsecuente control de precios son los mayores impedimentos para la consecución de una economía planificada, pues si se elimina el sistema de precios, sería imposible calcular la oferta y demanda de los bienes y servicios futuros. El economista socialista Fred M. Taylor intentó resolver esta dificultad y propuso el método de ensayo y error, el cual fue agregado a nivel teórico en la operación de una economía socialista por el economista comunista polaco Oskar Lange (Camarinha Lopes, 2021). Esta solución demandaba una vigilancia continua de existencias, a fin de poder establecer el precio correcto.…”