Mises argued socialism cannot price production goods without a market
Evidence
Although Mises acknowledged that workarounds might be developed to identify appropriate prices for consumer goods, he argued in an infl uential 1920 article that state own ership would render the construction, or even the simulation, of a competitive market for production goods impossible. In the absence of such a market, there was no way to determine how to allocate resources effi ciently. “There is only groping in the dark,” he wrote. “Socialism is the abolition of rational economy.” — Angus Burgin, The Great Persuasion, 61
Categorization
- DEFINE: The economic calculation problem: the claim that state ownership makes rational resource allocation impossible because no market exists to price capital goods.
- XREF: This is the famous socialist calculation debate, which connects to the reader’s broader work on free-market thought and to Hayek’s later contribution. — connects to: Mises launched the socialist calculation debate against Austro-Marxists and scientific Marxism — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 101; Mises’s price-based rebuttal of planning opened the Vienna planned-economy debate — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 58; The philosophical test of market theory is the transition from socialism to capitalism — Fredric Jameson, Postmodernism, or, The Cultural Logic…, 609
Broader Connections
- Mises launched the socialist calculation debate against Austro-Marxists and scientific Marxism
#expands(0.85) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 101 - Mises’s price-based rebuttal of planning opened the Vienna planned-economy debate
#expands(0.80) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 58 - The philosophical test of market theory is the transition from socialism to capitalism
#expands(0.75) — Fredric Jameson, Postmodernism, or, The Cultural Logic…, 609