TY - JOUR
AU - Camarinha Lopes, Tiago
AB - 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 This shows that Mises’ challenge from 1920 was solved and has been replaced by a political posture developed by Hayek and leading Austrians economists, who have been struggling since the 1980s to revise the standard interpretation of the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. 1.The historical rise of the socialist economic calculation The socialist economic calculation debate constitutes one of the most controversial and long-lasting episodes of class struggle within economic theory. It came to the fore in the early twentieth century due to the transition away from liberalism towards economic planning. It is nothing less than a war between two clearly polarised sides engaging with the same technical issues. With the rise of neoliberalism, it is being fought with renewed vigour and in its recent form, the very history of the debate itself has been weaponised. Before examining the dispute between the two major narratives, it is important to outline the origins and scope of the debate. Classical political economy developed from a focus on the logic of value accumulation underlying economic decisions. Before the sixteenth century, economic decisions were not dominated by capital. The decline of feudalism led to the end of the fair price model and its ethical constraints on market agents. Thereafter, buying at one price and selling at the highest price possible were the standard behaviours of anyone engaged with transactions in the market. With capitalism, economic rationality became synonymous with the imperative to increase productivity, wealth and capital. Resources then had to be used to maintain the infinite expansion of the economy. As industrialisation spread across countries, the earlier individualistic laissez-faire ideology gave way to a systemic perspective on economic decision-making. Economic calculation, once tied only to the individual analysis of how to make the most out of the price system, became a more complex and coordinated procedure of evaluation on a larger scale. It considered the relationship between the private use of resources and the general needs regarding the total capital of society as an aggregated unity. The regularly increasing agglutination of small and isolated amounts of capital pushed the economy to a pattern of organisation beyond the private concern of any singular bourgeois agent. The capitalist as an individual vanished in the massive organised flow of investment led by the monopolist alliances. Real capitalism is based on the coordination of total capital by capitalist states (rather than on the independent actions of many small agents with little influence over prices in general). Despite its undeniable potential for the development of productive forces, it has been criticised as a mode of production since the early nineteenth century. Most of the original criticisms at the beginning of the Industrial Revolution concerned the living conditions of wage labourers. Later, war and the brutal exploitation of mass populations around the world impelled the working class to react against capitalist imperialism. One of the theoretical consequences of this dissatisfaction was a search for another method of decision-making regarding the allocation of resources. There arose the idea that economic calculation should be distinct from the calculation of capitalist self-interest: the new calculation should not blindly follow the dictatorship of capital and infinite value expansion, but should prioritise the needs of the people. As a result, social welfare became a central issue that any serious political economist had to address. Socialism itself as an idea and movement started to appear more frequently in the economic literature. In the 1820s, utopian socialists began to design systems of economic organisation that incorporated the principles of democracy, equality and freedom. The scientific revolution had enabled humankind to alter ‘Nature’; if human beings were changing the natural world in which they lived, why should they not shape their own society as well? The socialist dream was powerful, and it seemed like nothing could stop its progress in the nineteenth century. However, the real dimensions of the problem and the challenge faced by socialists were only fully understood a century later. The core paradigm of political economy assumed that self-interest and social well-being went hand in hand. During the sequential events of World War I, the Russian Revolution and the Crash of 1929 invalidated this assumption, and economic planning became the new paradigm of political economy. The transition from economic calculation performed on an individual agent basis to coordinated economic calculation performed for society at the aggregate level is an objective historical phenomenon. It was translated into technical terms in the so-called socialist economic calculation debate. The socialist economic calculation debate, therefore, is not merely a scholarly controversy but is dependent on and interacts with the objective transformations in the real economy. These concrete changes forced all economists to integrate planning into their theories. Thus, economic planning is a historical fact that stems from the development of capitalism itself. Its original purpose was to maintain the infinite expansion of capital. At the same time, the working class struggled to conquer the instruments of planning for its own cause. However, capital-allied economists spread the ideological thesis of the impossibility of rational economic organisation under socialism to alienate the working people from the reality of the dispute around planning. The socialist economic calculation debate is the theoretical counterpart that archives this dramatic fight in economic science. The debate can be divided into three main phases. First, the period between 1920 and 1937, when Ludwig von Mises’ challenge to the possibility of socialist planning drew widespread attention and socialist reactions to it were developed. The second phase began in 1937 when the axis of Mises’ argument was replaced by that of Friedrich Hayek and ended with the fall of the USSR. The idea that the empirical reality of the end of the Soviet project constituted a rejection of socialism was what ushered in the third phase. This last and ongoing phase of the controversy started in 1989 in the context of the new geopolitical reality created by the triumph of neoliberalism (at least outside China and other socialist projects).1 This has helped the Austrian School to defuse Hayek’s acknowledgement of the real possibility of socialism and to recover Mises’ original thesis. The controversy has been a struggle between real political forces since its beginnings. On each side, there are representatives of the two opposing classes in capitalist society. This is why the socialist economic calculation debate is both so abstract and so polarised: it is the form in which two mutually exclusive modes of production express themselves in economic science. The study was aimed to explain that the great merit of Oskar Lange’s intervention in the debate lies in exposing the contradictions between the standard economic framework and the anti-socialist discourse. Thus, he aimed to detach the established paradigm of economic science from any political affiliation and thereby also prevent capitalist-allied economists from co-opting it. This effectively led to the expulsion of the Austrian School from mainstream economics as they were forced to develop a non-standard economic framework in order to sustain their anti-socialist position. This shows that the continuous effort to demonstrate the impossibility of socialism is not the outcome of disinterested scientific research, but of conscious political action to shape economic theory in order to discredit and disable the rise of communism. I present evidence that Mises’ ([1920] 1935) thesis that rational economic calculation under socialism is technically impossible was substituted with the more general claim that socialism is a politically undesirable economic system. This change of argument on the anti-socialist side has turbulent consequences for the followers of Mises and Hayek. Today, taking advantage of the political and economic developments after 1989, current Austrian economists try to obscure the turn in the debate that occurred in the 1930s and 1940s with a view to designing alternative readings of the controversy. I argue that their attempt to rewrite the history of the debate as if there was a solid continuity between Mises and Hayek is not acceptable as sound scholarly practice.2 It will serve as evidence for the thesis that socialism is not being rejected because it is technically unfeasible, but because it contradicts a particular class interest, for which ‘Hayek seems blissfully unaware of being, as he in fact is, a special pleader’ (Bay, 1971, p. 110). 2.Ludwig von Mises’ challenge In 1920, Ludwig von Mises published a paper that has come to symbolise the beginning of the controversy. It provided the catalyst that turned the problem of economic calculation under a social order without private property from one that was previously little-known outside Marxian circles3 into a controversy disseminated worldwide. Importantly for my purposes here, it has become the locus of recuperation by those in the current Austrian School engaged in an ideological attempt to rewrite the history and meaning of the socialist calculation debate. Its title, Die Wirtschaftsrechnung im sozialistischen Gemeinwesen, means literally ‘Economic accounting in the socialist community’ and in it Mises presented a unique argument that stands out from all others against socialism. Before Mises’ paper, every debate between the supporters of the two forms of economic organisation (capitalism and socialism) had taken its starting point and argumentative framework entirely from the proponents’ political positions. There was no theoretical point of contact or common technical ground upon which the opposing sides could fight each other. Consequently, neither the defenders nor the enemies of socialism were able to produce novel arguments in the field of economic science. How did Mises change this picture? There are three points that explain this. First, the greatest achievement of Mises’ ([1920] 1935) text was not its position against socialism, as it may seem at first sight. Before revealing his denial of socialism as a real possibility, Mises wanted to deliver a genuinely scientific contribution by demonstrating that the problem could be stated in objective technical terms. He affirmed that it is necessary to ask first of all whether an economic system without private property is technically possible. Only then would it be valid to ask which economic system is superior according to the standard criteria of economic science (and to any other parameter of value judgement). However, if it could be proven that socialism impedes its own material reproduction, then it would make no sense to continue debating alternatives to free-market capitalism as all grounds for such a debate would have been eliminated. The singularity in Mises’ challenge lies in its forced separation between technique (economic science) and politics. Of course, such a separation is fundamentally unsustainable because these two entities belong together in the realm of reality. The separation is an idealistic procedure in order to create an abstract dichotomy and both Mises’ strengths and weaknesses derive from this singular approach. Second, it is extremely important that Mises took pains to promote his cause based on what was universally accepted as sound economics. He knew that his argumentative framework would lose its force if it could be seen as a rejection of socialism on political grounds and he explicitly excluded this stance: ‘The knowledge of the fact that rational economic activity is impossible in a socialist commonwealth cannot, of course, be used as an argument either for or against socialism’ (Mises, [1920] 1935, p. 33). Therefore, he had to show, within the framework of economics of his time, that socialism is unable to achieve rational economic accounting. Based on what was then accepted as scientific economics, he argued that economic calculation in socialism would not drive society to an outcome of abundance, but to a scenario of scarcity and chaos and hence non-survival. This is because, in his view, socialist economic calculation is incapable of being rational. The fundamental reason given for this is that the absence of private property and the market would eliminate prices. The consequent lack of information provided by prices would negatively affect every economic decision to the increasing detriment of community well-being, leading ultimately to the destruction of the economy and the society based on it. The core of this argument is that the necessary information simply does not exist if private property is absent from the system. For Mises, it is not a matter of which system is better suited to gathering the information needed, but rather that no comparison is possible, given the complete non-existence of this information under socialism. Since rational economic calculation depends on price-derived information, consequently even the theoretical possibility of a rational socialist economy must be excluded. In Mises’ view, the irrationality of the socialist economy necessarily leads to its own destruction sooner or later. Mises concluded that a socialist system with rational economic accounting is impossible. He did not argue that socialism is undesirable or use any of the other then typical arguments against socialism, such as that it politically polarises people with different interests, or that the various groups and classes cannot agree on how to produce and distribute. For Mises, socialism is technically impossible in the sense that it is not capable of providing the means for using resources rationally. Since for Mises economic rationality is what guarantees society’s survival, any political discussion about socialism’s advantages or disadvantages over capitalism would be irrelevant. This is the core of Mises’ thesis. There can be no discussion about the socialist commonwealth because the technical base upon which it must perform rational economic calculation is absent. The third and final point that reveals the importance of Mises’ ([1920] 1935) paper is that it contained an explicit challenge for socialists. If they wanted to continue promoting the superiority of socialism, they had to prove first how rational economic calculation can occur in the absence of prices and private property. Mises’ claim was clear—socialism does not have an economic structure that allows rational economic accounting—and he challenged economists to prove him wrong. These three points show that Mises firmly established a clear common scientific ground for the political battle of capitalism versus socialism: that of economics. His ambitious intention was to end that debate once and for all by showing that rational economic accounting under socialism is impossible. He did not seek to do this by developing a new branch of economic science or a parallel school of thought, but by using universally acknowledged economic science. He assumed every economist had to follow his idea since they all used the same framework. He aimed to have the final word on the issue: rational economic calculation under socialism must be excluded from the realm of the possible by the standard theory accepted by the entire scientific community of economists. 3.Oskar Lange’s orientation Many economists and scholars engaged in trying to meet Mises’ challenge (see Boettke, 2000A). Karl Polanyi, Eduard Heimann and Nikolai Bukharin delivered the first responses but these were based on more qualitative and political analysis. Later, Frederic Taylor, Frank Knight, H. D. Dickinson and Abba Lerner tried to rebut Mises using standard economic theory of price formation.4 This approach, as it later turned out, contained the greatest potential to nullify Mises’s attack, but it was not until 1936 that a communist economist managed to create a strategic procedure to successfully defend socialist economics. The collective effort to conquer Mises’ ([1920] 1935) challenge culminated in an article written by Oskar Lange. He published the study On the Economic Theory of Socialism in two parts, in 1936 and 1937, in The Review of Economic Studies, and presented a singular interpretation of the question that had enormous and far-reaching repercussions. Lange took an alternative approach to that of other obvious pro-socialism authors who had tried to intervene in the debate without using the same framework as Mises. Maurice Dobb (1935, 1937, 1939), for example, tried to criticise both Mises and his methodological toolbox in a rigorous way.5 Instead of trying to elaborate his own methodological approach separate from the general outlines of orthodox economics, Lange simply pointed out where the standard economic theory contradicts Mises’ claim. This is not to say that Lange had uncritically embraced standard economic theory, rather, he adopted it in order to serve a very concrete goal: to expose Mises’ argument as an apologetic discourse for capitalism against socialism and expel it from mainstream economics. Lange was aware that failure to remain within what was recognised as orthodox economics meant defeat in the debate. Lange had a very coherent research project in economic theory. However, historians of economic thought still think of him as an eclectic economist, who mixed theoretical systems without coherent criteria. According to Lampa (2014), this incorrect judgement must be addressed by showing the continuity of Lange’s works in the context of his political action and thought. Inspired by Rosa Luxemburg’s treatment of political economy, Lange’s overall project could be described as a continuous effort for more than 30 years to merge mainstream economic theory with socialist theory, and Marxism especially. The purpose was to sever any link between modern economics and its (hitherto) implicit defence of capitalism (Lampa, 2014, p. 125). Already by 1935, Lange was theoretically ahead of the communist movement in Poland and was one of the most significant theoreticians of the Polish Socialist Party (Kowalik, 1964, 1990). He had written an important work in favour of a planned socialist economy together with Marek Breit (Breit and Lange, [1934] 2003), but this was rather a political piece proposing how a revolutionary government in Poland could accomplish the transition to socialism through the socialisation of industries and farming unities over a certain size. During his Rockefeller fellowship for research in the USA, Lange (1935) sketched the first guidelines on how to understand the modern economic toolbox from a rigorous Marxist point of view as a reaction to the prevailing view among Marxian economists that Marx’s system of political economy is superior to bourgeois economics because of its unique conceptual ability to describe the functioning of capitalism. In contrast to his previous work, this article, called Marxian Economics and Modern Economic Theory, was directed towards an academic audience. He was trying to display the practical usefulness of the conventional doctrine of economics for a transition to socialism. He believed that ‘modern “bourgeois” economic theory’—as he referred to the general framework of ‘Wieser, Böhm-Bawerk, Pareto or even Marshall’ (Lange, 1935, p. 191)—does not necessarily lead to the ideological defence of capitalism. Lange explained here that the superiority of Marxian economics over other economic frameworks does not depend on fixed concepts such as the labour theory of value, surplus value in contrast to utility value theory, or the time-preference theory of interest. According to Lange, Marxian economics is superior on one specific crucial point: it alone distinguishes the institutional conditions that explain how capitalism arises and develops historically. Marxian economics can separate the general laws of economics common to all modes of production from the specific laws valid only within the boundaries of a certain concrete economic system, such as feudalism, capitalism and socialism. Modern economic theory, on the other hand, had the ability to be very precise in drawing the fundamentals of the human–nature relation to describe the non-sociological aspects of material reproduction. It is a magnificent tool to analyse a Robinson Crusoe economy. But every economist must understand both (i) the general conditions of material reproduction limited by the laws of nature (human–nature relation), and (ii) the specific institutions under which this reproduction takes place in any given human society (human–nature–human relation). The question addressed by Lange is: What if it could be shown that modern bourgeois economics deals only with problem (i)? Then Marxian economics and mainstream economic theory would not be alternative, mutually exclusive paradigms, but two different approaches dealing with the totality of economic science, where the first is broader and more extensive, while the second is narrower, more focused and limited. Lange understood that the Marginal Revolution was a politically driven movement to evade the radical conclusions drawn from the Classical approach, such as that value is created by labour through exploitation. Nonetheless, he also recognised that it is based on theoretical fundamentals that correctly describe the surface of the market economy, including the essentials of individual subjective evaluation that are disregarded in the Physiocratic tradition. Its standard paradigm focuses on the general relations of interaction between humans and objects in terms of use-values. In Lange’s view, since these relations are the same in every conceivable social system, then this paradigm must also be applicable in a society that consciously intends to produce and distribute units of use-value. This is the theoretical starting point from which Lange was able to harness Mises’ economic framework in order to subvert his conclusion from within. It was part of Lange’s overall economic project, but it was also importantly a vital strategic device to interact with and influence the official community of western economists of the 1930s, by speaking to them in their own language. Like Mises’ ([1920] 1935) article, the force of this new contribution stemmed from Lange’s use of the standard economic theory, rather than from its political position, that is, from the scientific methodology with which Lange defended his position (as acknowledged by Lange, who identified himself as a Marxist communist): he answered the challenge using the same language and framework as Mises.6 Lange (1936) openly acknowledged his debt to Mises. He opened his essay with a remarkable paragraph, in which he imagines a statue of Mises in front of a hypothetical Ministry of Socialisation or Planning. The figure would stand there as a sign of recognition for his explanation to socialists about the economic calculation problem. Even though the problem had been recognised by many socialist authors before 1920, Lange (1936) explained that Mises’s contribution had been decisive for expanding the controversy, making it clearer to the public, and bringing light to the great challenge in the process of transition from capitalism to socialism. After all, it was after this explanation that socialist economists began in earnest to look for the accounting system for the commune. In fact, the one point on which both sides of the controversy converge is that they identify Economic Calculation under the Socialist Commonwealth (Mises, [1920] 1935) as the text that posed a complex and previously identified problem in the simplest way possible. As Lange pointed out, his statue tribute would not have pleased the Austrian economist, because he would then be in the company of the great leaders of the socialist movement. However, the statue itself is not the peak of this iconic scene. To complete the story, Lange imagined a future class on dialectical materialism in which the teacher would take his students to see the statue and explain to them the Hegelian List der Vernunft (how the progress of history occurs from the Marxist perspective). It would be an example of how even the most ardent enemy of socialism, a conscious bourgeois economist, ended up serving, against his own will, the cause of the proletariat. Although Lange agreed that Mises had correctly described the problem, he considered Mises’ solution to be in error. Lange explained that to solve the calculation problem in any circumstance, three sets of information are needed: (1) a scale of preferences which guides choices, (2) knowledge about the terms in which the alternatives are offered and (3) knowledge about the quantities of available resources. According to Lange, Mises denied that the socialist economy could obtain information (2), but if (1) and (3) exist, then (2) is determined in the last instance by the technical conditions of the transformation of one good into another. In Lange’s scheme, the State would mimic the process of information gathering by the market through a process of trial and error. It would be a tâtonnement process in general outline, in which the planner constantly adjusts supply to demand. In this process, price moves closer and closer to value, which is the guide for resource allocation at each cycle of production and distribution. If it is a perfect market, as modelled by the usual structures of mainstream economics, the price-convergent-to-value corresponds exactly to the technical relation of choice of production between the use-values under consideration. Thus, the exchange in Lange’s model corresponds to the technical conditions of substitution between use-values. This reveals the entire structure of the production of the economy, allowing the resources to be allocated according to a specific aim. Lange’s line of thought is that it is in fact possible to discover the quantitative relation determined by the technical coefficients through an ‘artificial’ interactive process that would be like that which occurs ‘naturally’ in the perfect market.7 If prices gravitate around the demand curves for specific use-values, then both the market system and the socialist system have the same equations to solve. Lange (1936) and others have helped to show that on a highly idealised level, the opposing economic systems are identical in the sense that for both systems, the general state of equilibrium is linked to the total satisfaction of the individual needs of each member of society. The equilibrium model serves only as an analytical tool to develop the thesis of formal similarity. This thesis states that the market economy and the socialist economy are equal from the point of view of describing the technical balance of their input and output matrices. Lange (1936, p. 68) concludes that the argument that prices in a socialist economy, including those referring to means of production, cannot be objectively determined is strictly wrong. At the same time, the idea of the technical impossibility of rational accounting under socialism is false. Lange also acknowledges that he is not alone in reaching this conclusion. As he points out, Hayek ([1935] 1963B) and Robbins (1934) had already abandoned Mises’ line of thought and adopted another kind of solution (Lange, 1936, pp. 55–56). They accepted the theoretical possibility of rational economic calculation under socialism and denied only its practical feasibility. When presenting the controversy in 1935, Hayek acknowledged that the argument against socialism could not be as direct as Mises believed: ‘Now it must be admitted that this [socialist economic accounting] is not an impossibility in the sense that it is logically contradictory’ (Hayek [1935] 1963B, p. 207).8 It is extremely important for scholars and historians of economic thought today to revisit this moment in the history of the controversy. The retreat from Mises’ extremist position to a more realistic approach was a movement born from within the enemies of socialism themselves. Oskar Lange did not invent this update of the calculation challenge; rather he used it to show readers what was going on in the debate as even anti-socialist authors recognised that Mises’ argument had to be modified. From the socialist perspective, this shift in argument from Mises’ to Hayek’s position signified a huge advance. From then on, the socialist future depended on finding a suitable way for the theoretical solution to become a practical reality. All of Lange’s subsequent effort was focused on indicating how it is possible to make successive adjustments to control the law of value. The transition is envisioned as a process of constructing a non-centralised planned economic system, where the demands of individual workers are moved progressively to the centre of determining social production. So, commodity relations of production do not disappear right away. Socialist politics gradually dominate and suppress commodity relations according to the real possibilities of substituting the market by the socialist economic plan. Lange’s concern is about a detail in the process of revolution. Reforms should be made under the strict control of the revolutionaries and aimed at the final objective of ending capitalism and constructing the socialist order. The changes in the functioning of the economy may be gradual, but robust and in quick succession. There can be no hesitation in the transition from the bourgeois system to the dictatorship of the proletariat and from that to the next stages towards communism. The transition requires strong leadership to carry on the program of ending capitalist relations of production: ‘socialism is not an economic policy for the timid’ (Lange, 1937, p. 135). Lange’s vision considers many kinds of private property with different social impacts. For example, under some circumstances, a structure of small independent producers of commodities may offer a product that is necessary for the positive development of society. The socialist government must protect small owners, if socially useful. The delicate alliance between the proletariat and the poor peasantry during the Russian Revolution led by Lenin was based precisely on this critical nexus (Bettelheim, [1977] 1983). His New Economic Policy (NEP) emerged historically as a necessity described by this theoretical knowledge. It envisioned that the market would dissolve over time through the gradual education of small proprietors about the advantages of socialism for all who live from their own labour. Lange’s overall orientation is against disdaining the challenge and attacks by anti-socialists, and strongly for engaging with these assaults with creativity. He believed this was the best way to reveal capitalist apologetics, unveil their contradictions and find concrete solutions that will eventually help to overcome the problems of transition to communism. His approach has been mistaken for uncritical eclecticism but, in fact, was firmly in the analytical footsteps of Karl Marx himself. Marx took the same approach with the three most developed fields of knowledge in Europe: philosophy in Germany, politics in France and political economy in England. He studied with rigour all relevant thinkers of the bourgeois era and took everything from their theories that he found correct and useful for workers, even if the political position of the author was essentially in sharp contrast with the interests of the proletariat. Oskar Lange is a careful apprentice of Marx and Engels and one of the most influential economists of the twentieth century. His thinking is both critical and open. He accepts the paradigms of economics as it evolved from the dissolution of Classical political economy, but he also exposes its ideological biases. He does not despise the thoughts and writings of the defenders of capitalism on the grounds that it is more coherent to engage critically with them in a constructive sense. He believes it is necessary to politically conquer every other school of thought by not only pointing out their relationships to the various classes in society but also using them in favour of the working class. His unfinished treatise, Political Economy, published partially in 1959, shows that this coherent synthesis is entirely consistent with the key elements of historical materialism. Lange’s mission is not to develop a separate branch of Marxian economics, but from a solid Marxist perspective to advance economic science as the study of how humans reproduce their material and social relationships. This procedure enabled Lange and other socialist economists to reinterpret mainstream economics in favour of the arguments for planning and socialism. The Austrian School gained the status of a full branch of thought in economics as a necessary withdrawal from the official arena in economic science. It was expelled from universities, not only because of the strength of the Keynesian School but also because socialist economists managed to use standard economic theory for their cause more successfully than the Austrian economists did. 4.Friedrich Hayek’s endurance By 1935, Friedrich Hayek had moved attention away from Mises’ conclusion that socialist economic accounting cannot be logically rational. His work to modify Mises’ critique culminated in his paper ‘Socialist calculation: the competitive solution’ in the journal Economica of 1940. Hayek (1940) recognises that rational accounting under a system without private property is indeed theoretically possible, but he argues that the position against communism is still valid because of the practical infeasibility of the centralised planned economy. By fully accepting the idea that there can exist rational socialist economic calculation, he contributed to spreading this new paradigm of the debate and its affirmation became a consensus view. This is a significant retreat from Mises’ ([1920] 1935) original thesis. Hayek argues that a decentralised system can solve the calculation problem more rapidly than a central agent who would be simply unable to process the large volume of information in a reasonable time. When analysing Lange’s and Dickinson’s models, Hayek asks about the concrete ways in which the prices are adjusted (e.g. what is the specific period of time for price fixation?). He directs his attention to the detailed functioning of this kind of ‘artificial’ economy as a shadow of the market economy. By doing so, he generates a new counterpoint: the idealistic description of the socialist economy does not coincide with the actual experiences of planning in the real world. Moreover, Hayek points out that the structures of incentives are completely different in the socialist model. If the impetus of an organisation is to attend to the demands of consumers as expressed in their utility functions, then it is possible that there would be no mechanism pushing down the costs of production. The risky process of innovation, which is conducted by the entrepreneur (also developed by Schumpeter [1942] 1961), would be eliminated in an economy in which technological novelties must be approved by a central council. Hayek claims that the market is the most appropriate environment for selecting progressive innovations in the shortest time. Therefore, the free market would be the best economic structure to enlarge the potential of wealth creation. Hayek’s (1940) article takes the controversy along a dangerous path. Previously, the question had been centred on the possibility of using resources rationally under the socialist system. Thereafter, the issue revolves constantly around a comparison between two viable systems. It was no longer a matter of whether socialism is possible, but if it can surpass the capitalist system in selected aspects.9 It became exactly what Mises did not want: a debate about which system is superior on the basis of comparing accumulated data for certain aspects. This new perspective reveals at least three important implications. First, the theoretical basis upon which socialism can exist was now beyond debate. Second, its practical feasibility could now be discussed. Third, if by any chance socialist economies were to become a reality (as was and is indeed the case in the twentieth and twenty-first centuries), then this leaves only its political structure as a possible target for attack. This is the political core of the calculation controversy. When the data on the tremendous success of state-led industrialisation and growth both in the East and in certain developing countries were published, the anti-socialist side could no longer attack socialist planning as inefficient and began instead to disparage it by saying that its political form is authoritarian. Hayek systematically makes the analogy of socialism with fascism/Nazism in an attempt to demonstrate that its planning leads to nothing but a dystopia. Socialism is treated as synonymous with totalitarianism, socialist bureaucracy is cast as the nightmare mechanism destroying the free entrepreneurship dream and collectivism functions as the new label for all systems defying the rule of liberalism. This argument was repeated extensively in his work The Road to Serfdom (Hayek, 1944) and, particularly against the backdrop of Nazi Germany as the common enemy of both polarised sides, it had a profound impact on the socialist movement in the West. What must be noted here is that Hayek introduces a qualitatively different approach to the debate. There is nothing that addresses the issue of efficiency or the economic capacity of planning—would anyone be willing to contest the vigorous recovery of Germany’s economy from the First World War or the USSR’s performance in the Second World War? Mises’ ambition was to present a purely technical argument against socialist planning. Although Hayek continues to press his case on technical issues, such as knowledge and the dynamic nature of dispersed economic unities, this move is secondary. His main drive is based on political grounds10: any attempt to socialise the economy will lead to the dystopian reign of serfdom. Uniting politics and economics in the way the planned economic systems require demolishes the very liberty upon which the power of private property is built. Here, Hayek has moved far beyond questions of practical feasibility to issues of political normative values: […] in order to plan at all on an extensive scale, a much more extensive agreement among the members of the society about the relative importance of the various needs is required than will normally exist, and that in consequence this agreement will have to be brought about and a common scale of values will have to be imposed by force and propaganda. (Hayek, 1940, p. 148) This analysis of socialist planning, both in theory and in practice, is not based on any neutral standard of the economic relation between means and ends. It is a political position because the supporters of this position diverge from the scale of values determined by the majority, that is, wage-earning working class. This is also an evident moral judgement against socialist planning, which serves as his ultimate weapon against the impetus of the masses towards controlling the economy. This new kind of critique against regulation of markets was so strong that even John Maynard Keynes would have to be labelled as an enemy of the open society in the sense of Popper (1945). As can be seen, Hayek’s position is entangled in an acute contradiction. Socialism must be shown incompatible with individual freedom. However, if a great number of individuals freely choose socialism, then anti-socialists have to resort to criticising democracy and free democratic choice, as the concept of transitional dictatorship, developed by Hayek since the late 1960s, clearly indicates (Farrant and McPhail, 2014). Thus, Hayek remains an obstacle for socialists in two different aspects. One concerns the real technical issues of how planning can be controlled by the majority, that is, by the working masses; the other is his political position regarding the will of these masses. In response to the first aspect, socialists try to demonstrate that planning does not have to be centralised or authoritarian, but that there are systems whereby everyone can be involved in decision-making in a radically democratic process of choice. These new contributions and perspectives on how to push forward the transition to socialism and communism have been developing since the rise of computers, and further expanding with the huge potentialities of information exchange enabled by the internet. Participatory planning and decentralised decision-making are the main novelties in the current phase of the debate.11 As shown, the fact that alienation and exploitation could persist in a planned economy has provided ammunition for the discourse of neoliberalism. Since socialist planning alone does not necessarily mean the immediate end of capitalist or other forms of economic exploitation, these developments in non-authoritarian decision-making processes are highly significant for the advancement of the technical part of the debate. As for the second, political, aspect, there can be no doubt as to where socialists stand. It is worth mentioning one recent concrete event where a democratic process of transition to socialism was interrupted, not because its technical economic systems failed, but because anti-socialist political forces resorted to violence to break the process. The project Cybersyn under Allende in Chile 1971–73 aimed to connect all production unities of the country in a unique web of computers. This would aid the government in its decisions for the national economy. It was part of the Unidade Popular socialist program to facilitate an advance towards socialism in an original, non-authoritarian way, that is, neither by taking power through military force as in Cuba nor by implementing the soviet-style central planning paradigm. However, the imperialist coup d’état put an end to this gradual transition by bombing Allende and his comrades on 11 September 1973.12 The authoritarian puppet regime of Pinochet installed thereafter was notably supported by Hayek, as recent evidence has confirmed.13 Neoliberal dictatorship is justified as a means to the higher good in the same manner as the dictatorship of the proletariat: the difference is that while the first defends capitalists, the second defends the working masses. As shown, Hayek profoundly changed the strategy developed by Mises. The technical issues still remain in debates about the dynamics of information in complex systems of decentralised decision-making. However, the political drive overrides these, and when socialism is proved to be technically feasible both in theory and practice, Hayek considers political condemnation a legitimate argumentative tool (even in the form of direct action). Mises’ wore a mask to hide his political position behind the technical challenge. Hayek, differently, wears the emperor’s new clothes: he is naked, but many pretend he is very well dressed. 5.Rewriting history: the disputed narrative of the socialist economic calculation debate While Mises’ attack was intended to be exclusively technical and neutral in form, Hayek’s perspective is unashamedly political. More precisely, he first moves away from the thesis that socialism is technically impossible towards the claim that it is practically unfeasible, and later (faced with the real existence of socialist economies) to the claim that it is, above all, politically undesirable. The impressive performance of socialist economic planning proved them both wrong but the rise of neoliberalism after the fall of the Berlin Wall has given the Austrian School an opportunity for a counter-attack. Their focus on dispersed tacit knowledge and the dynamic structure of the calculation problem does indeed raise real issues that demand attention, but it does not address the essentials of what had been established by the debate during the 1930s and 1940s. A crucial part of this counter-attack is the need to conceal the all-important change from Mises’ position to Hayek’s, and this is why they have developed a revisionist history of the debate. The interpretation of the debate’s development presented here comes directly from consulting the original authors (Mises, Lange and Hayek).14 It coincides with the standard version of Samuelson (1976), which is a shortened version of the history as told by Schumpeter ([1942] 1961), Bergson (1948) and Lippincott (1938).15 This standard interpretation was the recognised version of the history of the debate and prevailed unchallenged until the publication of Rivalry and Central Planning by Lavoie (1985). Prior to this, Lavoie (1981) distinguished two competing interpretations of the controversy and its history based on fundamental points that I present here in abbreviated form16: 5.1Standard interpretation 1) Before 1920, socialists had no model of how the economy under socialism would work in the absence of the normal institutions of market and private property. 2) Mises’ paper of 1920 brings socialists’ attention to the problem and adds the thesis that rational economic calculation under socialism is impossible. 3) Socialists such as Lange manage to destabilise the idea of the logical impossibility of socialism by utilising standard economic theory against Mises’ argument. Earlier contributions are recovered as part of the response to Mises’s challenge, such as those of Enrico Barone and Léon Walras, who had anticipated the thesis of formal similarity between capitalism and socialism. 4) The theoretical model that substitutes the market with the plan is broadly accepted by the scientific community of economists. Consequently Austrian economics develops to differentiate itself from mainstream neoclassical economics and its ideas of static equilibrium. 5) Hayek’s change of argumentative focus is considered to represent a retreat from Mises’ position: he no longer argues that socialism is impossible in theory, but only in practice. 6) Socialist models of trial and error, using the power of computers to process information, are developed, indicating that socialism is practicable in principle. The conclusion is that the theoretical clash over calculation cannot resolve the dispute between the systems. From the standpoint of economic science, both systems can be used for solving the problems of material reproduction. Since the rise of neoliberalism, Austrian economists have suggested an alternative counter-reading in order to dispute the history of the socialist economic calculation debate. A summary is presented below. 5.2Alternative (Austrian) interpretation 1) Before 1920, socialists had already tried to envisage, both in theory and practice, a model of central planning. At least some of the difficulties of these attempts were well understood, but Mises’ and Hayek’s arguments increased their awareness about the limitations of central planning. 2) Mises did not deny the purely logical possibility of socialism, but he insisted that central planners had to develop an alternative way to apply the same standard of decision-making on resource allocation if they intended to have rational economic accounting. Static models of the neoclassical type were not a valid means to counter-attack because Mises was not arguing based on the notion of equilibrium. 3) The thesis of formal similarity between socialism and capitalism was not a valid argument for answering Mises because his challenge was founded on a dynamic scenario and not a static one. The static equations of the model are inapplicable to the real world, so it is not a matter of devising an ‘artificial’ problem-solving tool that is as rapid as the market because the model does not take time into consideration. 4) Hayek’s argument does not represent a retreat from Mises’ position, but a further development of an idea that was already embedded in his challenge and remained unnoticed until the models of central planning via ‘equation-solving’ and ‘trial and error’ appeared. Hayek’s contributions are fully consistent with Mises’ original view. 5) The socialist trial and error scheme based on a model of perfect competition cannot be regarded as an answer to Mises’ original challenge of 1920, because it rests on a different paradigm (statistical equilibrium analysis, rather than the broader Austrian conception of an economic theory that deals with change). 6) The standard conclusion that economic theory cannot determine which system is superior to the other is valid only if the economic theory is understood as static equilibrium analysis. The new Austrian perspective successfully reestablishes Mises’ thesis by applying issues of tacit knowledge in a dynamic context, and therefore it is wrong to conclude that socialism has been proved viable by economic theory in general. The standard interpretation shows that economic science alone is unable to reject the form of the economic system chosen by society to conduct economic business. It states that economic science, as it is studied and taught in the main economic institutions of the world, cannot reject socialism as an economic system able to conduct rational economic decisions. Mises’ intention was precisely this: to show that, regardless of any political or value judgement, the socialist economy was not able to perform rational economic calculation. In this respect, the standard interpretation demolishes Mises’ dream to preclude the comparative analysis of both systems. The alternative (Austrian) interpretation indicates a persistent search for a narrative that, despite some useful corrections, does not allow a reader to comprehend the significant differences between the positions of Mises and Hayek. Historians of economic thought should be very aware of the political motives behind this new proposal for reading the socialist economic calculation debate. The geopolitical context of neoliberalism has allowed for an alternative flawed interpretation that excessively favours the Austrian side. I do not mean that the alternative reading has no improvements at all. Some important points to note are that before 1920, many socialists were indeed conscious of the problems of allocation in the absence of market and full private property institutions. The theoretical challenge posed by the Austrian economists was simply one more approach showing the difficulties of the process of transition from market capitalism to planned socialism. It is also accurate to recognise that Mises did not deny the purely logical or theoretical viability of socialism. In this respect, it is misleading to claim that Mises concluded that socialism is plainly impossible. He states that socialism is not capable of having rational economic accounting.17 Moreover, there are some relevant novelties introduced later by Hayek, such as his ideas on dispersed knowledge and the problems of driving complex spontaneous systems. All these novel points are important for a more coherent and accurate description of the controversy. Although these are important points, they arise in the later history of the debate (and of the Austrian School’s development outside mainstream economics) and so cannot be retroactively inserted into the earlier history in order to force through a change to the standard interpretation. In the original historical context, there was no distinction between ‘official economic science’ and Austrian economics. Consequently, it is inadequate to argue that the then standard static equilibrium model could not have been used successfully against Mises. Since there was no clear position separating Austrian economics from the standard economic theory, the socialists were using the same tools as the anti-socialists in order to defend their cause. As a direct result of their loss during the debate in the 1930s and 1940s, the Austrian economists sought to re-entrench their position by developing their own school of thought along independent lines. They were expelled from mainstream economics.18 Their current claim that socialists must find another way to answer Mises’ challenge, one that does not rest on the mainstream neoclassical model, only serves to prove that currently accepted scientific economics (neoclassical in all its breadth) cannot reject socialism. What remains for Austrian economists is the claim that economic science, in the sense of their own school of thought, is capable of rejecting socialism. The crux of Lavoie’s (1981) argument is that the Austrian paradigm is different from the neoclassical paradigm, specifically in the sense that static equilibrium is not part of the Austrian scheme. Thus, he claims that since Mises’ challenge was based on a dynamic model, it could not have been solved based on a static model. From the standpoint of methodological procedure in the history of ideas, it is easy to understand why such an idea should not be accepted as justification for changing the interpretation of the debate. The following three reasons will suffice. First, it is simple to insert dynamics into the traditional static equilibrium paradigm (Crookes and Wit, 2014). Second, a model of participatory planned economy can incorporate tacit knowledge and the atomistic nature of discovery (Adaman and Devine, 1996). Third, and more fundamentally, the socialist side did not violate the essentials of the Homo economicus paradigm as accepted since the Marginal Revolution of the 1870s.19 The argumentative strategy of Oskar Lange in the 1930s absorbs Mises’ ([1949] 1998) Human Action entirely. Rejecting a universally accepted reading of a scientific controversy in order to justify the detachment of the Austrian School’s perspective from neoclassical economics helps to spread the false notion that Mises’ thesis has not been challenged. Against this incorrect perspective, I argue that the fact that the Austrian School functions outside the mainstream should be evidence enough to prove that Mises has been countered at the highest level. Besides being ejected from the mainstream, there emerge internal conflicts within the Austrian School, which developed into the Mises-Hayek dehomogenisation debate of the 1990s. The attempt to unite Mises and Hayek in the same framework in order to rebut the socialist side on this specific debate is a forced move. It ignores their own individualities and their resistance to being classified in a homogenised unity.20 If the standard interpretation must change as Lavoie argues, then it is unavoidable to conclude that the Austrian economists have developed their own framework separate from mainstream neoclassical theory with the explicit aim of repelling the socialist argument, and impeding the demonstration of the validity of the socialist economy. Is there any doubt that Mises’ intellectual project envisaged an isolated system, impenetrable to socialist principles? Under the influence of this project, Austrian economists are struggling to escape from the once generally accepted reading of the debate. From the perspective of the history of economic thought, there are no valid reasons for changing the standard view. It is true that the Austrian and mainstream neoclassical frameworks diverge. However, it is not reasonable to use this distinction, which developed only later, to argue that no one understood Mises correctly. In addition, it is illogical to claim, as Boettke (1998) does, that Mises deliberated shaped his discourse for a Marxist audience, whereas Hayek’s words were directed towards neoclassical economists’ ears. They were both communicating with the established community of economic scientists of their time, regardless of any division between different schools of thought. The Austrian School reading of the socialist economic calculation debate reinforces the mistaken idea that Austrian economics is built upon a solid common ground that has nothing to do with Walras and Jevons. However, the earlier lineage represented by authors like Hermann Heinrich Gossen (1810–58), Fredéric Bastiat (1801–50), Jean-Baptiste Say (1767–1832), Anne Robert Jacques Turgot (1727–81) and Richard Cantillon (1680–1734) also culminates in the same body known as the Marginalist Revolution of the 1870s. The fact is that, although it was born during the Methodenstreit in the 1880s, the Austrian School only developed a full identity of its own as a direct result of the unfolding of the socialist economic calculation debate. Lavoie’s (1981) argument for rewriting the history of the debate is flawed because it reveals that the construction of an entire school of economics separate from the mainstream has the political purpose of continuing to block the consensus that rational economic accounting under socialism is not only feasible but also potentially more efficient than under capitalism based on the criteria of efficiency acknowledged by the international scientific community of economists.21 6.Conclusion Neoliberalism, the transition economies of the East, and market socialism in recent China have opened up a new historical phase that has allowed radical liberal economists to try to revise the standard interpretation of the socialist economic calculation debate. Hayek’s later reformulation of the Austrian perspective helped to make it popular. The issue of dynamic information as the fundamental basis for organising the market and a planned economy led to the incorporation of many theoretical elements into economic science, such as praxeology and the dynamic modelling of structural changes. The problem of uncertainty (also a feature of Post-Keynesian theory), for example, has become central in the current phase of the calculation controversy. Although these elements can be regarded as improvements to the technical side of the debate, the motives for the current Austrian School attempt to defy the standard interpretation do not rest there, but include also the historical opportunity to erase from collective memory the persistent victory of socialism during most of the twentieth century. Oskar Lange engaged with these technical novelties as they were being developed. He expanded Marx’s system with the most advanced discoveries and experiences of various branches of research. His strategy for dealing with bourgeois economics was and still is extremely valuable to all interested in engaging in the struggle around economic science on the side of the working class. Lange’s solid commitment to the proletarian cause was his greatest source of energy in the technical fight against the enemies of socialism. His use of the standard economic theory language should not confuse us about his affiliation because he always had a keen understanding of the tactics of the political battle surrounding the controversy. Every communist economist will be well advised in the future stages of this combat by studying his strategy.22 Future historians of economic thought will be in a better position to adequately analyse the place of the socialist economic calculation debate in the history of economic science. However, it is already possible to affirm that this controversy gathers around it numerous technical weapons to equip economists in their struggles, be it in favour or against workers. So, in response to the paper’s question, I can say that the controversy is both technical and political. This explains why it will continue to be important in the literature unless one of the opposing systems completely defeats the other in the real world of class struggle. Does this mean that the controversy does not produce any conclusion? I do not think so. If I were to select one accepted truth revealed by the debate, it would be that socialism cannot be scientifically rejected, but only politically by those whose economic interests are opposed by it. Bibliography Ackerman , S . 2012 . The Red and the Black, Jacobin , available at https://www.jacobinmag.com/2012/12/the-red-and-the-black (date last accessed 2 December 2020 ) Adaman , F. and Devine , P. 1996 . The economic calculation debate: lessons for socialists, Cambridge Journal of Economics , vol. 20 , no. 5, 523 – 37 Google Scholar OpenURL Placeholder Text WorldCat Agafonow , A . 2012 . The Austrian dehomogenization debate, or the possibility of a Hayekian planner, Review of Political Economy , vol. 24 , no. 2 , 273 – 87 Google Scholar OpenURL Placeholder Text WorldCat Arnold , N. S . 1987 . Marx and disequilibrium in market socialist relations of production, Economics & Philosophy , vol. 3 , no. 1 , 23 – 47 Google Scholar OpenURL Placeholder Text WorldCat Bandeira , L. A. M . 2008 . Fórmula para o caos: A derrubada de Salvador Allende (1970–1973) , Rio de Janeiro , Civilização Brasileira Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Bardhan , P. and Roemer , J. E. 1994 . On the workability of market socialism, Journal of Economic Perspectives , vol. 8 , no. 2 , 177 – 81 Google Scholar OpenURL Placeholder Text WorldCat Barone , E . 1908A . Il ministro della produzione nello stato collettivista, Giornale degli Economisti , vol. 37 , 267 – 93 Google Scholar OpenURL Placeholder Text WorldCat Barone , E . 1908B . Il ministro della produzione nello stato collettivista (Continuazione), Giornale degli Economisti , vol. 37 , 391 – 414 Google Scholar OpenURL Placeholder Text WorldCat Bay , C . 1971 . Hayek’s liberalism: the constitution of perpetual privilege, Political Science Reviewer , vol. 1 , 93 – 124 Google Scholar OpenURL Placeholder Text WorldCat Bergson , A . 1948 . Socialist economics, pp. 412 – 48 in Ellis H. S. (ed.), A Survey of Contemporary Economics , vol. 1 , Homewood , Richard D. Irwin Inc . Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Bergson , A . 1967 . Market socialism revisited, Journal of Political Economy , vol. 75 , no. 5 , 655 – 73 Google Scholar OpenURL Placeholder Text WorldCat Bettelheim , C. [ 1977 ] 1983. A luta de classes na União Soviética. Segundo período: 1923–1930 , Rio de Janeiro , Paz e Terra Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Boettke , P . 1998 . Economic calculation: the Austrian contribution to political economy, Advances in Austrian Economics , vol. 5 , 131 – 58 Google Scholar OpenURL Placeholder Text WorldCat Boettke , P. (ed.) 2000A . Socialism and the Market: The Socialist Calculation Debate Revisited , London and New York , Routledge Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Boettke , P . 2000B . Introduction: towards a history of the theory of socialist planning, pp. 1 – 39 in Boettke , P. (ed.), Socialism and the Market: The Socialist Calculation Debate Revisited, volume I , London and New York , Routledge Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Breit , M. and Lange , O. [1934] 2003 . The way to the socialist planned economy, trans. J. Toporowski, History of Economics Review , vol. 37 , no. 1 , 51 – 71 Google Scholar OpenURL Placeholder Text WorldCat Bukharin , N. [ 1920 ] 1979. The Economics of the Transition Period , London , Routledge & Kegan Paul Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Burczak , T . 2014 . Dictating liberty, Review of Political Economy , vol. 26 , no. 3 , 368 – 71 Google Scholar OpenURL Placeholder Text WorldCat Bylund , P. L. and Manish , G. P. 2017 . Private property and economic calculation: a reply to Andy Denis, Review of Political Economy , vol. 29 , no. 3 , 414 – 31 Google Scholar OpenURL Placeholder Text WorldCat Campbell , A. (ed.) 2012 . Designing socialism: visions, projections, models, Science & Society , Special Issue, vol. 76 , no. 2 Google Scholar OpenURL Placeholder Text WorldCat Cockshott , P . 2010 . Von Mises, Kantorovich and in-natura calculation, Intervention , vol. 7 , no. 1 , 167 – 99 Google Scholar OpenURL Placeholder Text WorldCat Cottrell , A. and Cockshott , P. 1993 . Calculation, complexity and planning: the socialist economic calculation debate once again, Review of Political Economy , vol. 5 , no. 1 , 73 – 112 Google Scholar OpenURL Placeholder Text WorldCat Crookes , D. J. and Wit , M. P. 2014 . Is system dynamics modelling of relevance to neoclassical economics? South African Journal of Economics , vol. 82 , no. 2 , 181 – 92 Google Scholar OpenURL Placeholder Text WorldCat Denis , A . 2015 . Economic calculation: private property or several control? Review of Political Economy , vol. 27 , no. 4 , 606 – 23 Google Scholar OpenURL Placeholder Text WorldCat Denis , A . 2017 . Private property or several control: a rejoinder, Review of Political Economy , vol. 29 , no. 3 , 432 – 39 Google Scholar OpenURL Placeholder Text WorldCat Devine , P . (ed.) 2002 . Building socialism theoretically: alternatives do capitalism and the invisible hand, Science & Society , Special Issue, vol. 66 , no. 1 Google Scholar OpenURL Placeholder Text WorldCat Dickinson , H. D . 1933 . Price formation in a socialist community, The Economic Journal , vol. 43 , no. 170 , 237 – 50 Google Scholar OpenURL Placeholder Text WorldCat Dobb , M . 1935 . Economic theory and socialist economy: a reply, Review of Economic Studies , vol. 2 , no. 2 , 144 – 51 Google Scholar OpenURL Placeholder Text WorldCat Dobb , M . 1937 . Political Economy and Capitalism , London , Routledge Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Dobb , M . 1939 . A note on saving and investment in a socialist economy, Economic Journal , vol. 49 , no. 196 , 713 – 28 Google Scholar OpenURL Placeholder Text WorldCat Engels , F. [ 1880 ] 1973. Die Entwicklung des Sozialismus von der Utopie zur Wissenschaft , Marx-Engels-Werke (MEW 19,4), Berlin, Dietz Verlag, available at https://www.mlwerke.de/me/me19/me19_177.htm (date last accessed 2 December 2020 ) Farrant , A. and McPhail , E. 2014 . Can a dictator turn a constitution into a can-opener? F. A. Hayek and the alchemy of transitional dictatorship in Chile, Review of Political Economy , vol. 26 , no. 3 , 331 – 48 Google Scholar OpenURL Placeholder Text WorldCat Gardner , R . 1990 . L. V. Kantorovich: the price implications of optimal planning, Journal of Economic Literature , vol. 28 , no. 2 , 638 – 48 Google Scholar OpenURL Placeholder Text WorldCat Greenwood , D . 2007 . Planning and know-how: the relationship between knowledge and calculation in Hayek’s case for markets, Review of Political Economy , vol. 19 , no. 3 , 419 – 34 Google Scholar OpenURL Placeholder Text WorldCat Hayek , F. A. (ed.) [ 1935 ] 1963A. Collectivist Economic Planning , London , Routledge & Kegan Paul Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Hayek , F. A. [ 1935 ] 1963B. The present state of the debate, pp. 201 – 44 in Hayek , F. A. (ed.), Collectivist Economic Planning , London , Routledge & Kegan Paul Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Hayek , F. A . 1940 . Socialist calculation: the competitive ‘solution’, Economica , vol. 7 , no. 26 , 125 – 49 Google Scholar OpenURL Placeholder Text WorldCat Hayek , F. A . 1944 . The Road to Serfdom , Chicago , University of Chicago Press Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Hayek , F. A . 1945 . The use of knowledge in society, The American Economic Review , vol. 35 , no. 4 , 519 – 30 Google Scholar OpenURL Placeholder Text WorldCat Hayek , F. A . 1952 . The Sensory Order , London , Routledge & Kegan Paul Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Hayek , F. A . 1960 . The Constitution of Liberty , Chicago , University of Chicago Press Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Hayek , F. A. [ 1988 ] 1992. The Fatal Conceit: The Errors of Socialism , London , Routledge Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Hoppe , H.-H . 1996 . Socialism: a property or knowledge problem? Review of Austrian Economics , vol. 9, no. 1 , 147 – 54 Google Scholar OpenURL Placeholder Text WorldCat Horwitz , S . 1996 . Money, money prices, and the socialist economic calculation debate, Advances in Austrian Economics , vol. 3 , 59 – 77 Google Scholar OpenURL Placeholder Text WorldCat Hurwicz , L . 1969 . On the concept and possibility of informational decentralization, The American Economic Review , vol. 59 , no. 2 , 513 – 24 Google Scholar OpenURL Placeholder Text WorldCat Jablonowski , M . 2011 . Markets on a (computer) chip? New perspectives on economic calculation, Science & Society , vol. 75 , no. 3 , 400 – 18 Google Scholar OpenURL Placeholder Text WorldCat Jaffe , W . 1976 . Menger, Jevons and Walras de-homogenized, Economic Inquiry , vol. 14 , no. 4 , 511 – 24 Google Scholar OpenURL Placeholder Text WorldCat Jevons , W. S. [ 1871 ] 1970. The Theory of Political Economy , Baltimore , Penguin Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Kayeri , K . 2003 . Socialism and the market: methodological lessons from in the socialist economic calculation debate, The Work of Karl Marx and challenges for the XXI Century Conference , Institute of Philosophy , Havana , 5–7 May 2003 , available at https://biblioteca.clacso.edu.ar/ar/libros/cuba/if/marx/documentos/22/Socialism%20and%20The%20market....pdf (date last accessed 2 December 2020 ) Kirzner , I . 1988 . The economic calculation debate: lessons for Austrians, Review of Austrian Economics , vol. 2 , no. 1 , 1 – 18 Google Scholar OpenURL Placeholder Text WorldCat Kirzner , I . 2000 . The Driving Force of the Market: Essays in Austrian Economics , London and New York , Routledge Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Knight , F. H . 1936 . The place of marginal economics in a collective system, The American Economic Review , vol. 26 , no. 1 , 255 – 66 Google Scholar OpenURL Placeholder Text WorldCat Kowalik , T . 1964 . Biography of Oskar Lange, pp. 1 – 13 in Organizing Committee of Oskar Lange’s 60th Anniversary (ed.), On Political Economy and Econometrics: Essays in Honour of Oskar Lange , Warszawa , Polish Scientific Publishers PWN Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Kowalik , T . 1990 . Oskar Lange, pp. 133 – 46 in Eatwell , J., Milgate , M. and Newman , P. (eds.), Problems of the Planned Economy , vol. 4 , London , The Macmillan Press Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Lampa , R . 2014 . When science meets revolution: the influence of Rosa Luxemburg on Oskar Lange’s early project (1931–1945), pp. 122 – 40 in Bellofiore , R., Karwowski , W. and Toporowski , J. (eds.), The Legacy of Rosa Luxemburg, Oskar Lange and Michal Kalecki , New York , Palgrave Macmillan Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Lange , O . 1935 . Marxian economics and modern economic theory, The Review of Economic Studies , vol. 2 , no. 3 , 189 – 201 Google Scholar OpenURL Placeholder Text WorldCat Lange , O . 1936 . On the economic theory of socialism: part one, The Review of Economic Studies , vol. 4 , no. 1 , 53 – 71 Google Scholar OpenURL Placeholder Text WorldCat Lange , O . 1937 . On the economic theory of socialism: part two, The Review of Economic Studies , vol. 4 , no. 2 , 123 – 42 Google Scholar OpenURL Placeholder Text WorldCat Lange , O . 1945 –46. The scope and method of economics, The Review of Economic Studies , vol. 13 , no. 1 , 19 – 32 Google Scholar OpenURL Placeholder Text WorldCat Lange , O. [ 1961 ] 1978. Introduction to Econometrics , Warsaw , Pergamon Press Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Lange , O. [ 1965 ] 1970. Introduction to Economic Cybernetics , Oxford , Pergamon Press Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Lange , O . 1967 . The computer and the market, pp. 158 – 61 in Feinstein , C. H. (ed.), Socialism, Capitalism and Economic Growth: Essays presented to Maurice Dobb , Cambridge , Cambridge University Press Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Lange , O . 1971 . Political Economy , vol. 2 , Oxford , Pergamon Press Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Lavoie , D . 1981 . A critique of the standard account of the socialist economic calculation debate, Journal of Libertarian Studies , vol. 5 , no. 1 , 41 – 87 Google Scholar OpenURL Placeholder Text WorldCat Lavoie , D . 1985 . Rivalry and Central Planning , Cambridge, UK , Cambridge University Press Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Lavoie , D . 1986 . The market as procedure for the discovery and conveyance of inarticulate knowledge, Comparative Economic Studies , vol. 28 , 1 – 19 Google Scholar OpenURL Placeholder Text WorldCat Lavoie , D . 1990 . Computation, incentives and discovery: the cognitive function of markets in market socialism, The Annals of the American Academy of Political and Social Science , vol. 507 , no. 1, 72 – 79 Google Scholar OpenURL Placeholder Text WorldCat Lerner , A . 1934 . Economic theory and socialist economy, The Review of Economic Studies , vol. 2 , no. 1 , 51 – 61 Google Scholar OpenURL Placeholder Text WorldCat Lerner , A . 1936 . A note on socialist economics, The Review of Economic Studies , vol. 4 , no. 1 , 72 – 76 Google Scholar OpenURL Placeholder Text WorldCat Lerner , A . 1937 . Statics and dynamics in socialist economics, The Economic Journal , vol. 47 , no. 186 , 253 – 70 Google Scholar OpenURL Placeholder Text WorldCat Lerner , A . 1938 . Theory and practice in socialist economics, The Review of Economic Studies , vol. 6 , no. 1 , 71 – 75 Google Scholar OpenURL Placeholder Text WorldCat Lippincott, Benjamin , E . 1938 . Introduction, pp. 1–38 in Lippincott, B. E., Lange, O. and Taylor, F. M. (eds.), On the Economic Theory of Socialism, NED - New edition ed., vol. 2, University of Minnesota Press, JSTOR, available at www.jstor.org/stable/10.5749/j.ctttsbzm.3 (date last accessed 6 March 2021) Google Scholar OpenURL Placeholder Text WorldCat Marx , K. [ 1891 ] 1973 . Kritik des Gothaer Programms, Marx-Engels-Werke (MEW 19,4) , Berlin , Dietz Verlag Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Meadowcroft , J. and Ruger , W. 2014 . Hayek, Friedman and Buchanan: on public life, Chile, and the relationship between liberty and democracy, Review of Political Economy , vol. 26 , no. 3 , 358 – 67 Google Scholar OpenURL Placeholder Text WorldCat Medina , E . 2011 . Cybernetic Revolutionaries: Technology and Politics in Allende’s Chile , Cambridge , MA, MIT Press Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Menger , C. [ 1871 ] 1950. Principles of Economics , New York , Free Press Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC von Mises , L. . ([1920] 1935). Economic calculation in the socialist commonwealth, pp. 87–130 in Hayek, F. A. (ed.), Collectivist Economic Planning, London, Routledge & Kegan Paul Mises , L. v. [ 1949 ] 1998. Human Action , Auburn , Ludwig von Mises Institute Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Murrell , P . 1983 . Did the theory of market socialism answer the challenge of Ludwig von Mises? A reinterpretation of the socialist controversy, History of Political Economy , vol. 15 , no. 1 , 92 – 115 Google Scholar OpenURL Placeholder Text WorldCat Nell , G . 2014 . The alchemy of the can opener: how an Austrian economist found himself supporting dictatorial imposition of a liberal order, Review of Political Economy , vol. 26 , no. 3 , 349 – 57 Google Scholar OpenURL Placeholder Text WorldCat Nell , G . 2017 . The Driving Force of the Collective: Post-Austrian Theory in Response to Israel Kirzner , New York , Palgrave Macmillan Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Neurath , O. [ 1919 ] 1973. Through war economy to economy in kind, pp. 123 – 57 in Neurath , M. and Cohen , R. S. (eds.), Empiricism and Sociology, Vienna Circle Collection , vol. 1 , Dordrecht , Springer Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC O’Neill , J . 1989 . Markets, socialism and information: a reformulation of Marxian objection to the market, Social Philosophy and Policy , vol. 6 , no. 2 , 200 – 10 Google Scholar OpenURL Placeholder Text WorldCat Pareto , V. [ 1906 ] 2014. Manual of Political Economy , Oxford , Oxford University Press Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Pierson , N. G. [ 1902 ] 1935. The problem of value in the socialist society, pp. 41 – 86 in Hayek , F. A. (ed.), Collectivist Economic Planning , London , Routledge & Kegan Paul Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Popper , K . 1945 . The Open Society and Its Enemies , London , Routledge Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Prychitko , D. L . 1988 . Marxism and decentralized socialism, Critical Review , vol. 2 , no. 4 , 127 – 48 Google Scholar OpenURL Placeholder Text WorldCat Quiggin , J . 2013 . The Light on the Hill: A Reply to Seth Ackerman , Jacobin , available at https://jacobinmag.com/2013/01/john-quiggin-on-the-red-and-the-black/ (date last accessed 2 December 2020 ) Ramsey Steele , D . 1981 . Posing the problem: the impossibility of economic calculation under socialism, The Journal of Libertarian Studies , vol. 5 , no. 1 , 7 – 22 Google Scholar OpenURL Placeholder Text WorldCat Robbins , L . 1934 . The Great Depression , London , Macmillan Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Rothbard , M . 1991 . The end of socialism and the calculation debate revisited, Review of Austrian Economics , vol. 5 , no. 2 , 51 – 76 Google Scholar OpenURL Placeholder Text WorldCat Salerno , J. T . 1990 . Postscript to economic calculation in the socialist commonwealth, pp. 49 – 69 in Mises , L. v. (ed.), Economic Calculation in the Socialist Commonwealth , Auburn , Ludwig von Mises Institute Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Salerno , J. T . 1993 . Mises and Hayek dehomogenized, Review of Austrian Economics , vol. 6 , no. 2 , 113 – 46 Google Scholar OpenURL Placeholder Text WorldCat Samuelson , P. A . 1976 . Economics , 10th ed., New York , McGraw-Hill Book Co . Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Schleifer , A. and Vishny , R. W. 1994 . The politics of market socialism, Journal of Economic Perspectives , vol. 8 , no. 2 , 165 – 76 Google Scholar OpenURL Placeholder Text WorldCat Schumpeter , J. A. [ 1942 ] 1961. Capitalismo, Socialismo e Democracia , Rio de Janeiro , Fundo de Cultura Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Selgin , G. A . 1990 . Praxeology and Understanding: An Analysis of the Controversy in Austrian Economics , Auburn , Ludwig von Mises Institute Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Shapiro , D . 1989 . Reviving the socialist economic calculation debate: a defense of Hayek against Lange, Social Philosophy and Policy , vol. 6 , no. 2 , 139 – 59 Google Scholar OpenURL Placeholder Text WorldCat Taylor , F. M . 1929 . The guidance of production in a socialist state, The American Economic Review , vol. 19 , no. 1 , 1 – 8 Google Scholar OpenURL Placeholder Text WorldCat Temkin , G . 1989 . On economic reforms in socialist countries: the debate on economic calculation under socialism revisited, Communist Economies , vol. 1 , 31 – 59 Google Scholar OpenURL Placeholder Text WorldCat Vaugh , K . 1980 . Economic calculation under socialism: the Austrian contribution, Economic Inquiry , vol. 18 , no. 4 , 535 – 54 Google Scholar OpenURL Placeholder Text WorldCat Walras , L. [ 1874 ] 1954. Elements of Pure Economics , Homewood , Richard D. Irwin Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Wiseman , J . 1953 . Uncertainty, costs, and collectivist economic planning, Economica , vol. 20 , no. 78 , 118 – 28 Google Scholar OpenURL Placeholder Text WorldCat Yeager , L . 1994 . Mises and Hayek on calculation and knowledge, Review of Austrian Economics , vol. 7 , no. 2 , 93 – 109 Google Scholar OpenURL Placeholder Text WorldCat Yeager , L . 1996 . Rejoinder: Salerno on calculation, knowledge and appraisement, Review of Austrian Economics , vol. 9 , no. 1 , 137 – 39 Google Scholar OpenURL Placeholder Text WorldCat Yeager , L . 1997 . Calculation and knowledge: let’s write finis, Review of Austrian Economics , vol. 10 , no. 1 , 133 – 36 Google Scholar OpenURL Placeholder Text WorldCat Zimmer , T . 2013 . On Democracy and Socialism , Jacobin , available at https://www.jacobinmag.com/2013/01/on-democracy-and-socialism-a-reply-to-seth-ackerman (date last accessed 2 December 2020 ) Zygmont , Z. X . 2006 . Debating the socialist calculation debate: a classroom exercise . The Journal of Economic Education , vol. 37 , no. 2 , 229 – 35 Google Scholar OpenURL Placeholder Text WorldCat Footnotes 1 For a different division of the history of the debate, see Boettke (2000B), who proposes four parts: the first part covers the period between 1920 and 1937, the second part from 1937 to 1985, the third part between 1985 and 1990 and the fourth part is the contemporary phase of the debate since 1990. The aim of this paper was not to evaluate the current state of the debate or the core issues disputed in each phase, but to show that the history of the debate itself is currently in dispute. 2 Some may feel that the gap presented here between Mises and Hayek is too wide. Greenwood (2007) argues that their differences are not sufficient for undertaking a position like the one explored in this paper. It is true that there are many elements of continuity between these two authors. However, the thesis presented here focuses on a single point of divergence between them, that is, the core strategy used to defeat the socialist economists. Mises was closed in the theoretical world and wanted to pre-empt any comparison between economic systems. Hayek was more open to engaging with opposing views and more pragmatic. Hayek’s intervention meant the failure of the short ‘pop’ idea that socialism is impossible. This is the background of the Mises-Hayek dehomogenisation debate of the 1990s. It showed that Hayek and Mises had different ideas about what the calculation problem was. For Hayek, it was a matter of computation, but for Mises, it was not. 3 Fundamental works on the problem before 1920 are: Marx ([1891] 1973), Engels ([1880] 1973), Pierson ([1902] 1935), Bukharin ([1920] 1979) and Neurath ([1919] 1973). For a full introduction to the debate and compilation of the most relevant contributions up to 2000, see Boettke (2000A). 4 See Taylor (1929), Knight (1936), Dickinson (1933) and Lerner (1934). 5 I thank Fikret Adaman for bringing my attention to Maurice Dobb’s position in the debate, which may become extremely relevant today, since it anticipated many aspects of the controversy that are being discussed now. This paper does not intend to devalue Dobb’s third strand, because it has its own merits. Rather, the paper explores Oskar Lange’s strategic approach as the most effective for showing the contradictions between the political soul of the Austrian School of thought and the official framework of mainstream economics. 6 The emphasis on Oskar Lange in this paper does not mean that he is the sole originator of the model presented in Lange (1936, 1937). I am not focusing here on the theoretical model per se, but on the strategic argument based on this model that was developed by Lange to expel the Austrian School from official, recognised economic science. So, controversial interpretations of the model and its characterisation as market socialism, whether it is really a planned economy, or has the capacity to operate under the logic of profit maximisation, are outside the scope of this paper. For a detailed account of the general model, see Walras ([1874] 1954), Pareto ([1906] 2014), Barone (1908A, 1908B), Taylor (1929), Dickinson (1933), Lerner (1934, 1936, 1937, 1938) and Knight (1936). 7 Exactly the reverse could also be said, that is, that the market mimics the planners. The standard argument that planners would have to mimic the market derives from the idea of the market as a natural institution. However, both the state and the market are artificial: they are human creations. For a detailed account of how Lange conceives a transition from capitalist market to socialist planning, see Lange (1935, 1945–46, [1961] 1978, [1965] 1970, 1971). 8 The book Collectivist Economic Planning (Hayek ([1935] 1963A) was one of the first collections of contributions on the controversy and was organised and edited by Hayek. It helped to spread the debate in the 1930s and 1940s and is still one of the main reference works on the topic. 9 The debate on economic calculation has a strong emphasis on technicalities. The dispute between the two systems based on hard criteria such as productivity, efficiency or capacity to generate economic growth is separate from any political considerations. It should be noted that a correct approach to the calculation controversy should not try to find arguments in favour or against one or other system based on supposed neutral criteria. The analyst of the controversy must comprehend that he has a political position in that debate and consciously take it into consideration. For the socialist side, for example, the transition to socialism does not only follow the course of the development of productive forces simply measured as the enhancement of labor productivity, but mainly the interest of the working class to alter the relations of production according to its desires. The idea of the primacy of the technique over the historical development, as if the development of the productive forces were the only explanatory factor for an advance towards socialism, was popularised by the official Marxism spread by the Soviet Union because of specific limitations under which Bolshevism was born (Bettelheim [1977] 1983, pp. 453–506). 10 For a careful analysis of the debate under the influence of Hayek’s new strategy in comparison to that of Mises, see Wiseman (1953), Bergson (1967) and Murrell (1983). After the mid-1940s, Hayek brings the problem of scattered knowledge and the dynamics of complex systems to the centre of his analysis. He strongly opposes the mainstream paradigm about markets. Given the reality of rapid changes and the vast amount of information that cannot be gathered objectively, there could only be one way to approximate the best rational use of available resources: spontaneous order. Thus, he concludes that any attempt at actively designing a determinate social outcome is an exercise of pure imagination. His final arguments (inspired by John Locke, John Milton, Adam Smith, David Hume, Richard Cobden, John Bright and others) are an intransigent defense of individualist philosophy as the most sacred value of eighteenth and nineteenth centuries Western culture, and the position that economic planning is doomed to failure because of the limitations of the human mind, that is of human nature. See Hayek (1945, 1952, 1960, [1988] 1992). 11 For an overview of the debate on allocation, programming and computational dynamic structures, see Lange (1967), Hurwicz (1969), Lavoie (1986), Gardner (1990), Lavoie (1990) and Jablonowski (2011). Selected contributions that represent the current stage of the debate are Arnold (1987), Prychitko (1988), Shapiro (1989), O’Neill (1989), Schleifer and Vishny (1994), Bardhan and Roemer (1994), Adaman and Devine (1996), Cottrell and Cockshott (1993), Horwitz (1996), Cockshott (2010), Denis (2015, 2017) and Bylund and Manish (2017). From the standpoint of socialists, see the collection of contributions in the special editions of Science & Society edited by Devine (2002) and Campbell (2012). For a more philosophical and broader approach, see Ackerman (2012), Quiggin (2013) and Zimmer (2013). For an account of the controversy within the Austrian School, see Kirzner (2000) and Nell (2017). 12 For the history of Project Cybersyn, see Medina (2011). For the imperialist attack against the Chilean democracy, see Bandeira (2008). 13 For Hayek’s position in favour of the Pinochet dictatorship, see Farrant and McPhail (2014), Nell (2014), Meadowcroft and Ruger (2014) and Burczak (2014). 14 Zygmont (2006) proposes an exercise to replicate the debate in undergraduate courses of economics which focus precisely on the sequence Mises−Lange–Hayek. Even though I oppose Zygmont, an apprentice of Don Lavoie, I enthusiastically support this exercise because it focuses on the essentials of the debate. 15 I emphasise this point to make it clear that my defence of the standard interpretation does not rest on the argument of authority. 16 Lavoie is not alone in his attempt to rewrite the history of the socialist economic calculation debate. Other authors who also challenge the standard interpretation are Vaugh (1980), Ramsey Steele (1981), Murrell (1983), Shapiro (1989), Temkin (1989) and Rothbard (1991). Although there are some differences between them, this paper views them as part of the same effort to change the standard interpretation of the debate. 17 It is true that he has a specific understanding of rationality and this can be evaluated. If, for example, it is shown that a socialist society can exist using a different logic of the use of resources, one that is not rational from a Misean perspective, then it would have been proven that what is at stake are two different parameters. However, the concept of rational economic accounting itself has not been seriously disputed in any phase of the debate. 18 Kirzner (1988) explains that the Austrian School developed their own framework distinguished from neoclassical economics, as a necessity in order to clarify that Mises’ original challenge had been misunderstood. 19 It is true that, as Jaffe (1976) has pointed out, Menger ([1871] 1950) differs from Jevons ([1871] 1970) and Walras ([1874] 1954). I do not deny the legitimacy of the Austrian School as a school of economic thought, since its formation can be described without focusing on the socialist economic calculation (even though this is a crucial phase of its history). What I argue is that it is unacceptable to change the interpretation of the history of the debate by retroactively applying a later Austrian School theoretical framework to an earlier context. 20 Hoppe (1996), for example, tries hard to revive Mises’ original claim and discredit Hayek’s contribution as introducing fallacies that only added confusion. For an overview of the internal dispute within the Austrian School on the divergence between Mises and Hayek, see Salerno (1990, 1993), Kirzner (1988), Selgin (1990), Rothbard (1991), Yeager (1994, 1996, 1997), Boettke (1998) and Agafonow (2012). 21 A softer response to the Austrian School’s pledge for a rematch is provided by Adaman and Devine, who also show that within the standard economic framework, the socialists have won (1996 p. 526). Furthermore, they accept the new challenge to play the game within the Austrian framework itself and, inspired by Maurice Dobb’s early contribution, propose a collaborative rather than a coercive or competitive model. Cottrell and Cockshott (1993) have a similar approach, accepting various points raised by the later Austrian economists and answering them. I support their approach, but I understand that it is also necessary to dispute the official narrative of the debate. If this is not done, one might think the modern Austrian School’s new reading (Vaugh, 1980; Lavoie, 1981; Ramsey Steele, 1981; Murrell, 1983; Shapiro, 1989; Temkin, 1989; Rothbard, 1991) has nothing to do with the historical context of neoliberalism and that it represents a disinterested scholarly contribution, as if there were no economic and political interests behind it. 22 For a critique of the market socialism approach relying on the standard economic theory framework, see Kayeri (2003). His standpoint represents the scepticism towards Oskar Lange’s relationship to mainstream economics that is common among Marxists of various qualitative traditions. I have tried to show that Oskar Lange is aware of the apologetic discourse in both the Austrian and the mainstream neoclassical tradition and that his utilisation of these tools (alien to Marx) has the strategic purpose of politically combating the anti-socialist side on a concrete technical matter. © The Author(s) 2021. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model)
TI - Technical or political? The socialist economic calculation debate
JO - Cambridge Journal of Economics
DO - 10.1093/cje/beab008
DA - 2021-04-26
UR - https://www.deepdyve.com/lp/oxford-university-press/technical-or-political-the-socialist-economic-calculation-debate-ROa39UwEXP
SP - 1
EP - 1
VL - Advance Article
IS - 
DP - DeepDyve
ER -