Rev Austrian Econ (2006) 19: 81–93
Relaxing benevolence: public choice, socialist calculation,
and planner self-interest
Eric Crampton · Andrew Farrant
Springer Science + Business Media, Inc. 2006
Abstract The Austrian calculation argument suggests that inability to engage in economic
calculation worsened outcomes in socialist states. We suggest that this is hardly the case.
When Austrian assumptions of benevolence are relaxed, inability to engage in economic
calculation prevents the non-benevolent planner from fully extracting all available surplus
from the citizenry. Consequently, when planners are non-benevolent, calculation ceases to be
a relevant argument against the desirability of central planning; its normative force reverses
absent benevolent planners.
JEL Code P0, P16, P50
“The impracticability of Socialism is the result of intellectual, not moral, incapacity. Even angels, if
they were endowed only with human reason, could not form a socialistic community. If a socialist
community were capable of economic calculation, it could be set up without any change in men’s
moral character.” Ludwig von Mises (1932 : 407).
“[I]f the purpose is one of drawing the constitutional limits on the taxing power, would it not be
meaningful to utilize a worst-case scenario and to model governments, anywhere and everywhere,
as revenue-maximizing? That is, given any revenue source, would it not be best to assume maximal
exploitation?” James M. Buchanan (1992: 105).
E. Crampton (
Department of Economics, University of Canterbury, Private Bag 4800, Christchurch, New Zealand 8005
Department of Economics, Dickinson College, Carlisle, PA 17013