https://medium.com/p/4dce1e2a99ba
Here is Schumpeter ( https://en.wikipedia.org/wiki/Joseph_Schumpeter ) on the socialist calculation problem. In his History of Economic Analysis ( https://archive.org/details/HISTORYOFECONOMICANALYSISJOSEPHALOISSCHUMPETER ). Notice, that unlike other members of the Austrian School, like Ludwig von Mises and Friedrich Hayek, Schumpeter did not think that rational economic planning was impossible under socialism. In fact for this and other reasons. other members of the Austrian School regarded him as being a kind of traitor and to this day there is still debate over whether Schumpeter can be legitimately regarded as having been a member of the Austrian School. I suspect that might have been due to the fact that he had known, and even had been friends with, some very able socialist economists. That was true both when he was living in Austria and Germany, and later on when he was living in the US and teaching at Harvard. For example, while at Harvard, one of his teaching assistants was the young Marxist economist Paul Sweezy. Despite sharp differences between the two men over both their political and economic views, they became good friends. After Schumpeter died, Sweezy worked with his widow Elizabeth Boody Schumpeter to edit his History of Economic Analysis into publishable form. Anyway, Schumpeter is one of those thinkers who has always intrigued people on both the left and the right: > > > > The essential result of Barone’s or any similar investigation is that > there exists for any centrally controlled socialism a system of equations > that possess a uniquely determined set of solutions, in the same sense and > with the same qualifications as does perfectly competitive capitalism, and > that this set enjoys similar maximum properties. Less technically, this > means that so far as its pure logic is concerned the socialist plan makes > sense and cannot be disposed of on the ground that it would necessarily > spell chaos, waste, or irrationality. This is no small thing and we are > within our rights when we emphasize again the importance of the fact that > this service to socialist doctrine has been rendered by writers who, since > they were not socialists themselves, thereby victoriously vindicated the > independence of economic analysis from political preference or prejudice. > But, at the same time, this is all. We must not forget that, just like the > pure theory of the competitive economy, the pure theory of socialism moves > on a very high level of abstraction and proves much less for the > ‘workability’ of the system than laymen (and sometimes theorists also) > think. In particular, the proposition about the maximum properties of the > solution that characterizes the equilibrium of a socialist economy is of > course relative to its institutional data, and avers nothing concerning > the question whether this purely formal maximum is higher or lower than > the corresponding maximum of the competitive economy — especially if we > refuse to go into the further questions, whether the one or the other > institutional set-up is less exposed to deviations from its own ideal or > more favorable to ‘progress.’ These questions are so much more important > in practice than is the question of determinateness or ‘rationality’ per > se, that it is sometimes not easy to tell whether the later critics of the > socialist plan, especially von Mises, really meant to deny the validity of > the Pareto-Barone result. For it is quite possible to accept it and yet to > hold that the socialist plan, owing to the administrative difficulties > involved or for any other of a long list of reasons, is ‘practically > unworkable’ in the sense that it cannot be expected to work with an > efficiency comparable to the efficiency of capitalist society as revealed > by the index of total output. But although pure theory contributes little > to the solution of these problems, it helps us to posit them correctly and > to narrow the range of justifiable difference of opinion. We thus arrive > at the same conclusion as in the case of nonsocialist planning; ever since > Marshall, the theoretical possibility of improving the purely competitive > mechanism by public policy should no longer be a matter of controversy; > but it is of course still possible — as Marshall well understood — to > criticize either particular measures or even the whole idea of planning on > such grounds as lack of confidence in the political or administrative > organs that are available for the task. (It seems as if Marshall had been > alone in understanding this situation.) > > -=-=-=-=-=-=-=-=-=-=-=- Groups.io Links: You receive all messages sent to this group. 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