We disgree, fundamentally, about whther the calculation debate was ever
about whether geberal equilibrium analysis could be applied to planning;
that was Lange's initial view, as I said, but he misunderstood what Hayek
was onto. I don't think the Austrians ever thought that equilibrium analysis
was possible or even a useful model. I certainly don't. I think Steele is
better on this than Kirzner. I think that planners can use tacit knowledge;
that plans work as well as they do, when they work, shows that they do.
Whether plans offer as good sources gfor information, tacit and otherwise,
for rational economic decisions, is another question. --jks
>
>The "socialist calculation" debate was about whether neoclassical general
>equilibrium analysis could be the basis of socialist central planning. Read
>the contributions. Of course, for Hayek and Mises (and others) there were
>other issues at stake, but those followed from what the answer to that
>question was. Israel Kirzner is very clear on this, by the way, and for me,
>that is an infinitely more reliable and respectable Austrian source than
>Steele, no offense intended. Again, the knowledge issues were brought up in
>the context of neoclassical general equilbrium analysis, its assumptions
>(about knowledge and foresight), framework, limitations. Lerner was
>enamored with Walras (who as someone else mentioned also considered himself
>a "semi-socialist", as did many early neoclassicals, the Fabian Wicksteed
>for example). Of course the Austrians were critical of NCE, that part I
>said I agree with much of the criticism of perfect competition, equlibrium,
>perfect knowledge and foresight, etc. But do you or do you not think that
>planners can employ tacit knowledge and discovery or is there some logical
>reason that they are exempt from these faculties while scientists and
>entrpreneurs are not?
>
>-----Original Message----- From: Justin Schwartz
>[mailto:[EMAIL PROTECTED]] Sent: Wednesday, February 07, 2001 5:06 PM To:
>[EMAIL PROTECTED] Subject: [PEN-L:7879] Re: RE: Re: RE: Re: RE:
>Critique of mathematical economi cs
>
>
>No, the calculation debate was NOT about whether neoclassical economic
>would apply to a socialist economy. AT least that's not what the Austrians
>thought. Hayek and Misesw ere onto the knowledge problem to start with.
>They were also critics of NCE. The initial socialist response by Lange et
>al. were neoclassical, but even Lange later realized that missed the point.
>David Ramsey Steele, From Marx to Mises, offers an good historical overview
>from an Austrian perspective.
>
>--jks
>
>
> > >Justin writes: > > >"I like the book, but I _do_ buy the old Austrian
>take on the calculation >problem, no "almost" about it. -jks" > >me: > >the
>socialist "calculation" debate was not about socialism versus >capitalism,
> >it was about whether or not neoclassical economics could apply to a
> >"socialist" >economy. of course it does not, neoclassical economics
>doesn't even apply >to a >market economy. so if that is what you mean by
>the Austrians winning, then >fine. >But the socialist calculation debate
>has been re-interpreted in more recent >Austrian literature as about the
>"knowledge problem." See for example Don >Lavoie's work. There are
>knowledge problems in all spheres of social life. >Understanding requires
>interpretation. Goal-oriented activity has to deal >with >these issues. The
>Austrians like to think of market activity as analogous >to >scientific
>investigation, entrepreneurs are like scientists who are trying >to
> >"discover." Planners are somehow exempt from these creative powers.
> >Scientists >and entrpreneurs can take advantage of tacit knowledge, but
>planners >cannot. >Why? Why can't policymakers and planners also employ
>tacit knowledge, >creative >discovery? What is it that exempts policy
>makers and planners from >overcoming >knowledge problems just as scientists
>and entrepreneurs do? there is a >dichotomous view of "market" and "state"
>here. will planners make mistakes >sometimes? of course, just as
>entrepreneurs and scientists make mistakes. >the >Austrians were right in
>critiquing "rational" planning, but there are other >types of planning:
>mixed-scanning, general systems, learning-adaptive, >approaches provide
>insights, as does some "postmodern" planning. > >Lachmann called the
>"concept of 'plan'...a fundamental hermenutic notion" >and >stated that it
>"will have to be introduced into the theory of consumption" >asking "If
>firms can make plans, why not households?" And why, we must ask, >not
> >other social groups, like neigborhoods, communities, cities, states,
> >nations, >and regions? as my professor of economic planning, Tom
>Vietorisz, wrote, >planning, as an "exercise in social intent...shares the
>characteristics of >all >deliberate action...all deliberate human action
>aims in part at social >effects." > >i hope to someday see a statue of
>Michael Polanyi right outside the >Ministry of >Planning. > >Mat >
>
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