INTERMEDIATE

Socialist Calculation Debate

The socialist calculation debate occurred during the 1920s and 1930s between free-market economists Ludwig von Mises and F.A. Hayek and economists Fred M. Taylor, Abba Lerner, and Oskar R. Lange who, among others, promoted market socialism. The market socialists argued that, given appropriate information,  economic planners might successfuly plan an economy. Mises and Hayek argued that prices set outside of the context of the market forces of supply and demand convey no information about the value of goods. Instead officials determine them arbitrarily in a socialist economy. The setting of prices without knowledge and without incentive provided by profits leads to either shortages or gluts of different goods and services.

Ivan Pongracic - Ludwig von Mises and the Socialist Calculation Debate

 

Steve Horwitz - The Socialist Calculation Debate

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November 2014

It's been 40 years since F. A. Hayek received his Nobel Prize. His insights, particularly on the distribution of knowledge and the impossibility of economic planning, remain hugely important today. In this issue, we look back on the influence of his work. Max Borders and Craig Biddle debate whether liberty must be defended from one absolute foundation, further reflections on Scottish secession, and how technology is already changing our world for the better--including how robots, despite the unease they cause, will only accelerate this process.
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