The Socialist Calculation Debate and its Normative Implications
Austrian Economics: The Next Generation
ISBN: 978-1-78756-578-4, eISBN: 978-1-78756-577-7
Publication date: 3 December 2018
Abstract
During the socialist calculation debate, Ludwig von Mises and F. A. Hayek made a positive argument regarding the impossibility of economic calculation under socialism. In this study, I argue that the arguments made by Mises and Hayek have normative implications for capitalism. I do so by drawing an analogy between an Austrian account of the market process and a neo-Aristotelian account of human flourishing. Neither economic calculation follows passively from implementing a set of profit-maximizing rules nor does human flourishing follow passively from following a set of universal moral norms (be they of utilitarian, deontological, or natural law inspiration). Both economic calculation and human flourishing are inherently based on individual acts of knowledge creation, actualized only by self-directed individuals. In both cases, the creation of such knowledge is both contextual and specific to the unique circumstances of each individual of a particular time and place. Therefore, to assume that such knowledge exists ex ante, and is objective and transpersonal across time, place, and institutional context renders both economic calculation and human flourishing into a technological problem of given means and given ends, in essence defining both activities out of existence. The possibility of economic calculation and human flourishing are therefore dependent upon a political/legal order that protects the possibility of self-directed knowledge creation in both the economic and moral realms, that is, to say an institutional framework of private property rights.
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Acknowledgements
Acknowledgments
This paper was prepared for the 6th biennial Wirth Institute Workshop on Austrian Economics, which was held March 23–26, 2017, in Montreal, Canada. I would like to thank Professor Steve Horwitz for the invitation to write and deliver this paper, as well as Professor Richard Ebeling and the conference participants for their valuable feedback and comments. I also thank Peter Leeson, Alexander Craig, Daniel D’Amico, Douglas Den Uyl, Julian Müller, and Ed Younkins for reading and commenting on an earlier draft of this paper. I owe a particular debt of gratitude to Peter Boettke and Douglas Rasmussen for their time and patience in reading different drafts of this paper and offering invaluable comments and feedback. I also acknowledge the financial support of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center, the Institute for Humane Studies at George Mason University, the Intercollegiate Studies Institute, and the Political Theory Project at Brown University.
Citation
Candela, R.A. (2018), "The Socialist Calculation Debate and its Normative Implications", Horwitz, S. (Ed.) Austrian Economics: The Next Generation (Advances in Austrian Economics, Vol. 23), Emerald Publishing Limited, Leeds, pp. 29-44. https://doi.org/10.1108/S1529-213420180000023005
Publisher
:Emerald Publishing Limited
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