Why Socialist Calculation debate can not be regarded as a guide to socialist countries for their
economic decision making processes.
Economic planing of Socialist countries was not a well known fact for western world. Mises’ argued
the idea of this planning from a pro-market stance. He put the existence of the markets to an essential
role for allocations. However, Barone’s and Lange’s solutions and the problem which is asserted by
Mises were not on the same track. Moreover, other supporting arguments from Hayek and Dobb’s
front reshaped the debate from its practical core. That is to say, socialist calculation debate lost its
function as a contribution to economic planning.
First of all, Mises’ claim about the calculation and the answers of Barone and Lange have
different concepts.Debate itself have been built on the impossibility of measurement schemes
under the state ownership.Mises also emphasized that, the absence of price mechanism for
production will create biases towards combination of goods which are inputs(Screpanti and
Zamagni 1995, 296).Lange and Barone’smathematical methodwas accurate in a technical
sense to solve these issues, however practicality of these methods were poor. Indeed, trial and
error type can not be an influential mechanism for soviet countries where social immobility
and self-perpetuation are high. Due to the state based morality is common, a soviet man is
redefined and reshaped in a way far from neoliberal individual.So that, planing bureau’s
attempts to use trial and eror method might be biased because of the different types of
rationality in the soviet context.
Furthermore, both settings are totally different than each other. Austrian understanding depicts more
dynamic picture. The whole market argument underlines the importance of alteration by
entrepreneurial activities and tries to show how tacit knowledge notion of discovery imply time free
creativity for the entrepreneurship (Adaman and Devine 2002, 2). However, neoclassic walrasian
approach has bold distributional emphasis which is static and main argument of entrepreneurial
activity is absent; hence there is no inter-temporal accumulation of knowledge and inherited methods
of managerial behaviors. This approach might have been useful for war communism era which
introduces military style of rationing and controlling the whole economic life. However, this kind of
strict policy had resulted in economic disincentive of people and strong black market. So to say,neither
Austrian approach nor neoclassical approaches was useful for the socialist agenda.
Maurice Dobb’s perspective has had a tendency to clarify the differences between debate and the real
cases in socialist countries. However, he had a neoclassical understanding which is influenced by
Soviet experience. Yet he standed out for the static and inadequate setting in neoclassical theory
(Adaman and Devine 1996,529) . inspite of his critiques about neoclassical framework, he could not
wrap up the different sides of the debate into a body which might be applicable for socialist countries.
To sum, all participants of the debate asserts unorganized ideas which can not be incorporated in order
to implement new policies or economic methods in a given socialist country. Debate also has weak
resillience to contribute to socialist economic decisions in real cases due to the misengagements of the
ideas and lack of mutual comprehension.
Bibliography
Adaman,Fikret.,and Pat Devine.2002. “A Reconsideration of the Theory of Entrepreneurship: A
participatory approach” Review of Political Economy, Vol. 14, Iss. 3, p 2.
Adaman,Fikret.,and Pat Devine.1996. “The economics calculation debate: lessons for socialists”
Cambridge Journal of Economics ,Vol. 20 Iss.5, 523-537,p 529.
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