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Economic Calculation Problem: Difference between revisions

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The '''economic calculation problem''' is the Austrian-School argument (Mises 1920, developed by Hayek) that rational economic calculation is impossible under socialism because, absent private ownership of means of production, there are no genuine market prices for capital goods, and hence no way to compare alternative production plans.
The '''economic calculation problem''' Mises' claim that rational allocation is impossible without market prices — is the standard theoretical objection to socialism, and Haz Al-Din treats it as a pseudo-problem built on a false picture of what planning requires.


== The argument ==
== Haz's handling ==
1. Prices condense dispersed knowledge about scarcity and preference.
* The dismissal ([https://infrared-transcripts.pages.dev/en/kick/infrared/10ec3a31-ea24-45c9-8219-68350a003135/ INTENSE DEBATES stream]): "It's complete bullshit... based on faulty premises from the beginning." The premise: that everything must "collapse into one number" — price — for coordination. But reality is already centrally coordinated: "the mode of production is already centralized... objectively these supply chains have to all come together somehow from very disparate origins" ([https://infrared-transcripts.pages.dev/en/kick/infrared/5e76e0d7-c4cc-459e-b8b1-65ade98827ae/ MASSIVE DEBATE ROYALE]) — the pencil argument turned against Friedman: the global pencil proves planning exists, markets merely mystify it.
2. This knowledge is tacit, local, and cannot be aggregated (Hayek's "The Use of Knowledge in Society," 1945).
* The deeper point ([https://infrared-transcripts.pages.dev/en/kick/infrared/00e75c5d-493b-453c-9b4b-bca9603c6ed7/ WE'RE SO BACK stream]): the calculation debate assumes a "common measure" is needed in the absence of exchange value — Haz gestures at Cantor's mathematics of the infinite: multiple incommensurable dimensions don't need collapse into a scalar to be handled; the demand for a single metric is the value-form's own prejudice generalized into ontology.
3. Therefore central planners face an insoluble computation and knowledge problem.
* Historical answer: OGAS — the Soviet cybernetics proposal for computerized planning, discussed on [https://infrared-transcripts.pages.dev/en/youtube/black-lenin/nnuhnb76u_0/ the Lib Discord debate] via Cockshott — the calculation problem was being answered technically before the USSR fell to other causes.


== Socialist responses ==
== See also ==
* '''Market socialism''' (Lange–Lerner): planners can simulate markets with trial-and-error pricing; Lange's 1936 reply conceded the market mechanism while socializing ownership.
* [[Ludwig von Mises]]
* '''Cybernetic planning''': Chile's Cybersyn (Stafford Beer, 1972) and Soviet proposals like Glushkov's OGAS aimed at real-time feedback planning; modern computational capacity reopens the question (Cockshott & Cottrell, ''Towards a New Socialism'', 1993 — labor-time calculation with linear programming).
* [[We already live in socialism]]
* '''Value-theoretic reply''': Marxists note prices themselves presuppose socially necessary labor time; the market is one lossy approximation of it.
 
== Contemporary relevance ==
Big-data logistics (Amazon, Walmart, PLA procurement) demonstrate planning at scales Mises thought impossible — inside firms larger than national economies of his day. Infrared cites this to argue the calculation debate is empirically obsolete, its persistence ideological (see [[Ludwig von Mises]]).


== References ==
== References ==
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<references/>


[[Category:Economics]][[Category:Socialist planning]]
[[Category:Economics]][[Category:Austrian School]][[Category:Theory]]

Revision as of 09:58, 21 August 2026

The economic calculation problem — Mises' claim that rational allocation is impossible without market prices — is the standard theoretical objection to socialism, and Haz Al-Din treats it as a pseudo-problem built on a false picture of what planning requires.

Haz's handling

  • The dismissal (INTENSE DEBATES stream): "It's complete bullshit... based on faulty premises from the beginning." The premise: that everything must "collapse into one number" — price — for coordination. But reality is already centrally coordinated: "the mode of production is already centralized... objectively these supply chains have to all come together somehow from very disparate origins" (MASSIVE DEBATE ROYALE) — the pencil argument turned against Friedman: the global pencil proves planning exists, markets merely mystify it.
  • The deeper point (WE'RE SO BACK stream): the calculation debate assumes a "common measure" is needed in the absence of exchange value — Haz gestures at Cantor's mathematics of the infinite: multiple incommensurable dimensions don't need collapse into a scalar to be handled; the demand for a single metric is the value-form's own prejudice generalized into ontology.
  • Historical answer: OGAS — the Soviet cybernetics proposal for computerized planning, discussed on the Lib Discord debate via Cockshott — the calculation problem was being answered technically before the USSR fell to other causes.

See also

References