Austrian School of Economics: Revisionist History and Contemporary Theory

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8. The Debate on the Socialist Calculation Debate

  • Austrian School of Economics Salerno

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06/10/2005Joseph T. Salerno

The debate still continues. It is all about Mises’ initial article and then book on Socialism in 1922. He demonstrated the necessity of the price system and showed how subjective values were transformed into objective prices which could be used as meaningful cardinal numbers in economic calculation.

One big cartel that owns everything would be just like socialism, because there would be no price signals. Mises calls this the intellectual division of labor. With no market you never have profits or losses. You have no information. The distinctive mark of socialism is the oneness. Capitalism is an entrepreneurial system, not a static system like those just playing market.

Lecture 8 of 10 from  Joseph Salerno's Revisionist History and Contemporary Theory.


Contact Joseph T. Salerno

Joseph Salerno is academic vice president of the Mises Institute, professor emeritus of economics at Pace University, and editor of the Quarterly Journal of Austrian Economics.

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