Socialism and the Anarchy of Production

The goal of this article is to extend the argument about the possibility of economic calculation under socialism first advanced by Ludwig von Mises (and later extended by Rothbard) to a related topic, the possibility of developing a comprehensive plan of production as a whole when all of the means of production are owned by a single owner. A division of ownership of the means of production permits a division of intellectual labor, a necessity when the scale of production is large. When plans of production are made independently, there is always the chance that the content of Plan A will not be compatible with the content of Plan B. I make a distinction between the direct coordination of plans of production and the indirect coordination of plans of production, which is effected by the direct coordination of plans to buy and to sell. Buying and selling requires two owners, which means that the indirect coordination of plans of production is impossible when there is only one owner, which means that the indirect coordination of plans of production is impossible under socialism. I explain in detail why it is impossible for anyone to come up with a comprehensive plan of production as a whole, i.e., with a Plan, and then apply that conclusion to the experience of the Soviet Union: there may have been central planners in the Soviet Union, but there never was central planning.