[Marxism] on hayek, mises etc.

[Jim Farmelant]

On Mon, 2 Jun 2008 13:07:34 +0200
=?iso-8859-1?Q?David_Pic=F3n_=C1lvarez?= <david at miradoiro.com> writes:
> From: "brendan cooney" <cooney at bluebottle.com>
> > Can anyone recommend any good literature of a marxist engagement 
> with
> > the Austrian school of economics?
> 
> Stuff by Lange, of course, and in a more contemporary way, check out 
> 
> 'Calculation, Complexity and Planning: The Socialist Calculation 
> Debate Once 
> Again', which you can get in pdf from 
> http://www.ecn.wfu.edu/~cottrell/socialism_book/
> 
> --David.
> 
>

Also, from a post on the Usenet group
alt.politics.socialism.trotsky
>In article <3AB1A... at MailAndNews.com>, "Jim F." <deb... at MailAndNews.com>

wrote: 

>> As I recall, Hayek attempted to answer Lange by arguing that real 
>> markets are distinguished by their ability to to coordinate 
>> both the articulated and tacit knowledge of the economic actors 
>> that participate in them.  In his view, the kinds of simulated 
>> or pseudo-markets that Lange and other socialist economists 
>> have proposed are simply lacking in the sorts of incentives 
>> that are necessary in his view for motivating economic actors. 
>> Hayek formulated his critique of Lange's position at least 
>> partially in terms of epistemological arguments which stressed 
>> the limitations of human knowledge, especially of knowledge 
>> concerning social reality, which places relatively severe 
>> constraints on our ability establish a rationally planned 
>> control over human social action with its many nuances, tacit 
>> practices, and unintended consequences.  In the view of Hayek, 
>> socialist economists failed to appreciate the dynamic nature 
>> of markets and this failure doomed attempts to create 
>> pseudo-markets that would achieve rational planning through 
>> the use of eqilibrating shadow prices.  Shadow prices in 
>> the Hayekian view could never hope to convey the same sort 
>> of information content that real market prices convey.  Likewise, 
>> Langean economic planners could not hope to establish 
>> meaningful marginal cost and marginal utility functions either. 
>> In the Hayekian view, these functions could only become 
>> known through a trial-and-error learning process which is 
>> best realized under the free market.  Thus socialism was 
>> in Hayek's view condemned to calculational chaos,even if 
>> socialists attempted to avail themselves of the remedies 
>> proposed by Lange and others. 

>Hayek criticizes the Langean approach for two reasons: markets provide 
>greater incentives, and markets have a dynamical quality not captured by

>Languean schemes. The first is weak, for It rests on a conception of
human 
>nature usually rejected by socialists. 


That seems about right.  Hayek as I understand him (actually I am 
relying largely on Chris Sciabarra's books *Marx and Hayek* 
and *Total Freedom* for these points), makes both a human 
nature argument (i.e. people respond best to the sorts 
of incentives that a market economy provides) and an 
epistemologically based argument concerning the nature 
of human social action which is that essential elements 
of social action cannot be captured in terms of articulated 
knowledge.  Much of it exists in the form of tacit knowledge. 
Thus for Hayek, entrenerurial knowledge which he considered 
essential for exonomic dynamism, tends to exist largely in 
the form of tacit knowledge.  Hence, it is not something that 
economic planners can readily duplicate or simulate. 

Now I think that Hayek had a germ of a valid point here.  But 
I think that this argument proves not so much that rational economic 
planning is impoosible but that such planning cannot be rational 
unless it is democratic.  Planners cannot plan rationally 
without the input of those whe are effected, and that can 
only occur if the planning process is democratized.  Hence, 
the irrationalities that occurred in the USSR under Stalin. 
On the other hand Hayek as I understand him (from Sciabarra's 
account) seemed to think that rational economic planning required 
a certain degree of omniscience, whereas markets do not 
require this.  Instead, markets were said to work on the 
basis of a trial-and-error learning process.  But I don't 
see why the same could not be said for democratic economic 
planning.  I don't think that economic planning requires 
omniscience any more than do markets.  Also, from Sciabarra' 
account, it seems that Hayek prehaps misunderstood what 
happens when emgineers attempt to bring natural forces 
under a rationalized control.  Being a software engineer 
who works closely with hardware engineers, I am quite 
that none of us is anywhere close to being omnsicient! 
The law of unintended consequences is very much alive 
in technological fields.  Hayek apparently seems to have 
thought otherwise, hence allowing him to draw a distinction 
between the natural sciences (and technologies based upon 
them) and the social sciences.  But I find this disntinction 
somewhat specious. 

>What does Hayek mean by dynamic character; how do Langean schemes 
>necessarily fail to capture it? 


Hayek (and other Austrians) denied that prices can be understood 
in terms of equilibating processes, as the neoclassical economists 
maintained. In fact they were quite critical of this and other 
aspects of neoclassical economists (and so of those socialist 
economists like Lange who drew upon neoclassical economics). 

>The Langean argument, or at any rate my reinvention of it, comes from 
>realizing that anything capitalism can do socialism can simulate in
form. 
>The crux of the debate seems to be whether human nature conforms to the 
>requirements of the form, combined with a socialist system of
incentives. 

>If that's true, a calculation argument for capitalism cannot in
principle 
>be sustained. Its supporters have to retrench to the last line of
defense, 
>human nature. 

>srd