EconomicCalculationProblem

Quora Answer : Can any communist debunk Mises economic calculation problem?

Nov 10

Sure.

In order to say which of two economic systems is most accurately "solving a particular calculation", or "getting the best approximation" to an ideal, you have to actually have an independent way of finding out what the right answer to the calculation, or what that ideal, actually is.

If we had such an oracle to tell us the "right" distribution of goods and services in the economy, then we would just use that to distribute them rather than either markets or planners.

But if we don't have a way of identifying the "right" distribution, then how can we say which of two outcomes, the one from the market or the one from the planners, is actually closer to it? We don't know what "it" is.

By introducing the concept of a "right" distribution or a "good" distribution, Mises is introducing a normative or value judgement into economics.

Which is exactly the kind of thing that mainstream economists claim they don't do. And don't want in economics.

Now, as a "communist" (at least for the purposes of this answer), I have no problem with that. I think that "economics" without value judgements is pointless and sterile.

BUT ... if we're admitting that the argument between Mises and the communists is actually an argument about values (he has his values and that leads him to prefer one distribution, we have our values that lead us to prefer a different distribution) then he can't now pretend that his argument is based on some other neutral and objective technicalities of how the economic system works.

If he says "markets, through setting prices, calculate a distribution like this, but the bureaucrats distributed goods and services like that" what makes the one "better" than the other?

No. He just likes the distribution outcome that markets give. And that's his prerogative, but that's all it is.

Now he is welcome to argue for his values as values if he likes. But he can't simultaneously argue for his values and pretend he's making some other kind of, "more objective" case.