Austrian School of Economics: Revisionist History and Contemporary Theory

8. The Debate on the Socialist Calculation Debate

06/10/2005 Joseph 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.

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