Sam Bostaph claims that this argument from Dickinson-  
  
>   
> "the attempt to check irresponsibility will tie up  
> managers of socialist enterprises with so much red  
> tape and bureaucratic regulation that they will lose  
> all initiative and independence. In this case the  
> chief advantages of the price system will be lost --  
> managers would be simply bureaucratic officials  
> taking their orders from the supreme planning  
authority --  
> they would never be in a position to make  
> independent  
> economic judgments, to exercise choice between  
> different markets or sources of supply, and what is  
> worse, they would have no financial responsibility  
> for success or failure." (Dicknson 1939 p214)  
  
-was not also made by Mises, and that such incentive  
issues were unimportant to the calculation argument.  
As Sam wrote-  
  
> Not really; and, the incentives aspect was a minor  
> one in Mises' critique of  
> socialism.  
  
Mises made the arguments that I refer to in many  
places. One of the more clear passages is on p102 of  
Liberalism (1927). HE also did this in in a 1933  
article, reprinted on page 210 of the 'Lost Papers'  
volume edited by Ebeling. Mises (1922) discusses "the  
problems of the bureacratic mind" and "the lack of  
busisness spirit" in socialism here-  
  
"the problem is not nearly so much the question of the  
manager's share in the profit, as of his share in the  
losses which arise through his conduct of business.  
Except in a purely moral sense the property-less  
manager of a public undertaking can be made answerable  
only for a comparatively small part of the losses. To  
make a man materially interested in profits and hardly  
concerned in losses simply encourages a lack of  
seriousness." (Mises 1922)  
  
Mises also wrote about this in his 1944 book on  
bureacracy and in Human Action. THis was a central  
part of the calculation argument. Mises argued that  
decentralized managment without private profit would  
result in severe abuse and mismanagment. Central  
authorities could stop this only by removing  
discretion from local managment, by imposing rules.  
Local managers would then be limited to complying to  
these rules, and only the higher officials could  
exercise discretion. this is what Hayek was talking  
about when he mentioned the imporance of 'the man on  
the spot' reacting to changes in local conditions.  
  
Severe problems with allowing local socialist managers  
to exercize discretion meant that central authorities  
were the only ones who could make real decisions-  
hence Mises's emphasis on the problems of central  
planning. So the incentive issues that Sam discounts  
were in fact vital to Mises's argument because this is  
the reason why Mises insisted that under socialism  
'one will dominates'. This, of course brings us to the  
argument that Sam emphasized- the  
knowledge/calculation problem. I agree that Mises  
argued that Mises argued that central planners could  
not plan without market prices to guide them, but the  
reason why he attacked central planning, and not some  
decertralized socialist system was because he thought  
that bad incentives at the lower level of managment  
made it certain that higher officials would restrict  
lower level managerial independence.  
Anarcho-socialists still don't get this point.   
  
Here is another quote from Dickinson to show his  
understanding of this issue-  
  
"If the establishment of a decentralized economic  
organization, coordinated by a price and cost system,  
is to realize its economic advantages to the full, a  
very large degree of independence must be given to the  
managers of the of the various economic organs of the  
community. They must be free to experiment �The  
socialist manager must be invested with many of the  
attributes of the entrepreneur under Capitalism. This  
brings us to a highly contentious issue�the argument  
that the planned economy is incompatible with the true  
entrepreneur function �there can be none of that  
steady, ubiquitous, quantitatively adjustable and  
automatically self regulating correspondence of  
judgment with reward that makes entrepreneurship under  
Capitalism the exact science it is. In any case the  
success or failure of a manager under planned economy  
would be a matter of technical or administrative  
competence, not of economic judgment  (1939 p213-215  
emphasis added)"  
  
Mises and Dickinson both argued that bad incentives at  
the local level of a socialist system meant that  
managerial discretion could not be allowed at the  
local level of a socialist state. This meant that  
local managers could not react to changing local  
conditions, as could entrepreneurs. Higher authorities  
of a socialist state would exercize discretion, but  
not as fast as Hayek's capitalist 'man on the spot',  
and wihout market prices. Dickinson was pretty astute  
on these issues. He would have made a fine Austrian  
economist, had it not been for his ideological  
baggage.  
  
DW MacKenzie