Subject: |
|
From: |
|
Date: |
Fri Mar 31 17:19:22 2006 |
In-Reply-To: |
|
Message-ID: |
|
Parts/Attachments: |
|
|
Doug MacKenzie says:
<Even commited socialists had their
Austrian moments. Here is a little gem 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)
Mises made the same exact argument- same idea,
different words. >
Not really; and, the incentives aspect was a minor one in Mises' critique of
socialism.
Mises main critique is that socialist systems will lack the basis for
economic calculation because such systems lack markets for higher order
goods (capital goods, raw materials and other intermediate goods in
neoclassical lingo). The absence of such markets means the absence of
prices that are formed by profit-seeking individuals and that consequently
reflect the relative scarcity of resources, as perceived by the
best-informed actors. Without such prices, there will be no means of
engaging in economic calculation--the calculation of profit and loss that
drives a market system to rationalize the use of resources through time.
This means that decisions in socialist economies will be arbitrary and the
ability to coordinate the production of all goods will be absent. It will
be, as Mises termed it, a "planned chaos."
Sam Bostaph
|
|
|