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