Date: Tue, 01 Nov 1994 13:27:44 -0500 From: cottrell-AT-wfu.edu (Allin Cottrell) Subject: Mises-Hayek critique At least one contributor to this list has suggested that the Mises- Hayek critique (MHC) of socialist economic planning is the most important theoretical topic facing socialists today. I agree. Ever since it first emerged as a political doctrine, theory of society, and hope for humanity, socialism has existed in several variants, but few would dispute that the most fully-articulated and coherent version of socialism is that of Marx and Engels. The Marx-Engels critique of capitalism has two main aspects: (1) capitalism is a deeply unjust and exploitative system, and (2) it is also irrational and wasteful (although it was at first a tremendously progressive system). The force of these points rests on the claim that 'we can do better' -- that a superior mode of production and form of social organization is feasible: a planned, cooperative and egalitarian system. And this alternative system is not just a 'nice theory': the material preconditions for socialism are brought about by the process of capitalist development itself, although the realization of socialism requires a sharp break at the political level, including the expropriation of the owners of capital. Now, if it turns out, as per the Mises-Hayek critique, that the Marxian vision of a planned, cooperative and egalitarian mode of production is just a dangerous delusion, then we might as well pack up and go home. In that case we have no basis -- no *right* even -- to criticize capitalism, as opposed to this or that particular abuse or misguided policy under capitalism. We can still be 'progressives', in some fairly loose sense, and we can still champion the cause of the underdog, but if there is no workable socialist alternative, the critique of *capitalism as such* is just empty sentimentality. Hence the importance of probing the MHC. In addition to some of the other work cited on the list, Paul Cockshott and I have been working on this topic for some years. We believe we have some strong arguments against the MHC, and in support of socialist planning -- not as it was practiced in the USSR, but as it could feasibly be practiced given modern information technology (and, of course, given the political will). Aside from our book, Towards a New Socialism (1993), we have written two articles specifically on Mises and Hayek. One, which deals primarily with Mises' version of the arguent, I have mentioned previously (it's in the Review of Political Economy, 1993). A second piece tackles Hayek's 1945 article, 'The Use of Knowledge in Society'. This is currently a working paper. It argues that Hayek's points about the inherent superiority of decentralized, market-based decision-making -- while quite plausible at first sight --are not sustainable in the light of the scientific theory of information. It also argues that his strictures on the absurdity of attempting the 'conscious' direction of socio-economic development are based on an untenable subjectivist philosophy that is out of joint with modern scientific materialism. And we argue that Hayek's analogy between market processes and natural evolution is superficial and misleading. To date, we have received rather little comment on our work -- and we would greatly appreciate informed criticism. For anyone interested, the two papers mentioned above are available over the internet, from the colorado 'hererodox economics' gopher. Point a gopher at csf.colorado.edu and look under /econ/Authors/Cottrell.Allin -- soccalc.ps and hayek1945.ps are postscript versions of the Mises and Hayek papers respectively. (hayek.ps is also a critique of Hayek, but it deals with his theory of the business cycle). ======================Allin Cottrell Department of Economics Wake Forest University Winston-Salem, NC 27109 (910) 759-5762 cottrell-AT-wfu.edu ====================== ------------------
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