File spoon-archives/marxism.archive/marxism_1994/94-11-30.000, message 15


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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