Technical or political? The socialist economic calculation debate

Abstract

Abstract The paper presents both the key arguments and the historical context of the socialist economic calculation debate. I argue that Oskar Lange presented the most developed strategy to deal with bourgeois economics, decisively helping to create the scientific consensus that rational economic calculation under socialism is possible. Lange’s arguments based on standard economic theory reveal that the most ardent defenders of capitalism cannot reject socialism on technical terms and that, as a consequence, the Austrian School was left with no choice but to diverge from mainstream economics in its search to develop a framework that could support its political position. This shows that Mises’ challenge from 1920 was solved and has been replaced by a political posture developed by Hayek and leading Austrians economists, who have been struggling since the 1980s to revise the standard interpretation of the socialist economic calculation debate. I argue that this revision should not be uncritically accepted and conclude that socialism cannot be scientifically rejected; it can only be politically rejected, by those whose economic interests it opposes.