Employment

I’ve been teaching the socialist calculation debate again this spring. Each time I return to these arguments, I think I see them more clearly. Here is my latest try at summing up the Austrian position and its implications for potential economic systems, capitalist or otherwise. The web is crawling with Austrophiles, so they can tell me whether I am walking in light or darkness. 1. The key concept is discovery: discovering what consumers need and want, and discovering the true costs of providing these things. Since they are subject to tacitly known and otherwise irreducibly qualitative determinants, values and costs cannot be ascertained apart from the actual processes of producing and marketing, so the technical problem of number crunching—devising algorithms to calculate equilibrium prices and quantities out of cost and demand information—is secondary. Any reasonably efficient economic system has to have processes of discovery, some for costs, others for the value of goods and se...