More on Hayek

Paul W. Cockshott cockshpw at wfu.edu
Mon Oct 17 07:33:31 MDT 1994


If people are interested in replies to Hayeks arguments against
socialist planning, the article that I mentioned in Review of
Political Economy by Cottrell and Cockshott is largely devoted
to this topic. Cottrell also shows up some of the internal logical
fallacies of Hayeks work in the Cambridge Journal of Economics,
1994, Vol 18, pp 197-212.

It is worth pointing out that in Hayek the idea of conscious economic
control is given, in keeping with his general philosophy, a
radically subjectivist interpretation. He writes repeatedly of
the impossibility of one mind being able to comprehend the
complexities of the economy.

Austrian opponents of socialism talk as if socialist planning was to be
carried out by one man---Mises personified him as `the director'.
Hayek continues the metaphor by saying the  ``data from which the
economic calculus starts are never for the whole society given to a
single mind". How can one mind presume to improve on the
combined result of the cogitations of millions? Surely only a
megalomaniac, or one blinded by scientific hubris, could propose such
a thing.

Of course no single individual has the brainpower to understand all of
the interconnections of an economy, but when have socialists ever
asserted anything so foolish?  Not even the most avid personality
cultists claimed that Stalin drew up the 5-year plans himself. What
socialists have proposed is the replacement of  market information
processing by the processing of economic information within a
planning organisation. In the past, because of technological limitations,
the planning organisation has proceeded by a division of mental labour
among a large number of people. In the future, the information
processing is likely to be done mainly by computing machines.

In neither case is the information concentrated in one mind. In the
former case it is obviously not in the mind of a single worker, but it is
not even in the minds of a collection of workers. Instead, the
information is mainly in their written records, forms, ledgers, etc.
These constitute the indispensible means of administration. Going
back to the earliest temple civilisations of Sumer and the Nile, we find
that the development of economic administration was predicated upon
the development of means of calculation and record. The human
mind enters in as an initial recorder of information and then as a
manipulator of the recorded information. By procedures of calculation
strings of symbols are read and transformed ones written down. The
symbols---whether they be arabic numerals, notches on tally sticks or
quipu---represent physical quantities of goods; their transformations
model actual or potential movements of these goods.

By posing the question in terms of concentrating the information in a
single mind, Hayek harks back to a pre-civilised condition, abstracting
from the real processes that make any form of administration
possible. If instead, his objection is that no system of administration
can possibly have the information-processing capacity required for
the task, then he is liable to the attack that information technology has
revolutionised the amount of information that can be administered.



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