The Hayek critique Progressive Economists Network <pen-l at>

Justin Schwartz jschwart at
Wed Oct 26 12:23:52 MDT 1994

On Wed, 26 Oct 1994, Doug Henwood wrote:

> It seems that everyone these days accepts the Hayek critique of planning.
> Are there any sharp new critiques of the critiques that the comrades
> could recommend?

Well, not everyone. I do, more or less, but there are Albert and Hahnel,
Pat Devine, and of course Ernest Mandel. The pro-planning position is
still dominant in the partisan and self-styled Marxist left, what's left
of it, although not among theorists. Unfortunately with the honorable
exceptions mentioned above, the planning crowd has not produced attempts
to answer the Mises-Hayek critique (MHC) of planning. They prefer to
attack markets instead. Now one promising line, urged a Mandelite, Phil
Gasper, in my forthcoming collection <Beyond Communism and Capitalism> is
to grant that planning is inefficient, but argue that markets are no less
inefficient, so the choice has to be made on other. e.g., moral, grounds.
This needs to be worked out more.

In general there are three kinds of possible responses to the MHC:

1. Deny that there is any necessary catastrophic calculation problem and
argue that planning can be efficient. See Albert & Hahnel, etc. The really
technical version of this approach, with all the bells and whistles, is in
their Quiet Revolution in Welfare Economics, the short version is in the
Political Economy of Participatory Economics.

2. Admit the MHC but deny that it calls for capitalism, although allow
that it calls for markets. This is the market socialist line, to which I
adhere. But note that for M&H, the force of the critique depends on the
argument that all factors of production, including labor and capital, must
be marketized so that they can be priced. Most MS do not accept this,
arguing instead that some markets are OK, but others, typically labor
and capital markets, are not. That is Schweickart's line.

3. Admit the MHC but assert that markets are just as bad if not worse.
Gasper basically goes this way, and so do Albert & Hahnel in their attack
on markets, although they don't admit the MHC.

Tips: the best short discussion of the MHC, from the right, is in Scott
Arnold's Karl Marx's Radical Critique of Capitalist Society, pp. 246-263.
The best popular longer discussion,  also from the right, is David Ramsay
Steele's From Marx to Mises.

I think this is the central theoretical issue for the socialist movement,
so I hope folks have good ideas about it.

--Justin Schwartz


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