Marx and the Austrians Again

michael at michael at
Fri Sep 3 16:09:36 MDT 1999

I will stop this if there is no interest in the subject besides that
coming from Chris.  The Austrian idea is to postulate a perfectly
functioning market and then to insist that a top down centrally planned
economy cannot match that level of efficiency.

I once extended Marx's concept of fictitious capital [in my book, Marx's
Crises Theories] to show how Marx made a similar argument against the

During an expansion, high expectations let prices loose their underlying
contact with values.  As a result, prices do not give their Hayek-like
signals to business, but instead mislead firms -- just as the Austrians
would say that central planning misleads the economy.

Evenually, this disconnect between prices and values [under ideal
conditions they would not be equal, but would bear a rough similarity]
leads to a crisis, which can either destroy the system or re-establish the
connection between prices and values.
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at

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