[OPE-L:4774] Re: opposition to Hayek

Michael William (mwilliam@compuserve.com)
Mon, 14 Apr 1997 15:55:41 -0700 (PDT)

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I started at the 'top of the pile', and responded to Allin's later
endorsement of Paul C.'s post first. So I will just fill in some gaps here:

Paul C. writes:
> the claim that the Mises/Hayek critique of socialism is sound. I think we
> should be quite clear as to the implications of this. If it is true, then
> the
> whole communist idea, of which Marx was a leading theoretical exponent,
> is invalid and utopian. If Mises/Hayek are right, then
> capitalism is eternal, there is no feasible alternative to
> a capitalist market economy.

This is mere assertion. The notion of planning through a data-base of
vertically integrated labour times *is* utopian. It carries forward the
capitalist fallacy of the 'techno-fix' for what are at bottom social

> Our argument is that if one basis oneself on the Marxian labour
> theory of value instead of neo-classical value theory, then the
> von Mises critique can be shown to be flawed. The labour theory
> of value treats prices as being determined by values, something
> which is determined in production prior to sale. It is thus possible
> to base economic calculation on something other than price -
> on the labour time necessary to produce things. We then argue
> that whilst under a market economy this labour time is only
> indirectly represented in prices, it can, under a different sort
> of economy be calculated directly.

This, even it were the case, which, as you know, is not uncontroversial,
this doesn't deal with the - intrinsically distributed - information
problem. Planners anyway still need to know *what* to produce.

> If there exists a common database of labour contents of goods
> it is possible for workers at a given unit of production to chose
> the technique of production which, considered overall, is the
> most economical to society in terms of its time.
> This, in my opinion, is why it is so important to defend the distinction
> between prices and values. If values can only be derived from prices,
> then the Austrian critique of socialism holds - socialism without
> a market to determine prices would flounder in a morass of
> economic inefficiency.

Which it may well do. The Austrian critique of planning cannot be reduced
to a critique of socialism without further discussion. Because we don't
like what we see to be the political implications of a body of thought may
motivate but it cannot be the ground of our critique of that body of

> their ideas were perfectly
> suited to the needs of reaction, providing an
> ideological cover for attacks on the living
> standards and social power of the working class.
> The fact that the reactionaries found them suitable
> does not mean that we should thus give them any credence.

I agree. But 1. Neither is it in itself a cogent reason for dismissing
their arguments.
2. It is childish name-calling to lump everyone who rejects the 'values are
determined in production' fallacy, and the ahistoric conceptualisations
that go with it, in with the reactionary politics of the Austrians.

Dr Michael Williams
"Books are Weapons"

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