¹ See, for example, Hoff, Trygve J.B., Economic Calculation in the Socialist Society (London: Armamento, 1949)Google Scholar, and Lavoie, Don, Rivalry or Central Planning? (Cambridge: Cambridge University Press, 1986).Google Scholar For less abstract, yet highly illuminating, discussions of the Soviet experience, See Nove, Alec, The Economics of Feasible Socialism (Cambridge: Cambridge University Press, 1983)CrossRefGoogle Scholar, Part 2 and Rutland, Peter, The Myth of the Plan (La Salle: Open Court, 1985).Google Scholar

² For conflicting evidence, See Elliot, John E., “Marx and Contempory Models of Socialist Economy,” History of Political Economy, vol. 8 (Summer 1976), pp. 151–84CrossRefGoogle Scholar; see especially 175–77.

³ Marx does discuss a system of production for exchange in which the workers control the means of production; he calls this ‘simple commodity production’. However, he never maintains that this is an actual, stable historical form of social organization. (See Catephores, G. and Morishima, M., “Is There An Historical ‘Transformation Problem’?”, The Economic Journal, vol. 85 (June 1975), pp. 314–15.Google Scholar) This system of simple commodity production is a hypotherical abstraction used to illustrate some points about the economics of commodity production.

⁴ I have argued elsewhere that market socialism, as it is usually conceived, would probably degenerate into capitalism or non-democratic state socialism. See my “Marx and Disequilibrium in Market Socialist Relations of Production,” Economics and Philosophy, vol. 3 (Spring 1987), pp. 23–47.

⁵ See, for example, Schweickart, David, Capitalism or Worker Control? (New York: Praeger Publishers, 1980)Google Scholar; Horvat, Branko, The Political Economy of Socialism (Armonk: M.E. Sharpe, 1982)Google Scholar; Vanek, Jaroslav, The General Theory of Labor-Managed Economies (Ithaca: Cornell University Press, 1970).Google Scholar

⁶ See note 3.

⁷ This designation of the two stages of post-capitalist society seems to have been first made explicit by Lenin. See his State and Revolution (Moscow: Progress Publishers, 1971), ch. V.

⁸ Marx, Karl, Critique of the Gotha Programme (Moscow: Progress Publishers, 1971), pp. 14–18Google Scholar, 26.

⁹ ibid., p. 16.

¹⁰ Karl Marx, Sochineniia vol. XIII (Moscow, n.d), pp. 241–42; as cited in Wiles, Peter, The Political Economy of Communism (Cambridge: Harvard University Press, 1962), p. 358.Google Scholar

¹¹ Engels, Frederick, Socialism: Utopian and Scientific (Moscow: International Publishers, 1985), pp. 70, 75.Google Scholar

¹² Engels, Frederick, Anti-Dühring (New York: International Publishers, 1939), p. 309.Google Scholar

¹³ Marx, Karl, Economic and Philosophic Manuscripts of 1844 (Moscow: Progress Publishers, 1974), p. 66.Google Scholar

¹⁴ Marx, Karl, Excerpt-Notes of 1844, quoted in Allen, Buchanan, Marx and Justice (Totowa: Rowman and Allenheld, 1982), p. 39.Google Scholar

¹⁵ Marx, , Capital I (Moscow: Progress Publishers, 1977), p. 77.Google Scholar

¹⁶ It might be thought that a regime of petty producers who both own their own means of production but produce for a non-competitive market would be a counterexample to this claim. Marx does discuss such a system under the heading of ‘simple commodity production’. However, as noted above (see note 3), he never maintains that such a system ever actually existed. Indeed, at least under conditions of moderate scarcity, it is hard even to conceive of a system of commodity production in which competitive forces do not have a major role. It is worth noting that Engles excoriates Rodbertus for failing to recognize the functional necessity of competition for market economies. See Engels, Frederick, “Preface to the Second German Edition,” in Karl, Marx, The Poverty of Philosophy (New York: Intenational Publishers, 1963), p. 16ff.Google Scholar

¹⁷ Some economists (e.g., F.A. Hayek) have argued that commodity production is not inherently crisis-prone, and that state intervention in the economy is primarily responsible for the business cycle. Even if this is true, it may be that capitalism is crisis-prone, if state intervention in the economy is endogenous to the latter. In any case, it is clear that Marx and nearly all Marxists believe that capitalism is inherently prone to economic crisis and that the “anarchy of production” is a contributory cause.

¹⁸ Although it is clear that the elimination of commodity production is a sufficient condition for eliminating the mystification it causes, it is less clear that it is a necessary condition as well. For Marx, the false beliefs induced by commodity production are like mirages, which do not “go away” even if their explanation is known. Why Marx thought this is a complicated story which cannot be adequately discussed here. For an excellent discussion, See Cohen, G.A., Karl Marx's Theory of History: A Defence (Princeton: Princeton University Press, 1979), pp. 115–33Google Scholar; pp. 326–38.

¹⁹ Arnold, “Marx and Disequilibrium…,” Section II.

²⁰ Cohen, pp. 201–4.

²¹ It is unclear whether central planning is a logically necessary condition for socialism as Marx conceived it. Although one can be reasonably confident that there are some logically necessary features (e.g., those that specify the relations of production), any attempt to construct a list of jointly sufficient conditions is probably indicative of an unhealthy preoccupation with the analytic/synthetic distinction; in any case, it is foreign to the spirit of Marx. Throughout this essay, I use the term “Marxian socialism” to refer to a system of socialist relations of production with a centrally planned economy.

²² Ludwig Von Mises, “Economic Calculation in the Socialist Commonwealth,” reprinted in Collectivist Economic Planning, ed. F.A. Hayek (London: Routledge and Kegan Paul), pp. 87–130.

²³ For a useful analysis and summary of the debate, See Lavoie, Don, “A Critique of the Standard Account of the Socialist Calculation Debate”, Journal of Libertarian Studies, vol. 5 (Winter 1981), pp. 41–87.Google Scholar Lavoie's article contains the most complete citation of sources on the debate to date.

²⁴ Both are reprinted in On the Economic Theory of Socialism, ed. Lippincott, B.E. (New York: McGraw Hill, 1964).Google Scholar

²⁵ For a discussion of the contribution of the capitalist qua capitalist, see my “Capitalists and the Ethics of Contribution,” Canadian Journal of Philosophy, vol. 15 (March 1985), pp. 87–102.

²⁶ On all this, See Kirzner, L.M., Competition and Enterpreneurship (Chicago: University of Chicago Press, 1973), pp. 154–81.Google Scholar

²⁷ This approach was inspired by the work of Sraffa, Piero See his Production of Commodities by Means of Commodities (Cambridge: Cambridge University Press, 1963).Google Scholar See also Steedman, Ian, Marx After Sraffa (London: New Left Books, 1977).Google Scholar

²⁸ This also suggests that physical output figures may be an inaccurate guide to growth in the forces of production. Unused, rusting steel is not a force of production.

²⁹ For the purposes of this essay, nothing hangs on distinguishing wants and needs. Nor does the argument depend on any account of the difference between legitimate or undistored needs and wants and illegitimate or distorted needs and wants. That would require a large theory of human nature. Marx's conception of what counts as a need is fairly generous, since he believes that needs are historically determined.

³⁰ Rutland, pp. 114–17.

³¹ See Von Mises, Ludwig, Socialism: An Economic and Sociological Analysis (New Haven: Yale University Press, 1951), pp. 196–208.Google Scholar

³² See, e.g., Schweickart, pp. 219–20.

³³ “It will be a kaleidic society, interspersing its moments or intervals of order, assurance, and beauty with sudden disintegration and a cascade into a new pattern…. It invites the analyst to consider the society as consisting of a skein of potentiae and to ask himself not what will be its course, but what the course is capable of being in case of the ascendency of this or that ambition entertained by this or that interest.” Shackle, G.L.S., Epistemics and Economics (Cambridge: Cambridge University Press, 1972), p. 76.Google Scholar

³⁴ Schumpeter, Joseph, Capitalism, Socialism, and Democracy (New York: Harper and Row, 1942), pp. 81–86.Google Scholar

³⁵ This assumes that no one can foresee all changes or their effects, i.e., that no one is omniscient in this connection. Of course, to the extent that the effects of change can be foreseen, they will be reflected in current factor prices. More on this below.

³⁶ Hayek, F.A., “The Uses of Knowledge in Society,” American Economic Review, vol. 35 (September 1945), p. 524Google Scholar; reprinted in Hayek, F.A., Individualism and Economic Order (London: Routledge and Kegan Paul, 1949).Google Scholar

³⁷ Von Mises and Hayek do not presuppose perfect competition in the neoclassical sense. Under “perfect competition,” there are no entrepreneurial profits at all. Everyone is a “price-taker,” and all factors receive their marginal value.

³⁸ See Hayek, F.A., “Economics and Knowledge,” Economics, vol. 4 (February 1937)Google Scholar; reprinted in Individualism and Economic Order, pp. 59–61.

³⁹ Lange in Lippincott, pp. 59–61.

⁴⁰ Hayek, “The Uses of Knowledge in Society,” p. 524.

⁴¹ Olson, Mancur, The Logic of Collective Aclum (New York: Schocken Books, 1965)Google Scholar, chs. I and II.

⁴² Lange in Lippincott, pp. 86ff.

⁴³ I say “might adopt” because, as far as I am able to determine, few Marxists are even aware of this problem; among those that are, none has dealt with it at a theoretical level without retreating to some form of market socialism.

⁴⁴ Rutland, p. 192.

⁴⁵ See Lavoie, Don, National Economic Planning: What is Left? (Washington: The Cato Institute, 1985), pp. 76–87.Google Scholar

⁴⁶ There have been some efforts to program computers to stimulate abilities of this sort in expert systems research. Results thus far have been disappointing. For some principled objections to this program, see the revised edition of Dreyfus, Hubert, What Computers Can't Do (New York: Harper and Row, 1979).Google Scholar

⁴⁷ A third factor is the absolute size of the population served by the economy in question. How large this population is depends in part on how “economies” are individuated. At this time, it is unclear to me how much absolute population size is responsible for complexity in the structure of production. Pre-capitalist economic systems were composed of relatively small autarchic units; their small size was surely a factor in making a system of production for use feasible.

⁴⁸ Indeed, there is an instructive parallel here with the development of socialist thought since Marx. Originally, socialists, including Marx and Engels, argued that the superiority of socialism lay in its huge potential for creating wealth – wealth to meet human wants and needs, and not wealth for its own sake. When actually existing socialist regimes failed in this mission, socialism was advocated on other, “non-economic” grounds.

⁴⁹ It might be thought that existing centrally planned economies would provide a model for this scenario. However, they have access to prices on the world market to use as a rough guide to scarcity values. If world-wide socialist revolution resulted in one centrally planned world economy or a number of relatively autarchic centrally planned economies, the planners would be significantly worse off than existing central planners are, since there would be no market prices anywhere to serve as guides to scarcity values.

⁵⁰ “Forces of production” is a technical term for Marx whose extension includes means of production, labor power, and scientific and technical knowledge, etc. Cohen (pp. 31–55) has painstakingly delimited the intensional and extensional boundaries of this term as Marx uses it.

⁵¹ Cohen, p. 177.

⁵² See Rutland, pp. 131–33; 146–49.

⁵³ It can be granted that subjective alienation relating to the organization of the workplace under capitalism would disappear under Marxian socialism, since the latter envisions democratic self-governance in production units.

⁵⁴ Marx, Critique of the Gotha Programme, p. 16. The irony of Marx's metaphor is that most birthmarks are permanent!

⁵⁵ See note 4.