Epicurus
Reasonable
(This is from a paper I just turned in.)
Why did the attempt at a Marxian economy fail so spectacularly? Many socialists and communists believe that the Soviet Union deviated from its Marxist origins by attempting to skip transitional steps between capitalism and true communism (Stites). Other economists have pointed to inherent flaws within the ideology of communism itself (Richmond).
Some asserted that the Soviet Union's system of centralized planning confirmed what had been suggested in academic settings: That a centrally directed economy is paradoxically the least capable of effectively organizing production.
One such critic of economic centralization was economist Ludwig von Mises of the Austrian school. His work demonstrated that a system of free exchange was absolutely essential to a “rational economy”. Without free exchange of goods and capital, there was no market, and without a market there were no prices. Without prices as an indicator, costs and expenditures could not be rationally calculated, leading to massive instability in the economy.
As Mises himself put it “Without calculation, economic activity is impossible. Since under Socialism economic calculation is impossible, under Socialism there can be no economic activity in our sense of the word... All economic change, therefore, would involve operations the value of which could neither be predicted beforehand nor ascertained after they had taken place... Socialism is the renunciation of rational economy.”
Why did the attempt at a Marxian economy fail so spectacularly? Many socialists and communists believe that the Soviet Union deviated from its Marxist origins by attempting to skip transitional steps between capitalism and true communism (Stites). Other economists have pointed to inherent flaws within the ideology of communism itself (Richmond).
Some asserted that the Soviet Union's system of centralized planning confirmed what had been suggested in academic settings: That a centrally directed economy is paradoxically the least capable of effectively organizing production.
One such critic of economic centralization was economist Ludwig von Mises of the Austrian school. His work demonstrated that a system of free exchange was absolutely essential to a “rational economy”. Without free exchange of goods and capital, there was no market, and without a market there were no prices. Without prices as an indicator, costs and expenditures could not be rationally calculated, leading to massive instability in the economy.
As Mises himself put it “Without calculation, economic activity is impossible. Since under Socialism economic calculation is impossible, under Socialism there can be no economic activity in our sense of the word... All economic change, therefore, would involve operations the value of which could neither be predicted beforehand nor ascertained after they had taken place... Socialism is the renunciation of rational economy.”
