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Cooking the Books: Mises is Irrelevant

The 'Weekly Worker' (28 April) carried an interesting article by the Trotskyoid Hillel Ticktin which, unusually for someone from his political background, gave a good description of socialism which (also unusually) he called socialism:

‘A distinguishing mark of socialism is that distribution would operate according to need, rather than input … people will be able to walk into a distribution point and pick up what they need.’

‘In a socialist society you would expect workers to work in the way that they judge is correct. Since a worker’s incentive under socialism is not money, they work as best they can in order that they not only fulfil what they are doing for the collectivity, but for themselves. You would expect that they would work as well as they can, without any need for discipline from outside.’

Curiously though, at one point he says ‘von Mises was right’. Mises, the arch-advocate of the dystopia of a free market capitalism, argued that in a socialist society, with common ownership and no free market in means of production, rational economic calculation would be impossible and that such a society would not last for long but would eventually break down in economic chaos. This was a circular argument in that he defined rational economic calculation as calculation based on prices set by the free play of market forces.

Ticktin was accepting Mises’s argument that in a situation where productive capacity is not enough to satisfy people’s needs, calculation in some general unit of account such as money or labour-time would be necessary. He speculates that Marx’s ‘period of the revolutionary transformation’ of capitalist into communist society during which he says this would have to be the case could last ‘let us say anything between 10 and 50 years.’

Ten years is one thing but fifty is another. Maybe in Marx’s day, in 1875, any such period might have been nearer to the fifty end. Today, however, in view of the tremendous development of the forces of production since then, even ten years seems on the long side for a period in which to re-orient production so as meet people’s needs, especially as, unlike Mises’s followers, Ticktin rejects that humans needs are infinite:

‘The bourgeois concept of the human being having infinite needs is ridiculous, but it is the basis of bourgeois economics. … In fact there is a limited amount that needs to be produced for a given society and consequently under socialism we will be able to identify the limited areas in which increased production is needed.’

Also, Ticktin accepts that there is an enormous amount of wasted production under capitalism whereas in socialism:

‘Obviously there will be no such thing as finance, and whole sections of economic activity will no longer exist because they are completely wasteful and unnecessary. There will be no arms production, no advertising and, of course, no City of London – you can go through the different wasteful forms that will cease to exist. It is quite clear that the standard of living could very quickly be raised if such waste is removed.’

So, once this waste is ‘very quickly’ removed, we would already have a situation of relative abundance and so should be able to move equally quickly to socialism and free access to available goods and services.

So, why would we need to go to the trouble – and waste – of setting up a vast bureaucracy to measure the labour-time content of everything with a view to reducing it to a minimum and an individual’s input to production with a view to calculating their entitlement to goods and services, when the supposed need for this is not going to last for long? Even Mises conceded that socialism could continue for a while without having recourse to his ‘rational economic calculation’.