Mises on the Knowledge Problem

#economics #socialism #money

The discussion over calculation is very confused. It goes that Mises used property and Hayek used knowledge. While correct, its not the entire story. Mises identified the knowledge problem first, but pointed out calculation is impossible because the lack of property. “The mind of one man alone—be it ever so cunning, is too weak to grasp the importance of any single one among the countlessly many goods of a higher order. No single man can ever master all the possibilities of production.”

If property is given up—or forcibly removed—no rational monetary prices can ever be established. If prices cannot be established, rational economic calculation is impossible. Every step away from property is a step away from calculation. Thus, a step towards chaos. This fact is very easily overlooked. Much like Say’s Law, calculation is critical to understanding economics. Keynesian nonsense and socialist schemes rest on ignoring these. More precisely, rest on abolishing property.

Read More: https://mrdevinney.com/mises-on-the-knowledge-problem/