Financial Markets and Economic Planning: Unmet Challenges in the Interwar Debate on Socialism

Douglas MacKenzie

Advisor: Tyler Cowen, PhD, Department of Economics

Carow Hall, 1A
November 30, 2005, 07:00 PM to 07:00 PM

Abstract:

"There are two neglected parts of the socialist calculation debate First, public ownership of the means of productions means the payment of social dividends. Examination of social dividends shows that market socialism was a true form of socialism, and that it does not allow for economic calculation, as Mises understood it. Social dividends are essential to comparing bureaucracy with entrepreneurship. Second, Lange and Dickinson admitted that the rate of capital accumulation in a socialist society must be arbitrary. While most socialists were wrong in their understanding of the calculation problem, this was not true of the Lange and Dickinson. They did not think in terms of perfect competition and did understand many of the dynamic issues in the calculation debate. Acceptance of market socialism derived largely from experience with the Great Depression, rather than from the model of perfect competition."