Markets, Planning and Democracy

Markets, Planning and Democracy

Essays after the Collapse of Communism

New Thinking in Political Economy series

David L. Prychitko

The essays contained herein span over a decade and reflect David Prychitko’s thinking about the role of the market system, and its relation to planning and democratic processes. The collection consists of previously published and unpublished articles written not only for economists but also for an interdisciplinary audience.

Chapter 8: Hayekian Socialism: Rethinking Burczak, Ellerman and Kirzner

David L. Prychitko

Subjects: economics and finance, austrian economics


8. Hayekian socialism: rethinking Burczak, Ellerman, and Kirzner* In ‘Socialism After Hayek’, Ted Burczak (1996/1997) offers a theoretical alternative to both capitalism and comprehensively planned socialism. He concedes the Hayekian ‘knowledge problem’ and agrees that a technologically advanced economy requires competitive market pricing of the means of production to coordinate the plans of producers and consumers. He is also quite comfortable abandoning the labor theory of value in favor of an Austrian-style methodological subjectivism. He rejects, however, the traditional Austrian School’s normative defense of the capitalist market system. Instead, Burczak hopes to show that one of the more important normative goals of socialism – the ideal of allowing labor to appropriate the whole product – can be theoretically preserved in a competitive market economy that constitutionally abolishes the wage–labor contract in favor of democratic, self-managed enterprise. With Cullenberg (1992), Burczak calls this a form of ‘thin socialism’, as opposed to comprehensively planned socialism. I would instead suggest ‘Hayekian socialism’, a more provocative label for obvious reasons.1 An Austrian might respond that Burczak’s thin, Hayekian socialism is merely a semantic guise for interventionism (that is, a market economy with a great deal of state interference) rather than socialism. Many Marxists might respond similarly, and there is something to be said for such an argument. But that would miss a neat opportunity offered by Burczak: if comprehensive planning is both empirically and theoretically bankrupt, must socialists admit total defeat and abandon their solidarist ethics in favor of the hard capitalist ethics...

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