Socialism, Economic Calculation and Entrepreneurship

Socialism, Economic Calculation and Entrepreneurship

New Thinking in Political Economy series

Jesús Huerta de Soto

This highly topical book presents a new theory on the characteristics of entrepreneurial knowledge. It explores the recent shift among professional economists and scholars in their evaluation of the debate of socialism. Socialism, Economic Calculation and Entrepreneurship presents an application of Israel M. Kirzner’s theory of entrepreneurship to the theory of the impossibility of socialism. It discusses the influence of the fall of socialism, with particular reference to the evolution of economic thought.

Chapter 1: Introduction

Jesús Huerta de Soto

Subjects: economics and finance, austrian economics, history of economic thought, political economy, politics and public policy, political economy

Extract

This introductory chapter will be devoted to an outline of the main features and new insights which distinguish the analysis of socialism contained in this book. We shall briefly summarize and assess the content, structure and conclusions of the work and end the chapter by suggesting some possible lines of research which, if pursued with the proposed analysis as a basis, should be of interest and importance and thus inspire scholars to develop them. 1 SOCIALISM AND ECONOMIC ANALYSIS The Historic Failure of Socialism The fall of socialism in the countries of Eastern Europe was a historic event of the first magnitude, and there is no doubt that it caught most economics experts off guard. The issue is not only that economic science failed to rise to the occasion in the face of momentous historical circumstances which economists were unable to predict, but also, and this is even more serious, that it failed to provide humankind with the analytical tools necessary to prevent the grave errors committed.1 In fact, economists have often done quite the opposite: they have used their scientific aura and prestige to justify and promote economic policies and social systems which have been patently unsuccessful and involved a disproportionate cost in human suffering. When confronted with this situation, western economists have not appeared uneasy or disconcerted; instead, they have carried on with their science as if nothing had happened.2 On those few occasions when a prominent economist has raised the uncomfortable question of why most professional theorists...