Subjectivism and the Austrian School of Economics
- New Thinking in Political Economy series
Chapter 7: The Debate on Collectivism
___________________________________________________ From 1848 to World War 1, the growing success of socialist ideas in public opinion provoked a series of reflections on the theoretical principles of the functioning of a socialist economy. Marx and Engels, paradoxically hardly participated in this debate, their only written references to the socialist project appearing in the Manifesto of the Communist Party (1848), Critique of the Gotha Program (1875/1890-91) and the Anti-Dühring (1878). Marx and Engels’ position can be summed up thus: communist society, the end of History, would mean the end of the State and disappearance of scarcity, but there first needed to be a transitional stage called ‘socialism’ or ‘first phase of communist society’. This would be established by a proletarian revolution to end capitalism and would be centred around three basic economic principles: nationalization of the means of production, thus removing the market of productive factors; planning, the basic socialist method; and lastly that this idea of planning should go hand in hand with the abolition of market value and of monetary calculation. The abolition of monetary calculation almost immediately raised questions as to the possibility of such a collectivist economy functioning. In one famous passage, Gossen, a precursor of marginalism, considers that: ‘the central authority, proposed by the communists, for the distribution of the various tasks and their reward, would very soon find that it had taken on a job the solution of which far surpasses the abilities of individual men’ (Gossen, Entwicklung der Gesetze des Menschlichen Verkehrs, 1854). Pierson, (‘The...
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