Calculation and coordination essays on socialism and transitional political economy

369 Pages·2001·2.641 MB·English

by  Boettke, Peter J

Calculation and Coordination

Calculation and Coordination explores the founding and failure of socialism,
and the attempts to reform and transform it in the twentieth century. It combines
the strengths of the Austrian market-process tradition with the political economy
of public choice to provide an analytical framework for theoretical and historical
examination of socialist practice and post-socialist political economy.
Peter J.Boettke places particular emphasis on the difficulties of economic
calculation in the absence of secure private-property rights and on the
importance of establishing a credible commitment to limited government in
smoothing the path from Soviet socialism to a liberal political and economic
order in Post-Soviet Russia. The volume features essays on:

• The theoretical debate over socialism, and in particular the contributions
of Mises and Hayek.
(cid:127) The origins of socialism in Russia.
(cid:127) The institutionalist maturation of socialist practice and the de facto
organizing principles of the mature Soviet-type economy.
(cid:127) The collapse of and failure to successfully reform the Soviet system.

This collection will prove to be of great interest to academics and students in the
fields of economics, comparative politics, and development studies.
Peter J.Boettke is Associate Professor at George Mason University, where he
also serves as the Deputy Director of the James M.Buchanan Center for Political
Economy.
Foundations of the Market Economy
Edited by Mario J.Rizzo, New York University, and
Lawrence H.White, University of Georgia
A central theme in this series is the importance of understanding and assessing
the market economy from a perspective broader than the static economics of
perfect competition and Pareto optimality. Such a perspective sees markets as
causal processes generated by the preferences, expectations and beliefs of
economic agents. The creative acts of entrepreneurship that uncover new
information about references, prices and technology are central to these
processes with respect to their ability to promote the discovery and use of
knowledge in society.
The market economy consists of a set of institutions that facilitate voluntary
cooperation and exchange among indiviudals. These institutions include the
legal and ethical framework as well as more narrowly ‘economic’ patterns of
social interaction. Thus, the law, legal institutions and cultural and ethical norms,
as well as ordinary business practices and phenomena, fall within the analytical
domain of the economist.
The Meaning of Market Process
Essays in the development of modern Austrian economics
Israel M.Kirzner
Prices and Knowledge
A market-process perspective
Esteban F.Thomas
Keynes’ General Theory of Interest
A reconsideration
Fiona C.Maclachlan
Laissez-Faire Banking
Kevin Dowd
Expectations and the Meaning of Institutions
Essays in economics by Ludwig Lachmann
Edited by Dan Lavoie
Perfect Competition and the Transformation of Economics
Frank M.Machovec
Entrepreneurship and the Market Process
An enquiry into the growth of knowledge
David Harper
Economics of Time and Ignorance
Gerald O’Driscoll and Mario J.Rizzo
Dynamics of the Mixed Economy
Towards a theory of interventionism
Sanford Ikeda
Neoclassical Microeconomic Theory
The founding of Austrian vision
A.M.Endres
The Cultural Foundations of Economic Development
Urban female entrepreneurship in Ghana
Emily Chamlee-Wright
Risk and Business Cycles
New and old Austrian perspectives
Tyler Cowen
Capital in Disequilibrium
The role of capital in a changing world
Peter Lewin
The Driving Force of the Market
Essays in Austrian economics
Israel Kirzner
An Entrepreneurial Theory of the Firm
Fréderic Sautet
Time and Money
The macroeconomics of capital structure
Roger Garrison
Microfoundations and Macroeconomics
An Austrian perspective
Steven Horwitz
Money and the Market
Essays on free banking
Kevin Dowd
Calculation and Coordination
Essays on socialism and transitional political economy
Peter Boettke
Keynes and Hayek
The money economy
Gerry Steele
Calculation and Coordination

Essays on socialism and transitional
political economy

Peter J.Boettke

London and New York
First published 2001
by Routledge
11 New Fetter Lane, London EC4P 4EE

Simultaneously published in the USA and Canada
by Routledge
29 West 35th Street, New York, NY 10001

Routledge is an imprint of the Taylor & Francis Group

This edition published in the Taylor & Francis e-Library, 2003.

© 2001 Peter J.Boettke
All rights reserved. No part of this book may be reprinted or reproduced or
utilised in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in
any information storage or retrieval system, without permission in writing
from the publishers.

British Library Cataloguing in Publication Data
A catalogue record for this book is available
from the British Library

Library of Congress Cataloging in Publication Data
Boettke, Peter J.
Calculation and Coordination: essays on socialism and transitional
political economy/Peter J.Boettke.
p. cm.—(Foundations of the market economy)
Includes bibliographical references and index.
ISBN 0-415-23813-7 (hardcover)
1. Marxian economics. 2. Austrian school of economics. 3. Social choice.
4. Soviet Union—Economic policy. I. Title. II. Foundations of the
market economy series.
HB97.5.B548 2001
338.947–dc21 00–042218

This book has been sponsored in part by the Austrian Economics program at
New York University
ISBN 0-203-46968-2 Master e-book ISBN

ISBN 0-203-77792-1 (Adobe eReader Format)
To Israel M.Kirzner,
teacher, scholar, and mentor

Contents

List of illustrations xi
Copyright acknowledgments xiii
Acknowledgments xv
1 Introduction 1
2 Why are there no Austrian Socialists? Ideology, science,
and the Austrian school 7
3 Economic calculation: the Austrian contribution to
political economy 29
4 Hayek’s The Road to Serfdom revisited: government
failure in the argument against Socialism 47
5 Coase, Communism, and the “Black Box” of Soviet-type
economies 66
6 The Soviet experiment with pure Communism 77
7 The political economy of utopia: Communism in
Soviet Russia, 1918–21 105
8 Soviet venality: a rent-seeking model of the Communist
state 140
9 Credibility, commitment, and Soviet economic reform 154
10 Perestroika and public choice: the economics of autocratic
succession in a rent-seeking society 176
ix