On the Economic Theory of Socialism: Part I

Abstract

S ocialists have certainly good reason to be grateful to Professor Mises, the great advocatus diaboli of their cause. For it was his powerful challenge that forced the socialists to recognise the importance of an adequate system of economic accounting to guide the allocation of resources in a socialist economy. Even more, it was chiefly due to Professor Mises’ challenge that many socialists became aware of the very existence of such a problem. And although Professor Mises was not the first to raise it, and although not all socialists were as completely unaware of the problem as is frequently held, it is true, nevertheless, that, particularly on the European Continent (outside of Italy), the merit of having caused the socialists to approach this problem systematically belongs entirely to Professor Mises. Both as an expression of recognition for the great service rendered by him and as a memento of the prime importance of sound economic accounting, a statue of Professor Mises ought to occupy an honourable place in the great hall of the Ministry of Socialisation or of the Central Planning Board of the socialist state. However, I am afraid that Professor Mises would scarcely enjoy what seems the only adequate way to repay the debt of recognition incurred by the socialists, and it is difficult to blame him for not doing so. First, he might have to share his place with the great leaders of the socialist movement, and this company might not suit him. And then, to complete the misfortune, a socialist teacher might invite his students in a class on dialectical materialism to go and look at the statue, in order to exemplify the Hegelian List der Vernunft which made even the staunchest of bourgeois economists unwittingly serve the proletarian cause.

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