Thursday, 28 May 2015

Seminar: Economic Calculation Debate

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Here’s what’s on tonight at the Auckland University Economics Group. Why not get along?

You’ve heard of the Keynes-Hayek debate.
You may have heard of  the Cambridge Capital debates.
In tonight’s seminar we examine the Economic Calculation Debate, perhaps the greatest yet least-known economic controversies of the twentieth century: Often referred to as the Socialist Calculation Debate, this argument drew in great thinkers from Vienna to Moscow, and from Warsaw to Chicago—and included at its climax a joke whose punchline was New Zealand.
Central planners had said scientific socialism would bury the west in goods.  Soviet leader Nikita Kruschev  banged his shoe on the podium at the U.N. saying: "History is on our side. We will bury you in fine [goods]. You hear that? Quality!" Meanwhile, successive editions of Samuelson’s textbook on economic principles – the most widely-used textbook worldwide – showed a graph all through the 1980s projecting the Soviet Union would overtake the United States in production terms.
That never happened. Instead, in 1989 when the Berlin Wall finally crumbled, the experiment of “scientific socialism” was shown to be a complete disaster.
It was a defining moment in twentieth-century history. "Scientific socialism," which started in Utopia and was continued midst bloodshed and famine, was revealed not as any kind of miracle of production (as many mainstream economists had seemed to think) but as a complete and utter bust.
The reasons for the collapse were explained all the way back in 1920 by one Viennese hero. In a slim pamphlet that was to shake the economic world Ludwig Von Mises identified the flaw at the heart of the socialist economy, of any economy organised along socialist lines, that means the system can never produce anything but misery--why it was inevitable that an economy organised along socialist lines would collapse--and after decades of debate, in 1989 he was finally conclusively proved right.
For Mises, it was not even possible for it to survive theoretically, let alone practically!
  • What ideas were at the heart of this argument?
  • Why did Mises insist collapse was inevitable?
  • What answers were his arguments given by the central planners?
  • And how did Hayek’s answers, when he joined the debate, differ radically from his teacher’s?
Join us tonight to discuss that fatal flaw and some of that history, as we discuss this landmark debate in twentieth-century economics--including several important lessons that debate still has for us today.
        Date: Thursday, 28 May
       
Time: 6-7pm
       
Place: Room 040C, Level Zero, Business School
                      (plenty of parking beneath the Business School, entry off Grafton Rd)

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