The “Economic Calculation” controversy:

The “Economic Calculation” controversy: unravelling of a myth by Robin Cox (2005)

From issue 3 of the Common Voice journal

The economic calculation argument (ECA) has to do with the claim that, in the absence of market prices, a socialist economy would be unable to make rational choices concerning the allocation of resources and that this would make socialism an impracticable proposition. Tracing the historical development of this argument, this article goes on to consider some of its basic assumptions about how the price mechanism actually works in practice; in so doing, it attempts to demonstrate that the argument is based upon fundamentally shaky foundations. A rational approach to the allocation of resources in a socialist economy is then sketched out. Such an approach is predicated on a particular view of socialism as entailing a largely decentralised — or polycentric — structure of decision-making in contrast to the view typically held by proponents of the ECA that socialism would entail central — or society-wide — planning. Applying a decentralised model of socialist decision-making, this article identifies a number of key components of such a model and goes on to show how, through the interactions of these key components, the objections to socialism raised by the ECA are decisively overcome.

A long read but a worthwhile one. 

Continued at link:

https://socialiststandardmyspace.blogspot.com/2024/03/the-economic-calculation-controversy.html