Socialist Calculation Debate

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A debate about how a socialist economy would be able to allocate resources between goals without resort to capitalism. The debate tends to ignore the fact that Communist and wartime command economies did very well with centralized planning. Not to mention Walmart. This is a zombie issue: it was decisively settled by the idea of market socialism (now instantiated as Social Wealth Funds) because markets are not exclusive to capitalism.

Links

Against Hayek [More...]
"Hayek and his followers have grossly overestimated the difficulties of carrying out rational socialist planning. They have coupled this with an exaggerated idea of the effectiveness of the free market as an economic regulator."
Hayek Meets Information Theory. And Fails. [More...]
Modern economic theories of prices-as-information are seventy years out of date.
Hayek, the Mind, and Spontaneous Order: A Critique [More...]
Richard Posner finds Hayek's refutation of universal central planning to be useless in real-world mixed economies. He points out Ronald Coase has shown that central planning works better than markets for some problems, hence firms (including governments.)
Hutchison on the Socialist Calculation Debate [More...]
"It is just too facile to demonstrate that socialist planners may not be able to improve on the allocation of competitive markets if everybody in those markets -- more or less by definition -- is equipped with full or perfect knowledge."
In Soviet Union, Optimization Problem Solves You [More...]
An extraordinary explanation of why optimal social planning is impossible. But then, in the section "Errors of the Bourgeois Economists", the alternative problems of markets and capitalism are discussed, arriving at the conclusion that experimentation with second-best solutions is the only good recourse.
Information and Economics: A Critique of Hayek [More...]
A thorough dismemberment of Hayek's "Socialist Calculation" argument. At this point, Hayek is thoroughly out of date in terms of understanding human actors, corporate actors and modern information technology. Vast amounts of information can be centralized: that's how Walmart works.
The Strange Case of Dr Hayek and Mr Hayek [More...]
An excellent overview of Hayek's life and career, giving good weight to his failures and inconsistencies. There is also a long appendix about the socialist calculation debate.

Quotations

[Hayek] is not evaluating a mixed system, in which there is a degree of personal freedom but also a degree of imposed order. A mixed system is what we and our peer nations have, and I have not been able to figure out what help Hayek offers for evaluating such a system.
Richard Posner, "Hayek, the Mind, and Spontaneous Order: A Critique"
We don't have to go into "Monkey's Paw" territory to realize that getting what you think you want can prove thoroughly unacceptable; it's a fact of life, which doesn't disappear in economics.
Cosma Shalizi, "In Soviet Union, Optimization Problem Solves You"