Vol.10 No.3 ---- Summer 1996
Contents
CRITICS OF CAPITALISM
David Ramsay Steele | Between Immorality and Unfeasibility: The Market Socialist Predicament
The recent proliferation of economically informed writings favoring market
socialism exhibits dissonances in this evolving theoretical orientation. The ethical
presuppositions of classical socialism have often been inherited by those who now
embrace markets under socialism. But precisely because it accepts markets, market
socialism may prove incompatible with these sentiments.
David Schweickart | Dr. Pangloss Goes to Market: From Marx to Mises
David Ramsay Steele's From Marx to Mises argues correctly that the
standard account of the economic calculation debate is a misrepresentation. Mises and
Hayek were not bested by Lange and Taylor However, it is not true, as Steele claims,
that socialists have yet to face the Misesian challenge, nor that the debate over
socialist calculation sheds much light on the recent collapse of communism. Steele's
critiques of market socialism and worker self-management and his treatment of Marx
are, moreover deficient, as a consequence of his "Libertarian Panglossism."
Steven Horwitz | Keynes on Capatalism: Reply to Hill
Greg Hill's recent article voices the Keynesian complaint that capitalism
produces unemployment because there is no mechanism that coordinates decisions to save
with decisions to invest. But resources that are not spent on current consumption are
either "invested" as bank deposits or "hoarded" as cash. Deposits are lent out by banks
to investors, who are informed by interest rates as to the degree of saving for future
consumption that is taking place. And wage/price flexibility, as well as increases in
the supply of cash, can avoid declines in real income and employment caused by
increased cash holdings.
Greg Hill | Capatalism, Coordination, and Keynes: Rejoinder to Horwitz
In the ideal market of general equilibrium theory, choices are made in
full knowledge of one another and all expectations are fulfilled. This
pre-harmonization of individual plans does not occur in real-world markets where
decisions must be taken in ignorance of one another. The Austrian school grants this,
but claims that real-world price systems are nonetheless effective in coordinating
saving and investment decisions, which are motivated by disparate considerations. In
contrast, Keynes held that without the pre-reconciliation of individual plans,
investment and employment would be less than optimal, and the resulting distribution
of income arbitrary and inequitable.
Warren Breckman, Lars Trägårdh | Nationalism, Individualism, and Capitalism: Reply to Greenfeld
Reversing tlhe arguments of Anderson, Gellner and Hobsbawm, Liah Greenfeld
contends that it is nationalism that produces economic development. Specifically, she
claims that nationalism inspired three seminal economic thinkers: Marx, List, and
Smith. However, Greenfeld's ideological preferences lead her to a problematic conception
of individualism as nationalism, as well as to flawed treatments of Smith, List, and
Marx. Nationalism is better understood as an attempt to address the deepening conflict
between the imperative of community and the secular trends of the marketplace, which
challenge national sovereignty and democracy.
Liah Greenfeld | The Birth of Economic Competitiveness: Rejoinder to Breckman and Trägårdh
In "The Worth of Nations" I proposed that nationalism was a major
factor in the emergence of the modern, growth-oriented economy. In response to
criticisms, I demonstrate here the nationalistic inspiration of seventeenth-century
English -- or British -- economic tracts. Urging a reconsideration of earlier approaches
(such as that of W.W. Rostow) to the problem of why -- rather than how -- the modern economy
emerged, I agree with Max Weber's challenge to the naturalness of our proclivity for
constant economic expansion, while departing from his explanation for it.
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