Countering this argument?

[comrade_cyanide444]

I was arguing with a Capitalist on how Socialism works. He seems to be an economics student however, so he can easily understand the economic literature. He gave me the following arguments on why Socialism will not work.


See: Ludwig von Mises, Human Action, "The Theory of Value and Socialism." (1949) "The illusion that a rational order of economic management is possible in a society based on public ownership of the means of production owed its origin to the value theory of the classical economists and its tenacity to the failure of many modern economists to think through consistently to its ultimate conclusions the fundamental theorem of the subjectivist theory." (requires research to understand)

and


quoting again: "The classical economists and their epigones could not, of course, recognize the problems involved. If it were true that the value of things is determined by the quantity of labor required for their production or reproduction, then there is no further problem of economic calculation. The supporters of the labor theory of value cannot be blamed for having misconstrued the problems of a socialist system. Their fateful failure was their untenable doctrine of value."

What would be an effective counterargument?

[Zanthorus]

The illusion that a rational order of economic management is possible in a society based on public ownership of the means of production owed its origin to the value theory of the classical economists

Bullshit. According to Marx at any rate labour values are only what regulates exchange between autonomous production units. In socialism the law of value dissapears to be replaced with conscious planning. This comment seems to be linked to Von Mises belief in the inherent efficiency of the market which makes him use it as the measuring stick for everything else. The goal of socialism therefore must be to imitate the supposed "efficiency" of the market and socialists can only possibly achieve this if value is objective and can be enforced by the state just as easily as it can be worked out by the market. It can't therefore socialism is false.

But again - The law of value according to Marx can only be realised in a competitive capitalist economy. The point of socialism is not to imitate the market or enforce the markets law of value but to wholesale eliminate the capitalist law of value.

[mikelepore]

Zanthorus is right. I have also seen Mises readers claiming that a socialist economic system would supposedly be based on what Marx called the law of value. They have it backwards. Marx's theory was that _capitalism_ is based on the law of value, and the establishment of socialism would be when the law of value would stop operating.

[Blake's Baby]

Without state ownership, indeed, ownership of any kind, where is the problem? Of course, if he's arguing that a statised economy cannot compete in a capitalist world market with a 'free market' economy, he's probably right. Luckily, that's only a problem if you think 'socialism' means nationalising everything.