Part 1 of 8

Economic Calculation in the Socialist Commonwealth
Introduction by Ludwig von Mises

There are many socialists who have never come to grips in any way with the
problems of economics, and who have made no attempt at all to form for
themselves any clear conception of the conditions which determine the character
of human society. There are others, who have probed deeply into the economic
history of the past and present, and striven, on this basis, to construct a theory of
economics of the “bourgeois” society. They have criticized freely enough the
economic structure of “free” society, but have consistently neglected to apply to
the economics of the disputed socialist state the same caustic acumen, which they
have revealed elsewhere, not always with success. Economics, as such, figures
all too sparsely in the glamorous pictures painted by the Utopians. They
invariably explain how, in the cloud-cuckoo lands of their fancy, roast pigeons
will in some way fly into the mouths of the comrades, but they omit to show how
this miracle is to take place. Where they do in fact commence to be more explicit
in the domain of economics, they soon find themselves at a loss--one remembers,
for instance, Proudhon’s fantastic dreams of an “exchange bank”--so that it is not
difficult to point out their logical fallacies. When Marxism solemnly forbids its
adherents to concern themselves with economic problems beyond the
expropriation of the expropriators, it adopts no new principle, since the Utopians
throughout their descriptions have also neglected all economic considerations,
and concentrated attention solely upon painting lurid pictures of existing
conditions and glowing pictures of that golden age which is the natural
consequence of the New Dispensation.
Whether one regards the coming of socialism as an unavoidable result of
human evolution, or considers the socialization of the means of production as the
greatest blessing or the worst disaster that can befall mankind, one must at le ast
concede, that investigation into the conditions of society organized upon a
socialist basis is of value as something more than “a good mental exercise, and a
means of promoting political clearness and consistency of thought.”
1
 In an age in which we are approaching nearer and nearer to socialism, and even, in a certain
                                               
1
Karl Kautsky, The Social Revolution and On the Morrow of the Social Revolution (London:
Twentieth Century Press, 1907), Part II, p.1.3 Economic Calculation in the Socialist Commonwealth
sense, are dominated by it, research into the problems of the socialist state
acquires added significance for the explanation of what is going on around us.
Previous analyses of the exchange economy no longer suffice for a proper
understanding of social phenomena in Germany and its eastern neighbors today.
Our task in this connection is to embrace within a fairly wide range the elements
of socialistic society. Attempts to achieve clarity on this subject need no further
justification.