ABSTRACT
In the last chapter I noted that there was not one socialist calculation debate but many, and as far as the opening part of the debate on commensurability is concerned, parties to the dispute crossed political boundaries. Mises and Lange stand opposed to Neurath and Hayek. Hayek’s criticism of the possibility of socialism turns not on issues of commensurability but rather of epistemology. The epistemological argument against socialism and in defence of market economies concern problems of human ignorance. The argument runs that there are necessary limitations to the knowledge that any particular individual or subset of individuals in society can possess. Hence, there are limitations to the knowledge at the disposal of any central planning board in a planned economy. In contrast to these limitations of centralised planned economies, the market overcomes the problems of human ignorance. The market is presented as a self-regulating economic homeostat, providing the informational feedback between economic actors necessary for the mutual adjustment of their activities. The market may not be perfect, but it is the most efficient communicative device we could have to enable production and consumption to grow and contract in the appropriate places.
