ABSTRACT

The defenders of capital argue that the capitalist mode of production is the only system capable of solving the economic problem that all human societies confront. According to F. A. Hayek, the economic problem facing society is not how to optimally allocate resources given full knowledge of the available means but rather it is a problem of the utilization of knowledge which is not given to anyone in its totality. The socialist aims to create an alternative society without class exploitation in which full advantage is taken of the division of knowledge. In his view, the most efficient economic system is that which can make the fullest use of the existing knowledge. For this reason, he praises the price system, arguing that it is more than a metaphor to describe the price system as a kind of machinery for registering change.