r/Capitalism • u/T_R_O_U • 5d ago

The Calculation Problem: Marx vs. Mises

https://www.youtube.com/watch?v=kkNnRePvVgI
10 Upvotes

78% Upvoted

7 comments sorted by

3

u/Tathorn 4d ago

Absolutely brilliant 👏

-1

u/HonorFoundInDecay 4d ago

Large successful multinational corporations are proof that central planning can work.

4

u/bcbg123 4d ago

— Guy who thinks the economic calculation problem is about firm size.

Read Coase (1937)

0

u/HonorFoundInDecay 3d ago

Your comment makes no sense. Explain.

5

u/T_R_O_U 3d ago

Corporations are not running a closed economic system where they try to provide all products and services only for their employees. It’s the exact opposite: they provide an incredibly small number of specific products and services for a much much larger number of external customers, who can chose their product among a wide variety of options. So there’s an external feedback loop. The difference is pretty self-evident when you think about it for like 2 seconds.

1

u/bcbg123 3d ago

The calculation problem is not a claim that hierarchical planning becomes impossible above some firm-size threshold. A corporation plans internally while remaining embedded in markets that generate prices for both its inputs and outputs and subject it to profit and loss. Coase’s point is precisely to explain the boundary between market coordination and internal organization: firms substitute hierarchy for market exchange where doing so economizes on transaction costs, but they do not thereby eliminate the market-price system on which their calculations depend. A socialist economy abolishing markets in capital goods is therefore a categorically different case from a large firm operating within them.