Ludwig von Mises, Neue Schriften zum Problem der sozialistischen Wirtschaftsrechnung (1928)

Mises’s short review article surveys recent contributions to the socialist calculation debate, moving from criticisms of Jakob Marschak and Otto Neurath to approving discussions of Erich Horn, Boris Brutzkus, and Adolf Weber. Its organizing question is whether socialism can calculate economically: compare heterogeneous resources and productive alternatives within a coherent system of valuation. Mises treats neither criticism of capitalism nor confidence in planning as an answer to that institutional problem.

Marschak, he argues, substitutes objections to capitalist monetary accounting for a demonstration that socialist accounting is possible. Mises rejects the inference from imperfections in market calculation to the viability of its proposed replacement. He also distinguishes syndicalism, whose capacity for calculation he says he never disputed, from socialism:

Aber das wissenschaftliche Problem, das zur Erörterung steht, ist eben: Wirtschaftsrechnung im sozialistischen, und nicht: Wirtschaftsrechnung im syndikalistischen Gemeinwesen.

English translation: But the scientific problem under discussion is precisely this: economic calculation in the socialist, and not economic calculation in the syndicalist commonwealth.

The distinction establishes the review’s methodological demand: an argument must address the specific economic organization under examination. For Mises, Marschak’s discussion of monopoly and syndicalist calculation avoids rather than resolves the question.

Neurath’s renewed defense of calculation in kind prompts a second distinction, between comparing particular goods and calculating across an economic system:

Es ist natürlich richtig, daß man auch, wie Neurath feststellt, ohne Zuhilfenahme des Geldes zwei konkrete Teilmengen verschiedenartiger Güter miteinander vergleichen und die eine als wertvoller, die andere als weniger wertvoll bezeichnen kann.

English translation: It is of course correct that, as Neurath establishes, one can also, without calling money to aid, compare two concrete partial quantities of goods of different kinds with one another and designate the one as more valuable and the other as less valuable.

Mises immediately denies that such comparisons establish the possibility of aggregating and balancing quantities of heterogeneous goods and services. The issue is not whether people can value without money, but whether those valuations supply a practicable calculus for production. Against Neurath, he cites Horn’s conclusion that even an economy oriented toward collective provision must retain monetary business accounting if it values economic rationality.

The longest discussion concerns Brutzkus’s study of Marxism in light of the Russian Revolution, originally published in Russian in 1922 and now available in German. Mises reports the author’s imprisonment and expulsion, but grounds his praise in the study’s theoretical treatment of Soviet experience. Brutzkus examines attempts by Tschajanow, Strumilin, and Varga to establish socialist accounting, especially the proposal to use labor as the measure of value. As Mises presents the argument, production still requires labor, capital, and nature under socialism; a labor-cost calculus therefore cannot adequately discriminate among productive alternatives:

Der Arbeitskostenkalkül könne also keine irgendwie brauchbaren Hinweise über die größere oder geringere Wirtschaftlichkeit der Unternehmungen liefern.

English translation: Labor-cost calculation, therefore, could furnish no indications of any usefulness concerning the greater or lesser economic efficiency of enterprises.

This failure bears directly on the possibility of a unified production plan. Scientific theory and extensive statistics cannot, on this account, replace a mechanism that weighs demand and coordinates individual branches of production with the economy as a whole. Mises praises Brutzkus for analyzing this structural difficulty instead of offering sensational descriptions or politically distorted reports about Russia. His claim that Brutzkus provides the first and only fundamentally scientific treatment of Soviet problems expresses the review’s sharply polemical assessment of the existing literature.

The conclusion widens that judgment to socialist writing during the decade following the Russian Revolution. Drawing on Cassau’s criticism of ideological sterility, Mises argues that political success and opportunities for debate have not produced a satisfactory theory of socialist economic organization. He closes with an approving excerpt from Adolf Weber, linking rational coordination to consumer competition, monetary accounting, and prices throughout production. Within that excerpt, Weber states:

Es ist zu dem Zwecke notwendig, daß nicht nur für das Fertigprodukt, sondern auch für alle vorbereitenden Stadien, insbesondere aber für die knappen Produktionselemente Arbeit und Kapital ein Preis sich bildet.

English translation: For that purpose it is necessary that a price be formed not only for the finished product but also for all the preparatory stages, and in particular for the scarce elements of production, labor and capital.

The article’s significance lies in its concentrated restatement of the calculation challenge through contemporary controversy. Mises distinguishes valuation from calculation, critiques of markets from workable alternatives, and statistical knowledge from economic coordination. The review’s central claim is that rational planning requires an account of how scarce productive resources acquire comparable values; neither calculation in kind nor labor accounting has supplied it.