Rivalry and central planning Book

Written with stellar clarity, Lavoie's re-examination of the Socialist Calculation Debate is both historically interesting and forward-looking in its confident reassertion of the modern Austrian perspective. Sure, it doesn't bring much new to the table, since it relies exclusively on the Mises-Hayek argument, but it surveys the scene with competence and plants its flag with bravado.

The central argument of the book is that the Austrian theory of the competitive market process, which allegedly underlies both Mises's and Hayek's theses in the debate, is a dynamic process theory of change that cannot be captured by neoclassical equilibrium models based on static assumptions of given knowledge, given technologies, given resource availability, etc. The failure of socialist calculation depends upon a fuller understanding of the role of entrepreneurship and institutions in managing risk, uncertainty, dynamic change, complex adaptation, etc. According to the author, the failure of the market socialists to fully understand the theory, and the failure of the Austrians to fully articulate it, led to a general state of impasse in the historical debate.

For the most part, the author does a pretty good job explaining all sides of the argument despite his professed love of and commitment to the Austrian cause. But I will subtract one star for the excessively generous treatment by which the author handles the Austrian side of the argument according to which they were always one step ahead of the opposition and never strayed from the one true path. The flip-side of this, of course, is the author's ungenerous treatment of the other side (although curiously not of Marx, who is given a VERY generous reading as a fellow disequilibrium theorist against the neoclassical mainstream!). This is reflected in the book's failure, in the middle act, to make a convincing positive case for the market socialist argument.

This, however, is the only major shortcoming in an otherwise excellent and clear treatise. The book is a very good introduction to and summary of the debate from the Austrian side.