Value and Capital was not Austrian. Hicks got the Marshallian education at Cambridge (allegedly at the time, pre-Keynes, Pigou used to say “it’s all in Marshall” - the fools, clearly it’s all in Mises!) but he studied a lot of French (Walras) and Italian (Pareto). Value and Capital combined Walrasian theory with Marshall which was new in Anglo-American economics. So not very Austrian. It’s an important book though.
Decades later Hicks wrote Capital and Time: A Neo-Austrian Theory, but that’s not really very Austrian either!
That’s hardly evidence of accepting the calculation argument. He says he struggled with his arguments but agreed with the conclusions. I’m still to find evidence that Hulsmann is wrong about Hayek.
Hayek’s knowledge problem is strictly different to Mises’ original calculation argument, if you want to find out more on this you should see the dehomogenisation literature. Salerno has been very good on this.
This is not to detract from Hayek’s contribution, I just wanted to emphasize his is a different one.
Mises argued that it is inconceivable that a socialist planner could calculate, because real market money prices are the only way that value can be dealt with arithmetically. Hayek accepted that it is was conceivable (since he accepted Wieserian imputation theory, which asserted that value is essentially a quantity, and thus can be directly used for calculation) but practically impossible, because of the amount of information that would need to be gathered by the single bureau.
The distinction between inconceivable and practically impossible is an important one when you’re dealing with people like socialists who will desperately try to exploit any opening to justify their precious system. In this regard, they’re rather like Jim Carrey’s character in this clip:
I’ve always understood Hayek and Mises’ arguments to be practically identical. The role of the price mechanism is to convey information to entrepreneurs; it tells them how to coordinate production, what kind of capital (how much capital) and labor to employ, and how to set up certain combination’s through trial and error (which are also turned into information signals). The failure of socialism is that there are no prices, and therefore, there are no information signals which direct spatial-temporal productions, and efficiently manage scarce resources. To say that there isn’t a functional price mechanism is to say that planners are clueless. If planners were omniscient then they could indeed centrally plan the economy–but then they would be gods, and not men. The only difference is that Mises flat out says that socialism is impossible, while Hayek only implicitly says so.
The biggest difference between Mises and Hayek, then, was that Hayek wasn’t as straightforward. Saying that they “come from different traditions” is entirely absurd. I mean Hayek explicitly states that he agreed with Mises’ conclusion, but wasn’t satisfied with his explanation. Also, the imputation argument suggests that Hayek believed value can be cardinally measured (this is a big deal). We can’t forget that this particular issue comprises only a fraction of their total works. This whole things appears to be one giant distraction.
toring, and prevention of labor shirking, etc.). Rather, it is concerned
with the lack of a genuinely competitive and social market process in
which each and every kind of scarce resource receives an objective
and quantitative price appraisement in terms of a common denomi-
nator reflecting its relative importance in serving (anticipated) con-
sumer preferences. "
In other words, the Misesian calculation problem is a total lack of appraisement, while the Hayekian knowledge problem is a deficiency in communication. In the Misesian argument, it’s not just about poor communication, it’s the complete lack of any useful information to communicate in the first place.
In retrospect, this seems to be an accurate analysis, which is why I always saw the Misesian calculation problem as superior to Hayek’s knowledge problem, however, I just assumed that Hayek simply tends to emphasize the communicative aspect of the problem more then the origin/soruce of the information itself.
I can’t possibly see from Hayek’s writings (from what I’ve read) to as why he would possibly think that the knowlege itself can originate (even in theory) in the absent of a market economy.
