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{{Infobox German Location
The '''economic calculation problem''' is a criticism of [[socialist economics]]. It was first proposed by [[Ludwig von Mises]] in 1920 and later expounded by [[Friedrich Hayek]].<ref name="Mises">{{cite book
|Art = Stadt
|title= Economic calculation in the Socialist Commonwealth
|image_photo = Itzehoe.jpg
|accessdate=2008-09-08
|Wappen = Itzehoe Wappen.png
|last= Von Mises
|lat_deg = 53 |lat_min = 55 |lat_sec = 30
|first= Ludwig
|lon_deg = 9 |lon_min = 30 |lon_sec = 59
|authorlink= Ludwig von Mises
|Bundesland = Schleswig-Holstein
|year= 1990
|Kreis = Steinburg
|format= pdf
|Höhe = 22
|publisher= [[Ludwig von Mises Institute]]
|Fläche = 28.03
|url= http://mises.org/pdf/econcalc.pdf
|Einwohner = 33285
|language= English}}</ref><ref>F. A. Hayek, (1935), "The Nature and History of the Problem" and "The Present State of the Debate," om in F. A. Hayek, ed. ''Collectivist Economic Planning'', pp. 1-40, 201-43.</ref> The problem referred to is that of how to distribute resources rationally in an economy. The capitalist solution is the [[price mechanism]]; Mises and Hayek argued that this is the only possible solution, and without the information provided by market prices socialism lacks a method to rationally allocate resources. Those who agree with this criticism argue it is a refutation of [[socialism]] and that it shows that a [[socialist]] [[planned economy]] could never work. The debate raged in the 1920s and 1930s, and that specific period of the debate has come to be known by [[economic historian]]s as the ''The Socialist Calculation Debate.''<ref name="School">{{cite web
|Stand = 2005-06-30
|url= http://cepa.newschool.edu/het/essays/paretian/social.htm
|PLZ = 25501 − 25524
|title= The socialist calculation debate
|PLZ-alt = 2210
|accessdate=2007-04-03
|Vorwahl = 04821
|last= Fonseca
|Kfz = IZ
|first= Gonçalo L.
|Gemeindeschlüssel = 01 0 61 046
|authorlink=
|Adresse = Reichenstraße 23<br />25524 Itzehoe
|year= 200?
|Website = [http://www.itzehoe.de/ www.itzehoe.de]
|format= HTML
|Bürgermeister = Rüdiger Blaschke
|publisher= HET
}}
|language= English
|quote= The information here has not been reviewed independently for accuracy, relevance and/or balance and thus deserves a considerable amount of caution. As a result, I would prefer not to be cited as reliable authorities on anything. However, I do not mind being listed as a general internet resource. ([http://cepa.newschool.edu/het/])}}</ref>


'''Itzehoe''' [{{IPA|ɪtsəˈhoː}}] is a [[town]] in [[Germany]], in the [[States of Germany|''Bundesland'']] of [[Schleswig-Holstein]], the capital of the district of [[Steinburg]].
[[Ludwig von Mises]] argued in a famous 1920 article "Economic Calculation in the Socialist Commonwealth" that the pricing systems in socialist economies were necessarily deficient because if government owned the [[means of production]], then no prices could be obtained for [[capital goods]] as they were merely internal transfers of goods in a socialist system and not "objects of exchange," unlike final goods. Therefore, they were unpriced and hence the system would be necessarily inefficient since the central planners would not know how to allocate the available resources efficiently.<ref name="School" /> This led him to declare "...that rational economic activity is impossible in a socialist [[commonwealth]]."<ref name="Mises" />. Mises developed his critique of socialism more completely in his 1922 book ''Socialism, an Economic and Sociological Analysis''.


It is located on the [[Stör]], a navigable tributary of the [[Elbe]], 51 km northwest of [[Hamburg]] and 24 km north of [[Glückstadt]]. The population is about 34,900.
==The problem==
=== Comparing heterogeneous goods ===
Since [[capital goods]] and [[Labour (economics)|labour]] are highly heterogeneous (i.e. they have different characteristics that pertain to physical productivity) economic calculation requires a common basis for comparison for all forms of capital and labour.


The [[Church (building)|church]] of St Lawrence, dating from the [[12th century]], and the building in which the Holstein estates formerly met, are noteworthy. The town has a [[convent]] founded in [[1256]], many [[school]]s, a [[hospital]] and other benevolent institutions. Itzehoe is a busy commercial place.
[[Money]], as a [[means of exchange]], allows many different goods to be analysed in terms of their cost in a very easy way; the cheaper good is a more desirable one to use. This is the [[signalling]] function of [[price]]s, and the [[rationing]] function prevents over-use of any resource.


Itzehoe is the oldest town in [[Holstein]]. Its nucleus was a [[castle]], built in [[809]] by [[Egbert]], one of [[Charlemagne]]'s [[count]]s, against the [[Denmark|Danes]]. The community which sprang up around it was variously called Esseveldoburg, Eselsfleth and Ezeho. In [[1201]] the town was destroyed, but it was restored in [[1224]]. The new town was granted the Lübeck rights by [[Adolphus IV]] in [[1238]], and the old town in [[1303]]. During the [[Thirty Years' War]] Itzehoe was twice destroyed by the [[Sweden|Swedes]], in [[1644]] and [[1657]], but was rebuilt on each occasion. It passed to [[Prussia]] in [[1867]], with the [[duchy]] of Schleswig-Holstein.
Without money to facilitate easy comparisons, socialism lacks any way to compare different goods and services. Decisions made will therefore be largely arbitrary and without sufficient knowledge, often on the whim of [[bureaucrat]]s.
Itzehoe is listed as a
garrison depot (Wehrkreis X, Hamburg) of the former Infanteriedivision 225. which was implicated
in the 1940 [[Vinkt Massacre]] in Belgium.


Itzehoe is also the location of the Wenzel Hablik Museum.
===Relating utility to capital and consumption goods===
The common basis for comparison for capital goods must also be connected to [[consumer welfare]]. It must also be able to compare the desired trade-off between present consumption and delayed consumption (for greater returns later on), via investment in capital goods. The use of money as a medium of exchange and unit of account is necessary to solve the first two problems of economic calculation. Mises (1912) applied the [[marginal utility theory]] developed by [[Carl Menger]] to money.


Marginal consumer expenditures represent the marginal utility or additional consumer satisfaction expected by consumers as they spend money. This is similar to the [[theory of equi-marginal returns| equi-marginal]] principle developed by [[Alfred Marshall]]. Consumers equalize the marginal utility (amount of satisfaction) of the last dollar spent on each good. So the exchange of consumer goods establishes prices that represent the marginal utility of consumers, and money therefore is representative of consumer satisfaction.


If money is also spent on capital goods and labor, then it is possible to make comparisons between capital goods and consumer goods. The exchange of consumer and capital/labor goods does not imply that capital goods are valued accurately, only that it is possible for the valuations of capital goods to be made.


During the period up to and including the [[Wacken Open Air]] festival, many festival goers chose to depart for the festival from Itzehoe using the 'Metal Shuttle Bus' which departs from the station area. During this time, the town can become very overcrowded and traffic; slow.
These first elements of the Calculation Critique of Socialism are the most basic element: economic calculation requires the use of money across all goods. This is a necessary but not a sufficient condition for successful economic calculation.


Without a price mechanism, socialism lacks the means to relate consumer satisfaction to economic activity, it is argued. The incentive function of prices allows diffuse interests, like the interests of every household in cheap, high quality, shoes, to compete with the concentrated interests of the cobblers in expensive, poor quality shoes. Without it, a panel of experts set up to ‘rationalise production’, likely closely linked to the cobblers for expertise, would tend to support the cobblers interests in a ‘conspiracy against the public’. If this happens to all industries however, everyone would be worse off than if they had been subject to the rigours of [[market competition| competition (economics)]]


The von Mises theory of money and calculation conflicts directly with Marxist [[labour theory of value]]. Marxist theory allows for the possibility that Labour content can serve as a common means of valuing capital goods, a position now out of favour with economists following the success of the theory of [[marginal utility]].


Germany's lowest elevation is to be found a short distance from Itzehoe, in the ''[[Wilstermarsch]]'', which reaches 3.54 m below [[sea level]].
===Entrepreneurship===

The third condition for economic calculation is the existence of genuine [[entrepreneurship]] and [[Competition (economics)| market rivalry]].

According to Kirzner (1973) and Lavoie (1985) entrepreneurs reap profits by supplying unfulfilled needs in markets. Entrepreneurship therefore brings prices closer to marginal costs. The adjustment of prices in markets towards ‘equilibrium’ (where supply and demand equal) gives them greater utilitarian significance. The activities of entrepreneurs make prices more accurate in terms of how they represent the marginal utility of consumers. Prices act as guides to the planning of production. Those who plan production use prices to decide which lines of production should be expanded or curtailed.

Entrepreneurs lack the profit motive to take risks under socialism, and so are far less likely to attempt to supply consumers demands. Without the price system to match consumer utility to incentives for production, or even indicate those utilities "without providing incentives", state planners are much less likely to invest in new ideas to satisfy consumer’s desires.

===Coherent planning===
The fourth condition for successful economic calculation is plan coordination among those who plan production. The problem of planning production is the knowledge problem explained by Hayek (1937, 1945) The planning could either be done in a decentralised fashion, requiring some mechanism to make the individual plans coherent, or centrally, requiring a lot of information.

Within capitalism, the overall plan for production is composed of individual plans from capitalists in large and small enterprises. Since capitalists purchase labour and capital out of the same common pool of available but scarce labor and capital, it is essential that their plans fit together in at least a semi-coherent fashion. Hayek (1937) defined an efficient planning process as one where all decision makers form plans that contain relevant data from the plans from others. Entrepreneurs acquire data on the plans from others through the price system. The price system is an indispensable communications network for plan coordination among entrepreneurs. Increases and decreases in prices inform entrepreneurs about the general economic situation, to which they must adjust their own plans.

As for socialism, Mises (1944) and Hayek (1937) insisted that bureaucrats in individual ministries could never coordinate their plans, not without a price system. If decentralized socialism cannot work, central authorities must plan production. But central planners face [[knowledge economics|the knowledge problem]] in forming a comprehensive plan for production. Mises and Hayek saw centralization as inevitable in socialism.

Opponents argued that in principle an economy can be seen as a set of equations. Thus, there should be no need for prices. Using information about available resources and the preferences of people, it should be possible to calculate an optimal solution for resource allocation. [[Friedrich von Hayek]] responded that the system of equations required too much information that would not be easily available and the ensuing calculations would be too difficult.<ref name ="School" /> This is partly due to the fact that individuals possess useful knowledge but do not realise its importance, or may have no incentive to transmit the information.<ref>{{cite book
| last = Hayek
| first = Friedrich
| authorlink = Friedrich Hayek
| title = [[The Road to Serfdom]]
| publisher = [[University of Chicago Press]]
| edition = 50th anniversary ed.
| date = 1994
| isbn = 0-226-32061-8}}</ref>
He contended that the only rational solution is to utilize all the [[dispersed knowledge]] in the market place through the use of [[price signal]]s.<ref>{{cite book
|last= Steele
|first= David Ramsay
|authorlink= David Ramsay Steele
|title= From Marx to Mises: post-capitalist society and the challenge of economic calculation
|year= 1992
|publisher= Open Court
|location= La Salle, Ill.
|isbn= 0-8126-9016-8}}</ref> The early debates were made before the much greater calculating powers of modern [[computers]] became available but also before research on [[chaos theory]]. In the 1980s, Alex Nove argued that even with the best computers, the calculations would take millions of years<ref> Alex Nove. (1983). The Economics of Feasible Socialism. George Allen and Unwin, London.</ref>

It may be impossible to make long-term predictions for a highly complex system such as an economy.<ref>{{cite web
| title = Economic Logic: a survey and variations on the theme
| url = http://www.phil.uu.nl/~janb/phloofin/eclog.html
| format = HTML
| accessdate = 2007-04-03}}</ref>

Hayek (1935, 1937, 1940, 1945) stressed the knowledge problem of central planning, partly because decentralized socialism seemed indefensible. Part of the reason that Hayek stressed the knowledge problem was also because he was mainly concerned with debating the proposal for [[Market Socialism]] and the [[Lange Model]] by [[Oscar Lange]] (1938) and Hayek's student [[Abba Lerner]] (1934, 1937, 1938), which was developed in response to the calculation argument. Lange and Lerner conceded that prices were necessary in socialism. Lange and Lerner thought that socialist officials could simulate some markets (mainly spot markets) and the simulation of spot markets was enough to make socialism reasonably efficient. [[Oskar Lange]] argued that prices can be seen merely as an accounting practice. In principle, claim market socialists, socialist managers of state enterprises could use a price system, as an accounting system, in order to minimize costs and convey information to other managers.<ref name="School" /> However, while this can deal with existing stocks of goods, providing a basis for values can be ascertained, it does not deal with the investment in new capital stocks.{{Fact|date=April 2008}}

Hayek responded by arguing that the simulation of markets in socialism would fail due to a lack of genuine competition and entrepreneurship. Central planners would still have to plan production without the aid of economically meaningful prices. Lange and Lerner also admitted that socialism would lack any simulation of financial markets, and that this would cause problems in planning capital investment.

Hayek's argumentation is not only regarding computational complexity for the central planners, however. He further argues that much of the information individuals have cannot be collected or used by others. First, individuals may have no or little [[incentive]] to share their information with central or even local planners. Second, the individual may not be aware that he has valuable information, and when he becomes aware, it is only useful for a limited time, too short for it to be communicated to the central or local planners. Third, the information is useless to other individuals if it is not in a form that allows for meaningful comparisons of value (i.e. money prices as a common basis for comparison). Therefore, Hayek argues, individuals must acquire data through prices in real markets.<ref>{{cite web
| first = Carlo
| last = Zappia
| authorlink = Carlo Zappia
| title = The economics of information, market socialism and Hayek's legacy
| url = http://www.econ-pol.unisi.it/pubdocenti/HEI99.pdf
| format = PDF
| accessdate = 2007-04-03}}</ref>

===Financial Markets===
The fifth condition for successful economic calculation is the existence of well functioning [[financial markets]]. Economic efficiency depends heavily upon avoiding errors in capital investment. The costs of reversing errors in capital investment are potentially large. This is not just a matter of rearranging or converting capital goods that are found to be of little use. The time spent reconfiguring the structure of production is time lost in the production of consumer goods. Those who plan capital investment must anticipate future trends in consumer demand if they are to avoid investing too much in some lines of production and too little in other lines of production.

Capitalists plan production for profit. Capitalists use prices to form expectations that determine the composition of capital accumulation, the pattern of investment across industry. Those who invest in accordance with consumers desires are rewarded with profits, those who do not are forced to become more efficient or go out of business.

Prices in [[futures markets]] play a special role in economic calculation. Futures markets develop prices for commodities in future time periods. It is in futures markets that entrepreneurs sort out plans for production based on their expectations. Futures markets are a link between entrepreneurial investment decisions and household consumer decisions. Since most goods are not explicitly traded in futures markets, substitute markets are needed. The stock market serves as a ‘continuous futures market’ that evaluates entrepreneurial plans for production (Lachmann 1978). Generally speaking the problem of economic calculation is solved in financial markets.

The problem of economic calculation arises in an economy which is perpetually subject to change ... In order to solve such problems it is above all necessary that capital be withdrawn from particular undertakings and applied in other lines of production ... [This] is essentially a matter of the capitalists who buy and sell stocks and shares, who make loans and recover them, who speculate in all kinds of commodities”<ref> Mises 1922 [1936] p121</ref>
Mises

The existence of financial markets is a necessary condition for economic calculation. The existence of financial markets itself does not automatically imply that entrepreneurial speculation will tend towards efficiency. Mises claimed that speculation in financial markets tends towards efficiency because of a “trial and error” process. Entrepreneurs who commit relatively large errors in investment waste their funds over expanding some lines of production at the cost of other more profitable ventures where consumer demand is higher. The entrepreneurs who commit the worst errors by forming the least accurate expectations of future consumer demands incur financial losses. Financial losses remove these inept entrepreneurs from positions of authority in industry.

Entrepreneurs who commit smaller errors by anticipating consumer demand more correctly attain greater financial success. The entrepreneurs who form the most accurate opinions regarding the future state of markets (i.e. new trends in consumer demands) earn the highest profits and gain greater control of industry. Those entrepreneurs who anticipate future market trends therefore waste the least amount of real capital and find the most favorable terms for finance on markets for financial capital. Minimal waste of real capital goods implies the minimization of the opportunity costs of capital- economic calculation. The value of capital goods is brought into line with the value of future consumer goods through competition in financial markets, because competition for profits among capitalists financiers rewards entrepreneurs who value capital more correctly (i.e. anticipating future prices more correctly) and eliminates capitalists who value capital least correctly.

To sum things up, the use of money in trading all goods (capital/labor and consumer) in all markets (spot and financial) combined with profit driven entrepreneurship and Darwinian natural selection in financial markets all combine to make rational economic calculation and allocation the outcome of the capitalist process.

Mises insisted that socialist calculation is impossible because socialism precludes the exchange of capital goods in terms of a generally accepted medium of exchange, or money. Investment in financial markets determines the capital structure of modern industry with some degree of efficiency. The egalitarian nature of socialism prohibits speculation in financial markets. Mises therefore concluded that socialism lacks any clear tendency towards improvement in the capital structure of industry.

===Example===
Von Mises gave the example of choosing between producing wine or oil:
{{cquote|
It will be evident, even in the socialist society, that 1,000 hectolitres of wine are better than 800, and it is not difficult to decide whether it desires 1,000 hectolitres of wine rather than 500 of oil. There is no need for any system of calculation to establish this fact: the deciding element is the will of the economic subjects involved. But once this decision has been taken, the real task of rational economic direction only commences, i.e. economically, to place the means at the service of the end. That can only be done with some kind of economic calculation. The human mind cannot orientate itself properly among the bewildering mass of intermediate products and potentialities of production without such aid. It would simply stand perplexed before the problems of management and location.<ref name="Mises" />}}

Such intermediate products would include land, warehouse storage, bottles, barrels, oil, transport, etc. Not only would these things have to be assembled, but they would have to compete with the attainment of other economic goals. Without pricing for capital goods, essentially, Mises is arguing, it is impossible to know what their rational/most efficient use is. Investment is particularly impossible, as the potential future outputs, which cannot be measured by any current standard, let alone a monetary one required for economic calculation. The value consumers have for current consumption over future consumption cannot be expressed, quantified or implemented, as investment is independent from savings.

==Implementation of central planning decisions==

Hayek, in [[The Road to Serfdom]], also argues that the central administrative resource allocation, which often must take away resources and power from subordinate leader and groups, necessarily requires and therefore selects ruthless leaders and the continued strong threat of coercion and punishment in order for the plans to be somewhat effectively implemented. This, in combination of the failures of the central planning, slowly leads socialism down the road to an oppressive dictatorship.<ref>{{cite book
| last = Hayek
| first = Friedrich
| authorlink = Friedrich Hayek
| title = [[The Road to Serfdom]]
| publisher = [[University of Chicago Press]]
| edition = 50th anniversary ed.
| date = 1994
| isbn = 0-226-32061-8}}</ref>

==Counter arguments==
===Scale of Problem===

One criticism, though, has been that proponents of the problem overstate the strength of their case, in describing socialism as impossible, rather than inefficient.<ref>{{cite book
| last = Boettke
| first = Peter J.
| authorlink = Peter J. Boettke
| coauthors = Peter T. Leeson
| year = 2004
| title = Socialism: still impossible after all these years
| url = http://www.mises.org/journals/scholar/Boettke.pdf
| publisher = Ludwig von Mises Institute
| format = PDF
| accessdate = 2007-04-03}}</ref>

[[Bryan Caplan]] is a mainstream economist and wrote a piece explaining why he 'is not an [[Austrian economist]]'. In it, he discusses the economic calculation debate, and, while admitting that it is a problem for socialism, denies that Mises has shown it to be fatal, or that it is this particular problem that lead to the collapse of the socialist states.

{{cquote|Austrians have overused the economic calculation argument. In the absence of detailed empirical evidence showing that this particular problem is the most important one, it is just another argument out of hundreds on the list of arguments against socialism. How do we know that the problem of work effort, or innovation, or the underground economy, or any number of other problems were not more important than the calculation problem?<ref>[http://www.gmu.edu/departments/economics/bcaplan/whyaust.htm Why I Am Not an Austrian Economist<!-- Bot generated title -->]</ref>}}

An Austrian response to this claim is that most national attempts at socialism have relied upon capitalist markets, foreign and domestic, to determine the socialist system's accounting prices, observe successful innovations, and even import and export goods. Domestic black markets and gift-systems such as the Soviet's blat would expose socialism to market calculations. Global socialism, completely reliant upon central planning, would not have such methods to make socialism in tune with capitalist successes.<ref>[http://mises.org/story/2401 The End of Socialism and the Calculation Debate Revisited - Murray N. Rothbard - Mises Institute<!-- Bot generated title -->]</ref>

=== Efficiency of Markets ===
Another counter-argument is to dispute the claim that a free market is efficient at resource allocation. [[Alec Nove]] argues that in "Economic Calculation in the Socialist Commonwealth" von Mises "tends to spoil his case by the implicit assumption that capitalism and optimum resource allocation go together",<ref>{{cite book
|first= Alec
|last= Nove
|authorlink= Alec Nove
|editor= Alec Nove & D. M. Nuti
|title= Socialist economics: selected readings
|year= 1972
|publisher= Penguin books
|location= Harmondsworth, Middlesex}}</ref> and

Mainstream economists, such as [[Paul Samuelson]] have argued however that markets are, on the whole, allocatively efficient{{Fact|date=April 2008}}.

[[Joan Robinson]] claims many prices in modern capitalism are effectively "administered prices" created by "quasi monopolies", thus challenging the connection between capital markets and rational resource allocation.<ref>{{cite book
|first= Joan
|last= Robinson
|authorlink= Joan Robinson
|editor= Alec Nove & D. M. Nuti
|title= Socialist economics: selected readings
|year= 1972
|publisher= Penguin books
|location= Harmondsworth, Middlesex}}</ref>

[[Milton Friedman]] agreed that markets with monopolistic competition are not efficient. However, in countries with [[free trade]] the pressure from foreign competition makes monopolies behave in a competitive manner.<ref> Free to Choose, Milton Friedman, 1979, Secker and Warburg</ref> In countries with protectionist policies foreign competition cannot fulfill this role, but the threat of potential competition- that, were companies to abuse their position, new rivals could emerge and gain customers dissatisfied with the old companies, can still reduce the inefficiencies.

It is argued, however, that monopolies and big business are not generally the result of a free market, but government privileges, otherwise known as state capitalism, which Mises and other Austrians argued adamantly against. State capitalism incorporates central planning into a national economy, which removes power from individual calculation and moves it towards bureaucrats and politicians, similarly to socialism.

Socialists retort that [[natural monopolies]] and strict [[oligopolies]] even in a [[free market]] disprove the Austrian argument. <ref>http://papers.ssrn.com/sol3/papers.cfm?abstract_id=247490</ref>

===Other responses===

It has also been claimed that the contention that finding a true economic equilibrium is not just hard but impossible for a central planner applies equally well to a market system; As any Universal [[Turing Machine]] can do what any other Turing machine can, a system of dispersed calculators (i.e. a market) has no in principle advantage over one central calculator.<ref>>{{cite book
| last = Cottrell
| first = Allin
| authorlink = Allin Cottrell
| coauthors = Paul Cockshott, Greg Michaelson
| year = 2007
| title = Is Economic Planning Hypercomputational? The Argument from Cantor Diagonalisation
| url = http://www.macs.hw.ac.uk/~greg/publications/ccm.IJUC07.pdf
| publisher = International Journal of Unconventional Computing
| format = PDF
| accessdate = 2008-03-13}}</ref>

Some writers have gone on to suggest that with detailed use of real unit accounting and demand surveys a planned economy could operate without a capital market, in a situation of [[Abundance (economics)| abundance]],<ref>{{cite book
|last= Ticktin
|first= Hillel
|authorlink= Hillel Ticktin
|editor= [[Bertell Ollman]]
|title= Market Socialism: The Debate Among Socialists
|year= 1997
|publisher= Routledge
|location= New York; London
|isbn= 0-415-91967-3}}</ref><ref>{{cite book
|last= Neurath
|first= Otto
|authorlink= Otto Neurath
|title= Economic writings: selections 1904-1945
|year= 2004
|publisher= Kluwer Academic
|location= Dordrecht; London
|isbn= 1402022735}}</ref> The purpose of the price mechanism is to allow individuals to recognise the [[opportunity cost]] of decisions: in a state of abundance, there is no such cost.

====Steady state====

Robinson also noted that in a [[Steady state (macroeconomics)|non-growth economy]] (what Marxists would call a situation of [[simple reproduction]]) there would be an effective abundance of means of production, and so markets would not be needed.<ref>{{cite book
|first= Joan
|last= Robinson
|authorlink= Joan Robinson
|title= An essay on Marxism
|publisher= Macmillan
|location= London
|year= 1966
|isbn= 0333020812}}</ref> Von Mises acknowledged such a theoretical possibility in his original tract: {{cquote|The static state can dispense with economic calculation. For here the same events in economic life are ever recurring; and if we assume that the first disposition of the static socialist economy follows on the basis of the final state of the competitive economy, we might at all events conceive of a socialist production system which is rationally controlled from an economic point of view.<ref name="Mises" />}}He contended, however, that stationary conditions never prevail in the real world. Changes in economic conditions are inevitable; and even if it were, the transition to socialism would be so chaotic as to preclude the existence of such a steady state from the start.<ref name="Mises" />

==== Project Cybersyn ====
[[Project Cybersyn]] is an example of attempting to plan the [[Economic history of Chile|Chilean Economy]] through computer-aided calculation. It consisted of Telex machines located in workplaces communicating information in real time to a central control system. Its overall impact is difficult to assess, as it was destroyed in 1973.

==Bibliography==
* Boettke, Peter 1990 ''The Political Economy of Soviet Socialism''
* Caldwell, B: 1997. Hayek and Socialism The Journal of Economic Literature V35 1856-1890
* Cottrell, Allin and Cockshott WP "Calculation, Complexity and Planning: The socialist calculation debate once again" Review of Political Economy
* Dickinson HD 1933 Price Formation in a Socialist Community in ''The Economic Journal''
* Dickinson, HD 1939 ''The Economics of Socialism''
* Hayek, FA 1935 ''Collectvist Economic Planning''
* Hayek FA 1937 Economics and Knowledge ''Economica'' V4 N13 33-54.
* Hayek FA 1940 The Competitive "Solution" ''Economica'' V7 N26 pp 125-149
* Hayek, FA The Road to Serfdom
* Hayek, FA 1945 The Use of Knowledge in Society ''The American Economic Review''
* Hayek, FA 1952 ''The Counter Revolution of Science''
* Hayek, FA 1967 The New Confusion about Planning
* Kirzner, Israel 1973 ''Competition and Entrepreneurship''
* Lavoie, Don 1985 ''Rivalry and Central Planning''
* Oscar Lange On the Economic Theory of Socialism I, 1936, Review of Economic Studies. V4 N1 53-71
* Oscar Lange 1937 "On the Economic Theory of Socialism II, . Review of Economic Studies. V4 N 123-142
* Oscar Lange ''On the Economic Theory of Socialism'', 1938.
* Oscar Lange 1942 The Economic Operation of a Socialist Society I+II Contributions to Political Economy V6 p3-12, 13-24
* Oscar Lange 1957a Political Economy of Socialism
* Oscar Lange 1957b. Role of Planning in a socialist economy
* Oscar Lange 1967 The Computer and the Market in Socialism, Capitalism, and Economic Growth Feinstein Ed.
* Lachmann, L: 1978 ''Capital and Its Structure''. Sheed, Andrews, and McMeel, Kansas City
* Lavoie, D: 1981. A Critique of the Standard Account of the Socialist Calculation Debate Journal ofLibertarian Studies N5 V1 41-87
* Lavoie, Don 1985 ''Rivalry and Central Planning''
* Lerner, AP 1934 Economic Theory and Socialist Economy The Review of Economic Studies V2 N1 51-61
* Lerner, AP 1936 A note on Socialist Economics The Review of Economic Studies V4 N1 72-76
* Lerner, AP 1937 Statics and Dynamics in Socialist Economics The Economic Journal V47 N186 253-270
* Lerner, AP 1938 Theory and Practice in Socialist Economics The Review of Economic Studies V6 N1 71-5
* Lerner, AP 1944 ''The Economics of Control''
* MacKenzie, DW 2008 "Social Dividends, Bureacratic Rules, and Entrepreneurial Discretion" Eastern Economic Journal
* MacKenzie, DW 2006 "Oscar Lange and the Impossibility of Economic Calculation", Studia Economicze
* Mises LE 1912 ''The Theory of Money and Credit''
* Mises LE 1920 Economic Calculation in the Socialist Commonwealth, reprinted in Hayek (1935)
* Mises LE 1922[1936] ''Socialism, and Ecomomic and Sociological Analysis''
* Mises 1933 Planned Economy and Socialism; reprinted in Selected Writings of Ludwig von Mises, The Liberty Fund (2002) Richard M Ebeling ed.
* Mises LE 1944 ''Bureacracy''
* Mises LE 1944 ''Omnipotent Government''
* Mises LE 1949 ''Human Action''
* Mises LE 1957 ''Theory and History''
* Roemer, John (1994). ''A Future for Socialism'', Verso Press.
* Stiglitz, J: 1994. Whither Socialism? MIT Press
* Vaughn, Karen. 1980. Economic Calculation under Socialism: The Austrian Contribution. Economic Inquiry 18:535–54
* Yunker, James A. Post-Lange Market Socialism" 1995, Journal of Economic Issues


==References==
==References==
*{{1911}}
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==See also==

* [[Enrico Barone]]
* [[Ludwig von Mises]]
* [[Friedrich Hayek]]
* [[Otto Neurath]]
* [[Austrian School]]
* [[Socialism]]
* [[Post scarcity]]


{{Steinburg-geo-stub}}
==External links==
{{Cities and towns in Steinburg (district)}}
*[http://the-idea-shop.com/article/97/the-socialist-economic-calculation-debate-and-the-austrian-critique-of-central-planning The Socialist Calculation Debate and the Austrian Critique of Central Economic Planning] by [[Andrew Chamberlain]]
*[http://www.mises.org/humanaction/chap26sec1.asp The Impossibility of Economic Calculation Under Socialism] by [[Ludwig von Mises]]
*[http://www.missouri.edu/~econ4mp/Econ_4345/syl_articles/Hayek_The%20Use%20of%20Knowledge%20in%20Society%20(F.A.pdf The Use of Knowledge in Society] by [[Friedrich Hayek]]
*[http://www.mises.org/journals/scholar/mackenzie10.pdf Oskar Lange and the Impossibility of Economic Calculation] by D.W. MacKenzie
*[http://www.mises.org/journals/scholar/Boettke.pdf Socialism: Still Impossible After All These Years] by [[Peter J. Boettke]] and Peter T. Leeson
*[http://www.cvoice.org/cv3cox.htm The “Economic Calculation” controversy: unravelling of a myth] by Robin Cox
*[http://www.mises.org/misesreview_detail.asp?control=267 Must Economies Be Rational?] by [[David Gordon]]
*[http://www.econ-pol.unisi.it/pubdocenti/HEI99.pdf The economics of information, market socialism and Hayek's legacy]
*[http://reality.gn.apc.org/econ/hayek.htm Information and Economics: A Critique of Hayek] by Allin F. Cottrell and W. Paul Cockshott
*[http://www.mises.org/journals/qjae/pdf/qjae7_1_6.pdf Review Essay to ''Towards a New Socialism?'' by Allin F. Cottrell and W. Paul Cockshott] by Len Brewster
*[http://www.libertarian.co.uk/lapubs/econn/econn046.pdf Real Socialism Wouldn't Work Either]
*[http://www.ecn.wfu.edu/~cottrell/socialism_book/calculation_debate.pdf Calculation, Complexity and Planning: The Socialist Calculation Debate Once Again]
*[http://www.mises.org/story/2401 The End of Socialism and the Calculation Debate Revisited] by [[Murray Rothbard]]
*[http://www.mises.org/journals/rae/pdf/rae9_1_13.pdf Socialism: A Property or Knowledge Problem?] by [[Hans-Hermann Hoppe]]


[[Category:History of economic thought]]
[[Category:Towns in Schleswig-Holstein]]
[[Category:Comparative economic systems]]
[[Category:Austrian School]]
[[Category:Economic theories]]
[[Category:Economic planning]]
[[Category:Socialism]]
[[Category:Economic problems]]


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Revision as of 03:49, 11 October 2008

Itzehoe
Town
Coat of arms of Itzehoe
Coat of arms
Location of Itzehoe
Map
CountryGermany
StateSchleswig-Holstein
DistrictSteinburg
Government
 • MayorRüdiger Blaschke
Area
 • Total28.03 km2 (10.82 sq mi)
Elevation
22 m (72 ft)
Population
 (2022-12-31)[1]
 • Total32,258
 • Density1,200/km2 (3,000/sq mi)
Time zoneUTC+01:00 (CET)
 • Summer (DST)UTC+02:00 (CEST)
Postal codes
25501 − 25524
Dialling codes04821
Vehicle registrationIZ
Websitewww.itzehoe.de

Itzehoe [ɪtsəˈhoː] is a town in Germany, in the Bundesland of Schleswig-Holstein, the capital of the district of Steinburg.

It is located on the Stör, a navigable tributary of the Elbe, 51 km northwest of Hamburg and 24 km north of Glückstadt. The population is about 34,900.

The church of St Lawrence, dating from the 12th century, and the building in which the Holstein estates formerly met, are noteworthy. The town has a convent founded in 1256, many schools, a hospital and other benevolent institutions. Itzehoe is a busy commercial place.

Itzehoe is the oldest town in Holstein. Its nucleus was a castle, built in 809 by Egbert, one of Charlemagne's counts, against the Danes. The community which sprang up around it was variously called Esseveldoburg, Eselsfleth and Ezeho. In 1201 the town was destroyed, but it was restored in 1224. The new town was granted the Lübeck rights by Adolphus IV in 1238, and the old town in 1303. During the Thirty Years' War Itzehoe was twice destroyed by the Swedes, in 1644 and 1657, but was rebuilt on each occasion. It passed to Prussia in 1867, with the duchy of Schleswig-Holstein. Itzehoe is listed as a garrison depot (Wehrkreis X, Hamburg) of the former Infanteriedivision 225. which was implicated in the 1940 Vinkt Massacre in Belgium.

Itzehoe is also the location of the Wenzel Hablik Museum.


During the period up to and including the Wacken Open Air festival, many festival goers chose to depart for the festival from Itzehoe using the 'Metal Shuttle Bus' which departs from the station area. During this time, the town can become very overcrowded and traffic; slow.


Germany's lowest elevation is to be found a short distance from Itzehoe, in the Wilstermarsch, which reaches 3.54 m below sea level.

References

  • Public Domain This article incorporates text from a publication now in the public domain: Chisholm, Hugh, ed. (1911). Encyclopædia Britannica (11th ed.). Cambridge University Press. {{cite encyclopedia}}: Missing or empty |title= (help)
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This Steinburg location article is a stub. You can help Wikipedia by expanding it.

  1. ^ "Bevölkerung der Gemeinden in Schleswig-Holstein 4. Quartal 2022" (XLS) (in German). Statistisches Amt für Hamburg und Schleswig-Holstein.
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