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Socialist alternatives to capitalism I: Marx to Hayek


  • Duncan Foley

    (Department of Economics, New School for Social Research)


This paper surveys the development of the concept of socialism from the French Revolution to the socialist calculation debate. Karl Marx’s politics of revolutionary socialism led by an empowered proletariat nurtured by capital accumulation envisions socialism as a “top-down” system resting on political institutions, despite Marx’s keen appreciation of the long-period analysis of the organization of social production in the classical political economists. Collectivist thinking in the work of Enrico Barone and Wilfredo Pareto paved the way for the discussion of socialism purely in terms of the allocation of resources. The Soviet experiment abandoned the mixed economy model of the New Economic Policy for a political-bureaucratic administration of production only loosely connected to theoretical concepts of socialism. The socialist calculation debate reductively recast the problem of socialism as a problem of allocation of resources, leading to general equilibrium theory. Friedrich Hayek responded to the socialist calculation debate by shifting the ground of discussion from class relations to information revelation.
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Suggested Citation

  • Duncan Foley, 2017. "Socialist alternatives to capitalism I: Marx to Hayek," Working Papers 1705, New School for Social Research, Department of Economics.
  • Handle: RePEc:new:wpaper:1705

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    References listed on IDEAS

    1. Mandler, Michael, 2001. "Dilemmas in Economic Theory: Persisting Foundational Problems of Microeconomics," OUP Catalogue, Oxford University Press, number 9780195145755.
    2. Jonathan F. Cogliano, 2011. "Smith’s “Perfect Liberty” and Marx’s Equalized Rate of Surplus-Value," Working Papers 1108, New School for Social Research, Department of Economics.
    3. Foley, Duncan K., 2010. "What's wrong with the fundamental existence and welfare theorems?," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 115-131, August.
    4. Ellman,Michael, 2014. "Socialist Planning," Cambridge Books, Cambridge University Press, number 9781107074736.
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    Blog mentions

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    1. Altruismo, incentivi e informazione: due o tre cose che so sull’esperienza socialista
      by Sergio Cesaratto in Politica&EconomiaBlog on 2017-11-26 14:19:00


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    Cited by:

    1. Emilio Carnevali & André Pedersen Ystehede, 2023. "Is socialism back? A review of contemporary economic literature," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 239-270, April.

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