An excellent EconTalk episode with Pete Boettke on the socialist calculation debate.
I like Boettke on the three Ps.
The three Ps–property, prices, and profits and loss. Property incentivizes us. Prices guide us. Profits lure us to new changes and losses discipline us.
Today, “incentives matter” is often considered the first lesson of economics. But not so in the 1930-1940s.
Yeah, it’s so weird to read 1930s economics. Hayek’s colleague, H.D Dickinson, at LSE–when he teaches his course on economics of planning, his first statement is, ‘We will truck with no incentive talk here.’ Okay. Lange, in his famous paper on socialism, says that incentives are psychological problems and therefore not economic theory.
Pete’s new book on the socialist calculation debate with Candella and Truit is very good and available here.
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