> Mises and Hayek advanced, successfully as far as I can tell, a conception of
> prices as a way of communicating information about productivity and
> efficiency to various agents so that they can act accordingly without
> needing detailed information about the entire economy. Albert's Parecon and
> C&C's ideas about socialism - as well as all forms of "market socialism" -
> seem to start with a flat admission that this analysis is accurate. I can't
> see how Hayek and Mises point about the nature of markets has any bearing on
> the defense of capitalism. They certainly don't seem to me to have made the
> case that the current means of distributing information to agents and the
> heuristics they use to act on that information is the best _possible_ way to
> manage economic activity.
I think questions can be raised about the internal consistency of the Mises/Hayek argument respecting prices as communicators of information etc. but the question I was raising was much more fundamental. I think the premises are unrealistic even as a starting point for analysis of markets in capitalism let alone for drawing conclusions about socialism or communism. The premises are radically different from Marx's.
The starting point of Austrian economics (Mises, Hayek, Robbins etc.) is that we have ends and limited means for achieving them. Using means "efficiently" means realizing from their use the best of the limited set of possibilities such limited means allow. This seems unobjectionable. The content given to it, however, is radically inconsistent with Marx.
The Austrians claim not to be making any particular assumptions about ends. But this isn't so. They don't allow for ends as these are conceived by Marx for whom the end of existence is a "good" life understood as one in which "love" and "beauty" - concepts with very particular meanings expressing knowledge of objective values - are realized. While the Austrian conception allows for all sorts sorts of things to count as ends that the ordinary use of the word "consumption" doesn't suggest, it doesn't allow for love and beauty in Marx's sense as ends at all let alone as the ultimate ends.
One sign of this is insatiability. Desire conceived in the Austrian way can never be fully satisfied. Individuals always prefer more of the "stuff" of happiness as this stuff is conceived in this scheme. They are insatiably "greedy".
This isn't true of Marx's conception of ends. In that conception (which doesn't of course originate with Marx - this is why the same conception can be found in Keynes who foolishly despised Marx) what Hayek et al are treating as ultimate ends are themselves treated as means. "Consumption" is a means to the good life, not the good life itself. A life of relations of mutual recognition whose content is beauty is a life of desire satisfied. This imposes a limit on the means. They must be what is required for the actualization of the good life. Among other things, the time spent producing means has to be minimized in order to create maximum time for the good life itself. The needs which production in the "realm of necessity" satisfies include the provision of what is required for the production of "beauty" in the "realm of freedom."
This is one obvious way in which the conception of "rationality" in Hayek differs radically from the conception in Marx. Hayek assumes rationality can only be instrumental; reason must be the "slave" of the passions.
Instrumental reason is also identified with deductive reasoning from axioms - maximizing a "utility" function etc. In Marx even instrumental reason involves much more than this. Formal logic is subsumed within human logic e.g. the assumptions from which deductive reasoning begins are themselves a topic for rational determination ( philosophy, as conceived within this conception of rationality e.g. by Whitehead, is "the search for premises, it is not reasoning from premises"). Moreover, what is to be reasoned about will not always allow for deductive reasoning particularly formalized deductive reasoning making use of the logical concept of a "variable". Internal relations, for instance, often work in a way that makes such reasoning inapplicable. This is particularly true in reasoning about ends because the good is an "organic unity" in the sense of internal relations. The "beautiful," for instance, can't be fully analyzed into atomic parts; a beautiful whole is more than the sum of its parts (Keynes also insists on this, an idea he's taken from G.E. Moore - he explicitly criticized "utilitarianism" on this ground).
"Rationality" in Marx's sense defines the "universally developed individual." The social ontology Marx adopts makes this kind of subjectivity the outcome of an historical process of internally related stages of "bildung" in which "relations of production" play a key role not in the "determination" of "consciousness" in a deterministic way but in the development of rational self-consciousness, a radically different idea. A corollary is that self-consciousness does not begin as rational, it only becomes rational through a long and difficult process. Self consciousness in capitalism etc. is therefore to some important degree irrational. It's this that's expressed by the dominance of the system by insatiable greed, the misidentification of reason with instrumental reason and of instrumental reason with deductive reasoning from axioms, the fragmentation of reality in "atomistic" modes of thought, the misidentification of "freedom" with "free enterprise" or caprice etc. etc. This produces a framework for the analysis of capitalism and markets radically different from Hayek's. Ditto for communism and the transitional forms that might lead to it.
Ted Winslow