Socialist Calculation

April 21, 2010

So that title isn’t just inflammatory name-calling, but rather I’m referring to a real debate that was popular throughout the 30’s-40’s among economists. Ludwig von Mises gives one example. Sometimes I think I’m wasting my time reading about and studying socialism, since that debate has been settled since 1989. But it lingers in some places:

There is an identical census ad that uses “schools” in place of “hospitals.”

Compare with this article:

German:

“In den Restaurants war fast immer das Essen aus“

Wer jemals in einem Restaurant in der DDR aß, kennt folgenden Gesprächsablauf: „Ich hätte gern das Schnitzel mit Kartoffeln.“ „Das ist aus.“ „Dann nehme ich das Gulasch mit Nudeln.“ „Das ist auch aus.“ „Ja was haben Sie denn noch?“ „Nur die Bockwurst mit Brot!“

In der DDR hießen die Restaurants Versorgungseinrichtungen. Was dort auf der Speisekarte stand, hing nicht davon ab, was die Kunden am liebsten bestellten. Die Zutaten wurden vielmehr vom Ministerium für Handel und Versorgung zugeteilt. So kam es, dass mal besonders viel Rotkohl auf der Karte stand und man an anderen Tagen hauptsächlich Eiergerichte bestellen konnte. Die Preise für die Menüs waren genau vorgeschrieben, erzählt Daniela Ringpfeil, die vor der Wende mit ihrem Mann Gören eine Gaststätte im Ort Grüngräbchen in Sachsen führte: „Es gab Vorgaben, wie viel Prozent Fleisch in einem Gericht enthalten sein musste, wie viel Gemüse und wie viel Kartoffeln. Anhand dieser Anteile mussten wir dann die Preise der Menüs genau ausrechnen. Und wenn wir Hochzeitsfeiern in der Gaststätte hatten, haben wir manchmal Ausgefallenes wie Ananas, Champignons oder Mandarinen besorgt.“ Dafür mussten die Ringpfeils dann teilweise stundenlang durchs Land fahren.

English:

“The restaurants were almost always ‘out of’ everything”

Anyone who has eaten in a restaurant in the GDR knows the following conversation: “I’d like the Schnitzel with potatoes.” “We’re out of that.” “Then I’ll take the Goulasch with noodles.” “We’re out of that, too.” “Okay, so what do you have?” “Just Bockwurst with bread.”

In the GDR, restaurants were public services. The items on the menu didn’t depend on what the customers would have liked to order, but rather the ingredients determined by the Ministry of Commerce and Public Provision. Thus it was that on some days, lots of red cabbage would be on the menu, and on others, you’d have mainly egg-based dishes. And the prices of the meals were strictly regulated, according to Daniela Ringpfeil, who before the fall of the Wall ran a small restaurant in Grüngräbchen in Sachsen with her husband. “It was regulated, what percent meat a dish had to contain, what percent vegetables, what percent potatoes. Given these proportions, we had to calculate exactly what a meal should cost. If we had a wedding reception, we sometimes had special treats like pineapple, mushrooms, or tangerines.” To get those, the Ringpfeils would sometimes have to take hour-long trips through the country.

So those census ads annoy me.

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2 Responses to “Socialist Calculation”

  1. Tom Says:

    I’m not sure how knowing how man people live an a certain area equals socialist government regulation. What would you suggest instead?


  2. I’m really not anti-Census, and I don’t think the Census equals socialism or is an example of socialist intrusion on our liberty as Americans.

    But imagine they had run an ad similar to the Census ad in the GDR. “If we don’t know how many people are in an area, how do we know how many restaurants to build?” And yet the restaurants they built didn’t contain the food that people actually wanted to eat.

    Knowing how many people are in an area is fine, but the way that producers know what to produce and in what quantities is via price signals, not by counting the population.

    One of my classmates points out that private companies use Census data in making decisions about where to build, too. Fine.

    Again, I don’t care about the Census, I care about the ad. And I probably don’t care that much about the ad.


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