How Don Lavoie Changed the Debate about Socialism

How Don Lavoie Changed the Debate about Socialism



in terms of history of thought many people viewed ludwig von mises and FA Hyack as having lost the debate about socialism more broadly and globally you had major issues with efforts to actually impose real-world communism and socialism and so throughout the world you had various reform efforts which were trying to deal with the problems that real-world socialist economies were running into and so now all of a sudden you got Lavoie making a theoretical argument about that the Austrians were right after all at the same time that across the globe all the socialist economies are in fact admitting that they can't achieve the socialist goals and Lavoie had now set that stage that the kind of Austrian criticisms could in fact be part of the literature in the mainstream discussion of economics if you wanted to make an argument about socialism you had to deal with the argument the way Lavoie laid it out the carefulness of the scholarship the thoroughness of the scholarship meant that it would be sort of like scholarly irresponsible to not even if you disagreed with it to not have to grapple with a voice book so taken together the two books complement each other nicely on the one hand there's the knowledge problem that is there is the inability of central planners to access the appropriate economic information that is required for coordination and economic progress on the other hand lavoy also emphasizes that when you centralize economic planning it leads to what he calls a power problem that is that it grants those who have control over planning a significant amount of power and control over the lives of ordinary citizens lavoy also emphasized that this analysis of planning applied both to comprehensive economic planning that is efforts to plan the entire economy as well as non comprehensive economic planning in order to engage in planning I have to give authority to either centralized units or even decentralize units but they have final authority and so what happens is our lack of our knowledge means that we still have these peep with power so they're going to make their decisions based on political knowledge rather than economic knowledge and what's the main way in which we end up by using political knowledge is militarization our failure on the economic freedom side generates a militarization of the economy planning is militarization right regimentation allocation all of those things is in fact militarization and so that's why socialism doesn't generate a leftist Dreamland it generates instead you know like May Day parades right when the Soviet Union demonstrates its entire you know military apparatus we can understand that but it's also true in economies that have more decentralized methods so you have to go back to the 1980s you see steel factories going down in Youngstown in Pittsburgh and you see the car industry in Detroit having its problems so one of the answers to that was hey we need to engage in industrial policy in order to fix up these firms not let the new technology come in and and and wipe away not creative destruction and so Lavoie book national economic planning is directed at those kind of policy proposals that were put up many of which came from the left but in fact would result in in outcomes which the left would find deplorable none of them want to have a militarization of the economy but yet this is exactly what happens when we have large comprehensive planning proposals put forward really as political economist what we want to focus on is thinking about what institutional arrangements are feasible in different societies but then the alternative implications of those different institutional arrangements for the well-being of people and what Lavoie is body of work empowers us to do is to not only analyze different institutional alternatives but to think about what the implications are for human freedom so we're Lavoie comes down at the end of his study of real world socialism in real world central planning is the need for a radical agenda and a radical commitment to markets but he argues is that in order to overcome both the knowledge problem and the power problem what is ultimately necessary is to decentralize control and decentralized decision-making all the way down to the individual level and under a regime of private property rights and respect for rules a system where the rule of law exists where no one is above the law lavoy argues that individuals will be able to take advantage of dispersed knowledge but also they will be shielded from concentrated power precisely because no individual or group of individuals has control over the lives of another we treat people as with dignity and respect all human beings and that we don't allow power to be concentrated in the hands of a few right we allow governance not necessarily government power and that's the kind of picture that Lavoie is painting for us and that vision is extremely still attractive today as it was in 1985 we believe that these books are still part of an extended conversation that's essential for advancement in the social sciences

30 Comments on "How Don Lavoie Changed the Debate about Socialism"


  1. All well and good, just make free markets and the rule of law handle everything. But markets cannot function freely except at very local levels, where buyers and sellers CAN keep an eye on one another. Because NYSE and CBOT market makers cannot keep an eye one one another and because hedgers, speculators, and investors cannot keep an eye on each other or on market makers, those exchanges are subject to rules and were once closely policed.

    The rule of law is not some big traffic cop up in the sky. An aggrieved party or prosecutor must call for a trial. The average individual does not have the money to hire a lawyer to pursue a large firm for tortious deeds. A prosecutor will not give Joe Average 'anyone' the time of day.

    Good first swipe, George Mason, but the solutions you praise are too general and up there in the sky with you big, academic guys.

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  2. Social Sciences tend to disregard true human nature. It’s like Physics disregarding the existence of the atom.

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  3. Hogwash. Economics needs only one manuscript. The CM. Long live toilet paper (bread) lines!

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  4. Freedom leads to competition, competition leads to innovation, innovation leads to prosperity. Socialism is based on central planning, thus there is no freedom, thus none of the benefits, thus it fails. The downside of freedom, is that the competition produces winners and losers, and there much more losers then winners. The question then – is how the society is set up to deal with the losers. .

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  5. Socialism is immoral , you don't get to steal someone else's property just because a mob agrees it the right thing to do.

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  6. In order to provide centralized governance you need checks and balances. Got it
    Sounds familiar though 🤔😂

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  7. Bottom line, under Socialism those who work hard to have, must give up shares of what they have to to those who have not because they work not so that "equality" aka social justice is achieved. And the military is there to insure the haves give up what's required of them to the have nots. Social justice is never achieved. My relatives suffered under Italian Fascism, which is Socialism. There is nothing equal, just or fair about Socialism. I don't care what you've read about it.

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  8. Problem with Lavoises theories is Human Nature.. all political entities become Corrupted

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  9. On what planet do you live to say that Ludwig von Mises lost the debate on socialism? The only socialists that acknowledge his arguments say that it's a major blow to it and have no response against it, ignoring an argument doesn't mean you refuted it.

    Also the knowledge problem is not the same thing as the calculation problem that Mises exposed which says that even if you have all the necessary technical knowledge and knowledge of availability of resources, etc. you would still be incapable of planning the economy because you'd be incapable of figuring out which processes of production are the most efficient without prices in the means of production which can only truly arise when you have private property in the means of production.

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  10. Three problems with central planning:
    1) the Holomodor
    2) bureaucrats are pathologically lazy and have no motivation to do anything above and beyond the bare minimum.
    3) the Holomodor

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  11. The comparative topic discussed here is worth another look. Nothing wrong, per se, is said. What we are not looking at — errors of omission — eg. the demand side wastage of socialism (which motivated my friends for years) and the theoretical vs. philosophical boundaries (eg. lack of respect for actual property rights). I am left wondering why it has been so hard for alleged capitalists to note that denial of legitimate property rights is something not to be paved over and not regarded as a fundamental aspect of Marxism-in-action AND capitalism-at-its-beginning (before the title systems kick in). Colonialism was part of capitalism at the beginnings of it in most countries — and the manifestations to native populations were the same.

    In short, we need to do some kind of structure chart of comparative political-economic systems. The gaps in this short video need not have been gaps.

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  12. Crony socialism doesn't work.
    Crony communism doesn't work.
    Crony capitalism doesn't work.
    Maybe there's a pattern in all of this.

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  13. You know the theory y,ou figured out why it works now .. implement it motherfuckers. What's with the mega corporations and international conglomerates?
    You talk a good game but, when it comes to acting out on your convictions….you're stil all commies. You want to control the creation and distribution of wealth.

    Prove me wrong ,do away with your monopolies and disband the FED the IMF and World bank. You wont but, don't tell me you're capitalists.
    Just a bunch of corporatist liars. A truly free market scares you. Just as it scares the fuckers who own you.
    They want to be able to be irresponsible and fall back on mommy government and the money of the poor deluded sheeple it creates.

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  14. What? … The Left hasn't given a damn about "careful argument" for 50 years.

    It's all EMOTION now – and MORALITY … and to HELL with reality! – which is IMMORAL.

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  15. I am kind of new to actually sharing may thoughts, but I think the state that we find our self's in today warrant more open exchange of ideas and views.

    Socialism + time = oppression of the individual and society. because of human nature a "socialist utopia” could never work on a grand scale. The more power a government / individual has to implement "change" in the individual’s everyday life will inevitably lead to a government / individual who will take advantage of said power. Being human beings, we always want more. The founding fathers of the United States knew of this human flaw and because of the flaw set up the system we have (Capitalism) with individual freedom being the main focus with a system of checks and balances to fix mistakes that we as humans unavoidably make (no one is perfect). Capitalism doesn’t always work to secure induvial freedom which kits in the checks and balances part of the plain. However, Capitalism is the most perfect system the world has ever seen to date. Capitalism + time = individual freedom and prosperity worldwide (if implemented). At this time in human history anything else would by immoral.

    "Evil cannot survive the sunlight"
    .

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  16. This certainly is not proof that the problems of Socialism can ever be worked out. Just another theoretical attempt at diagnosing a fatal illness and offering hope that maybe Utopia can still be salvaged. Left unsaid is at what enormous cost to society do we attempt to resuscitate a bad idea!?

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  17. I believe this video to be epistemologically sound and ethically rigorous (though they’re just explaining things in outline).

    That is, the knowledge problem and the calculation problem (and the power problem) are reasons why centralization of decision-making (militarization, regimentation) inevitably and necessarily creates problems. Not just for human reasons, but for purely philosophical (logical) reasons. To solve the undeniable reality of the knowledge problem and the calculation problem (and the power problem) radical economic freedom is the answer. Radical economic freedom coupled with individual property rights protection can’t be divorced from individualism and freedom generally. This is why the ancap is an ancap: it’s the framework which learns from the best of history and solves the problems inherent (at a deeply philosophical and purely logical level) in all previous attempts at governance which make varying use of coercive centralization.

    Once you see the connection between pure undeniable axioms and the irrefutable truth of the various “problems” mentioned above, it changes your perspective. Suddenly all the same political and social issues have an alternative solution that is economically and ethically sound. Though it’s so radically different it’s hard to believe it’s really possible, it sounds so utopian. But then if you keep digging and seriously confront the arguments and find examples in history and innovations in the present to address various criticisms….eventually it can turn you into a believer, I think. For me it took many months of long days studying the issues to convince myself. I’m not sure how to get there when you have real-world commitments. 🙂

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  18. Socialism is idiotic.
    Capitalism is less idiotic.
    Anarchy is the only logical form of community living.

    Reply

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