Incentives vs. Knowledge: Reply to Caplan

Critical Review, 17(1-2): 179-202, 2005

24 Pages Posted: 23 Mar 2014

See all articles by Rodolfo Gonzalez

Rodolfo Gonzalez

San Jose State University

Edward Peter Stringham

Trinity College; American Institute for Economic Research

Date Written: 2005

Abstract

In the 1920s, Ludwig von Mises argued correctly that the problem of making economics calculations without market-generated prices would be an insuperable difficulty for socialist systems of production. Bryan Caplan is right to argue that there is no theoretical way to infer the magnitude of this difficulty, but he is wrong to insist that the history of poor economic performance displayed by real-world socialism should be attributed not to the "socialist calculation problem," but to inadequate work incentives. A state that had solved the calculation problem would have well within its means the solution to the incentives problem, too.

Suggested Citation

Gonzalez, Rodolfo and Stringham, Edward Peter, Incentives vs. Knowledge: Reply to Caplan (2005). Critical Review, 17(1-2): 179-202, 2005, Available at SSRN: https://ssrn.com/abstract=2088195

Rodolfo Gonzalez

San Jose State University ( email )

San Jose, CA 95192-0066
United States

Edward Peter Stringham (Contact Author)

Trinity College ( email )

Hartford, CT 06106
United States

American Institute for Economic Research ( email )

PO Box 1000
Great Barrington, MA 01230
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
42
Abstract Views
2,621
PlumX Metrics