Neoclassical versus complexity economics: the socialist calculation debate as a clash of paradigms

Abstract

Recently, the historical socialist calculation debate seems to have revived. Since the fall of the Soviet Union, some socialist authors have continued the apparently concluded calculation debate. One of the main ideas behind this revival held by the socialist side is that the latest advances in computation capacity enable central planning, thus overcoming past Austrian arguments based on information and knowledge problems. But beyond this specific argument, what really underlies this new round of the socialist calculation debate is the sign of a paradigm shift in economics. Concretely, a shift from neoclassical economics to the so-called complexity economics. This paper reassesses the socialist calculation debate, including the latest rounds and contributions, which precisely mark the paradigm shift. As it is argued in the article, socialists have refined their position by abandoning neoclassical theory and adopting a complexity perspective on which Austrians have been based from the beginning. Therefore, our analysis attaches even more importance to the socialist calculation debate than it is typically attributed since it sees it as a transcendental event in the history of economics. The calculation debate signifies a clash of paradigms, and its development serves us to indicate how this clash is evolving: the first rounds of the socialist debate can now be seen as a conflict between two competing economic paradigms, and the newest rounds as the consolidation of complexity economics over neoclassical theory. Likewise, this complexity view of the historical event can help determine the conclusion of the debate.

Keywords: Socialist calculation debate, complexity economics, paradigm shift, neoclassical economics, Austrian economics

JEL Classification: B20, B51, B53