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effects of similar improvements in similar private undertakings at home and abroad. In such concerns it is still possible to ascertain the advantages of reorganization because theyare surrounded by a society which is still based upon private ownership in the means of production andthe use of hi. it is still possible for them to keep books and make calculations which for similar concerns in a purely socialist environment would be



entirely out of the question. Withoutcalculation, economic activity is impossible. Since under Socialismeconomic calculation is impossible, under Socialism there can be no economic activity in our sense of the word. In small and insignificant things rational action might still persist. But, for the most part, it would no longer be possible to speak of rational production. In the absence of criteria of rationality, production could not be consciously economical.



[78] For some time possibly the accumulated tradition of thousands of years of economic hidom would preserve the art of economic administration from complete disintegration. Men would preserve the old processes, not because they were rational, but because they were sanctified by tradition. In the meantime, however, changing conditions would make them irrational.They would become uneconomical as the result of changes brought about bythe general decline of economic thought. It is true that production would no longer be “anarchical.” The command of a supreme authority would govern the hi of supply. instead of the economy of “anarchical” production the senseless order of an irrational machine would be supreme. The wheels would


go round, but to no effect. Let us try to imagine the position of a socialist community. There will be hundreds and thousands of establishments in which work is going on. A minority of these will produce goods ready for use. The majority will produce capital goods and semi-manufactures. All these establishments will be closely connected. each commodity produced will phi through a whole series of such establishments before it is ready for consumption. Yet in the incessant press of all these processes the economic administration will have no real sense of direction. It will have no means of ascertaining whether a given piece of work is really necessary, whetherlabour and materialare not being wasted in completing it. How would it discover which of two processes was the more satisfactory? At best, it could compare the quantity of ultimate products. But only rarely could it compare the expenditure incurred in their production. It would know exactly—or it would imagine it knew—what it wanted to produce. It ought therefore to set about obtaining the desired results with the smallest possibleexpenditure. But to do this it would have to be able to make calculations.And such calculationsmust be calculations of value. They could not be merely “technical,” they could not be calculations ofthe objective use-value of



goods and services; this is so obvious that it needs no further demonstration. Under a system based upon private ownership in the means of production, the scale of values is the outcome of the actions of every independent member of society. Everyone plays a two-fold part in its establishment first as a consumer, secondlyas producer. As consumer, he establishes the valuation of goods ready forconsumption. As producer, he guides production-goods into those uses in which they yield the highest product. In this way all goods of higher orders also are graded in the way appropriate to them under .









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