A Final Word: Calculation, Knowledge, and Appraisement

Leland Yeager's rejoinder "Salerno on Calculation, Knowledge, and Appraisement" (1996) merits a final word, because I believe it makes a subtle though very important concession to the argument made by Rothbard, Herbener, and myself regarding the function of the price system. Before addressing this issue, I will offer comments relating to two other points raised by Yeager in his rejoinder. 1.Yeager (p. 175) denies having said, in his original article (1994), that Salerno, Rothbard, and Herbener (SRH) "equate arithmetic and calculation." While strictly speaking he is correct, I believe it is a quite reasonable inference from the statements he does make when characterizing the problem confronting central planners who are endowed with perfect knowledge of the economic data. As I have discussed in my Reply (Salerno 1994, pp. 120-23), in SRH's interpretation of Mises's argument, granting the unrealistic assumption of complete and perfect information, about either present disequilibrium market conditions or the future final equilibrium state toward which the real market is tending a t any moment, does not obviate the need for monetary calculation provided by the market's pricing process. Yeager (1994, p. 97) states, however, that given "the centralized availability of information," the argument against socialism "boilb) down to a contention about arithmetic." Elsewhere, in questioning the "supposed distinction" that SRH observe in Mises's writings between calculation and knowledge, Yeager (1994, p. 94) remarks "I cannot believe Mises was merely saying that i f the socialist planners possessed in some way all the information normally conveyed by the market prices, they still would be stymied