Otto Neurath
The design of an appropriate accounting system posed a difficult problem for Marxist economists which they tried to cope with by using the labour hour as an accounting unit (Chaloupek 1990).
In this context, the most radical, but also most controversial contribution to the post-war socialization debate came from the Austrian philosopher and social scientist Otto Neurath (1882-1945) (1919 [1979]: 14) with his proposition that production in a socialist economy would be carried out according to a central plan based on accounting in kind (“Naturalrechnung” - accounting in natural terms). Neurath thought that the war economy was sufficient proof for the feasibility of his natural economy. On the basis of utilitarian economic reasoning, “the maximum degree of happiness, of life disposition of the population, of utility as the goal of a socialist economy” (Neurath 1925: 394) could be chosen among alternatives only by a democratic decision, based on detailed comparisons of a variety of alternatives, showing possible combinations of inputs and outcomes in natural terms. Despite its practical irrelevance, Neurath’s idea attracted considerable attention, though the reactions were overwhelmingly negative. If Ludwig von Mises (1922: 79) cited Neurath as a witness of the impossibility of rational calculation in a socialist economy, the socialists hastened to reject the idea of accounting in kind in order to ward off damage for their political seriousness (Kautsky 1922: 308; Leichter 1923: 77).
More on the topic Otto Neurath:
- Otto Neurath
- Economics and Mathematics in Interwar Vienna
- The two Vienna schools: the Mathematisches Kolloquium and the Kreis
- Ludwig Heinrich von Mises was born in Lemberg (capital of Galicia, then a province of the Habsburg empire, today Lviv, Ukraine) on 29 September 1881 and died in New York 18 October 1973.