Socialist calculation debateThe socialist calculation debate, sometimes known as the economic calculation debate, was a discourse on the subject of how a socialist economy would perform economic calculation given the absence of the law of value, money, financial prices for capital goods and private ownership of the means of production. More specifically, the debate was centered on the application of economic planning for the allocation of the means of production as a substitute for capital markets and whether or not such an arrangement would be superior to capitalism in terms of efficiency and productivity.
Calculation in kindNOTOC Calculation in kind or calculation in-natura is a way of valuating resources and a system of accounting that uses disaggregated physical magnitudes as opposed to a common unit of calculation. As the basis for a socialist economy, it was proposed to replace money and financial calculation. In an in-kind economy products are produced for their use values (their utility) and accounted in physical terms. By contrast, in money-based economies, commodities are produced for their exchange value and accounted in monetary terms.
ClockwiseTwo-dimensional rotation can occur in two possible directions. Clockwise motion (abbreviated CW) proceeds in the same direction as a clock's hands: from the top to the right, then down and then to the left, and back up to the top. The opposite sense of rotation or revolution is (in Commonwealth English) anticlockwise (ACW) or (in North American English) counterclockwise (CCW). Before clocks were commonplace, the terms "sunwise" and "deasil", "deiseil" and even "deocil" from the Scottish Gaelic language and from the same root as the Latin "dexter" ("right") were used for clockwise.
Cardinal directionThe four cardinal directions, or cardinal points, are the four main compass directions: north, south, east, and west, commonly denoted by their initials N, S, E, and W respectively. Relative to north, the directions east, south, and west are at 90 degree intervals in the clockwise direction. The ordinal directions (also called the intercardinal directions) are northeast (NE), southeast (SE), southwest (SW), and northwest (NW). The intermediate direction of every set of intercardinal and cardinal direction is called a secondary intercardinal direction.
Economic calculation problemThe economic calculation problem (sometimes abbreviated ECP) is a criticism of using economic planning as a substitute for market-based allocation of the factors of production. It was first proposed by Ludwig von Mises in his 1920 article "Economic Calculation in the Socialist Commonwealth" and later expanded upon by Friedrich Hayek. In his first article, Mises described the nature of the price system under capitalism and described how individual subjective values (while criticizing other theories of value) are translated into the objective information necessary for rational allocation of resources in society.
