Ȉȃ Partʺ: Economicswhether particular institutions are desirable. Hayek’s own insight is consis-
tent, though, with points made by Mises and reiterated by Salerno: how-
ever unplanned as a whole the evolution of an institution may be, most
steps in the process were taken by individuals acting rationally in the light
of their own purposes and information. Human rationality must not be
disparaged and blind impersonal processes exalted. Surely, however, there
is no need to imagine a rationalist Mises and irrationalist Hayek at logger-
heads with one another. Nor is there any warrant for imputing to Hayek
the view that “Whatever is, is right”; his writings on economic and politi-
cal reform demonstrate the contrary. Ļe two men’s insights are mutually
reinforcing.
Ļe dehomogenizers particularly disparage Hayek’s elaborations on
Mises’s analysis of why accurate economic calculation is impossible under
socialism. An early example appears in Salerno’sȀȈȈȂarticle, which crit-
icizes several Austrian economists’ diverse contributions to aFestschrift
for Hans Sennholz. Salerno distinguishes between two paradigms. Ļe
“Hayekian” one “stresses the fragmentation of knowledge and its disper-
sion among the multitude of individual consumers and producers as the
primary problem of economic and social cooperation and views the mar-
ket’s price system as the means by which such dispersed knowledge is
ferreted out and communicated to the relevant decision-makers in the
production process” (ȀȈȈȂ, p.ȀȀȄ). Ļe “Misesian” paradigm “focuses on
monetary calculation using actual market prices as the necessary precon-
dition for the rational allocation of resources within an economic system
featuring specialization and the division of labor” (p.ȀȁȄ). Surely, though,
no sharp contrast is warranted. Both strands enter into a full description
of the problem and process of economic calculation.
Salerno emphasizes that numerical data, especially market prices, are
necessary for economic calculation; qualitative information is not enough
(ȀȈȈȂ, p.ȀȁȀ). Without genuine exchanges of factors and genuine market
determination of their prices, central planners could not “cost” resources
and allocate them efficiently or purposefully (p.ȀȂǿ). Agreed: quantita-
tive results—suitable product and factor quantities—presuppose quantita-
tive inputs. Ļese must include, somewhere in the calculation process, the
numerical specifics of utility and production functions. But these, along
with the qualitative information also necessary, could never all be available
for centralized, nonmarket decisions.
Market prices, though necessary for calculation, are not ultimate data.
Prices represent intermediate steps in taking account of the more nearly