Otto Neurath’s Concepts of Socialization and Economic Calculation and His Socialist Critics

Otto Neurath was one of the most active participants in the debate about socialization that developed after the First World War. His name is mentioned most prominently in the context of two issues: “total socialization”/“Vollsozialisierung” (as opposed to partial socialization), and “in kind accounting”/“Naturalrechnung.” In both respects he is mostly seen as an advocate of strategies and concepts which aimed at changes in the economic system of a much more radical sort than those proposed by the main-stream Social democratic parties in Germany and Austria. Neurath maintained this position despite the early failure of “revolutionary” political experiments in Bavaria and Saxony until 1925. The present contribution is confined to the debate between Neurath and his critics from the Social democratic parties of Germany and Austria—to the part of the debate that took place “inside” the socialist movement. Responses from Karl Kautsky, Otto Leichter, Helene Bauer and others exposed the all too obvious deficiencies of Otto Neurath’s concepts of socialization and of calculation in particular, whereas they could not offer convincing solutions especially of the calculation problem, due to their consequent to the Marxian labour theory of value. The contribution makes only occasional references to contributions from “outside”, which are much better known nowadays due to the prominence which the interventions of Mises and Schumpeter came to acquire later.