Economic Calculation in Non-Monetary Terms: The Forgotten Ideas of Kantorovich and Siroyezhin

Ivars Brivers

Bulletin of Political Economy, 2009, vol. 3, issue 1, 37-49

Abstract: Discussions about possibilities of calculation in socialism have always been on the agenda between different economists-theorists. A deep and fundamental criticism of socialism is expounded in the voluminous work of famous Austrian economist Ludwig von Mises. As calculations in the capitalist system are based on market prices, the impossibility of calculations is not a threat in this case. But even in the capitalist system there may appear another threat – if economic indicators are expressed only in monetary terms, the measurement of goals may be questionable from the point of view of sustainable development. The idea of welfare maximization in non-monetary terms can be found in works of the only one Nobel Prize winner in Economics among the Soviet economists – Leonid Kantorovich and his disciple Ivan Siroyezhin. It is possible to set up a non-monetary objective function even at a macro level – maximization of bundles of necessities. The modern mathematical approach in economics gives a possibility to consider a set of objective functions. It may turn out that ideas of Kantorovich and Siroyezhin are still unappreciated and up-to-date from the point of view of sustainable development.

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:awu:journl:v:3:y:2009:i:1:p:37-49

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