Max Weber
Economic calculation

Like his colleague Werner Sombart, Weber regarded economic calculation, particularly double-entry bookkeeping, as having played a significant role in rationalisation and the development of capitalism. Weber's preoccupation with the importance of economic calculation led him to critique socialism as lacking a mechanism to efficiently allocate resources to satisfy human needs. Otto Neurath, a socialist thinker, thought that prices would not exist and central planners would use in-kind, rather than monetary, economic calculation in a completely socialised economy. According to Weber, this type of coordination was inefficient because it was incapable of solving the problem of imputation, which related to the difficulties in accurately determining the relative values of capital goods. Weber wrote that the value of goods had to be determined in a socialist economy. However, there was no clear method for doing so in that economic system. Planned economies were, therefore, irrational. At approximately the same time, Ludwig von Mises independently made the same argument against socialism. Weber himself had a significant influence on Mises, whom he had befriended when they were both at the University of Vienna in the spring of 1918. However, Mises ultimately regarded him as having been a historian, rather than an economist.
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