Otto Neurath

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in natura planning

Otto Neurath, a remarkable but largely forgotten polymath of early twentieth-century Vienna. The kernel of his philosophical system was the rejection of ‘pseudorationality’ – the belief that any single metric could guide all decisions

Half-Earth Socialism

Neurath came to these conclusions by studying ancient and contemporary examples of economies based on ‘natural’ (or in natura) units of discrete physical things rather than money

Half-Earth Socialism

After all, Neurath argued, there were no ‘war units’ to guide a battleship commander’s decisions. What mattered were incommensurate things: ‘the course of the ship, the power of the engines, the range of the guns, the stores of ammunition, the torpedoes, and the food supplies’. In an emergency, prices fail to convey any information at all.

Half-Earth Socialism

The war had usefully shown that profit could be disabled as the guiding metric for investment, a development that would be continued under socialism

Half-Earth Socialism

In natura calculation would banish the ‘veiling concealments’ of money so that ‘everything becomes transparent and controllable

Half-Earth Socialism

Mises and especially Hayek undermined Neurathian socialism through powerful epistemic critique, which diverted the Left into pseudorational market socialism

Half-Earth Socialism

Neurath argued that plans based on labour time are as pseudorational as capitalist profit, in that both are based on a universal equivalent that obscured more than it clarified

Half-Earth Socialism

Despite his espousal of ‘total plans’ to co-ordinate society, Neurath was deeply sceptical of technocracy

Half-Earth Socialism

Rather than relying on a Platonic elite of logicians, Neurath thought that a visual language could democratize reason by making the essence of an economic problem apparent to non-experts

Half-Earth Socialism

Neurath was one of the original targets of Mises’s 1920 broadside against planning. He is remembered today as the theorist of total planning—a phrase that incorrectly conjures the image of social engineers running the economy from a control room. Nothing could be further from Neurath’s vision. On the contrary, Neurath argued that a socialist economy would have to be highly democratic—precisely because it could not be purely algorithmic

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For Neurath, the algorithmic character of the price system was a problem to be overcome, rather than something that socialists should try to replicate. In a capitalist economy, managers are able to make clear-cut decisions about cost-effectiveness only because they are allowed to ignore all of the non-economic costs of their decisions, which include destroying communities, immiserating workers, depleting non-renewable resources, and filling the world with garbage. Economically rational decisions at the level of the firm add up to an increasingly irrational society

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Neurath laid out his version of a planning protocol—a term that he did not himself use—in “Economic Plan and Calculation in Kind,” an essay he wrote in 1925. Planning begins with expert planners reducing the “unlimited number of economic plans” that are “possible” down to a few “characteristic examples.” These planners do the algorithmic calculations, which clarify the options among which people must decide. People are then presented with these options for direct comparison. They evaluate a few different plans across multiple criteria and decide which they prefer: listening to comments, voicing their concerns, and taking a vote

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Towards the end of his life, Neurath spent years trying to determine how semi-literate peasants and urban workers could be incorporated into a planning protocol, via the distribution of simple graphical representations that he called isotypes

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Neurath hoped that councils, guilds, and other associations could find another way forward. In particular, he speculated that they might be able to use planning protocols to make their own direct comparisons between different “ways of working”—taking into account many and varied criteria that could not “be reduced to one single unit”—while collaborating with one another to help fulfill society-wide goals

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1. Elsewhere

1.2. In the Agora

1.3. Mentions

This page last updated: 2022-05-30 Mon 20:23. Map. Recent changes. Source. Peer Production License.