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. As far as this part of Neurath’s work is concerned, 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 in his contributions to the socialization debate which he continued to publish until 1925. In the later 1920s, when chances for realization of socialization more or less disappeared, socialization also vanished as a theoretical issue.

This 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. It makes only occasional references to contributions from “outside”, which are of course much better known nowadays due to the prominence which the interventions of Mises and Schumpeter came to acquire later.