Calculation in kind

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Calculation in kind is a type of accounting based on physical magnitudes and physical quantities rather than a common unit of accounting for economic calculation. Calculation in kind, or valueless calculation, is often described as the form of calculation that would supersede monetary calculation in a moneyless socialist economy. As a replacement for monetary calculation, calculation in kind would dispense of an object's exchange-value inherent to all commodities in monetary economies, so that only an object's use value would remain as the basis for economic accounting.[1]

Political economist Otto Neurath argued in favor of calculation in kind as a basis for a moneyless socialist economy in opposition to market socialists and Austrian school critics of economic planning.[2]

See also

References

  1. ^ The Alternative to Capitalism. Retrieved July 05, 2010, from wspus.org "The disappearance of economic value would mean the end of economic calculation in the sense of calculation in units of value whether measured by money or directly in some unit of labour-time. It would mean that there was no longer any common unit of calculation for making decisions regarding the production of goods...Calculation in kind is an essential aspect of the production of goods in any society, including capitalism. A commodity is, as we saw, a good which by virtue of being produced for sale has acquired in addition to its physical use value a socially-determined exchange value. Correspondingly, the process of production under capitalism is both a process of production of exchange values and a process of production of use values, involving two different kinds of calculation. For the former, the unit of calculation is money, but for the latter there is no single unit but a whole series of different units for measuring the quantity and quality of specific goods used in the process of producing other specific goods (tonnes of steel, kilowatt-hours of electricity, person-hours of work and so on). The disappearance of economic or value calculation in socialism would by no means involve the disappearance of all rational calculation, since the calculations in kind connected with producing specific quantities of goods as physical use values would continue."
  2. ^ Otto Neurath's concepts of socialization and economic calculation and his socialist critics. Retrieved July 05, 2010: http://www.chaloupek.eu/work/NeurathFin.pdf

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