More on this topic here at the Mises Economic Blog: Austrian Economics and Libertarian Political Theory courtesy of the Ludwig von Mises Institute. Here is a preview:

Wittgenstein’s Tractatus and Wieser’s “communist economy” modeled social phenomena as a pure logic constructed by and available to a single mind. Sometimes brilliant mistakes are the very thing which leads to revolutionary advance in social theory. The revolution came with Wittgenstein’s later “private language” argument and Mises’ discovery of the impossibility of economic calculation in a pure socialist system.

Wittgenstein at first imagined that a formal construction of atomic meanings and stipulated logical relations available as a systematic construction to one mind circumscribed all of what was conceivable in thought and language. In effect, a single mind could imagine language and all which could be thought as if it were synoptically viewable from a bird’s eye perspective (as Wittgenstein put it). Wieser similarly thought that he could capture the necessary structure of the economy by imagining the market as a thing replaceable by a communist dictator using only the pure logic of marginal valuation upon all economic goods, including both consumer goods and production goods. The dictator could have a bird’s eye view upon the whole economy, and he could put everything in its place using calculations of utility based on the formal logic of marginal utility theory.

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