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By Hong qi

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Extra info for A great victory for Leninism: in commemoration of the 95th anniversary of the birth of Lenin : Hongqi editorial

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What you need, if through that inevitable apprenticeship you hope ultimately to rise to more responsible positions, is a capacity to interpret the detail with which you will be concerned and to see through the catchwords and phrases which govern everyday life. Does the study of the social sciences as it is now pursued provide this education—or how can it be made to do so? This raises immediately the vexed problem of specialisation versus a general and all-round education, much more acute and difficult in the social sciences than anywhere else.

If the cost of capital—interest and amortisation—invested in it is less than the cost of the other factors it replaces, the new machinery will be introduced not in order to do the work of machinery which is already in existence, but because it does that work plus the work of a quantity of other factors which will produce elsewhere more than the new capital could have done. It is obvious that a wise planner would have to act on the same principles, and that he could only do so on the basis of a given rate of interest, expressing the productivity of capital.

Side by side with such complaints are others to the effect that capital is ‘wasted’ by replacing existing machinery when it is still fit for many years’ use. Each of these obviously incompatible criticisms is made a plea for centralised planning. Each implies that competition leads to uneconomic production which a wise planner would avoid. Closer analysis, however, reveals the fact that either of the alternatives which the intelligent planner is supposed to adopt would lead to a waste of 15 [James Bonar was in the chair when Hayek delivered this Inaugural Address.

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