Friday, February 7, 2014

The Worst Idea in the World

Five years after the Bolshevik Revolution, Austrian economist Ludwig von Mises predicted that the Soviet project was doomed to fail. In his classic work Socialism, Mises explained that the attempt to replace the market system with central economic planning could not succeed, because the planners could not possibly have the information necessary to make all the decisions which, in a market economy, are made by individuals whose needs and desires are reflected in prices: "The problem of economic calculation is the fundamental problem of Socialism."
"Everything brought forward in favour of Socialism during the last hundred years," Mises wrote in 1922, "in thousands of writings and speeches, all the blood which has been spilt by the supporters of Socialism, cannot make Socialism workable. .... Socialist writers may continue to publish books about the decay of Capitalism and the coming of the socialist millennium; they may paint the evils of Capitalism in lurid colours and contrast with them an enticing picture of the blessings of a socialist society; their writings may continue to impress the thoughtless -- but all this cannot alter the fate of the socialist idea."

http://spectator.org/articles/57691/worst-idea-world 

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