from The Daily Bell:
The twentieth century has witnessed the beginning, development, and end of the most tragic experiment in human history: socialism. The experiment resulted in tremendous human losses, destruction of potentially rich economies, and colossal ecological disasters. The experiment has ended, but the devastation will affect the lives and health of generations to come. The real tragedy of this experiment is that Ludwig von Mises and his followers — among the best economic minds of this century — had exposed the truth about socialism in 1920, yet their warnings went unheeded. – Dr. Gary North quoting Yuri Maltsev (1990)
Dominant Social Theme: Free markets can’t be trusted.
Free-Market Analysis: Gary North has written an interesting article entitled “Socialism Is Dead. Let’s Move On. We Won” that incorporates his usual rigorous logic. It is posted at his website and also at LewRockwell.com. It is interesting because it provides an insight of which we were not aware. In fact, if you asked us if socialism was dead before reading this article, we would have insisted that socialism was alive and well. But here is Dr. North to remind us that words have meanings and that those meanings need to be respected.
Socialism is dead as an ideology and also as a political movement. It is an example of a god that failed. Socialism is a very specific form of economic opinion. A socialist believes that the civil government should own the means of production. This is what socialism has always meant. When Ludwig von Mises refuted socialism in 1920, he had in mind exactly this outlook regarding the economy.
Here was his argument. If the government owns a nation’s capital, meaning the tools of production, the planners cannot establish the value of these tools. There is no free market for pricing these tools.
Without free-market pricing, there is no way for any central planning agency to determine what the most desired consumer goods are in society. There has to be a free market in order to price consumer goods and capital goods. There is neither in a socialist economy. Therefore, said Mises, socialist economic planning is inherently irrational.
There is no disagreeing with Dr. North, nor would we wish to do so given the acuteness of his insights and frame of reference. He further buttresses his argument by invoking the fall of the Soviet Union.
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