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11/20/08
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December
11, 2006 At the root of the dazzling revolutionary implosion and collapse of socialism and central planning in the "socialist bloc" is what everyone concedes to be a disastrous economic failure. The peoples and the intellectuals of Eastern Europe and the Soviet Union are crying out not only for free speech, democratic assembly, and glasnost, but also for private property and free markets. And yet, if I may be pardoned a moment of nostalgia, four-and-a-half-decades ago, when I entered graduate school, the economics Establishment of that era was closing the book on what had been for two decades the famed "socialist calculation debate." And they had all decided, left, right, and center, that there was not a thing economically wrong with socialism: that socialism's only problems, such as they might be, were political. Economically, socialism could work just as well as capitalism. Mises and the Challenge of Calculation Before Ludwig von Mises raised the calculation problem in his celebrated article in 1920,[1] everyone, socialists and non-socialists alike, had long realized that socialism suffered from an incentive problem. If, for example, everyone under socialism were to receive an equal income, or, in another variant, everyone was supposed to produce "according to his ability" but receive "according to his needs," then, to sum it up in the famous question: Who, under socialism, will take out the garbage? That is, what will be the incentive to do the grubby jobs, and, furthermore, to do them well? Or, to put it another way, what would be the incentive to work hard and be productive at any job? The traditional socialist answer held that the socialist society would transform human nature, would purge it of selfishness, and remold it to create a New Socialist Man. That new man would be devoid of any selfish, or indeed any self-determined, goals; his only wish would be to work as hard and as eagerly as possible to achieve the goals and obey the orders of the socialist State. Throughout the history of socialism, socialist ultras, such as the early Lenin and Bukharin under "War Communism," and later Mao Tse-tung and Che Guevara, have sought to replace material by so-called "moral" incentives. This notion was properly and wittily ridiculed by Alexander Gray as "the idea that the world may find its driving force in a Birthday Honours List (giving to the King, if necessary, 165 birthdays a year)."[2] At any rate, the socialists soon found that voluntary methods could hardly yield them the New Socialist Man. But even the most determined and bloodthirsty methods could not avail to create this robotic New Socialist Man. And it is a testament to the spirit of freedom that cannot be extinguished in the human breast that the socialists continued to fail dismally, despite decades of systemic terror. (Read the rest here - click your "back" button to return to The Price of Liberty)
Other articles at the von Mises Institute (There are thousands of them, all free.) Defense
Services on the Free Market Making
Economic Sense The
Trouble with NASA
Ludwig
von Mises Institute The
Free Market, published by the Mises Institute The
Independent Institute Foundation
for Economic Education (FEE) Ayn
Rand Institute Institute
for Humane Studies National
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Archives The
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Idea of a Private Law Society The
Source of Prices Enterprising
Education: Doing Away with the Public School System Why
is Medical Care so Expensive? The
Snare of Government Subsidies How
We Come to Own Ourselves The
Antifederalists Were Right The
Revolutionary War and the Destruction of the Continental The
Fraudulent Tax Globalization:
The Long-Run Big Picture A
Century of War Middle-of-the-Road
Policy Leads to Socialism Click
the "back button" to return to The Price of Liberty.)
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