One of my favorite books, and among the most important for my intellectual development, was Hoppe’s A Theory of Socialism and Capitalism, which could be labeled “property economics in one lesson.” FULL ARTICLE by Mateusz Machaj
Source link: http://archive.mises.org/11536/the-nature-of-socialism/
The Nature of Socialism
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Such clarity of thought – your time with Dr. Hoppe was well spent.
I must say, this is one of the best restatements of the 1930′s Austrian “critique of Socialism” I have read in awhile. Prof. Machaj has obviously done his homework.
However, it has little to do with the present global economic crisis, or even, I would maintain, with “Socialism” as such.
Prof. Machaj says:
“The argument about the economic chaos resulting from the establishment of socialism (understood as one compulsory owner) was restated in this article. It was shown that socialism’s economic deficiency does not result from the lack of a numerical system; rather, it flows from essential characteristics of socialism. Socialism means dictatorship, necessarily survives as dictatorship, and no centrally produced accounting ratios will change that fact. As such, competition is literally impossible under socialism, and this cannot be changed by the introduction of centrally administered accounting ratios.”
There are virtually no “Socialists” of this kind advocating anything of this kind, today. No one but military dictators of the Pinochet variety think they “own” the economy, and of course they don’t try to control it by this kind of “central planning,” either.
There is one extant system of “democratic socialism” which advocates such planning that I know of, and that is Michael Albert and Robin Hanel’s system of “Participatory Economics” (Parecon). There’s a lot of information about this on the Z-Net website, if anyone is interested. They advocate just this kind of input-output analysis and voting by workers/consumers, etc. about what to produce, according to some sort of “demonstrated demand” determined by local consumer and workplace committees.
Bastiat’s formulation that “we don’t have property because of laws; we have laws because of property” is similar to Engel’s work on the origins of property in the state and family – i.e., hierarchical, authoritarian structures based on force, obedience, and status.
The whole point of socialism is to replace these authoritarian, status structures with free, democratic, and pluralistic structures which represent the needs and interests of ordinary people rather than some sort of dictators and oligarchs. Ownership is dispersed and distributed, as is control. Ideally, this is the real “free market” of small firms and families, co-ops and collectives, working together to serve their common needs and interests. Expropriators are excluded. One firm or co-op cannot take over another one to “grow” and “be more competitive.” Of course, they can trade or sell assets, and as individuals, join different firms or families.
To maintain that socialism is based on a single owner-dictator is simply absurd.
The professor is confusing socialism with Stalinism, Bolshevism, or some other kind of dictatorship. No real socialists support that, now.
If you want to simplify things try this.
There are only two types of social structures; freedom and socialism.
In socialism, citizens are forced to put differing portions of their money (production) into a pool and the forcers get to spend it.
In freedom, everyone has 100% control of their own property.
No country has ever had freedom. All countries are socialist in varying degrees.
The USA came closer to freedom than any other country ever. Hence, in less then 200 years became the most prosperous country ever.
Production eliminates poverty. Plunder eventually eliminates production.
Profit is any moral increase in happiness.
Plunder is any immoral increase in happiness.
Austrian arguments on planning attack all forms of it, voluntaryist or not, as economically unsound. Syndicalism being an exception as it is market-based in its nature, though it suffers from other issues…
I understand that Paul Stephens must be from US as he has not understood much about socialism from this article.
“The whole point of socialism is to replace these authoritarian, status structures with free, democratic, and pluralistic structures which represent the needs and interests of ordinary people rather than some sort of dictators and oligarchs”
And now compare this sentence with a bail-out program for Goldman-Sachs.
Stalin in order to take the gold from the people caused famine in Ukraine in 1933.
Roosevelt sign executive order.
Different methods, similar goal.
US advantage is that west from US there is only Pacific ocean and then China. If there would be a normal place to go …
Central planning and price controls have never worked, without a free market. fair value can not determined for a good or service.
Mises centered his critique of socialism on the lack of “price structure†for a very good reason. A “good, bad example†I offer is that of boats that have holes in the hulls. It makes little difference if the hull is mono, catamaran, or a tri-hull. It makes little difference if the boat has a 6 foot or 100 foot beam, or if it is used for pleasure or hauling crude oil. Boats work simply by water displacement and it if displaces less water that its weight, it simply sinks.
Mises elaborates on this extensively around chapter 30 of Human Action and discusses every known variation of socialism and government intervention, including “Syndicalismâ€, national socialism, communism, and a myrid of other “ismsâ€. He also speaks extensivly of the Asian nations as they were at the time of his writing and why the grinding poverty exists there. The expectation was that after China annexed Hong Kong, they would make it like the rest of China. Unexpectedly they remade China into the Hong Kong model unleasing a free market system. They seem to be communist in name only and now produce millionairs! Democracy does not produce wealth, whereas individual freedom and private property promotes the capital formation that precedes productivity. Only the price structure can provide the signals that automaticly steer both the production process and assign materials where they are needed to best serve the greatest need.
In a free market, people get an unequal share of goods. In non-market economies people get an equal share of misery. A “mixed†economy always migrates to a non-market economy. I know of no examples in history that contradicts this.
While not wishing to be labeled a sexist, I find Human Action is written almost as an art form that rivals the female form in beauty. Economics; “the dismal scienceâ€? I think not!
Al Sledge
Big Pine Key Florida
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