The American Socialist Commonwealth (Part 1 of 2)
Filed Under: Capitalism, Economy, Featured, Fiscal Policy, Government, Government Spending, Markets
In 1920, as socialist parties held power in Germany, Austria, Hungary, and Russia, it appeared that the world following World War I would be a world built by socialist planning. Ludwig von Mises, the Austrian economist, thought that a socialist world simply wouldn’t do, and put pen to paper to explain why. The result was Mises’ first published article, “Economic Calculation in the Socialist Commonwealth.â€
Mises’ premise was really quite simple; in a socialist economy, things that are used to produce other things are controlled by the state, which means that investment in production goods no longer involves price comparisons. In a socialist system, the planners decide that more tractors should be built, and order factories to build them.
Socialist administrators can …
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