Alles gute zum Geburtstag

Noah tells me via email that today is Ludwig von Mises' birthday. And in fact, the link and title are both shamelessly stolen from the same email. (Let it never be said I don't cite my sources!)

The link goes into great detail about Mises contributions, so I will let it do most of my speaking for me. For my part, I'll add merely that the world (the entire world) owes this man a great debt for keeping Capitalism on the table in political discussions. The debate between Capitalism and Socialism is not academic. It is, quite literally, the struggle between success and failure - between a human system of wealth, rights, and individual dignity, where there is plenty for all, and a neo-tribalist system of misery, where equality is purchased at the cost of ever-growing poverty.

Socialism, Mises demonstrated, in his greatest original contribution to economic thought, not only abolishes the incentive of profit and loss and the freedom of competition along with private ownership of the means of production, but makes economic calculation, economic co­ordination, and economc planning impossible, and therefore results in chaos. For socialism means the abolition of the price system and the intellectual division of labor; it means the concentration and centralization of all decision-making in the hands of one agency: the Central Planning Board, or the Supreme Dictator.

Indeed. Socialism destroys crucial economic information. In a free system, prices really do measure worth. They are the output of a massive amount of small negotiations - of businesses trying to make money and consumers trying to save it - of businesses trying to offer goods at prices consumers are willing to pay, and consumers trying to obtain what they need and want. The negotiated price tells a business how much demand there is for a thing, and therefore how much to supply. The negotiated price tells the consumer how valuable a thing is, and how much value he will need to produce to justify his ownership of it. Having destroyed this crucial information, Socialism then expects a handful of individuals to somehow magically plan the economy anyway - as though the task were even possible before the tampering.

It's astoundingly stupid. The whole Socialist project - from the amateurish philosophy to the miserable implementation - is astoundingly stupid. And yet for reasons I will never grasp, it continues to find followers after over a century of nothing but failure.

Von Mises did us all a favor by stating these flaws clearly and providing the intellectual basis for something better. Happy birthday!!!