What Mises Understood about Prices and Trade That Socialist Economists Did Not

Walter Block and Robert Batemarco

Socialism is a very popular system. Vermont Senator Bernie Sanders attracts thousands of fellow economic innocents on college campuses, and even professional economists of the ilk of Paul Samuelson were taken in by the siren song of this ineffective and evil system. (He predicted in his economics textbook that the USSR would overtake the American economy).

There stood Ludwig von Mises, like the Rock of Gibraltar, standing in the path of socialists of all types and varieties. He laid down the line: under socialism without free market prices, planning would necessarily be irrational. How and why, then, the existence of this pernicious system in Russia from 1917 to 1991 with the dissolution of the Soviet Union. How is it that socialism still exists in places like Cuba, North Korea, and Venezuela? That is because market prices, generated elsewhere, were available to the economic dictators. During the period of USSR socialism, there was the Chicago board of trade and Consumers’ Reports. They made market prices available to the Soviet planners; they were a not-totally-unreasonable approximation to Russian realities. Nowadays, at least …

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.