From: lessgovt@gmail.com   
      
   QUORA: Are there any reasons why socialism can't work as well as capitalism   
   when applied on large scales?   
   answered by Jim Langcuster, March 5, 2023   
      
   Two men, Ludwig von Mises and Friedrich von Hayek, both classical liberal   
   economists associated with the classical Austrian School, supplied a sweeping   
   condemnation of socialism, namely, its inefficiencies.   
      
   Socialism, at least, as Marx was concerned, was inimical to capitalism. He   
   readily acknowledged the ways that industrialization associated with   
   capitalism had carried humanity to a higher stage of development, but he   
   contended that it was beset with    
   internal contradictions and that these would result in its falling to the   
   class exploited by it - the workers. They then would acquire all of the   
   material achievements of capitalism and operate this advanced economy to the   
   benefit of all.   
      
   The question remained: How would workers acquire and operate this economy to   
   everyone's benefit? Some, if not most, socialists presumed that this would be   
   carried out on the basis of central planning, which would enable the vanguard   
   class, the working    
   class, to dispense with markets entirely.   
      
   This, as Mises and Hayek argued, constituted the fatal flaw of Marxism. Mises   
   initially contended that without property rights and sound currency, a   
   centrally planned system would prove dysfunctional, as it would be unable to   
   assign prices and costs    
   adequately to social resources. The end result, he contended, would prove   
   chaotic.   
      
   Hayek further refined this idea with his view on the knowledge problem bound   
   up in extended societies. In the context of such societies, knowledge is   
   widely dispersed, and central planning, by its very nature, lacks omnipetence   
   (a Hayek coined) to    
   supercede this sort of dispersed knowledge. This is further complicated by the   
   fact that local knowledge is constantly evolving.   
      
   Consequently, sound currency embedded in a market system underpinned by   
   private property is the only way to impart knowledge across such a widely   
   dispersed system.   
      
   Some socialists steadfastly maintain that markets can operate within a   
   socialist order but these are far less efficient than the patterns of   
   ownership that have evolved within market systems where entrepreneurs and   
   investors typically are not insulated    
   against risk.   
      
   Von Mises’ Socialism: An Economic and Sociological Analysis is an excellent   
   introduction to the inherent inefficiencies of socialism. It is an expanded   
   version of an article he wrote in 1920, a mere two years after the Bolshevik   
   revolution, one that    
   proved remarkably prescient.   
      
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