The Socialist Experiment That Failed from the Start

A Socialist Experiment That Failed from the Start

- On Reading Mises’s Socialism Cover to Cover for the First Time

Ludwig von Mises published Socialism in 1922. The Russian Revolution had taken place in 1917, and the Soviet Union, the world’s first socialist state, had been established, so the socialist experiment was one whose failure was foretold from the very beginning. How did Mises define socialism, and why did he say it would fail?

“The aim of socialism is to transfer ownership of the means of production from private property rights to the organized society, that is, to the state.” p.66

“Not only formal transfer, but also restricting the rights of owners is a means of socialization.” p.67

The definition of socialism is clear: “the socialization of the means of production.” Mises was convinced that other terms for socialism were merely political tactics and carried little real significance. If so, why is there such an enormous gap in living standards between places where the means of production have been socialized and places where private property is recognized?

The reason is “economic calculation.”

“Without calculation, economic activity is impossible. … Where there is no standard of rationality, production cannot consciously be economic.” p.196

In a system where the means of production are socialized, the value of the means of production and the various factors of production cannot be assessed. In reality, even if the use of money is permitted, it would end with the mere exchange of consumer goods. In the end, resources are not consumed rationally, inefficiency increases, and what is called an “economy” in a capitalist system cannot be sustained.

The socialist experiment failed from the moment it began. Yet even now, 100 years later, there are still those trying to summon back its ghost.

2023.3.28 Bench Press

▶Join the Liberalism Reading Group:

https://open.kakao.com/o/g4Nn1uud

---

Original title: 시작과 동시에 실패한 사회주의 실험

Author: Jayujuui Ipmun Dokseotoronmoim

Date: 2023-03-29

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=reading01&pn=4&idx=25493