Ludwig von Mises’ Century of Validation
Gordon looks back into the past in search of answers to today’s economic problems. He discusses Italian economists Enrico Barone and Vilfredo Pareto, and the opposing views of Austrian economist Ludwig von Mises.
Mises argued that, in a socialist economy, rational economic calculation is impossible; in the absence of private ownership of the means of production attempts to allocate resources efficiently must fail.
Without market-determined prices for goods and services via free exchange it is impossible to establish prices that reflect actual conditions. Without prices that are grounded in reality, the production and consumption relationship becomes distorted. In the absence of the natural corrective mechanism of market-determined prices, oversupply and scarcity conditions extend out to absurdity.
Mises’ efforts to refute socialist economic proposals nearly a century ago were explicitly validated with the decline and fall of Soviet socialism. Presently, they are being openly validated again, with the utter chaos being heaped upon the people of Venezuela.
The results of government intervention are always the same. Stagnation, inflation, declining living standards and widespread social disorder. No doubt they’ll be repeated to insanity.
Although many refuse to recognize it, Mises’ truths are currently borne out in the United States, and other social and corporate welfare economies, where money, which is a form of private property, is covertly confiscated by the insidious effects of a centrally planned system that’s based on ever increasing issuance of debt.