Chapter Ƕ: Ļe Debate about the Efficiency of a Socialist Economy ȇȈhave no certainty, nor can any other form of organization give it. (ȀȈȂȆ,
pp.ȀȈȁ–ȀȈȂ)
In summary, innovations start out in a progressive economy as the
whim of the few and are adopted only later by the inert masses. Innovation
would be slowed in an economy which did not allow the widest possible
scope for variety, whims, even eccentricities.
It may be objected that the foregoing considerations arepoliticalobjec-
tions to socialism, but do not constitute aneconomicargument. I do not
think this is so. Whether an economic system is efficient or not is very
largely a matter of whether it is progressive or not. Ļe mere fact that
we cannot handle questions of economic development by the precise and
elegant techniques of price theory does not mean that such questions fall
outside the scope of economics.
Ļe political case against socialism is quite different. It would empha-
size, among other matters, the danger that pressure groups could sabo-
tage progress. Suppose, for instance, that the automobile had not yet been
invented, but that some men had ideas for developing “horseless carriages.”
Now which pressure group would have the ear of the government Research
Commission—the buggy makers, with their thousands of votes, or the
would-be automobile makers, with their mere handful of votes?
Ļis paper does not handle the political case against socialism or the
question of freedom or serfdom under socialism. I’ll leave these matters for
discussion afterward. But I do want to record my conviction that political
and cultural considerations about socialism rival in importance the purely
economic considerations. It does seem futile to worry about whether a
socialist government could manage the economy efficiently and in accord
with people’s wishes, when the more immediate question is whether pow-
erful rulers could at all times be forced to want to rule in the interests of
all the people.
It seems to me that the history of socialist literature is a history of
continual attempts to get rid of the difficulties in socialist blueprints. And
as these difficulties are eliminated, socialism comes to look more and more
like competitive enterprise. Ļerefore, it is not without some justification
that Professor Mises, with his characteristic dogmatism, now claims final
victory in the debate over the efficiency of socialism. In his latest book
Mises writes:
It is ... nothing short of a full acknowledgment of the correctness and
irrefutability of the economists’ analysis and devastating critique of the