One of the greatest contributions of Ludwig von Mises to the modern world was his sweeping demolition of the intellectual case for Karl Marx’s scientific socialism, which Mises first proposed in 1919, wrote up in 1920, and expanded in 1922. My own personal favourite book by Mises is the 1922 expansion, Socialism, which he later extended in 1935, for the first English translation, and subsequent to that too, in 1951. This exploding neutron star of a book forensically examined every extant and extinct form of socialism — from Russian soviet communism to German national socialism — and systematically applied Mises’ core idea that all of these multi-variant forms of socialism are simply incapable of carrying out rational economic calculation.
Without free market prices to determine the best use of scarce resources, it becomes impossible for central planners of all stripes to work out what to do with these scarce resources, to least wasteful effect, without resorting to mere political whim and fancy. This Misesian idea, which stood firm against all of the subsequent feeble socialist attacks upon it, was the primary reason why the Soviet Union eventually collapsed, and why Nazi Germany would have collapsed too, eventually, even if it had succeeded in invading England’s shores and creating SS-GB.
What is surprising, then, is not that the Soviet Union collapsed, but that it took so long to do so. That particular mystery is a long dark story of Gulags, bloody tyranny, and various forms of western support, which can be told in another time and place.
For those, though, who find this idea challenging, that socialism cannot calculate, Professor Joseph T. Salerno recently gave a superb lecture which covers the subject in depth.
At over an hour, this extensive lecture is a large commitment in time. However, if you have ever been a socialist, or you are trying to give socialism up, or you have socialist friends who you feel need a little life-enhancing re-education, then the time spent watching Professor Salerno explaining why socialism will always fail — unless it first manages to turn us all into ants — will prove an excellent investment of your time.
It would also be useful to watch if you are a government-appointed central planner in the Bank of England. You never know, you might then learn why all of your currency manipulation plans are falling about your ears: