The Economics of Why Socialism Fails
January 27, 2015—
Yuri Maltsev, the former Soviet economist who defected to the US in 1999, cautions that many young people in the West hold a naïve, romantic view of socialism.
True, socialism may sound wonderful: all is shared, universal equality is realized, and we all live happily ever after.
But in the real world, socialism fails. The cause is bad economics.
Socialism is a type of economic system. Economists refer to the socialist economy as a “command economy.” This means that a central planning body—the state—makes all of the economic decisions, commanding the actions of the people in the economy. In contrast to the free market, socialism necessarily hinges on the use of force by the central planners, not voluntary cooperation between people. In this respect, the essence of socialism is economically akin to tribal and slave economies, in which economic decisions, including the methods, values, and ends of production, are dictated by the chief of the tribe or the slave owner.
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