Journalist Discovers the Difference Between Central Planning and Real World Experience

439px-ludwig_von_misesIn 1929, our intellectual forefather Ludwig von Mises penned a lengthy tome about how socialism does not work. Not only does it not work in practice, he noted, it does not even work in theory, as some people say. The fundamental premise of his argument is that socialism cannot allocate resources effectively. Only the price system of the market (capitalism) can do that. No one person or committee of persons can appropriate resources for millions of people. In fact, even within a family unit, there is a good bit of friction when making such decisions. Scaling that up any further causes problems. The only thing that really can be done is provide a very basic distribution, but even that quickly becomes a logistical nightmare when scaled up too high.

A somewhat amusing example of this being shown privately in the real world is when a Washington Post writer researched data on every county in America collected by the USDA. He found that Red Lake County, Minnesota was the worst in the country to live in when he crunched the numbers in a spreadsheet. Within five minutes of publishing the post, the hate mail began. Real people who live there had a couple things to say about his conclusion. He later ended up visiting the place and was greeted with a marching band. Not only that, he discovered it was actually a great place to live and moved his family there from the Washington, DC area, where he remains today and works remotely.

What this tells us is that a bunch of bureaucrats looking at data hundreds of miles away cannot possibly have any idea whats going on in a given place. Data can seem to suggest any number of things, but without context, and a look at the overall picture, it can be way off the mark. Living conditions are a lot more complicated than some metrics on paper. Millions and billions of people need to make hundreds of decisions every day about what they want and need. No one else can decide this for them. Only by feeling things out with prices can we get goods and services where they need to be.


Leave a Reply

Your email address will not be published. Required fields are marked *