Here’s what our friends at the Auckland Uni Economics Group will be discussing this evening.
In this Tuesday’s seminar we turn to what is referred to as the Socialist Calculation Debate.
In 1956 Soviet leader Nikita Kruschev banged his shoe on the podium at the U.N., and told the west: "History is on our side. We will bury you in fine [goods]. You hear that? Quality!"
In 1971, he told an American president, "In 7 years we will reach the level of America. When we catch up and pass you by, we'll wave to you."
In 1989, however, the whole of Eastern Europe collapsed, and the economy and environment of the Soviet Union were exposed to the world as a complete and utter basket case. It was a defining moment in twentieth-century history. "Scientific socialism," which started in Utopia and was continued midst bloodshed and famine, was revealed not as a miracle of production (as many mainstream economists seemed to think) but as a complete and utter bust.
The reasons for the collapse were explained all the way back in 1920. The Utopians "invariably explain how, in the cloud-cuckoo lands of their fancy, cooked chickens will somehow fly into the mouths of the comrades," observed Ludwig Von Mises. "but they omit to show how this miracle is to take place."
In fact, despite all their rabid inventive, neither Karl Marx nor his followers had written even one word explaining how a socialist economy would actually work in the real world. And nor could they. Because as Mises pointed out, there is one fundamental economic flaw in the socialist Utopia that means the system can never produce anything but misery--and after decades of debate in 1989 he was finally conclusively proved right.
No wonder Soviet economists eventually insisted a statue to Ludwig Von Mises be placed in a prominent place in Moscow.
Join us tonight to discuss that flaw and some of that history, as we discuss the Socialist Calculation Debate--including several lessons from it for us today.
Date: Tuesday 31 May
Room: University of Auckland Business School, Owen G Glenn Building, Room 219 (Level 2)