Reply To: Economic Calculation


The economic calculation argument is that socialism, defined as state ownership of the means of production, does away with monetary prices for the means of production entirely. There are no money wages, no land prices, no prices of capital goods. Without such prices, there cannot be an economizing arrangement of resources.

The empirical evidence supporting this theory is overwhelming: West Germany v. East Germany; South Korea v. North Korean; Hong Kong v. mainland China before market reforms.

The freedom indexes show the correlation between freer enterprise and higher and faster growing standards of living. For example: