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The errors of socialism. I was raised in a socialist country and I found it hard to refute the socialist ideas altogether. Socialism is one of the most influential political movements of the twentieth century, inspired by good intentions on social justice and led by some of the most intelligent political thinkers of our time. However, in the same century we’ve witnessed the collapse of the states organized on socialist ideas. On that subject, earlier in GR weekly, I quoted an impressive paragraph from Wealth & Poverty by George Gilder. Recently, by an article on Reaganomics and Thatcherism, I was guided to the works of F.A. Hayek, his The Fatal Conceit in particular, a manifesto on the errors of socialism. Hayek argues that socialism has, from its origins, been mistaken on factual, and even on logical grounds.

worm-holes (Boulder, CO; Dec. 5, 2004)

This book argues that our civilization depends, not only for its origin but also for its preservation, on what can be pre- cisely described only as the extended order of human coop-eration, an order more commonly, if somewhat misleadingly, known as capitalism. To understand our civilization, one must appreciate that the extended order resulted not from human design or intention but spontaneously: it arose from unintentionally conforming to certain traditional and largely moral practices, many of which men tend to dislike, whose significance they usually fail to understand, whose validity they cannot prove, and which have nonetheless fairly rapidly spread by means of an evolutionary selection - the compara-tive increase of population and wealth - of those groups that happened to follow them. The unwitting, reluctant, even painful adoption of these practices kept these groups together, increased their access to valuable information of all sorts, and enabled them to be ‘fruitful, and multiply, and replenish the earth, and subdue it' (Genesis 1:28). This process is perhaps the least appreciated facet of human evolution.

The main point of my argument is, then, that the conflict between, on one hand, advocates of the spontaneous extended human order created by a competitive market, and on the other hand those who demand a deliberate arrange-ment of human interaction by central authority based on collective command over available resources is due to a factual error by the latter about how knowledge of these resources is and can be generated and utilised. As a question of fact, this conflict must be settled by scientific study. Such study shows that, by following the spontane-

F.A. Hayek: The fatal conceit, The errors of socialism, The University of Chicago Press, 1988.

 

ously generated moral traditions underlying the competitive market order (traditions which do not satisfy the canons or norms of rationality embraced by most socialists), we generate and garner greater knowledge and wealth than could ever be obtained or utilised in a centrally-directed economy whose adherents claim to proceed strictly in accordance with ‘reason’. Thus socialist aims and program-mes are factually impossible to achieve or execute; and they also happen, into the bargain as it were, to be logically impossible. [...] To follow socialist morality would destroy much of present humankind and impoverish much of the rest.

 2008-06-15 

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