Wednesday, November 27, 2019

Hayek Explains Why Socialism is Impossible

F. A. Hayek
The below is a great clip from an interview of Noble Prize laureate Friedrich Hayek.

In it, he points out that all knowledge to one person (or one central planning authority) is impossible and thus you can't solve for all the solutions that would be required in a planned society.

What is, therefore, meant by socialism being "impossible" is that it can never attain the goals the advocates of socialism think it will. You can have "socialism" but it will be a mess, a mad combination of distortions and a collapsing standard of living---and often vicious coercion to attempt to force the planned society in a way that does not match the desires of the general population.

And this is precisely the type of socialism that does develop that new advocates of socialism claim is not real socialism. In a convoluted manner, the new socialists are supporting the thesis of Hayek and Ludwig von Mises that socialism has never existed.  Hayek and Mises, however, go one step further and say it will never exist, that it is impossible.

To have a functional large civilization you need price, profit and loss signals so that individuals understand how to allocate resources.


(ht John Perkins)


  1. The real goals of Socialism (as opposed to the stated goals) are a small, wealthy, empowered ruling class and a huge, docile underclass living at subsistence levels, living where they are told and doing what they are told. In that goal Socialism "works" quite well.

  2. I've been looking for a great response to the "real socialism has never been tried" BS. Now I have one. Thank you