Sunday, February 23, 2020

A Letter From LBJ to the Economist Who Said Mises Was Right

 Robert Heilbroner
Below is a copy of a letter President Lyndon Baines Johnson sent in January 1964 to the economist and author Robert Heilbroner.

At the time of the letter, Heilbroner was proposing socialist-type programs, $50 billion in anti-poverty spending, expansion of TVA, youth job guarantees, etc.

(via @mattybram)

By the late 1980s though, as Gary North explains, Heilbroner realized that the warnings about socialism by Ludwig von Mises were correct:
What defeated the Soviet Union was socialist economic planning. The Soviet Union was based on socialism, and socialist economic calculation is irrational. Ludwig von Mises in 1920 described why in his article, "Economic Calculation in the Socialist Commonwealth." He showed in theory exactly what is wrong with all socialist planning. He made it clear why socialism could never compete with the free market. It has no capital goods markets, and therefore economic planners cannot allocate capital according to capital's most important and most desired needs among by the public...

Mises's argument was not taken seriously by the academic community. Socialism was so popular by 1920 among academics that they did not respond to Mises...

Finally, when it became clear in the late 1980s that the Soviet economy was bankrupt, a multimillionaire socialist professor named Robert Heilbroner wrote an article, "After Communism," for the New Yorker (September 10, 1990), which is not an academic journal, in which he admitted that throughout his entire career, he had always believed what he had been taught in graduate school, namely that Lange was right and Mises was wrong.
Then, he wrote these words: "Mises was right."...

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