"Jack dreams that he can hustle the American working man, who's one dream is that he could be rich enough not to work, into a revolution led by his party."
--Eugene O'Neill (Reds)
As Mises (1951) observes, opponents of capitalism often argue that social welfare is not the goal of self-interested capitalists. What socialists miss, however, is that by individuals making economic calculations grounded in their own self-interest, efficiency improves and innovation thrives.
Socialist systems, on the other hand, are incapable of economic calculation. Prices do not exist to provide the basis for calculation. And planners cannot grasp the complexity of long production systems, nor the dynamic taste preferences of consumers. Efficiency declines. Improvement stagnates.
A great paradox (or is it the irony?) of capitalism is that thru self-interested decisions of individuals, social welfare improves beyond the capacity of socialist systems.
References
Mises, L. 1951. Socialism: An economic and sociological analysis. New Haven: Yale University Press.
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