Surprisingly enough, there are plenty of people around the world and even in America who admire the ideas of central planning and communism. This is shocking because it means that very few people are aware of what happened in China in 1958 when Mao Zedong planned his economy and ended up starving millions of people.
Why doesn’t central planning work? Because the market (populated by everyone who buys, sells, or abstains from buying and selling) contains so much information spread so widely that no single person or committee could ever possess the knowledge to efficiently plan an economy. For recourses to be used best, they must be used by people who sense the signals the market is sending them through profit and loss. Government never sees these signals, which is why it is destined to fail.
This was explained in 1920 in Ludwig von Mises’ “Economic Calculation is the Socialist Commonwealth”. Notice that whether referring to central planning as socialism or communism, the result is the same. Venezuela is a perfect modern day example of why central planning doesn’t work. Where’s Bernie when you’d like to ask him a question?!
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