ECONOMY
The Greatest Thinker You’ve Never Read: Ludwig von Mises

Art Carden

Carden believes Ludwig von Mises (1881-1973) was the greatest social thinker of the 20th century, one who developed theories of economic growth and business cycles that are relevant today.

Mises’s greatest contribution was his demonstration that socialism cannot function as a rational economic system, and that private ownership of the means of production is necessary if value is going to be maximized and waste is going to be minimized in the production process.

Mises argued that prices cannot emerge without exchange, and exchange cannot happen without private ownership of the means of production. The market plays an essential role; it is not merely one of a number of possible allocative mechanisms. Exchange in a free market is an information- and knowledge-generating process. Competition in the free market is “a discovery procedure.” This emphasis on the coordinating and knowledge-generating properties of exchange in a free market with secure private property rights is one of the distinctive features of the modern Misesian tradition.

Mises’s arguments do not merely undermine arguments for pure, global socialism. They also undermine arguments for interventionism more generally. People respond to incentives, even when you don’t want them to, and the knowledge-destroying and incentive-distorting effects of interventionism all too often bring with them unintended consequences that not only reduce economic efficiency but also harm precisely the intended beneficiaries of the intervention.

In his introduction to the new edition of Socialism, Peter J. Boettke makes an important point:

“Critics of economics say that economists know the price of everything but the value of nothing. Nothing, perhaps, is so dangerous intellectually in the policy sciences as an economist who knows only economics, except, I would add, a moral philosopher who knows no economics at all.

source: forbes