Why Socialism is Literally Impossible

I explain Mises' impossibility thesis of socialism, i.e. the economic calculation problem, and why it makes a "socialist economy" strictly impossible.

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I have been unable to upload the script to my git repo, so the [8] citation is: Hans-Hermann Hoppe, /Against Fiduciary Media/

In this video, I discuss the Economic Calculation Problem (ECP), a problem in economics that shows why socialism is impossible. The ECP was first proposed by Ludwig von Mises, a leading Austrian economist, and it shows that a socialist economy cannot function because it lacks the market prices and information needed for economic calculation and planning. We explore this problem using the example of the Soviet Union, which was a socialist economy that ultimately failed because of its inability to solve the ECP. This video is a must-watch for anyone interested in economics, libertarianism, socialism, and the history of economics.

I explain how the ECP shows that a socialist economy cannot function because it lacks the market prices and information needed for economic calculation and planning. I also discuss the socialist calculation debate, which was a debate among economists about whether a socialist economy could overcome the ECP and achieve economic efficiency.

One of the key arguments made by proponents of the ECP is that a market economy is necessary for economic calculation and planning. In a market economy, prices are determined by the interaction of supply and demand, and this information is used by producers and consumers to make economic decisions. In contrast, a socialist economy lacks market prices, and this makes it impossible to calculate the costs and benefits of different economic choices.

Another key argument made by supporters of the ECP is that a socialist economy is inherently inefficient. In a market economy, competition drives producers to constantly improve the quality and price of their goods and services. In a socialist economy, there is no competition, and this means that there is no incentive for producers to innovate and improve. As a result, a socialist economy is likely to be less efficient than a market economy.

In the Soviet Union, the failure of socialism was particularly evident. The Soviet Union was a socialist economy that was plagued by inefficiency and shortages. Despite the government's efforts to implement economic planning, the Soviet economy was unable to overcome the ECP and achieve economic growth. Ultimately, the Soviet Union collapsed and transitioned to a market economy.

The ECP shows that socialism is impossible because it lacks the market prices and information needed for economic calculation and planning. The socialist calculation debate and the example of the Soviet Union demonstrate the practical implications of this theory, and support the idea that a market economy is necessary for economic efficiency and growth.

In this video, I discuss the Economic Calculation Problem (ECP) and its implications for socialism. The ECP was first proposed by Ludwig von Mises, a leading Austrian economist, and it shows that a socialist economy is impossible because it lacks the market prices and information needed for economic calculation and planning. The socialist calculation debate, which was a debate among economists about the feasibility of socialism, supports the Misesian theory that a market economy is necessary for economic efficiency and growth. The example of the Soviet Union, a socialist economy that ultimately collapsed, illustrates the practical implications of the ECP and the impossibility of socialism. In light of these arguments, it is clear that socialist economic policies are misguided and unworkable.

Chapters:

00:00 The Impossibility Thesis
04:54 Gross Output Planning
06:56 The Steady-State Economy
07:34 The Peoples Republic of Walmart
08:39 The Ethical Defeat of Socialism

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[LICENSE INFORMATION: I do not consider intellectual property to be a valid form of property, therefore it would be unethical for me to enforce the attribution requirement of the CC license that this video should be licensed under. Furthermore, if I have made a mistake and licensed under the standard YouTube license please let me know and I will amend it]

[orboakin]

As a Nigerian, it is so refreshing to see a westerner actually calling out the flaws of socialism and the bad-faith actors in the west who promote it.

[TheMeepster]

Argentina just deregulated their housing market and practically over night the number of rents increased by about 50 percent and prices dropped by about 20 percent.

[Crzszs]

"socialism is when the goverment does stuff, the more stuff the goverment does the more socialism and when the goverement does a ton its communism"
-LiquidZulu 2023

[THall-vicp]

"There is no ownership, only possession."

Translation:

_You will own nothing and you will be happy._

[tempejkl]

“Socialism is when the government does stuff, the more stuff it does, the socialister it is”

-carl marks

[xx_novumplayzyt_xx]

I think one of the main flaws of socialism and planned economies in general is not accounting for supply and demand. In a capitalist society, if you don’t want something, you don’t buy it, whereas under a planned economy you’re stuck with it because that’s what the state decided to make. Case in point the coffee shortages in east Germany when it was controlled by the soviets. The people were extremely unhappy to the point of rioting.

[Ironbattlemace]

That was well explained. I lived as a socialists for a long time until I realized how ridiculous it is, how it doesn't work with humanity and where it leads.

[fongangamassana]

Saying that a natural monopoly can’t exist is sweet but there’s the issue of oligopolies. These oligopolies generally agree not to compete with one another based on certain terms, effectively creating a situation of monopoly. That’s the case with telecommunication in the US, with companies carving up certain blocks of the country for themselves and agreeing not to compete with each other on their turf .

[MollyOKami]

The stick is a lot like the Coca Cola bottle in the 1980 movie The Gods Must Be Crazy. The tribe collectively owns the COke bottle & they find MANY uses for it, but there's only one & they start to fight over it. In that case, they decide it's best to jsut get rid of the bottle, hurting them all.

[voymasa]

"....which is why natural monopolies cannot exist..." I've suspected this and looking at US history it appears all monopolies and oligopolies were caused by government interference or favoritism

[tefky]

Even as non-socialist I think that this seeems to be pretty bad critique.

[maximfrappier]

I have discovered leftist arguments only a week ago (as I'm a teen, don't criticise my lack of understanding of economical systems) so can somebody please clear this up for me?

[cariyaputta]

What about the monopoly problem and resource wasting on stupid things? Because everything is profit driven on a limited resource, our planet is fucked right now. The only people that need to keep the system running is the already rich and powerful.

[thefrenchareharlequins]

If socialism was possible, I would be able to watch this as well as the MentisWave premiere

[hueyj]

>Potato analogy
The eternal hibernian strikes again

[SerbiaGaming]

Short essay debunking every single point he makes in this video:

A market doesn't determine the price of a commodity and a socialist one doesn't determine the value of the commodity arbitrarily either. Both systems' value of commodities are determined by the cost of which the commodity costs to be produced. The cost of which being how much the capital(such as machinery) costs to maintain or replace over the years, and the cost of labour-power, which in it of itself is a commodity sold by the labourer to the capitalist. This topic alone is mentioned in much more detail in Marx's "Wage labour and capital." The cost of commodities under capitalism only fluctuate due to the need for the highest profit possible, such as low demand high production = low prices, low production high demand = higher prices. The TRUE value of materials is known and is easily calculated. Even in a capitalist systems the market values of commodities can be calculated using computers nowadays.

To further push the point as you stated in the video car manufacturers do not need the market to determine the materials in which to make their cars out of that's simply science. You dont need trial and error in the form of the market to decide this when scientific experiments and critical thinking already does the job.

The very argument of the ECP is entirely moronic and made by people who have 0 understanding of marxist theory. The whole point of a socialist economy is for a more democratic approach to economic planning therefore you WOULD know of what commodities people need, because economic centralization doesn't mean 0 input from the "consumers." The sci-fi tech that you talk about which can allow a centrally planned economy to adequately distribute resources according to their needs is called THE INTERNET. I mean come on man the chileans figured out how to plan their economy using computers in the 70's and you're quoting a guy, who apparently isnt even aware of the events that took place within the last 40 years or so? Socialism isnt and has never been some random dudes sitting in a room trying to decide what the cost of a 3x4 should arbitrarily be they receive inputs from something called society through soviets(that being local organizations of elected leaders) and historically have been more efficient than capitalist societies at distributing necessary resources throughout practically every socialist experiment.

As for the example with the stick it is literally failing to grasp the meaning of democratic ownership. While the definition of ownership and possession can be debated at the end of the day this makes 0 difference against the argument for socialism other than "actually this definition is technically wrong therefore we have to continue using a system thats bringing forth the literal collapse of human society."

The final nail in the coffin would be that "capitalists take more risks tho" is also inherently untrue. Say 2 guys walk into a casino, one of them makes 250k a year and the other is a wage labourer that makes $7.50/hour. If they both spend $500 dollars. It cannot possibly be argued they are taking the same amount of risk as the one with a higher income stands to lose basically nothing, whereas the wage labourer betting that much in the first place endangers his entire livelihood. If the money were to be lost the guy getting paid $7.50 would most likely lose the money he needed to buy food, pay bills, etc, and most likely lose their apartment or whatever form of housing they rely on as they wouldnt be able to cover the expenses. In reality the wage labourer doesnt have the means to take said risks that grant capitalists so much status in the first place as its a fundamentally poor decision. The guy that makes 250k CAN take that risk further increasing his income and creating more money with money. That isnt the only reason too. Lets say the guy selling the logs as mentioned in the video is unable to sell any of his logs, perhaps eventually his business dies as hes unable to sell any logs, said workers lose their primary and only source of income, perhaps benefits(maybe a fancy logging company lmao) which he solely relies on for his very survival meanwhile the capitalist ends up with only half of his triple digit income. Oh no what will he ever do I guess he'll just have to spend the rest of his life providing enough necessary resources for his family, living comfortably, and maybe starting another company. And not only that with todays class division are you insinuating that elon musk takes more risks sitting on his couch watching his bank interest making more money than most americans do in their lifetime than a bolivian mine worker who risks his life and his family's future on an every-day basis?

[jojo]

I'm sick of these academy-like young teen blame all the problem on capitalism and make a long essay video about it, the one disgusted me the most is "How capitalism make you feel loneliness", in which video claimed the solution is socialism. (If you're feeling lonely get help, make friends, go out, work out, the solution is not socialism.) and the host tell you to support him by capitals via patreon at the end of the video.

[megabitmegabyte]

if you wanna critique socialism learn more about it.

[tylerbozinovski]

The fact that such a delusional ideology has been able to amass so much power and influence becomes more and more astounding to me every day.

[VseeAR]

Hearing an anarcho-capitalist speak about "impossible" political structures and economic bases is actually the funniest thing ever. Read a book.