World-class economist Paul Samuelson, a Nobel laureate, wrote in the tenth edition of his textbook Economics: “It is a vulgar mistake to think that most people in Eastern Europe are miserable.” This, mind you, in the aftermath of the 1953 East German uprising, the 1956 Hungarian uprising and the Poznan protests in Poland, the 1968 revolution in Czechoslovakia— all suppressed with bloodshed by Soviet tanks. In the eleventh edition, he took out the word “vulgar.” In the 1985 twelfth edition, that entire passage had disappeared. Instead, he and his coauthor, William Nordhaus, substituted a sentence asking whether Soviet political repression was “worth the economic gains.” This non-question was identified as “one of the most profound dilemmas of human society.” After 70 years of Leninism, Stalinism, and Maoism that took at least 100 million lives, this was still a dilemma? (...)
At a time when the magnitude of the Soviet economic disaster was apparent even to the most willfully blind Marxists in Central Europe and the USSR, the 1985 Samuelson text offered this paragraph about the Soviet economy: "But it would be misleading to dwell on the shortcomings. Every economy has its contradictions and difficulties with incentives—witness the paradoxes raised by the separation of ownership and control in America. . . . What counts is results, and there can be no doubt that the Soviet planning system has been a powerful engine for economic growth".
"The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive"Assumindo que Samuelson não agia de má fé (uma grande concessão), este género de casos deve constituir um aviso sobre a facilidade com que, até indivíduos reconhecidos entre os seus pares como líderes, podem retirar conclusões que negam por completo conceitos elementares dos mecanismos de acção económica:
Kennan may have been the first to realize that a society based on Communism would not survive politically, but it was Ludwig von Mises, in his 1922 work Socialism, who demonstrated that any such society could not survive economically.
When a collection of free individuals — the market — is willing to pay a price for a product that creates “excess” profits, it signals producers to provide more of that product. If the market does not support a given price, producers are forced to redeploy their assets for more pressing social needs. Similarly, if a factor of production, such as labor or capital, changes in price, producers instantly react, sending signals — through the prices of intermediate goods — down to the consumer. Prices effortlessly allocate society’s assets to reflect consumer preference and adjust to accommodate the ever-changing availability of scarce resources.
Mises argued that governmental interference in prices, through taxation, subsidies, and regulation, complicates this process — affecting not only the consumption of final goods, but also the economic calculations that are necessary to provide intermediate goods and services. Higher-order division of labor fails. Poverty results. For example, while Chinese and Russian central planners were busy setting quotas for steel mills, there was no method for consumers to signal that they preferred food — and millions starved to death.