Today in History: Austrian-American economist, sociologist, and philosopher Ludwig von Mises was born on this day in 1881. Mises was one of the great classical liberal (Libertarian) economists of the time, alongside Milton Friedman, Murray N. Rothbard and Friedrich Hayek. Mises was an early critic of Socialism and Marx and argued that a socialist economy was doomed to fail because such a system lacked the signalling information needed for a coherent and sane economy. For instance, a capitalist economy produces signals to producers that consumers want or need so much of a certain item. A centrally planned economic system like socialism has no such mechanism as production decisions are handled by the top few, or even the one.
The socialist author of "The Worldly Philosophers," Robert Heilbroner, after examining the socialist countries of the 20th century, famously declared that "Mises was Right." "Capitalism has been as unmistakable a success as socialism has been a failure. Here is the part that's hard to swallow. It has been the Friedmans, Hayeks, and von Miseses who have maintained that capitalism would flourish and that socialism would develop incurable ailments. All three have regarded capitalism as the 'natural' system of free men; all have maintained that left to its own devices capitalism would achieve material growth more successfully than any other system. From [my samplings] I draw the following discomforting generalization: The farther to the right one looks, the more prescient has been the historical foresight; the farther to the left, the less so."
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