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Socialism: An Economic and Sociological Analysis

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This work is an absolute masterpiece. Originally published in 1922, this work features von Mises at his best. He completely demolishes socialism from almost every angle concievable. He demonstrates that socialism cannot function rationally, period. The primary contribution that this work is cited for, is of course the proof of the theory that economic calculation is impossible under socialism. Building on this fact, as well as many other important insights, socialism is shown to be little more than a chimera with virtually no scientific backing whatsoever. Quite nearly every major form or variant of socialism is critiqued, from marxism to Christian socialism, and even syndicalism. In each case, the conclusion is the same, i.e. socialism destroys society and civilization and replaces it with slavery, chaos, and poverty. Indeed, Mises correctly identifies socialism as a fundamentally destructive, purely anti-social force. In sharp contrast to this is the capitalist form of society based upon the principles of (classical) liberalism. Throughout the work, Mises refutes widespread misconceptions, myths and anti-capitalist dogmas associated with the market economy. At all times it is made clear that it is only capitalism that can sustain and advance the needs of individuals and their civilization. The importance of this work is difficult to overestimate. It is without a doubt, one of the greatest works of the last century, if not of all time. Even now, after almost eight decades in print, his principles stand unrefuted, even as we continue to slip down the slope toward complete state slavery. The fact that the message of his work has not eliminated the evils that he exposed takes nothing away from his achievement. As long as there are a few individuals remaining in whom the spirit of liberty remains strong, this work will continue to shine as a profound monument to the intellectual potential of man, and the superiority of capitalism.

October 25th 1917- The Bolsheviks stage a coupe in Petrograd and overthrow the Kerensky regime. For the first time ever Marxists seize control of a major nation. It will be several years before the Bolsheviks overwhelm their opponents within Russia. However, one question demands an answer. Will it work? Can socialism at least match the results of capitalism? The full answer to this question came in 1922- the year that Mises published Socialism, an Economic and Sociological Analysis. Here Mises proved that socialism must fail.

Why must socialism fail? The simple answer is because it lacks private ownership and a market for the means of production. As Mises put it "where there is no market there is no price system, and where there is no price system there can be no economic calculation". The full answer has several parts. First, economic calculation requires functioning financial markets. Second, economic calculation requires actual rivalry in markets. Third, economic calculation requires entrepreneurial alertness to profit opportunities. With these three elements in place monetary calculation of private profit reflects true economic costs. As Mises put it economic calculation "is essentially a matter for the capitalists- the capitalists who buy and sell stocks and shares, who make loans and recover them, who make deposits in the banks and draw them out of the banks again, who speculate in all kinds of commodities". Perpetually changing economic conditions mean that- "it is above all necessary that capital should be withdrawn from particular lines of production, from particular undertakings and concerns and should be applied in other lines of production, in other undertakings and concerns". Speculation in financial markets directs resources to the most urgent consumer demands because the most profitable ventures satisfy consumer demand at the least economic cost. Socialism fails because it lacks speculation that takes place only with entrepreneurial rivalry and exchange in financial markets.

The issue of economic calculation is economic, but Mises also inquired into the political and psychological reasons behind the socialist movement. He also discusses historical and cultural issues. Socialism is a full-scale treatise, comparable to Smith's Wealth of Nations. Some might think that a book from 1922 might have lost its relevance, but this is untrue. Mises explained principles that are as valid today as they were originally. In fact, Socialism is more relevant today than many recent books on economics. This is because Mises dealt with the real life problems of a dynamic economy, while much of modern economics focuses on static models that apply only to imaginary economic conditions.

Socialism is not only Mises' best book; it is one of the greatest works ever written on social theory. Mises addressed vital issues with penetrating analysis and delivered profound results. All those who are serious about political economy should read this book, but only after having read Menger's Principles of Economics, and before reading Hayek's Road to Serfdom. Those who are less ambitious should read a shorter book by Mises- Liberalism in the Classical Tradition. In any case, Socialism is a towering intellectual achievement. Were its arguments more widely understood many of the tragedies of 20th century state socialism might have been avoided. This book remains important today because it explains why we live in an age of unprecedented prosperity, and how we can achieve further progress. To put it simply Socialism is as indispensable to intellectual development as property rights are to economic development.

A thorough analysis and brilliant refutation of socialism and the politics of redistribution. This book confront the many myths surrounding socialism that are stilled echoed today. It is so concise, straight-forward and covers all the bases in a simple, yet powerful text. Also, this book confronts all the so called "Third Way" positionists advocating social justice, a mixed economy, a corporatist state, fascism, syndicalism and other dubiously named contrivances that are essentially socialist forms of economic organization. Mises makes it clear that socialism, the so called economic system of the future, is anti-social and incompatible with human nature. As Mises declares, "Men must choose between capitalism and socialism," which is simply because, "If the the market is not allowed to steer the whole economic apparatus, the government must do it." There is no Third Way, how true! The debate lies between free-markets and socialism -and this book makes it clear socialism is illogical. This book might be helpful at deprogramming a quasi-socialist by exposing and refuting all the major myths. If you're getting a start on studying classical economics than get this book. The Law by Frederic Bastiat and Economics in One Lesson by Henry Hazlitt is also recommended.

In a well thought out work of considerable length (nearly 600 pages) Von Mises effectively demolishes the various arguments that have been made by the advocates of socialism. He approaches the problem of socialism from a number of different perspectives and provides very persuasive arguments concerning why socialism and its derivatives can only result in chaos. The underlying premise of Von Mises' work is that economic calculation is impossible under socialism, and the arguments that he advances on behalf of this proposition are in my view irrefutable. Overall, this is an excellent work by a very lucid, thorough, and perceptive thinker. My one complaint with the work - which was not enough to reduce it to below 5 stars - is that I found the manner of exposition sometimes more difficult than need be the case. Since this was not true with regard to "Liberalism" which was also authored by Von Mises, I can only conclude that this one deficiency may be attributable to the translation. However, if you are interested in reading Von Mises, I recommend that you read "Liberalism" (which is much shorter, easier to read, and a good introduction to Von Mises' thought), before reading "Socialism."

A great historical and economic reference for any lover of liberty who wants to recognize and incisively refute all Facist, Communist, and other Socialist arguments of the modern left with impecable logic and mathematical precision. ...Surprise, they are the same old arguments of 1800's >>early 1900's, easily recognized after reading this book. Your television news will never again seem as credible or informative...give your BS detector a quantum leap! Over 500 pages of facts, history, philosophy, and many predictions that came true after it was written in 1922. A must for serious historians, economists, and political science professionals.

This is THE definitive work on the impracticality, impossibility and immorality of socialism. Von Mises, who observed socialism first hand before having to flee his home in Europe, and who lived through the age of great collectivist experiments, has written a simply devastating critique. The (supposed) reader below who wrote the review entitled "Propogating Utopian Fallacies", obviously either has not read the book, or completely misunderstood the entire thing. A more ignorant review of this book can hardly be imagined. He makes several dubious assumptions in his review and attributes them to Von Mises. He makes statements like, "Mises doesn't understand," or "Mises believes" and then proceeds to use these statements to try to refute the idea of free markets. He also fails to apply his own logical excercises to himself. For example he states that if Mises were consistent, he would have rejected all government and not just some collectivist programs. Yet the reviewer seems to be a believer in a half-way system where markets are mixed with socialism, "democracy", and government intervention. I guess he must have a monopoly on believing that governments should do some things and leave others to the anarchy of the market. Anyone familair with the rest of Mises's works and with free market and libertarian theory in general can't help but laugh at the claims he makes. This reviewer clearly does not understand property rights based, modern anarchist theory (as opposed to the Rage Against the Machine variety which he makes reference to), nor does he understand this book. The claims he makes in the last paragraph of his reveiw are so outlandish and naive that they do not even warrant a response. An important lesson can be gained here though. Without some prior (correct) understanding of concepts like markets, anarchy, liberty, the true nature of government, and without some understanding of logical processes, it is easy to fall prey to such overly-simplified arguments. I would recommend along with this book, also reading other books by authors such as Mises, Murray Rothbard, Henry Hazlitt, and F.A. Hayek.

It is truly unfortunate that Von Mises is perhaps the most overlooked 20th Century champion of free market capitalism. His brilliant observations have heavily influenced the momentous (and much more revered) works of Friedrich Hayek, as well as subsequent scholars such as Murray Rothbard, Milton Friedman, Thomas Sowell, and others. Von Mises is the one who towers over almost every other laissez-faire economist (except Adam Smith and few others). His insightful formulations devastated the incessant obfuscations of the socialists and demonstrated, once and for all, the comparative benefits of a free market system.

At the heart of SOCIALISM is the argument that economic calculation is impossible without a free market. Von Mises effectively drove home the need for a market price in order to regulate the supply and demand of human society. Recent proposals for socialized medicine completely deny this importance of the price system: if the price of medicine (for consumers) is zero, the demand will be astronomical, and the doctors and other medical personnel will not be capable of effectively meeting such demand. Few proponents of "universal health care" ever address this concern, which colorfully evidences their lack of interest in -- or understanding of -- Von Mises' penetrating contentions.

"The market is a democracy in which every penny gives a right to vote. . . . Every individual is free to disagree with an election campaign or of the market process. But in a democracy he has no other means to alter things than persuasion. If a man were to say: 'I do not like the mayor elected by majority vote; therefore I ask government to replace him by the man I prefer,' one would hardly call him a democrat. But if the same claims are raised with regard to the market, most people are too dull to discover the dictatorial apirations involved." (p. 490) Von Mises had the presence of mind to fully discern the tyrannical motivations behind most calls for a collectivist arrangement. He knew that the grotesque desires of the elite would inevitably eclipse the true inclinations of man. More than an economic dissertation, SOCIALISM was an expression of human justice, as illuminated by the deference the author paid to the individual autonomy of the common man. Respect for the personal choices of others is, after all, the defining characteristic of freedom.

Regardless of the self-serving configurations of the statists and their innumerable followers, the free market works, as evidenced by the fact that even the poor feely partake in such a system and usually enjoy a much higher standard of living than even the average citizen in socialist nations. As the American federal government continues to expand at an alarming rate, we would do well as a society to better familiarize ourselves with the philosophies of Von Mises and his progeny. Reading SOCIALISM would be a start in the right direction. Those of us who have already surveyed the book should recommend it to as many thoughtful (and open-minded) people as we know. Day by day, one person at a time, we can begin to recover and restore our devotion to liberty as a society. As the author of this tremendous book well knew, the voluntary exchange of a free market will almost always be more efficient and preferable than the coercive force of government. The hollow promises of a big, active, all-intrusive state will always lure a great percentage of our soicety -- most of them well-meaning, but averse to logic and evidence -- yet such dreams always provide the essential fuel for despotism. A return to our federalist roots (in which the states are sovereign entities rather than ineffectual subsidiaries of the federal government) and to the free market principles of Smith and Von Mises would serve us well in our on-going struggle against state-sponsored tyranny.

This English translation of von Mises classic study of the economic foundations of socialism has weathered the test of time well. Although originally published between WWI and II, the analysis of socialist economics presented therein are still relevant in the new millenium.

Possibly one of the first scholarly texts dealing with the problems of socialism, the book deals with many leftist myths (myths that still appear in public debate today) in a timeless, thoughtful manner.

The book is detailed and well though out and yet is very readable. I strongly recommend it.

I want to thank all of the collectivists, central planners and socialists of both Left and Right affiliations for their low rankings and bad reviews of this book. If my entire worldview was shattered by a single book, I supposed I would be angry and irrational as well.

Anyway, this is a great book to learn not only why central planning and regulation of markets fail, but the mentality behind those type of people. This book exposes the myth that National Socialism and Soviet Communism were somehow radically different, and not in reality just different sides of the same coin. I have had many arguments with Lefists on how different socialism is from National Socialism, but with this book I can show them the error of their ways.

To sum up: If you are a market liberal, a fiscal conservative or libertarian, read this book and buy it for any central planning, anti-market advocates you know. If you are a collectivist or anti-market conserviative or liberal, please read this book and try to convince your fellows of the danger of their actions.

Socialism is a hard read and if you do not know much about economics, I would recommend reading free to choose by Milton Friedman first.

The author of this book is known as the Einstein of economics, in my opinion Einstein was not even close to this guy at all, totally and utterly destroys any arguments or thoughts for that matter on socialism. One read of this book and socialism will be closed in your mind forever!

Von Mises goes over why every form of socialism that has ever existed has failed, and every form that might exist and any mixed or partial distorted form of socialism that might somehow come about will fail...it is an extensive, mighty, engrossing, and completely comprehensive expose on socialism. It is the definitive work on the subject and the only book you need to read on socialism because all other books pail significantly in comparison. In fact Ludwig von Mises understudy Fredrick Hayak who was originally a socialist and was never able to fully unload that intellectual baggage and who conservatives always championed for some reason, said that with all he was doing at the time he was surprised that he was able to write a book much less a book of such incredible magnitude! I would say outside of Atlas shrugged of course and in the time frame of socialism's current dominance of the world at this point in history that this is the second most important book ever written!