Economists Prove That Capitalism Is Unnecessary 

Several readers sent me a link to Economists Prove That Capitalism Is Unnecessary. 

The title was hardly surprising, given that is what many economic illiterates think. However, I was startled to find out it was written by Steve Keen, one of my favorite economists.

Did Steve Keen really propose such a thing?  Thankfully, he didn’t. 

The first sentence of his article reads “Actually they’ve done no such thing. But they do effectively assume that it’s unnecessary all the time. … I’ve read this sort of nonsense in dozens of mainstream academic papers over the years, and railed against it in an academic sort of way.“

With that, I was more than a bit relieved. And in regards to central planning and ability of bureaucrats to spot bubbles, bad planning, and instability, Keen says …

“And how would economic agents notice this instability? They would realize that a pattern of relative prices that had occurred once before in the past happened again. Hmmm. O.K.A.Y.“

Getting to the heart of the matter, Keen praises Hayek …

“The strength of a market economy was how it let people combine fragmented and incomplete knowledge in a way that no centralized system could do. Hayek’s main target here were socialists who believed that a complex economy could be centrally planned—thus doing away with markets institutionally.“