The World After Capital
Lots of shaky assumptions and economic misconceptions in this book. Every decade there is always a utopian or a group of idealists who claim that we have the means to meet everyones needs and that capitalism and its economic laws are no longer capable of providing the goods and services that we demand. But these ideas are always incoherent and boil down to arbitrary assumptions about human nature.<p>Let us, for the sake of the argument ignore the fact that capitalism, voluntary exchange, and the free market is the _only_ system that is capable of rationally allocating resources in a society and instead assume that we have somehow surpassed the need for capital-based economics. What do the central planners like the author of the book have in mind to &quot;replace&quot; capitalism? The proposed solutions always boil down to some form of common ownership of the means of production. Private ownership is considered obsolete and common ownership of resources with a rational distribution system where everyone receives what they need. In the past people proposed that this rational distribution system would be controlled by a committee of experts, and today the same people say that a highly intelligent computer system would marshal the resources. Human needs can be objectively determined, and damn those who demand more than what they are entitled to from the rational distribution system.<p>Sounds familiar? That is because it is. Socialism _always_ fails because a central authority cannot, objectively, plan an economy better than the collective decisions by acting men in the free market. Hayek wrote about this in his essay _The Use of Knowledge in Society_ [1] This is the same fallacy that caused the collapse of every single planned economy in the past and will in the future. Without prices there is no economic calculation, and the best pricing system is one that is based on private property. Frankly, after skimming the book, I find that his entire argument boils down to the fact that he believes that certain things should be worth more and others should be worth less, and damn the market for telling me why they cost the way they do. There is a reason space travel costs as much as it does, but luckily for us we have a system that allows for entrepreneurship where innovative individuals and corporations who are able to arbitrage between the cost of factor inputs and the prices of their output get rewarded with a handsome profit. Since it is in their interest to maximise their spread they always tend to discover ways cut costs while still delivering the product that their customers demand (just look at Elon Musk and his space venture).<p>While I agree with the author that enabling people to widely access information will speed up the process of entrepreneurship, time is unfortunately an element in entrepreneurial discovery and there is no coming around that.<p>[1] <a href="http:&#x2F;&#x2F;www.econlib.org&#x2F;library&#x2F;Essays&#x2F;hykKnw1.html" rel="nofollow">http:&#x2F;&#x2F;www.econlib.org&#x2F;library&#x2F;Essays&#x2F;hykKnw1.html</a>