10 Socialist Arguments Destroyed
6. Socialism increases production
Socialism, whatever else it may do, hardly increases production. Through its emphasis on planned economy and distribution, it retards production in endless ways. The planned economy lowers the standard of living for everyone, including the poor.
A socialist system based upon a planned economy would not be able to allocate resources effectively due to the lack of price signals. Because the means of production would be controlled by a single entity, approximating prices for capital goods in a planned economy would be impossible. Socialism fails economically because of the economic calculation problem – the impossibility of a socialist government to make the economic calculations required to organize a complex economy. Without a market economy there would be no functional price system, which is essential for achieving rational and efficient allocation of capital goods to their most productive uses. Socialism fails as demand cannot be known without prices. Central planning by the government destroys the essential tool — competitively formed market prices — by which people in a society make rational economic decisions.
