Hayek4 - cis225: hayek4 February 2006, p.1 Does Socialism...

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cis225: hayek4 February 2006, p.1 Does Socialism Lead to Dictatorship? -- D Summary and Review of Hayek’s The Road to Serfdom 1 There are two major sets of arguments that are important for us in this course. 2 One set of arguments concerns the debate over whether socialism and central economic planning can outperform capitalism and competition as a means of generating social wealth and individual satisfaction of needs and desires. 3 Hayek argues that it cannot. 4 The second set of arguments concerns the question of whether central economic planning is compatible with democracy. 5 Hayek argues that it is not, that socialism and central economic planning are likely to undermine democracy and democratic values. 6 Let me summarize Hayek’s arguments in each case. Can socialism and central economic planning outperform capitalism and competition as a means of generating social wealth and individual satisfaction of needs and desires? 7 What kinds of arguments can be made about the respective abilities of socialism and capitalism to generate wealth and individual satisfaction of needs and desires? 8 Historically, Hayek says, it is capitalism which produced a remarkable increase in social wealth in its brief history. 9 Logically, it is the competition which is characteristic of capitalism which is able to generate the information about the values of goods and services so that producers and consumers can respond to what others most want.
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cis225: hayek4 February 8, 2001, p.2 10 This is done in a thoroughly decentralized fashion via the price system . 11 For a producer to know what to do, all that is necessary is to know the prices of raw materials, of labor, of machinery, and of the final product to determine whether it is worthwhile to produce more of the good or service. 12 There is no technological reason why monopolies can be expected to emerge and thereby eliminate competition in a capitalist economy. 13
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This note was uploaded on 04/09/2008 for the course ISS 225 taught by Professor Williams during the Spring '07 term at Michigan State University.

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Hayek4 - cis225: hayek4 February 2006, p.1 Does Socialism...

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