Socialism’s Calculation Problem
In the historical debates over socialism, its opponents would raise the problems described in previous posts and the proponents would usually respond by arguing that people would learn to work…
In the historical debates over socialism, its opponents would raise the problems described in previous posts and the proponents would usually respond by arguing that people would learn to work…
Socialists warn about the dangers of monopolies in capitalism, but ironically enough, socialism establishes one giant monopolist (the government) in control of all industries. The difference is that in capitalism…
In a market economy, scientists employed by a company might convince their managers that it would be worth it to expand their business. Managers take this idea to their superiors…
The vision It is a pure command economy (also called a command-and-control economy). The government owns all the resources and makes all the decisions of what to produce with them.…
Stocks allow people to own a portion of a firm. E.g. if you'd buy 50 stock of Amigo Company and they would have a total of 1,000 stocks, you would…
Many people seem to not grasp the concept of scarcity. For example, if a shoe factory stops expanding because the owner decides that profit has been maximized, they would say…
Suppose Jane spends $10,000 in January on a plot of land containing young Christmas trees. She doesn't need to spend any more money, she just has to wait until December…
Generally speaking, activities with high monetary profits will attract more entrepreneurs than those that cause losses. In a market economy with open competition, there is a tendency for monetary profits…
For some reason, people often think that credit transactions create money. They do not. When you buy icecream, money isn't created; you exchange money for the icecream. The same goes…
Interest is the amount of money paid to a lender above and beyond the return of the principal. For example, if someone lends out $1,000 and receives $1,100 back one…