Does capitalism efficiently allocate resources?
We have discussed, in section I.1.1, the negative effects of workplace hierarchy and stock markets and, in section I.1.2, the informational problems of prices and the limitations in using profit as the sole criteria for decision making for the efficient allocation of resources. As such, anarchists have reason to doubt the arguments of the “Austrian” school of economics that (libertarian) socialism is impossible, as first suggested by Ludwig Von Mises in 1920. [“Economic Calculation in the Socialist Commonwealth”, Collectivist Economic Planning, F.A von Hayek (ed.), pp. 87-130] Here, we discuss why anarchists also have strong reason to question the underlying assumption that capitalism efficiently allocates resources and how this impacts on claims that “socialism” is impossible. This is based on an awareness of the flaws in any (implicit) assumption that all prices are at equilibrium, the issue of uncertainty, the assumption that human well-being is best served by market forces and, las
