Why Marx Never Figured Out How to Distribute Goods in a Socialist Society
Contra Marx, Mises understood that human desires and needs are not determined merely by biology.
Karl Marx held that human interests are “uniquely and entirely determined by the biological nature of the human body.”1 He thought that people were exclusively interested in gaining as many tangible goods as they could. Therefore, a person’s wants would not depend on his ideas but on his physiological condition. More is better.
The question Ludwig von Mises posed, on the other hand, is: More of what?
Economics is concerned with how this is decided. It is one thing to say that under socialism men enjoy their toil because they will find self-actualization in producing goods for each other. It is another thing entirely to demonstrate who, under socialism, will choose what is made for whom, how, where, with what, and by whom.
The basic economic problem, as it is sometimes called by economists, is that resources are scarce but human wants are unlimited. While primitive men faced with starvation (and animals) may well only be interested in the quantity of food the can secure, as soon as civilization reaches its early stages people are faced with the problem of choosing which one of their various competing desires they should satisfy. Given there are various ways of satisfying the same needs, they also have to answer the question of how they should satisfy them.
Mises defines human action itself as the employment of scarce means for the attainment of preferred ends. To act is to choose between two or more things that we cannot have both of, preferring one and setting aside the other.2
Under capitalism different business owners attempt to make competing products in all different ways, and the consumer will ultimately decide which of them get rich and which go out of business. Each of us, as customers, apply our scarce means, setting aside some products to buy others, and in doing so we decide what is produced and by whom. How is the same going to be determined efficiently in a moneyless society where wage labor has been abolished, such as Marx envisaged?
We Act Based on Our Idea of What Is Best for Us
Ultimately, some authority must decide. This is unsatisfactory to Mises. For him, a free man gets to decide himself how he spends his income, but in a society where an authority supplies those things they think the people need—or ought to have—men are not free. Marxism does not differentiate between these two modes of want satisfaction and therefore does not apprehend the difference between freedom and slavery. The Marxian image of fre
Article from Mises Wire