re: The Communist Manifesto

Tom, Rothbard recounts Mises’s comment about a stock market being incompatible with socialism, as I note here. Rothbard wrote:

One time I asked Professor von Mises, the great expert on the economics of socialism, at what point on this spectrum of statism would he designate a country as “socialist” or not. At that time, I wasn’t sure that any definite criterion existed to make that sort of clear-cut judgment.

And so I was pleasantly surprised at the clarity and decisiveness of Mises’s answer. “A stock market,” he answered promptly. “A stock market is crucial to the existence of capitalism and private property. For it means that there is a functioning market in the exchange of private titles to the means of production. There can be no genuine private ownership of capital without a stock market: there can be no true socialism if such a market is allowed to exist.

Don’t expect the anti-corporate left to agree with this, since stock implies corporations!

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3:32 pm on September 25, 2008

re: The Communist Manifesto

I can’t recall where the story comes from, but Ludwig von Mises was reportedly asked once how to distinguish between a capitalist and a socialist economy in light of the fact that there is so much interventionism in “capitalist” economies. His answer was that the defining characteristic of capitalism was private capital markets.

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2:02 pm on September 25, 2008