Chicago School Market Socialism

Gary Becker’s advocacy of a higher gasoline tax, as mentioned below by Norm Singleton, is a good example of how Chicago School economics has long been a not-so-distant cousin of so-called market socialism. Market socialists were a band of self-deluding economists in the early 20th century who beleived that socialism could be made to work if they could only imitate the market, set prices by reading newspapers of capitalist countries, etc. Their arguments were always absurd because they ignored the fact that without private property there can be no genuine markets, and without markets there can be no genuine market prices, and without market prices economic calculation is impossible. Not to mention completely ignoring the role of the entrepreneurial class in capitalist economies. They were always shooting-in-the-dark central planners. I see no difference between them and Becker’s latest proposal (and much of what Chicago School founder Henry Simons advocated). It’s amazing that someone as smart as Becker doesn’t recognize the simplest of moral hazard problems that his proposal would create: higher gas prices today create political pressures to eliminate regulations that block development of oil resources in Alaska and elsewhere. A large gas tax increase would reduce those pressures, to our detriment. Myriad other unintended side effects could be discussed which further reveal the folly Chicago School market socialism.

Such collosal blunders are not made by those who understand the Austrian School view of how markets operate.

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