What would a socialist economy look like?
January 27, 2006 | Page 12 ERIC RUDER compares today’s market madness to a socialist economy based on planning. IT’S WIDELY assumed today that the free market is the only feasible way to coordinate economic life. And there’s an endless parade of academic books and mainstream economists to promote the idea that the “law of supply and demand” is the best way to insure that what people want gets produced. In exchanges on a free market, goes the argument, no one is forced to buy what they don’t want. You can’t force someone to buy a banana or a television, or a ticket to a movie at a price they’re not willing to pay. But if people buy–or “demand”–so many of these commodities at the current price that their supply becomes scarce, then the price rises until only those people willing to pay the higher price will still buy them. And if people no longer want an item, then the supply rises, the price falls, and those who make the good will stop producing so many. The free market, according to
