Physicists Should Stick to Physics
We know already since Einstein that renowned physicists would do better to avoid straying into the field of economics. In 1949 Einstein published an essay on economics and education that is brimming with ignorance. According to Einstein, “The economic anarchy of capitalist society [is] the real source of evil”. Any old Marxist could have written that of course – the “capitalist anarchy of production” was routinely mentioned as an alleged drawback by Marxists, one that their “scientific” central economic planning would overcome.
Albert Einstein: great physicist, terrible economist.
Photo credit: Steffen Kugler / Getty Images
This conviction eventually cost the lives of hundreds of millions of people and utterly bankrupted half of the world for good measure. A representative quote from Einstein’s article:
“I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion. A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child.”
We have no idea what possessed Einstein to write this clap-trap. Was he not aware, in 1949, of the evils perpetrated by Stalin and the planners of the Soviet Union? Had he not heard of the purges, the famines and the Gulag?
There should be no need to mention that Ludwig von Mises already showed in 1920 that economic calculation isliterally impossible in a society in which the State is the sole owner of the means of production. Moreover, a vigorous debate between F.A. Hayek and Lionel Robbins on the one side, and assorted supporters of central economic planning such as Oskar Lange and Henry Dickinson on the other side had been raging between the mid 1930s and early 1940s (previously Marxist writers had proscribed such debates on the basis of polylogism).
Possibly Einstein wasn’t aware of this debate, but a salient feature of it was that the socialist planners had been forced to retreat step by step, until in the end, the only proposal they were left with was that the central planning agency should try to “imitate a market”. As Mises remarked on this later (in Human Action, which incidentally was also published in 1949):
“What these neo-socialists suggest is really paradoxical. They want to abolish private control of the means of production, market exchange, market prices, and competition. But at the same time they want to organize the socialist utopia in such a way that people could act as if these things were still present.
They want people to play market as children play war, railroad, or school. They do not comprehend how such childish play differs from the real thing it tries to imitate.”
If the socialists had succeeded in establishing socialism globally after the Russian revolution, the world would have been back in something resembling the stone age within a few short years. Society would have fallen apart, people would have been forced to lead a hand-to-mouth existence, barely subsiding. The only reason why the communists held on for as long as they did was that socialism was not implemented on a global scale. The planners were therefore able to observe prices in the capitalist societies, allowing them to engage in a rudimentary form of economic calculation.
Polish economist and “Market socialist” Oskar Lange: he lost the socialist calculation debate and didn’t even realize it, as he simply failed to grasp the essence of the argument. Poland’s economy was duly run into the ground by his fellow socialists.
Photo credit: W?adys?aw Miernicki
It is truly remarkable how deeply embedded socialist thought remains in society to this day, in spite of the downfall of the socialist Prison State in the late 1980s/early 1990s, after its utter bankruptcy could no longer be concealed (as an aside, we plan to soon post another article on the enduring popularity of collectivism, a phenomenon that strikes us as more than passing strange). Thus yet another popular and renowned physicist, namely Stephen Hawkins, has jumped into the debate, seemingly attacking capitalism. According to the Huffington Post, “Stephen Hawking Says We Should Really Be Scared Of Capitalism, Not Robots”.
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