HT: Greg Ransom @ Taking Hayek Seriously
Take the following passage from Hayek’s The Road to Serfdom ([1944]2007, p. 135),
That the ideal of justice of most socialists would be satisfied if merely private income from property were abolished and the differences between the earned incomes of different people remained what they are now, is true. What these people forget is that in transferring all property in the means of production to the state they put the state in a position whereby its action must in effect decide all other incomes.
Smith interprets as following,
That is, as Hayek goes on to explain, there is nothing fundamentally wrong with communal ownership of the means of production. The mistake is to think that the government could facilitate such ownership because then the government is effectively a monopolist and that would give the government almost unlimited power.
Admittedly, in the beginning of that particular chapter (“Who, Whom?”) Hayek’s argument deals predominately with the implications communal ownership of the means of production would have on individual freedom, but I think Karl Smith is mistaken in interpreting a lack of discussion on the socialist calculation problem as a suggestion that communal ownership of the means of production is fundamentally sound.
It’s amazing that Karl Smith doesn’t consider Hayek’s Nobel lecture prize, “The Pretense of Knowledge”.