We admit an interesting change. The current boom-bust cycle is heading towards a new bust. So we are now at a moment of choice. Are we heading towards poverty or sustainable prosperity?
When we look at the path of sustainable growth, the school of Austrian economics, we hear the common complaint that there are no calculations made. Next, to the fact that it is not true, we need to realize that everywhere we make calculations.
Unfortunately, there are no critics for the socialistic calculations. They come with interesting facts about equality. But if we are all equal or we are all getting the money without working. Who will produce whatever we need? Are you going to work this week or will I work? It is an absolute question, but this is exactly what we will see in a socialistic system. Next to poverty. Just look at what is happening in Venezuela.
so what does it take not to enter the path of destruction and poverty? Let’s make a list.
- Private property. We need private property within the production. Or there is no market for produced goods.
- When there is no market for there is no method for setting the price.
- Monetary policies make it possible to determine the security of goods or services.
The problem with the centrally planned economy is that it is impossible to determine the needs over the decades.
So let’s assume the head of central planning has all the knowledge in the world. Something that is technically impossible. How can he outsmart the market? The market is just based upon what you are prepared to pay. the producer and the seller are prepared to participate in the transaction. After all the transaction is beneficial.
It is a matter of fact that knowledge is the real power to succeed. The only big question is if we are going to choose the path of sustainable wealth.