I, Mechanical Pencil: Why a socialist economy can never work

Steven Kates
06 February 2019 | PP14
I, Mechanical Pencil: Why a socialist economy can never work

Socialism brings poverty and oppression. The ignorance of so many as to why only a market economy is capable of bringing prosperity and political freedom is a major problem. Too many believe a socialist utopia can be achieved if only the right people took the right actions. In reality, a socialist economy can never provide prosperity and never has.
The current work is an extension of Leonard Read’s original I, Pencil, first published in 1958. The original stressed the importance of a free society in creating the conditions that underpin a prosperous community.
The present work, I, Mechanical Pencil, develops Read’s original ideas, but goes onto outline the specific elements that must exist in any economic system if a productive economy is to emerge. These are:
(1) entrepreneurs who make decisions for themselves
(2) an independent financial system
(3) an operating price mechanism
(4) business profitability as the major determinant of what is produced and how it is produced
(5) sound government regulation, and
(6) a robust defence of property rights.

Not only is each individually essential if an economy is to prosper, they are also essential if political freedom is to be achieved. One cannot have one without the other.

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