Products – The Centre for Independent Studies

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.

Latest Publications

90 Days to Freedom? Why Australia can learn from Canada’s vaccination success
Robert Carling
18 August 2021 | PP43

Predictions have been made by the Doherty Institute and others that Australia will achieve full vaccination of 70% of the eligible population by the end of October and 80% by mid-November, thereby meeting the thresholds for liberalisation of restrictions set by national cabinet. Doubts that have been expressed about these predicted vaccination levels are unwarranted. Basic modelling and comparisons with…

READ MORE
Crucial Collaboration: The Case for Closer Australia-UK Defence and Security Ties in Light of a Rising China
Tom Tugendhat
23 June 2021 | PP42

China’s rise is perhaps the single most significant geopolitical question of the next decade – indeed, the next century. The sheer scale of its economy and military, combined with an increasingly authoritarian regime under Xi Jinping, means that the Indo-Pacific lies at the heart of the China challenge. Growing militarisation and Chinese aggression are destabilising the region, whilst Beijing’s willingness…

READ MORE
The MMT Hoax
Tony Makin, Gene Tunny
27 May 2021 | PP41

Modern Monetary Theory (MMT) is a supposedly new macroeconomic paradigm, but it is essentially a reprise of 1930s Keynesian economics. Its central premise — that countries which can borrow in their own currencies should not worry about government deficits and can finance as much government spending as they want — is deeply flawed, yet it has political appeal and has…

READ MORE
Does high-rise development damage neighbourhood character?
Peter Tulip, Zachary Lanigan
29 April 2021 | PP40

Local residents often oppose new apartment buildings on the grounds that they would harm neighbourhood character. This paper suggests these concerns are overstated. The paper examines several examples of high-rise development in Sydney: Chatswood, Forest Lodge, Green Square, Liverpool and Turrella. If these developments harmed neighbourhood character, as local residents often claim, nearby house prices should fall. But that does…

READ MORE
Make every drop count, and count every drop: Vanishing groundwater needs proper monitoring and management
Grahame Campbell
22 April 2021 | PP39

Aquifer groundwater is a crucial and valuable resource for Australia, but is poorly managed and monitored to the point of being neglected in some areas. This neglect is a risk for the future of Australia’s $60 billion agriculture production and industry that relies on the resource in an arid country. About 30% of Australia’s total water consumption comes from groundwater,…

READ MORE