Abstract

HODGSON, Geoffrey M.. Two open letters to friends, an austrian economist and a socialist. Rev.econ.inst. [online]. 2019, vol.21, n.40, pp.111-142. ISSN 0124-5996.  https://doi.org/10.18601/01245996.v21n40.04.

I address these letters two imaginary friends. In the first, to a free-market libertarian, I recognize the strengths in her position but argue that the basic libertarian stance needs to be updated in the light of developments in the financial and corporate world, and of growing inequalities in the distributions of wealth. The second letter is to a socialist, who still wishes to maximize public ownership and minimize markets. I argue that this position has received fatal blows in the twentieth century, from theoretical critiques and from practical catastrophes. Socialism -at least in its classic sense- is dead as a practical and humane doctrine. The welfare state, perhaps also with a significant public sector, is not. The real debate concerns what direction we would wish to take capitalism.

JEL: A12, B13, B14, B24, B25, H11, H82.

Keywords : Austrian economy; free market; Hayek; von Mises; capitalism; socialism; welfare state.

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