The Perverse Persistence of Socialism

Why people gravitate toward socialism is a question that has been asked and answered by economists for a while. The fact is that we all grow up in an ideal socialist setting, namely our family. That molds our moral intuitions which then guide our normative positions. That is, our beliefs about how the economy should function is grounded on our intuitive understanding of how the world works, which are formed in our (what else) formative years.

Thus we reach conclusions that are at odds with the reality of the world. For example we believe that order cannot emerge without orders from above. This has intuitive appeal — something is true and needs no analysis or investigation — because we see that to be true in families and firms, not to mention in armies. So it is an alien concept that order can emerge without orders in a free marketplace. (Free here means that there are no barriers to entry or exit.) Continue reading