A definition of socialism is that socialism is about the prohibition of free entry into markets. This definition, via the Econlab article, focuses on what socialism does rather than its aims or motives. By emphasizing the restriction on market entry, the author aims to identify a common thread among different visions of socialism by referring to liberal thinkers Ludwig von Mises, Friedrich von Hayek, and Oskar Lange.

Mises argues that under socialism, the absence of private ownership of the means of production leads to the absence of markets and prices, making economic calculation impossible. Mises criticized natural approaches that propose alternative methods of economic calculation based on intrinsic values of goods. Lange, on the other hand, agrees with Mises about the importance of economic calculation but argues that central planners can set prices for factors of production. He suggests using market theory as a substitute for actual markets in socialist systems.

While Hayek responded to Lange by emphasizing the role of knowledge in market economies, he argues that market capitalist prices reflect widely dispersed knowledge about economic conditions, while market socialist prices only reflect the knowledge of the Central Planning Board. Hayek believed that freedom of entry and entrepreneurship are crucial for economic coordination and the discovery of dispersed knowledge in a market system.

Kirzner further develops the idea that entrepreneurship plays a central role in market economies. He suggests that Misesian entrepreneurs solve Hayekian knowledge problems by driving the market towards better coordination. Kirzner highlights the importance of freedom of entry for entrepreneurial activity and argues that a centrally planned economy prohibits entrepreneurship, leading to arbitrary economic calculation.

The author concludes that defining socialism as the prohibition of free entry allows for a distinction between socialism in name and socialism in practice. They also argue that fascism can be considered a form of socialism if it restricts the freedom of individuals to organize production according to their vision. Finally, the author criticizes Lange's market socialism for disregarding the importance of freedom of entry and the entrepreneurial function in decision-making.

What are your thoughts about socialism? 

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