Such systems [ed: "unregulated" free markets] cannot regulate themselves, either micro-economically or macro-economically. Wherever tried they systematically breed intolerable inequalities. And instead of such inequality being the necessary price to encourage dynamic progress via technological and managerial innovations, it instead breeds dysfunctional shortfalls in what economists call "total factor productivity."The great Paul Samuelson, 1989:
Convincing proof of these points can be found in the deterioration in the US from 2001 to 2008.
The Soviet Economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive.An anonymous commenter on Kids Prefer Cheese, in response to the above:
Paul is not so much with the R-square.Hat tips to Angus and Tyler Cowen.