The Knowledge Problem: Why Socialism Always Fails

In Round 7 of Wrestling with Economics, Matt Kibbe and Glenn Jacobs — Knox County Mayor and former WWE wrestler — examine why central planning, better known as socialism, can never work. As Ludwig von Mises argued in his landmark book Socialism, no group of planners can ever possess enough knowledge to coordinate the countless variables in a modern economy. In the United States alone, 330 million people make billions of decisions every day, each reflected in real-time through the price system. Prices act as signals, guiding resources to where they’re needed most. Socialism disrupts those signals, leading to inefficiency and chaos — often compounded by the all-too-human tendencies toward corruption and bad incentives.