To a certain extent Shumilin can be forgiven for his economic views because socialism had not yet provided irrefutable evidence of its impossibility. No such excuse exists for Waters and Hinchey. This pair belong to a party that has blocked the building of refineries for more than 30 years. This is the same party that is at this very moment is doing everything it can to prevent an increase in the domestic production of oil. And now two of its luminaries are using the consequences of their party's insane energy policy as an excuse to take over the oil companies.

What is striking about the Democrats is the number of cultists it now attracts. One of the chief characteristic of a cult is its imperviousness to counterfactual evidence. Those who have joined the cult will simply refuse to believe any evidence that clearly refute the doctrine. (See L. Festenger, H. W. Riecken & S. Schachter, When Prophecy Fails, Harper Torchbooks, 1966). This behaviour fits Waters and Hinchey down to a 'T'

Whenever socialism has been put in to practice the result has been an economic and social disaster. Yet Waters and Hinchey adamantly refuse to accept this reality. Socialists rationalise the collapse of communism by either denying that the Soviet Union was a socialist state (Trotskyites usually push this line) or that their socialist utopia will not repeat the planning mistakes of the Soviet Union. In other words, a socialist must be in a permanent state of denial. Waters and Maurice Hinchey are excellent examples of this proposition.

Informed opinion understands that the collapse of communism fully revealed the contradictions, gross errors, tragedy and unimaginable waste that attempts at central planning created. These enormous losses and mistakes were not caused by planning errors, bureaucratic inefficiency, lack of enthusiasm or even ingenuity. They were caused by the sheer impossibility of the task.

In a seminal essay (Economic Calculation in a Socialist Commonwealth, 1920, Augustus M. Kelley Publishers 1975) Professor Ludwig von Misses explained why central economic planning (meaning socialism) would always fail. At the heart of his critique is his insight that without money prices it is impossible to allocate resources efficiently. The Result is economic chaos. His insights were extended by Professor von Hayek’s work². The historic and economic case against central planning was now conclusive. (Also see David Ramsay Steele’s From Marx to Mises: Post-Capitalist Society and the Challenge of Economic Calculation, Open Court, 1992).

A great many lessons of economics and history are forever being forgotten and then, after much pain, relearned. Regrettably, the tragic lesson that is central planning has evidently been rejected by the socialist likes Waters and Maurice Hinchey. Their absurd belief in the power of the state, i.e., politicians like themselves, to successfully do the work of the market would be comical if it were not tragic.

Driven by a powerful mixture of statist ideology, a staggering ignorance of economics and economic history, and abundant arrogance Waters and Hinchey were probably licking their lips at the thought of being able to use the coercive power of the state to take over the oil companies, irrespective of the social, economic and political consequences.

(One would have to be particularly naïve to think that this pair could be so easily satisfied. To them, nationalising the oil companies would be the first step in their inordinate vision of controlling the whole of the United States massive economy).

Like all socialists Waters and Hinchey arrogantly believe that they can successfully substitute 'rational economic policies' for the "anarchy of production" that is capitalism. In their opinion government insights, the needs of vested interests and bureaucratic direction will eliminate the market’s alleged failures and its "exploitation" of labour by capital. The result of their hubris is that the complex phenomenon that the market spontaneously, continuously and successfully deals with would be subordinated to the interests of the state, meaning themselves.

How many people — excluding 37 per cent of Democrats dumb enough to support Waters and Hinchey's socialist agenda — really imagine that any bureaucrat, politician or academic could have created Silicon Valley? Entrepreneurs look to what can be. Planners look to what is. Hayek aptly called the belief in state planning the "fatal conceit". The emphasis should be on fatal. Moreover, such a state would have to suppress criticism of its actions. The last thing socialists want is an informed citizenry. Needless to say. both Waters and Hinchey are hostile to free speech hence their efforts to silence critics by reintroducing the infamous "fairness doctrine"³.

Of course, when socialists argue about a "plan" they are really arguing about whose "plan". As von Mises caustically observed, would-be economic planners are always arguing over whose plan is best. That a vital function of the market is to coordinate plans is something that never seems to occur to these one-size-fits-all ignoramuses.

1. Hinchey is a member of the socialist Progressive Caucus cult. Another group that thinks it can abolish economics and successfully impose a socialist state on Americans. Waters is a member of a number of socialist cults, one of which is the Campaign for America' s Future. Its co-director is Robert Borosage who was a pro-Soviet activist employed by the Institute of policy Studies during the Cold War. The IPA also hosted KGB officers.

2. Unfortunately Hayek muddied the waters somewhat by reducing the 'planning problem' to one of information. Mises stressed that what mattered is market money prices. These could only emerge when the institution of private property exists. From this it followed that socialist states do not have prices: they have price edicts.

3. Naturally, the doctrine would not be applied to leftwing newspapers and documentaries.

Gerard Jackson is Brookes’ economics editor

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