One of the most destructive beliefs in all of history is that government bureaucrats and technocrats somehow know better than all the rest of us how to utilize the fruits of our own labors.

They insist that, since they are so much wiser, we must hand over a significant proportion of our hard-earned currency to them, so that they can decide how that money ought to be spent.

The fallacy of this primitive belief system was exposed by economist Ludwig von Mises, who explained why central planning cannot possibly work.

It's a logical impossibility.

In this short video, Jon Stossel and the Mises Institute explain why central planning doesn't and cannot work:

Here's how I've often put it:

Government bureaucrats acting at best arbitrarily, assuming an absense of corruption and ulterior self-interested motives, do not know better than the market with its pricing system how to efficiently direct scarce resources toward productive ends as determined by the will of consumers.

There is no more perfect manifestation of democratic princples than the free market.

They also explain in the video how the Federal Reserve system exists to effect an upwards transfer of wealth, financing endless government spending by robbing us of our purchasing power through what amounts to a legalized counterfeiting operation.

If you do not yet understand how central banking exists to serve the politically connected financial eliets at the expense of the rest of us, you need to watch this. It's not long but succinctly explains the fundamental fallacy of central economic planning.

For a deeper understanding, also check out my book Ron Paul vs. Paul Krugman: Austrian vs. Keynesian Economics in the Financial Crisis, which was praised by Barron's as a must-read that is quick, easy, and humorous to read while providing more insights into the causes and cures of recessions than most economic textbooks.