What Happens When an MBA Student Raised in Communist China Reads Hayek – Foundation for Economic Education – Working for a free and prosperous world

When I was in college, we had four exchange students from Mainland China. A couple of them were majoring in physics, and we’d have occasional conversations in the physics lounge. One day, one of the students asked me what my monthly ration of potatoes was. He just couldn’t believe they weren’t rationed.

If he’d asked me that question a few years later, my response would have been to state my monthly income, and divide it by the per-pound price of potatoes. And then part two of my answer would have been to introduce the opportunity cost of buying only potatoes.

 

Source: What Happens When an MBA Student Raised in Communist China Reads Hayek – Foundation for Economic Education – Working for a free and prosperous world

Planning Is Counterproductive
The Chinese students in that 1999 economics class began their MBA studies much like the essay writer who explained, “I had trouble conceiving of an economic or social order that is not deliberately made for a specific purpose.” “Government planning,” it seemed to him, was needed “to bring order and coordination to otherwise chaotic economic conditions.”

Reading Hayek’s, “The Use of Knowledge in Society” convinced him otherwise. He wrote, “Central planning ignores its impossible knowledge requirements. It demanded that all the fragments of knowledge existing in different minds be brought together in one mind, a feat requiring that single mind process knowledge far in excess of what anyone could ever comprehend.”

The student realized, quoting Hayek from his book Law, Legislation and Liberty, Vol. 2, there is no need to agree on aims: “The Great Society arose through the discovery that men can live together in peace and mutually benefiting each other without agreeing on the particular aims which they severally pursue.”

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