Just as capitalism - private ownership of the means of production--is indispensable to the existence of a division-of-labor society, so, by the same token, socialism and collectivism are incompatible with the existence of a division-of-labor society. The truth of these propositions is confirmed by the collapse of socialism in Eastern Europe and--how wonderful the words sound - the former Soviet Union. Despite extensive Western aid, economic conditions in the Communist bloc were so bad for so long that finally all hope of improvement under socialism has been abandoned and attempts are now underway to institute private ownership of the means of production and establish a price system.

The incompatibility of socialism and collectivism with a division-of-labor society would long since have been blatant if the capitalist countries had not continuously rescued the Soviet Union and its allies from famine, with massive supplies of grain sent for free or on government guaranteed credit that was never intended to be repaid. Even the grain purchases made by the Soviet Union and its allies ultimately depended on the aid of Western governments, which guaranteed investments made in the development of natural resources and in the construction of factories in the Soviet Union and other Communist bloc countries. These investments, particularly those in the development of natural resources, in which the quality of the product does not enter as a decisive factor, were the foundation of most of the exports of the Soviet Union and the Communist bloc and thus of their ability to obtain funds with which to make purchases from abroad. In the absence of such Western aid, a series of famines - the necessary consequence of the massive inefficiencies of socialism - would have led to a flight from the cities and resettlement of practically the whole of the surviving population of the Communist countries on farms, in an effort of people to secure a food supply. This would have meant the end of all significant division of labor in those countries and their reversion to the economic conditions of feudalism.

It should be realized that collectivism openly demands that everyone think and act as a unit. It leaves no room for the vast differentiation and individuation of knowledge on which a division-of-labor society rests. The propaganda of socialism fully displays this absurdity when it pretends that under socialism all economic decisions will be arrived at democratically. In order for people intelligently to vote on all economic decisions, everyone would have to have all the necessary knowledge pertaining to all economic decisions, which is clearly impossible in a division-of-labor society. It would mean, for example, that the voters would have to decide such questions as whether a new steel mill should be built in Gary, Indiana, or somewhere else, what kind of steel mill it should be, how large it should be, and so on. In the face of hundreds or thousands of such questions arising every day, the voters would have to devote their lives to nothing else, and still they would be almost entirely ignorant about the matters raised in each case.

Socialism is not rescued from its incompatibility with a division-of-labor society by substituting the dictatorship of an alleged expert or body of experts for the democracy of the ignorant masses. For now, instead of demanding that everyone knows everything about production, it demands that one person or several people-the Supreme Dictator or the members of the Central Planning Board - know everything about production. The very expression "central planning" describes the essence of this absurdity. It means that one consciousness must be able to see and plan the entire economic system, either alone or in consultation with one or more other such all-seeing consciousnesses. For central planning means the planning of the entire economic system as an indivisible whole.

Socialism is incompatible with a division-of-labor society because in all of its versions it is incompatible with a division of the intellectual labor required in the planning of the conduct of the economic system. When it attempts such an intellectual division of labor, as it necessarily must, the result is contradictory partial planning. This is a state of affairs in which separate ministries, industries, regions, and even individual factories and farms plan in discoordination and at cross purposes. In a word, it is economic chaos. As a result of this chaos, the whole division of labor disintegrates - or would in the absence of aid from capitalist countries. For people are subjected to a chronic inability to obtain vital supplies from others and thus must attempt to produce them themselves.

The lack of vital supplies includes all manner of things. There are not only shortages of food, but also shortages of such things as lubricants, electric power, and raw materials and component parts of all kinds, and, of course, labor and all kinds of consumers' goods. It is in response to such conditions that Soviet factories found it necessary to attempt to manufacture even their own screws and nails.

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