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    Who Started World War I: Crash Course World History 210
    Articles, Blog

    Who Started World War I: Crash Course World History 210

    August 27, 2019

    Hi, I’m John Green, this is Crash Course World
    History, and today we continue our discussion of how a regional conflict became World War
    I. We’re also going to look at who started the war and although no one nation is truly
    to blame, some nations are more to blame than others. Like America, for once? Blameless. Well, not
    totally blameless. Largely blameless. Mr. Green, Mr. Green! That’s easy, the Germans
    started the war. Well, Me from the Past, as it happens many
    historians and British politicians would agree with you. I mean, you have an opinion that can be
    defended. And I can’t wait for you to defend it. Uhh… maybe they just, like, really liked war? I’m
    not really in the defending positions business, Mr. Green, I’m more in the like, bold proclamations
    business. Yes, Me from the Past, noted. But it turns
    out, there’s more to life than that. So the topic of who started World War I remains
    one of the most controversial and interesting topics to discuss in World History, not least because,
    you know, we’d like to avoid having another one. But in general, when we talk about World Wars,
    as when we talk about World Cups, we pretty quickly end up discussing Germany. The idea that the root cause of World War
    I was Germany, or more specifically, German militarism, continues to be popular. This
    has been the case ever since the 1960s when this historian, Fritz Fisher, identified Germany
    as the chief cause of the war. But Germany’s guilt for the war was also written into the
    Versailles Peace Treaty, in article 231, and most of you will be familiar with the idea
    that anger over that clause its incumbent debts helped lead to Hitler’s rise. Also, pretty much however you slice it Germany
    was definitely responsible for starting World War II, and looking back that made it more
    plausible that they would have also stated World War I, because, you know, they had a
    history of starting wars. To be fair, the definition of a Western European nation is
    “has a history starting wars.” Unless you’re the Swiss. Cue the Switzereel, Stan! Yeah okay, but the thing is attributing characteristics
    like militarism or authoritarianism to entire national populations is a little problematic.
    Also one nation’s militarism is another nation’s strong national defense, and when you live
    in the country, as I do, that spends more on defense than any other nation, it’s probably
    not that good of an idea to call people militaristic. There’s just something about that broad-brush
    painting of an entire nation sharing a particular characteristic that feels a little bit propaganda-y.
    Also, it wasn’t just Germans who were militaristic in 1914. The idea of “the glory of war” was
    a very popular concept all over Europe, and really there’s no evidence that the German
    people of 1914 were any more or less militaristic than the French or the Russians, They all
    had poetry that celebrated heroic sacrifice and dying for the Mother and/or Fatherland. That’s not usually and. Maybe, though. I’m
    gonna stay open minded. But there’s another problem with the whole
    idea that the Germans were more eager for war than anyone else in Europe. That argument
    relies a lot on the behavior of Kaiser Wilhelm II, the German leader, and the Kaiser did
    make some pretty bellicose and stupid public statements, which in turn made people fear
    that Germans were eager for war. So Wilhelm became kind of a stand-in for German aggression,
    a literal cartoon villain, upon whom the world, especially the English, could project their
    stereotypes. So I would argue that the German character
    isn’t to blame for World War I, and in fact no national character has ever been to blame
    for any war. But I am not going to let the Germans off the hook entirely. So you will remember that Germany offered
    the so-called “blank check” that Germans would always support Austro-Hungarians’ ultimatum
    to Serbia. And in some ways this empowering by Germany’s support encouraged Austria’s
    foreign minister Berchtold to behave as recklessly as possible, under the mistaken impression that
    this is what the Germans wanted him to do. So basically, Austria thought that Germany
    wanted a war, so they were like, “Oh, we’ll just behave really recklessly and we’ll give
    the Germans the war they’ve been so excited about.” But the Germans were offering the
    Austrians the assurance of support in the hopes that it wouldn’t lead to war. So you could argue that in fact most of the
    blame for starting World War I should fall on the shoulders of the Austrians, after all,
    they were the ones who issued the ultimatum to Serbia, and they were the first to declare
    war, although only against Serbia. But, the Germans were the first to declare war on a
    major power, Russia, on August 1st, and the German advance on France through Belgium is
    what brought Britain into the war. And those are pretty solid arguments that Germany turned
    the conflict from, you know, a regional thing in the Balkans, which isn’t unprecedented,
    to like this big pan-European war. But I don’t think we’re done assigning blame,
    because we didn’t just have a pan-European war, we had a world war. Russia. Now you’ll remember that of all the major
    powers, Russia was the first to mobilize its massive army, and it was Russia’s mobilization that
    drew Germany, France, and Britain into the war. Putin is looking at me, isn’t he, Stan. I’m
    just trying to–ah! you so scary! Stan, can you please make Mr. Putin go away,
    I’m just trying to talk about history, I’m not talking about any current conflicts. And it makes me nervous to say this, but there
    was really no good reason for Russia to mobilize in the first place. I mean, when Austria declared
    war on Serbia on July 28th, the Austrians could not mobilize their own troops for two
    weeks, because they were on harvest break. I mean, if we’ve learned anything about agriculture,
    it’s that it’s hard to have a large-scale war without it, so we can’t go to war until
    all the wheat has been farmed. But even if Austria had mobilized and attacked
    immediately, their initial plan was an attack on Belgrade, not Russia, which by the way
    was called somewhat confusingly, Plan B. Now, Vienna did have a plan to mobilize against
    both Serbia and Russia, but they never used it. But even if Austria had launched an all-out
    attack on Russia, Russia had begun its pre-mobilization, the period preparatory to war, on July 25th,
    and while I usually don’t care about dates, with the start of World War I, very important,
    because July 25th was before the Serbs had even responded to the Austrian ultimatum. And just as a general rule, it’s hard to play
    the blameless victim when you’re moving all of your troops to the border. Hey, why are
    you here again, Putin? So here we have Austrians and Germans receiving
    reports of Russian troops massing on their borders, and you know, that seems kind of
    like war. A lot of it comes down to how you understand Russia’s period preparatory to
    war. I mean, do you focus on the “period preparatory”, or do you focus on the “to war”? Regardless,
    Russia became the first power to actually put its war machine into motion. Let’s go to the Thought Bubble. So talking about Russia leads us to some of
    the more meta arguments about the causes of World War I because it’s difficult to understand
    what Russia was doing when it mobilized without trying to understand why they mobilized. After
    all, an Austrian attack on Serbia was hardly an existential threat to Russia, I mean, look
    at the map. Russia’s huge, and at the time, probably had the largest army in Europe, if
    not the world. So why would they care about what was likely to be a skirmish on the Bosnian
    border? Well, here’s where geo-politics and history
    come in. So, looking at the map, you can see that the Balkans are right next to the Dardanelles,
    the straits that give access to the Black Sea. Russia needed to maintain influence there
    in order to ensure traffic through those straits, especially if the Ottomans were going to form
    an alliance with the Germans, which they did. Also, at least in its own estimation, Russia
    was in danger of becoming a laughingstock in European politics: their humiliating loss
    to Japan in the Russo-Japanese War was followed by Russia’s inability to stop Austria from
    annexing Bosnia from the Ottomans in 1908, and that was the event that sparked Serbia’s
    drive to expand its own territory. Its history of prior weakness meant that Russia’s foreign
    policy makers feared that without some decisive action, Russia wouldn’t be taken seriously
    anymore. In the wake of Austria’s ultimatum, Russian
    foreign minister Sazonov concluded that Russia, quote, “Could not remain a passive spectator
    whilst a Slavonic people was being trampled down. If Russia failed to fulfill her historic
    mission, she would be considered a decadent state and would henceforth have to take second
    place among the powers…if at this critical juncture, the Serbs were abandoned to their
    fate, Russian prestige in the Balkans would collapse utterly.” Thanks, Thought Bubble. So judging from what we just learned in the
    Thought Bubble, it was really the Ottomans. If they could have just stopped Austria from
    annexing Bosnia in the first place, none of this would have happened. And if I may go
    a little further back, there wouldn’t have even been an Ottoman Empire without the stupid
    Romans. And of course the Roman Empire was largely dependent upon constant expansion
    and looting, so if only the Gauls could have defeated Caesar, none of this would have happened. In short, no wonder Caesar was assassinated,
    he was about to start World War I in 1900 years. I bring that up because that’s the tricky
    thing about the blame game. You can trace the causes of World War I back a bunch of
    ways. I mean, I can’t think of anyone who you can’t at least partially assign blame
    to – well, I mean except the Mongols. Actually you know what, if they’d just kept
    control of Russia, probably no World War I. Anyway, all of this only scratches the surface
    of the arguments about who’s to blame for World War I. I mean, I haven’t dealt with
    stuff like the alliance system or European imperialism, or you often hear about the naval
    rivalry between Britain and Germany, and then there are the ideological causes, like nationalism,
    and the Social Darwinist thinking that led people to believe that war was a natural and
    inevitable state of human affairs. You can tell all those origin stories of the
    Great War, and they’re important, but ours centers on diplomatic history. There are a
    few reasons for this, first, the decision to go to war was ultimately in the hands of
    a very small group of diplomats. I mean, even in the most democratic countries, Britain
    and France, popular opinion didn’t force mobilization. Also, in most countries that’s still the case.
    It’s still diplomats who decide whether to go to war. So understanding what makes governments
    and diplomats decide to go to war is very important. But looking at the diplomatic causes of the
    war also reveals something to us about the pitfalls of writing history. I mean diplomats
    are famous for keeping pretty detailed records of their dealings, both at the time and in
    retrospect, and then historians have to sift through all these sources and make choices
    about which ones to emphasize. And sometimes, even which ones to believe, because of course,
    often these sources are in direct conflict. Now, I’m no historian, but in creating this
    episode, we had to make choices that many of you will disagree with. Either because
    you don’t think we gave enough evidence or because you don’t like the things that we
    emphasized, and that’s great. It’s these constructive and critical conversations that lead us to
    dig deeper, to consult more primary sources, to read more broadly, and that in turn leads
    to a richer understanding of the world and a more engaged life. All that noted, the alliance system was certainly
    important and I’m sure you’ll be discussing it in your classes, and in comments. Thank you for watching, I’ll see you next
    week. Crash Course is filmed here in the Chad and
    Stacey Emigholz Studio in Indianapolis, and it’s made possible because of these people’s
    hard work and also because of your contributions on Subbable. Subbable is a voluntary subscription
    service that allows you to contribute directly to Crash Course for the monthly price of your
    choice and it allows us to keep Crash Course free for everyone forever, so thank you to
    all of our Subbable subscribers, and thanks to everyone who watches. As we say in my hometown, don’t forget to
    be awesome.

    North Korea’s Tiny, Terrible Airline
    Articles, Blog

    North Korea’s Tiny, Terrible Airline

    August 24, 2019

    This video was made possible by CuriosityStream. Watch for free for 31-days by signing up at and using the code, “HAI.” North Korea—it would be great as a reality
    show, but it’s less great as reality. As much as this country likes to pretend that
    the rest of the world is made up exclusively of brainwashed heathens living in hell-scape
    garbage fire countries, sometimes certain North Koreans, special enough to get a hall
    pass, need to get out, and sometimes other people go there to experience the dictator
    Disneyland. Now, there is a train to the DPRK from Russia
    and China, but honestly, what are trains good for… other than low-cost, long distance,
    time-efficient, economically stimulating, carbon minimal, socially egalitarian, death-reducing
    transport? Nothing, because they don’t have wings. That’s why North Korea has its own extra
    special, tiny, terrible, airline… and here’s some boring history, made possible by my declining
    audience retention statistics. Back in the 50’s, the USSR was North Korea’s
    sugar daddy, and so the airline was first established to fly to the eastern bit of the
    Soviet Union so that people could connect onto Aeroflot services to Moscow. In the early days, they flew exclusively Soviet
    planes, which sometimes didn’t crash, and mostly focused on flights to the USSR and
    later China. Eventually, though, they got some big boy
    Ilyushin Il-62 and Tupolev Tu-154’s, which, surprisingly, are not the names of toaster
    models but rather planes that could fly all the way to Eastern Europe. That meant they could finally fly the crucial
    non-stop route of Pyongyang to Moscow. They also eventually added some flights going
    all the way to some of the other Soviet united places like East Germany and Bulgaria. But then the USSR became USS not, North Korea
    and Russia’s relationship diminished, and Air Koryo started flying to some definitively
    non-Soviet places. As recently as 2010, they were flying to far
    flung destinations like Zurich, Budapest, and Prague, but then, the DPRK’s flag carrier
    ran into two major issues. One was that they were added to the prestigious,
    “Airlines Banned in the EU” list meaning that, for the most part, they could no longer
    fly through, to, or from most of Europe and two was that, especially in the past decade,
    a whole host of sanctions were imposed on North Korea by both individual nations and
    the United Nations. These sanctions, preventing all UN member
    states from conducting almost all types of trade with North Korea, mean that there’s
    barely any economic activity with the country so there’s little reason for people to travel
    there. Nowadays, Air Koryo is more modest in size
    compared to its former glory. They fly to just five destinations—Vladivostok,
    Shenyang, Beijing, Shanghai, and they just recently started a new route to Macau in August,
    2019 to allow the small number of North Korean elites to get to this gambling hub for some
    good old fashioned sinning. Since this longest flight is only three hours
    long, they don’t have to deal with some of the complications that would arise from
    their crew liking some of their layover cities a little too much since they don’t have
    to have any overnight layovers. They do, however, have plenty of complications
    arising from operating from one of the most sanctioned countries on earth. These sanctions have long prevented them from
    purchasing Boeing or Airbus planes so they bought Soviet or Russian built planes, but
    then North Korea accidentally pressed the big red, “sanction me more,” button. On November 28, 2017, North Korea launched
    a ballistic missile that landed uncomfortably close to Japan and, in response, the UN dropped
    the mother of all sanction packages outlined in this bad boy document—UN Resolution 2397. This resolution resolved, among other things,
    that all UN members states would, “prohibit the direct or indirect supply, sale or transfer
    to the DPRK, of all transportation vehicles.” It clarifies that this includes everything
    between HS codes 86 and 89, which are codes used by customs organizations, and if you
    pull up HS codes 86 through 89, you’ll see that that includes, among other things, locomotives,
    tractors, tanks, baby carriages, buoys, and aircraft. Therefore, since that’s a United Nations
    sanction, that means that North Korea can’t buy aircraft from, let me pull up my map,
    ummm, these countries. They could always buy from, like, Kosovo. They’re not a UN member. I wonder how their aircraft manufacturing
    industry is… not that Kosovo is a country… or not a country… or part of a country…
    or not part of a country… just forget I ever mentioned Kosovo. Anyway, what this all means is that Air Koryo
    can only operate aircraft it had pre-2017 and those were almost all old Russian, Ukrainian,
    or Soviet planes. UN Resolution 2397 specifically allows the
    DPRK to buy spare parts for their passenger planes, presumably to be sure they don’t
    fall out of the sky, so that’s not an issue, but many of their planes are old, and only
    getting older, that’s how time works, so their lack of plane buying ability certainly
    is becoming more and more of a problem. While plenty of countries regularly violate
    the sanctions in secret (*cough* Russia,) it would certainly raise some questions if
    North Korea just suddenly started flying around a shiny new Russian jet, I’d imagine. UN Resolution 2270 also bans all sales of
    aviation fuel to the DPRK, but it specifically includes an exemption for fuel used for passenger,
    commercial flights. It does, however, warn its members to only
    sell the exact amount an aircraft needs to get from, in the example of Russia, Vladivostok,
    to Pyongyang, and back to Vladivostok—no more that could sneakily make its way into
    a military jet, you know, somehow. Perhaps the craziest bit about Air Koryo,
    though, is that you can book a flight on their website, just like any other airline—it’s
    scarily easy. The reception when you get there—well, that
    might be less than warm. Of course, on their rickety Russian jets,
    Air Koryo lets you experience aviation’s past but, if you want to see what flying will
    be like in the future, you should watch, “Into the Skies”— a new episode of the Curiosity
    Stream original series, “Speed.” This covers how aircraft design will change
    to cope with a time not far off when 10 billion passengers will fly each year. This is just one of more than 2,400 titles
    that you can watch on Desktop, Smart TV, iOS, Android, Apple TV, Roku, Chromecast, and more
    platforms through Curiosity Stream. They’re the perfect site for anyone who
    likes being entertained and educated simultaneously. What’s best, for HAI viewers, you can watch
    any of these more than 2,400 titles for free for 31-days by signing up at
    and using the code, “HAI.”

    Eastern Front of WWII animated: 1941
    Articles, Blog

    Eastern Front of WWII animated: 1941

    August 19, 2019

    Europe summer 1941 Germany had secured most of Central and Western Europe with only Great Britain remaining defiant on the islands the only potential threat to Germany in Europe was its formal Ally the Soviet Union in order to break the stalemate with Britain and make Germany’s strategic position Indisputable Hitler decided to cripple the military capabilities of the Soviet Union and seize its natural resources Germany planned to achieve this goal by capturing most of the European part of the Soviet Union before the onset of winter 1941 the main attack would take place in the center and be directed towards Moscow with auxilliary attacks in the north and south By the middle of June 1941 the Germans had almost completed the preparations and the invasion was about to begin Meanwhile, the Soviet forces were unaware of what was coming and were ill-prepared to resist the German invasion first we’ll look at the southern sector the Soviets had deployed their strongest units in the south having 1 million and 200,000 men between the prepared marches and the Black Sea They were to be confronted by the Army Group South that was afraid flee the same strength The first objective of the axis troops was securing the western ukraine On June 22nd the invasion began The Soviets immediately gathered their armed forces and met the German spearhead with a massive counter-attack in the area of tube noir and Brody But due to the lack of combat readiness of the units involved it failed and the Soviets lost most of their tanks the German advance Continued and this created a threat to pincer comment to the Soviet troops in the south and they have to be withdrawn from the exposed position after the main attack had tied down the Soviet reserves the Axis forces in Romania joined the offensive the main Spearhead now made a dash towards the east and this made Soviet command think that the main German effort was directed towards Kiev however The Germans had stuck to their original plan and turned south when the so it’s realized the German intentions was already too late to withdraw their forces and the Germans encircled and destroyed many of the Soviet formations near the town of Amman the Soviets now abandoned Western Ukraine and retreated to the eastern bank of the river neva They deployed the first wave of freshly Mobilised troops to establish a strong defense on the river line and also cling to the port of Odessa at the same time Operations were being carried out in the north Where one and a half million German soldiers from army groups north and center were facing a million Soviet soldiers in the beginning of the invasion the Army Group center was to encircle Soviet forces at the Porter and then Advanced toward Smolensk and Moscow meanwhile Army Group North was to advance directly towards Leningrad threatening to trap the Soviet forces between them and the sea On June 22nd the Germans attacked the saw at Western Front was deployed forward and during the first days of the war the German forces encircled most of its formations near the towns of Bialystok and Minsk in the Baltics the Soviet Counter-attacks were defeated in the Battle of lasagna and then they attempted to pull back and establish a defensive line and Daugava River but the Germans reached the river before them and pushed onwards threatening the Soviet units in the West with encirclement at The same time Army Group centre had finished Encircling the Soviet Western Front and its infantry units began to reduce the pockets while its armored forces advanced eastwards almost unopposed The Soviets attempted to plug the gap by deploying most of their pre-war reserves to counter them But it was not enough and as the German offensive continued their armor broke through the Soviet lines and trapped these units near Smolensk by that time the first wave of Soviet mobilization was complete and the Soviets used these formations to block further German advance and attempted to free the encircled troops however the performance of these newly created units was lackluster and they were unable to liberate the pocket the Germans managed to close it up and Eliminate it the Germans had gained the upper hand in the central part of the front and now they were faced with two options They could continue the push towards Moscow immediately or secure the flanks of Army Group center first And then continue the offensive eastwards They decided to do the latter and the armored formations of Army Group center were sent to a neighboring army groups During this time battles had been raging in the north where Army Group North had failed to pull out lots Encirclements and their progress was slowed down by the Soviet counter-attacks and bad infrastructure nevertheless They were making slow but steady progress and after securing their left flank They reached the approaches to Leningrad when the help from Army Group center arrived They were able to perform the final push and cut off the land-based communications to the city Through the north Finland had entered the war against the Soviet Union and June 25th And the Finnish troops took advantage of the Soviet defeats by taking back the lands lost in the Winter War after that They established forward defensive positions between the lakes Even further north the Finnish and German troops attempted to capture the Soviet port city of borman’s and caught the Murmansk Railway in order to sever the allied supply route to the Soviet Union However, their attacks became bogged down in the rough terrain short of their objectives the front became static meanwhile, the other armored units of the Army Group centre were sent to help Army Group south the Soviets had anticipated that the Germans would continue their attack towards Moscow and concentrated their troops on this direction which allowed the German armored formations to push back the weaker Soviet units on their southern flank the German advance southwards Forced the Soviets to abandon their forward positions in the Pripet marshes to shorten the line In Ukraine the Soviet troops were occupying a strong defensive position With their flanks resting on the Dnieper River in the west and south and the marshes in the north yet the Panzers from Army Group centre were bypassing the marshes from the east and Advanced into the Soviet rear the Soviets thought that the Germans bear head was overextended and could be contained however Unbeknownst to them the armored formations of the Army Group south had secretly crossed the Dnieper from the south into a German Beachhead and now broke through towards north to link up with the spearhead as the group’s met most of the Soviet units in the central Ukraine became encircled 750 thousand men trapped in the pocket when the pocket had been liquidated the Soviet forces in Ukraine had been severely weakened After these operations, the flanks of Army Group center was secured But now the Germans didn’t have enough time to reach the objective Set in the beginning of the campaign and they decided to go for more limited goals in order to reach them They began a full-scale attack along the whole front in the south The Soviet resistance had been crippled with the recent encirclement and this allowed the Germans to carry out another encirclement trapping part of the Soviet forces on the coast of the Black Sea Then they pushed onwards and established their control over the resource-rich areas of the eastern, Ukraine and conquered the Crimean Peninsula With Soviets abandoning Odessa, but clinging on to the port of Sevastopol At the same time the German forces were pursuing their objectives in the north Their goal was to sever the remaining supply routes to Leningrad and link up with the Finnish forces The initial advance was successful and reached its first goal by cutting the railway lines supplying the city The main German effort was in the center all this time. The Soviets had anticipated an attack on Moscow and had deployed 1,250,000 mobilized troops to the sector during the German operations on the flanks They had even somewhat managed to bush Army Group centre back to improve their defensive perimeter But by the end of September the German army had finally returned to the center and proceeded to carry out the new attack once again Near the towns of be asthma and bryant’s the Soviet troops were encircled and this resulted in having the Soviet strength on the front after reducing the pockets The Germans closed their distance to Moscow then they attempted to encircle Moscow with a two-pronged attack But by that time the long advance had exhausted their offensive capabilities and the weather had become severely cold The Soviets managed to halt their advance and although they didn’t have large Superiority in numbers the Soviet proficiency in winter combat allowed them to carry out a counter-attack the Germans were forced to abandon their vulnerable forward positions on the flanks and pulled back in order to shorten the front line during the retreat they had to abandon some of Their heavy equipment at the same time the German attempt to cut off Leningrad had also failed and they had to retreat to their starting positions and the supply line to Leningrad was Restored in the south. The German advance was also checked by the Soviets forcing the Germans to abandon their forward positions in Rostov The first year of the war was over the Soviets had stopped the Germans far from their initial goals but at the great cost to their own military Capabilities the Red Army had been decimated and it would take a year or more to fully rebuild and we equipped the army The Germans wanted to use this window of opportunity And were sending most of their available forces to the Eastern Front to deliver a knockout punch in the following year 1942 would be the decisive year of the war

    What If There Were No Prices? The Railroad Thought Experiment
    Articles, Blog

    What If There Were No Prices? The Railroad Thought Experiment

    August 11, 2019

    To appreciate why market prices are essential to human well-being, consider what a fix we
    would be in without them. Suppose you were the commissar of
    railroads in the old Soviet Union. Markets and prices have been banished. You and your comrades. Passionate communists all. Now, directly plan how to
    use available resources. You want a railroad from city A to city B,
    but between the cities is a mountain range. Suppose somehow you know that
    the railroad once built. Will serve the nation equally well. Whether it goes through the mountains or
    around. If you build through the mountains,
    you’ll use much less steel for the tracks. Because that route is shorter. But you’ll use a great deal of
    engineering to design the trestles and tunnels needed to cross the rough terrain. That matters because engineering is also
    needed to design irrigation systems, mines, harbor installations and
    other structures. And you don’t want to tie up
    engineering on your railroad if it would be more valuable designing
    those other structures instead. You can save engineering for
    other projects. If you build around
    the mountains on level ground. But that way you’ll use much more steel
    rail to go the longer distance and steel is also needed for other purposes. For vehicles, girders, ships, pots and
    pans and thousands of other things. Which route should you choose for
    the good of the nation? To answer, you would need to
    determine which bundle of resources is less urgently needed for
    other purposes. The large amount of engineering and
    small amount of steel for the route through the mountains,
    where the small amount of engineering and large amount of steel for
    the roundabout route. But how could you find out the urgency
    of need for engineering and steel in other uses? Just one way engineering is used
    is to build irrigation systems. To assess the importance of a particular
    irrigation system, you would need to know what the farmers know about how irrigation
    would increase the yield of their fields. And to know the value of that increased
    yield, you’d need to know what grocers know about their customers eagerness for
    that produce. That in turn depends on what customers
    know about the better meals they could fix with that produce. How would you find all this out? Just one way to use steel
    is to build new trucks. To assess the importance of a particular
    new truck, you would need to know what the trucker knows about the capacity
    of his current truck, and how much more quickly he could make the deliveries his
    customers want with a new bigger truck. To know the importance of those
    deliveries, you would need to know what his customers know about the value
    of getting goods delivered. That in turn depends on what still others
    know about the uses of those goods at their destinations. To reason about where
    to route the railroad, you need this kind of information for all
    possible uses of engineering and steel. That’s a massive amount of knowledge, held
    by millions of people throughout society. How might you get it? You might try surveys, but think how
    many people you would need to survey. All those who prepare meals with produce,
    and all those who take delivery by truck for
    starters. The numbers would be staggering. And often people don’t even know what they
    prefer until they face an actual choice. So they might not be able to answer
    survey questions accurately. Even if they could,
    by the time the surveys were returned and processed, much of the information
    would be out of date. And even if you could get complete and
    timely information about what everyone knows, that’s relevant
    to every use of steel in engineering, you would still need to deduce from
    it where to build the railroad. How would you begin to make
    sense of that mountain of data? In the words of Ludwig von Mises,
    you would be groping in the dark. You would face what is known as
    the knowledge problem of central planning. The reason why comprehensive
    socialism inevitably fails. Central planners cannot get the knowledge
    they need in order to plan effectively. You, commissar, simply cannot know on what
    projects scarce resources should be used for the good of the nation. But now change the thought experiment. Imagine that somewhere in the market
    economy part of the world, you are the chief operating
    officer of a railroad company. You work not for the good of the nation,
    but to generate profits for your firm. You want to run a railroad
    line from city C to city D. Again, there’s a mountain
    range between them. Now, how do you decide on the route? You choose what’s cheapest. You would calculate the total
    cost of each route for each one, multiplying the amount of engineering
    required by the price of engineering, and adding that to the amount of steel
    required times the price of steel. Then, you would choose whichever
    cost your company less. You might give no thought at all to the
    good of the nation or society as a whole. But, and here’s the marvel,
    by choosing the route that is cheapest for your company you would thereby choose
    the route that’s best for society. You would use the bundle of resources
    that’s least urgently needed for other purposes. Why? Because those market prices you calculate
    with reflects the urgency of need for engineering and
    steel in all their alternative uses. For example, suppose customers wanting
    to taste your meals, would buy better, more expensive produce, if it were
    on the shelf of their local grocery. In effect,
    they’re offering grocers more for produce. So the grocers will offer farmers more for
    produce. So the farmers who feels would be
    sufficiently improved by irrigation will offer more for irrigation systems. And those who build irrigation systems
    will offer engineers more to design them. Now that designing irrigation
    systems pays engineers better, people who want to hire engineers for
    other projects, such as railroads, will have to offer them at least as
    much to make it worth their while. The higher price tells everyone who
    uses engineering that it’s become, for some reason, more valuable so
    maybe they should use less. In this way, the market prices of
    resources represent the particular knowledge and preferences of
    millions of people who directly or indirectly use those resources. And the prices communicate
    that knowledge and those preferences to everyone interested. Only with market prices to communicate
    this vast amount of human knowledge to us. Can we calculate the least costly
    ways of producing the things we want, coordinator activities with the activities
    of others, use resources where society values the most, and thereby satisfy
    as many human wants as possible?