Pro Bolivia

Introduction

In this insightful interview, Spanish economist and commentator Daniel Lacalle speaks with Dr. Jesús Huerta de Soto, a world-renowned representative of the Austrian School of Economics. Together, they explore the modern spread of statism, the evolution of socialism as an idea, and why government intervention obstructs the very creativity that defines human civilization. What unfolds is less a conversation and more a masterclass in political economy.

What is Socialism—Really?

Huerta de Soto explains that the classical definition of socialism—public ownership of the means of production—is outdated and too narrow. The concept has evolved:

• Hans-Hermann Hoppe defines socialism as any institutional aggression against private property.

• Huerta de Soto builds on this:

  “Socialism is any system of institutional aggression against the free exercise of entrepreneurial action.”

This new definition allows for a unified analysis of both real socialism (e.g., Cuba, North Korea) and interventionist mixed economies, where state coercion undermines individual creativity, economic coordination, and value generation.

Statism: The Modern Face of Socialism

Huerta de Soto now believes that his foundational book, originally titled Socialism, Economic Calculation, and Entrepreneurship, should be renamed:

“Statism, Economic Calculation, and Entrepreneurship.”

Why? Because:

• The fall of the Berlin Wall exposed real socialism’s failure.

• But today’s problem is more insidious: statism from all political parties, left or right.

“The belief that the State should be the driver of social progress is now a universal dogma—and it's dangerous.”

Four Reasons Why Statism Is Impossible

Huerta de Soto outlines four core reasons why the idea of a planned society is not just flawed—but scientifically impossible.

1. Volume of knowledge is unmanageable
The knowledge driving civilization is tacit, decentralized, and created daily by 8 billion people. It’s impossible for a central planner to absorb and coordinate it.

2. Most knowledge is non-formalizable
The most vital knowledge—like how to run a business, fall in love, or create something new—cannot be written in a manual or algorithm.

“It’s procedural, learned by doing, and impossible to encode.”

3. The future knowledge planners need… doesn’t yet exist
To plan society, the State would need knowledge of future preferences, values, and innovations. But that knowledge hasn’t been created yet—it’s still in the minds and hearts of the entrepreneurs who haven’t acted yet.

4. The State is coercion, and coercion kills creativity

“State action blocks the very human creativity that it needs in order to plan.”

This is the great paradox of socialism: the more a government intervenes, the less information is available to coordinate effectively—because coercion suppresses the discovery process.

The Arsonist Firefighter: How the State Causes the Crises It Solves

In finance, Huerta de Soto highlights a clear case:

• Governments and central banks create artificial booms through monetary expansion.

• When the bubble bursts, they rescue the banks... and blame capitalism.

“There are no 'market failures'—only imbalances that markets can correct themselves. State failures, however, are systemic.”

Language Corruption: The Myth of Capitalism

“Where is this capitalism everyone blames? If it exists, bring it out!”

With 1.4 million pages of new regulation every year, Spain—and much of the world—is under regulatory siege. What is called “capitalism” is often state intervention with private players as scapegoats.

This is a semantic corruption, says Huerta de Soto. What people criticize as capitalism are actually the consequences of interventionism.

Capitalism: The True Driver of Human Progress

Since the early 1960s, the world’s population has grown from 3.2 billion to 8 billion. According to the UN:

“70 million people exit poverty every year. That’s 10,000 people while we sit here talking.”

Even partially-free markets have lifted billions out of destitution. Imagine what could happen if states stopped obstructing capital accumulation and entrepreneurship in developing nations.

Final Thoughts: A Battle of Ideas

“I am a methodological optimist. I believe truth and sound ideas always win in the end.”

For Huerta de Soto, this is not a political battle—it’s an intellectual war. We must continue challenging the myth that the State is the solution. It’s not. It’s the problem.

“Civilization has progressed despite the State, not because of it.”

From economic theory to empirical evidence, Huerta de Soto's message is clear: statism is the deadliest virus, and freedom—true, creative, voluntary cooperation—is the only cure.