This is CBS, I On the World. I'm John Batchel.

Whiskey's for drinking, water's for fighting.

That is, as old as the West, and I go west now, welcoming David Henderson, writing it to

finding ideas, the Hoover Institution, about water.

Nothing humble about it.

Water is the centerpiece of all communities

and should be. David, however, is using a water example to illustrate socialism, capitalism,

capitalism, capitalism. David, one more time, we need to investigate what socialism represents, how it's actually lived,

and what capitalism represents, and how it actually lives.

Let's begin with socialism.

You write in your essay that there are two things to check off here.

We could actually say there are problems.

One is information. The second is incentives.

What information? What do you need to know? And what did Mr. Hayek once upon a time teach us about

socialism, central planning, all powerful governments, and information? Good evening to you, David.

Good evening, John. So Friedrich Hayrich wrote a piece in the American Economic Review in

1945 called The Use of Knowledge in Society. In it, he argued, he put aside the issue of incentives,

which I will get to. He said, let's not even think about incentives. Let's say the socialist

planners had good incentives. They don't have the information. The information

needed to plan an economy efficiently is necessarily in the minds of the millions of people,

the millions of economic actors, including you, me, and your listeners. And no central government,

no matter how powerful as computers, can aggregate that

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