The Guardian takes a look at Israel's kibbutz movement on its 100th anniversary. The Adam Smith Institute's Tim Worstall comments, "Without a price system no one knew what was the most productive use of labour: without a price system there was no rationing of resources." He goes on:
Now this sort of communal living, if it won't work with an all volunteer starting population, with people entirely raised within this egalitarian ethos, won't work even when motivated by the building of a new country and new way of life, well, I think we can say that it's been tried in the circumstances most favourable to its success and that failure shows the failure of the basic idea, not of the particular circumstances. We're just not going to make this egalitarian communalism work with human beings at any scale larger than the family.
It may be a bit too harsh an assessment; the kibbutzim did work for some time during the building of Israel. Though Mr. Worstall doesn't mention F.A. Hayek, the point about the knowledge conveyed by prices is a classic Hayek point.
