Drawing on the ideas of economist Frank Knight, this essay shows that within the institutional framework of socialism, economic agents must face an amount of unmitigated pure uncertainty that under capitalism is either completely absent or significantly reduced by profit-seeking entrepreneurs.

Juan Ramón Rallo is professor of economics at Universidad Francisco Marroquín.
Philipp Bagus is a professor at Rey Juan Carlos University. He is also a past winner of The Sir John M. Templeton Fellowships Essay Contest.
Miguel Ángel Alonso Neira is professor in the Department of Applied Economics, History and Economic Institutions and Moral Philosophy at King Juan Carlos University.
Philosophy and ReligionSocialism, Communism, and Collectivism
Other Independent Review articles by Juan Ramón Rallo
Winter 2019/20 Hayek Did Not Embrace a Universal Basic Income
Spring 2018 Some Fundamental Problems with Thomas Piketty’s Capital in the Twenty-First Century
Other Independent Review articles by Philipp Bagus
Spring 2017 Between Debt and the Devil: Money, Credit, and Fixing Global Finance
Spring 2011 The Tragedy of the Euro