The socialist calculation debate
laphamsquarterly.org
laphamsquarterly.org
But what I want is more democratically forms of corporations, government policies that produce less income inequality and regulations over business which prevents monopolies and market distortions, along with much stronger unions (ideally a situation where we keep the government, corporations and unions all more or less at odds with each other in order to maximize actual individual liberty--defined to exclude the current contradictory definition of liberty as "wielding as much capital power as you possibly can over other people").
What we have right now is a situation where corporations run the government and are in the process of consolidating every more tightly into monopolistic cabals. That is also the end goal of unregulated free market capitalism, it isn't the optimum allocation of capital, it is the optimum exploitation of labor for profits.
Yeah, the magic wand solution of government-run economies and doing away with money and markets doesn't work. Outside of some sophomorically edgy and loud tankies on twitter and reddit nobody really wants to do that, and it wouldn't get anywhere if they tried.
Of those two, free markets lead to better outcomes, but rarely optimal outcomes. There are middle grounds.
What’s worse is that America’s markets are already extremely skewed (tax deductible mortgage interest for example), but free market proponents ignore that, since it’s the baseline.
I do tend to agree with most socialist diagnosis of the problems of capitalism, I just don't tend to agree on the cure for the disease (or if there even is a cure, and not just limiting the damage).
The fact that the terms don't really exist are a good indication of how well the propaganda is working I guess.
> Yes it seems that capitalism/free markets works best most of the time (even China knows this) but there are many cases where it does not and something else has to happen (healthcare, housing etc.)
And I don't necessarily agree with this. I think money+markets will need to exist. I don't agree that the current top-down hierarchical nature of corporations is the best. CEOs are all tinpot dictators and we've universally decided that this is just okay and commands flow down from the top and people don't question that. I've found that to be a pretty shitty model, just on the basis of not having enough feedback loops from the bottom to the top which leads to badly performing economic machines. And as corporations consolidate and grow to become the size of governments the CEOs are becoming real political dictators and a ruling class.
My heuristic is that any time you're espousing a "pure", "unadulterated", "absolutist" philosophy, you're probably on the path to becoming a monster. The real world is never black and white and morally grey areas are unavoidable, if messy.
Rant over =)
If I’m at the top marginal rate, I effectively gain 40 cents for every untaxed dollar.
Loewe then tells me that instead of paying $5k for my calfskin bag today, I can take out a 1 year $1k loan with a 400% APR via store credit card.
So now instead of needing $8.3k of gross income to afford that bag, I only need $5.7k!
And you know who loses that $2.6k? The government.
It’s a market skew, most people agree that frivolous consumption shouldn’t be subsidized in that way, but the home thing is still up for debate (though I think it’s a bad skew now that we aren’t trying to win the Cold War, personally).
The more people are exposed to the true cost of housing, the more likely they are to care about it.
I also don’t think it’s an intrinsic good that people own their homes. Looks what it has done in places like CA where nothing gets built anymore.
Are you sure about that? In this state, at least, a politician cannot get elected without union endorsement.
The teachers' union rules the states, for example. It's illegal for teachers to strike, but they strike anyway with impunity, and the elected officials they endorsed always cave.
The unfunded pension system for public union employees is entirely due to their capture of the governments.
https://www.pewtrusts.org/en/research-and-analysis/articles/...
> Yeah, the magic wand solution of government-run economies and doing away with money and markets doesn't work. Outside of some sophomorically edgy and loud tankies on twitter and reddit nobody really wants to do that, and it wouldn't get anywhere if they tried.
While I agree the "socialists" who want full-blown (central, government run with no free market elements and no money) socialism are the minority, it's frustrating that good conversation around socialism is hard to find because detractors specifically attack this extreme side of the dichotomy.
I might be okay with inefficiencies if we really could get rid of class, or that we could keep our excess value of labor. That puts me on the extreme side.
The less extreme side just seems inefficient and creates a class of government workers/politicians who control resources are the new upper class.
It really sounds like you want capitalism with some sort of redistribution or better taxation. I most recently found Green Capitalism as a word I could likely get behind, but it still suffers from the issue of resources going through government workers/politicians.
It's accumulated wealth that is the problem (and leads to the corruption of free markets and democracy).
Policies should be focused on that - taxing wealth rather than work, and encouraging profitable investments rather than sitting on assets.
Whereas now the so-called "left-wing" policies are awful - rent control is popular in Europe despite being an unfair disaster in Sweden. There are high taxes on income and high VAT, whilst inheritance, land and wealth taxes have been abolished, greatly hurting social mobility while benefiting established, inherited wealth.
Same with a lot of focus on patching up symptoms - like not prosecuting low-value shoplifting, allowing squatting on "empty" properties, etc. rather than trying to improve market conditions, education and training and the housing market, etc. to ensure that everyone could get a much better salary to begin with.
[Citation needed]
To be clear, I'm not implying that it would be good to have absolutely everyone make exactly the same amount. I'm saying that income inequality at high levels is bad, demonstrably so, and inevitably leads to concentrations of wealth.
I'm also not sure why you think that high VAT and lack of inheritance and wealth taxes are "left-wing" policies. Those are all regressive, and exactly the kinds of things that the right wing is pushing for here in the US. At most, I would think that such policies would be compromises between a left wing that wants progressive income taxes alongside inheritance and wealth taxes, and a right wing that wants VAT and basically nothing else.
People could do more projects/start more companies to earn more, but no one should be accumulating millions by doing almost nothing as is the case now.
Outside of people who inherit this kind of wealth, who exactly is accumulating millions just sitting on their asses?
And then you have people earning millions, that at least when compared to the numerous workers being underpaid and actually doing the hard work that generates profit, basically do so little work they may as well be sitting on their asses.
Capital gains taxes don't prevent an investor from making money.
They're not exactly doing nothing but they're not producing anything of real value. This is a growing problem in the US.
Haven't they already?
Besides, that might be a good thing, if corporate overreach continues to grow unchecked.
Solved by limiting the profit that can be transferred out to foreign companies/parent companies.
If a market is too big, as long as money can still be made even with a cap, a company won't leave - or if they do a competitor will spring up to take its place.
Foreign investment drops off because, hey, who is going to invest if they can take their money back out?
It's also going to limit foreign investment outside the country.
It also screws with exchange rates and interest rates because of the Interest Rate parity law: https://en.wikipedia.org/wiki/Interest_rate_parity
https://www.theguardian.com/social-enterprise-network/2012/j...
And you think that's a bad thing?
There is nothing intrinsically limiting about the format of a coop that would prevent it from being as big as needed, IMO.
Inability to expand is practically built-in to the structure of worker and consumer cooperatives.
That they're free to exist but don't dominate the marketplace (the total revenue of those 300 companies is still less than the revenue of the top 10 non-coops) should be evidence enough but you're welcome to exploree the literature yourself.
Why do you think not dominating the marketplace is a bad thing?
What is it you think about their structure that limits them?
And regardless of your answer, whatever issues may or may not exist and be limiting, rules and limitations can be adjusted as needed. The fundamental principle is that workers would have more of a say to some extent, but more importantly receive more of the profit that their work produces.
A coop cannot pursue outside investment by issuing shares, it must rely on philanthropy, subsidisation, or loans for this.
Why would an employee-shareholder willingly reliquish their interest in the company to improve productivity and returns for their peers - such as automating away their own role? It necessitates make-work inefficiencies.
Increasing the size of the company doesn't mean an increased return for the employee-shareholders, they might even end up working much harder to just maintain their income - the larger the company gets the truer this becomes as they reach dimishing returns in their sector.
Successful coops get insular and wary of freeriders, as such they prefer to outsource where possible - Mondragon for example outsources labour.
Again the literature is plentiful and on a personal level I have no objection to them, but to believe they are without serious shortcomings is naive.
That aside, so your main complaint is people can't invest in coops? There is nothing limiting coops growth except the fact that the members are not trying to become global monopolies. And even if there were some limitation, the context of this discussion is some kind of improvement or alternative to the current system we have today. There is no reason what constitutes a coop could not be refined to eliminate any limitations.
Also, you vaguely claim 'the literature' supports what you are saying without naming anything specific, and I can do the same - there is plenty of literature arguing explicitly in favor of coops, addressing any of the things you claim as issues.
A difficult distinction to make, since profitable investments are also assets that one would presumably like to sit on for a while.
Yeah I don't agree with that.
> It's accumulated wealth that is the problem
I do agree that wealth inequality is the bigger problem, and I should have used that term instead.
As long as the McDonald’s worker has some kind of decent safety net underneath them, I think having a large disparity in pay between the two jobs is just fine.
Two, because they are willing to tell you if you spend some time talking to them.
But that is a fucking mouthful which is why normal humans just say things like 'wealth inequality is bad' -- until the internet's favorite pedantic muppets show up in the comments demanding clarification.
Here's the crux of it: "A world where doctors and McDonald’s workers are compensated exactly the same is one where something major is obviously broken."
Yes, it is obviously broken. The implication here is that the person arguing that "income inequality is bad" is unable to see this completely obvious thing, and pointing it out wins the argument. Because the poster has now "shown" the other position to be obviously wrong and broken.
Except it started with a misrepresentation of the position in order to arrive at that obviously wrong argument. Therefore, strawman.
> If you don't agree that income should be determined by the market, why should doctors make more?
Point of fact, doctors salaries are not set just by the market, because there is an artificial limit on the supply of doctors. If the market truly set doctors' salaries, they might be a lot lower. So saying "income inequality is bad" is not the same as saying "market dynamics are bad"; because here, as in many sectors of our economy, a perversion of market dynamics have caused gross income inequality.
I’ll wait and maybe you’ll give me the fellicific calculus proof, or maybe the EA calculator.
But in the end it’s all made up to retain classes so that people have some way to “prove” that they are more deserving of things than others.
So while I broadly agree that there will always be some necessary income disparity, I think it's disingenuous to use such simple examples and present this as a "work hard; get paid more" situation. In practice, income equality has more to do with whether the skills you have are socially valued or not.
I agreed with the rest of your comment but this is... strange. You might agree if it's rephrased as "extreme income inequality" is bad?
"Harrison Bergeron" was a straw man argument posing as a short story - don't let the similar strawman of "no income inequality" overshadow the more present and real threat to society of growing extreme income inequality. Some twitter posts accurately phrase this as the "too expensive to live" problem for some.
Having read the whole thing a few times I generally agree with your position. Differences in salary reflect differences in demand for certain roles, or the value you can bring to them. It's a real time signal. They can act as an incentive to draw more people to that position or signal when one is saturated. The system is abused a bit when finance jobs pay a lot despite dubious value to society, and teachers are underpaid relative to their importance, but as a general rule it works.
Wealth inequality is the major issue. It might be 'natural' in the sense that each generation of parents passes advantages to their kids, but I also think its a mark of civilization to be able to keep it in check. If you earned it, great, but when you die lets not burden the future with your family dynasty of rich but useless descendants.
All people can't be born equal if your financial situation is determined five generations before you were conceived.
I am curious if you know a system that can rank and precisely tell me the respective values to society for each action, job, hobby etc humans engage in.
The problem is that as it stands, the set of oligarchs currently holding their positions (see recent work from Stanford etc showing the US at least is clearly and oligarchy) are the ones doing all the planning.
However it’s in the form of “investments” and the accompanying regulatory capture.
So this idea of a “free market” with perfect information not only isn’t possible - as economists agree - but it’s not even DESIRABLE as power law in such a system dictates that profit will ALWAYS be the paramount virtue subordinate to any other.
No one other than ivory towers academics is dreaming about "perfect information". The rest of the world is using those "imperfect" free markets just fine.
Those planners are called “buyers” and they choose the products that live on the shelves and in online shops.
They don’t put anything for sale on your behalf, everything everywhere all the time is meant to push you into making a purchasing decision that is marginally related to your personal best interest.
Nobody asked for a Dorito taco yet these companies successfully have slowly propagandized millions of people into thinking that this collection of sugar fat and starch at massive scale is a good decision for society and we just sit back and pretend like people are evaluating these products equivalently with their best substitute.
I have never heard of somebody being made to buy those Dorito tacos. Do you think you know better than millions of people? Are they the ones being brainwashed while you are the only one with a clear perspective?
That's why teachers are so poorly paid even though everyone does the lip service of thanking them.
But, of course, free markets also decide whose visions to adopt. And that is unbearable to leftists who want nothing more than to impose their vision of how society should work on us.
Absolute poverty is the real enemy, but it is possible to have high inequality and low poverty.
Where I disagree with you is in accumulated wealth being the problem...it isn't generally bad or unproductive, but this is asset dependent, land-wealth is a sink and Georgist measures could significantly improve productivity and capital acceleration.
But the so called "left-wing" you describe seems intent on punitive taxation as opposed to productive...
By first principles socialism == worker control of the means of production, or the idea that the people who do labour should have a major stake in the decision making surrounding it.
This general idea of worker control is entirely compatible with markets and with price-discovery as a coordination mechanism between firms and localities. There's even partial examples of this in many "capitalist" economies today. Volkswagen is required to have union reps on their board of directors. That's socialism!
The US government/military control in WWII was essentially totalitarian, with rationing and price controls.
This is/was a subject of debate amongst economists actually, at least the very pro free-market ones: If market economies are better than centrally planned ones, why aren't firms with internal markets crushing the other, internally "socialist" ones?
https://en.m.wikipedia.org/wiki/The_Nature_of_the_Firm
The orthodox answer is that market systems have higher transaction costs so for things you have to do very often (paying a salary) it's burdensome to use a market and easier to have long, somewhat undefined contracts.
Rationing necessarily implies that there is a market economy to regulate: the whole reason why the government had to limit the production of civilian vehicles is because the wartime economy was still a market economy. Ford, GMC, etc. were still private companies at the end of the day, participating in a market economy. Rationing made it more attractive to cater to military acquisitions.
Different companies working competitively has consistently proven to put outcompete and surpass centrally planned economies. Lockheed Martin and Raytheon continue to export way more arms than most other companies, competition may mean information gets siloed but evidently it gets results.
- I’ve heard people say that socialism is simply representation to and protection of workers from the company they work for. But that exists in many industries and nations, including the US which socialists consider highly capitalistic.
- Others seem to describe socialism as redistribution of wealth, and often point to countries like those in Scandinavia, which sounds great to me except those countries are very much capitalist, and their economies seem more like “capitalism with sensible guard rails” (aka Social Democracy) than “socialism” as defined by many socialists themselves.
- Perhaps the closest thing to a concrete definition of socialism is “social ownership of the means of production”, but even that is far too vague to be helpful. What does “social” mean in this context? What does “means of production” mean here? If it’s “workers have ownership of a businesses capital”, then FAANG companies like Amazon paying huge amounts employee compensation in the form of equity are among the most socialist companies in the world. Obviously I don’t think anyone would agree with that.
- I’ve heard socialism (although this perhaps dips more into communism, as if the distinctions there are any less indecipherable) differing from capitalism in how they answer the question, “Can someone sell use of their possessions (ie capital, such money, equipment, or land) to someone else?” In capitalism the answer is yes (therefore giving birth to landlords, shareholders, boards, etc) and in socialism the answer is no. That actually seems to me like a pretty solid definition to go off of. But in that case, we have to ask how companies can actually get the capital they need to get going. In ventures like smaller cooperative communities, and in industries like agriculture, it seems more feasible. But think about how much capital is required for something like a pharmaceutical company, or a tech startup. Millions and millions of dollars in cash are required, and it is not feasible for workers to simply pool resources and bootstrap. It would seem like the only solution would be to have some entity, like the government, redistribute societies capital to those entities they see as most deserving. But now you are back at the central planning model many bemoan as being the flawed, “no-true-Socialism” incarnations of the 20th century.
I’m not an expert, and so I recognize my understanding could be flawed. And I am in no way at in love with capitalism. But it seems to me like the best we can hope for is Social Democracy style capitalism with guardrails as opposed to pie-in-the-sky socialism which seems to mean everything and nothing at all depending on the situation and who you are asking.
If the problem with socialism is that it is hard to define I gather then that that is not a problem that capitalism has? If so can you give a cogent definition of what capitalism actually is? If not, why isn't it a problem with capitalism?
The way out of this mess is worker controlled non-stock cooperatives
monopolies can be the "natural" outcome of market forces or economic realities. Like having the best product by far or owing the only possible railroads tracks. The solution would be to cap ownership/voting rights to make shareholding as decentralized as possible and having a progressive tax rate on ROA or similar metrics
Unions have shown time and time again to not be able to scale efficiently, shifting power from the "people" to the secretariat when becoming a mass organization. Secretariat that engage in political squabble to enlarge its own power and those of its associates. Unions become a tool for societial corruption.
I consider also the concept of antagonistic union a somewhat relic of the past (at least in europe) and will much more appreciate organizations acting more like consortiums of workers and getting consulative seats in the boards of the target industries akin to german unions
Isn't this true of corporations or any other mass organization? Unions, AFAIK, are at least democratic.
However, I am also tired of both sides claiming that labor unions, or social safety net, or some amount of government regulation are socialism and therefore either "see you like it, lets have some more" or "if government provides a health insurance scheme, it's Gulags right away". These things are governments or voluntary organizations of workers leveraging productivity of free market to accomplish some additional tasks deemed to remain unaddressed by market forces. Mind you, I am not a fan of lots of government, especially on central level. There are separate arguments about incentives for providers of aid to remain efficient and for recipients to be grateful and responsible. But let's have intelligent conversations about each thing rather than "Medicare is communism and border control is fascism".
There are also objective negative externalities like "if I didn't buy smoke from your factory, you have no right to blow it over my house", where regulation actually advances voluntary free market. Some movements like Georgism have interesting proposals to use mitigation of externalities to fund whatever government is needed while making market more efficient.
The price of health care in the US rose at the same rate as inflation, up until 1968. Then, the price increases tilted upwards, and have not slowed down since. What happened in 1968? Government health insurance.
This is just wildly wrong. What you're looking at is the "advent of modern medicine". Prior to the middle of the 20th century, doctors were more or less limited to stitching people up after injury. Since then, we can treat... almost everything, honestly. But that's expensive, in particular in regimes like the US that want to provide all that stuff to everyone in the private markets that have the ability to pay for it.
It's got absolutely nothing to do with how the payments are handled. That's just silly.
I dunno what went wrong but something did.
Your final sentence is just the same point upthread: you want a simple coincidence[2] to make your argument.
[1] There is a ton of analysis and argument to do there too, but suffice it to say that "because medicare" is just as terrible an explanation.
[2] It's not even a coincidence! Desire for government-guaranteed health care came about precisely because of and simultaneous to the availability of late-life care that actually worked. No one wanted medicare in the 20's because there wasn't anything to pay for even if you had it. But they damn sure wanted their walkers and hip replacements in the 60's.
Funny how it coincides with the very year the government started providing health insurance. Funny how the same thing happened when the government started providing education subsidies.
Funny how the inflation did not happen with medical procedures not covered by the government, such as Lasik eye surgery.
A longish, but good read about this:
https://www.theatlantic.com/magazine/archive/2009/09/how-ame...
P.S. Antibiotics came out in WW2, not 1968.
Government provided health care was introduced in 1965 as part of Title XIX of the Social Security Act under President Lyndon B. Johnson, not in 1968.
Not sure if I see it.
If it's a total expenditure graph, then surely it's obvious that expanding coverage would cost money?
per capita
First is a graph that shows healthcare costs increase steadily slightly above inflate rate over time from 1970
https://www.healthsystemtracker.org/chart-collection/u-s-spe...
Seconds are a bunch of numbers in a CSV indicating that there is nothing special about 1968, healthcare costs rose just like any other years. 1965 is in fact a pivotal years, costs rose more then previous years when medicare and medicate were rolled out (more on that later). But also noting that between 1960 and 1965 prices still rose above inflation, just not as much as in the late 1960s, while still much more than in the 1990s.
https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...
Third is an article explaining the trends (using same number as in nr. 2) in terms of historic events.
> Between 1961 and 1965, health care spending increased by an average of 8.9% a year. That's because health insurance expanded. As it covered more people, the demand for health care services rose. By 1965, households paid out-of-pocket for 44% of all medical expenses. Health insurance paid for 24%.
> From 1966 to 1973, health care spending rose by an average of 11.9% a year. Medicare and Medicaid covered more people and allowed them to use more health care services. Medicaid allowed senior citizens to move into expensive nursing home facilities.
https://www.thebalancemoney.com/causes-of-rising-healthcare-...
So when you say stuff like: “The price of health care in the US rose at the same rate as inflation, up until 1968.” first check if your data and your dates are correct, but also consider nuances. Like, what does it mean thate prices go up (explained in source nr. 2) Does it mean that individually your average out of pocket costs are higher, does larger funds go from government to the health care industry? Are hospital operations more expensive? etc. But also note that if nobody gets health care, health care costs are 0 USD, while treating more people will make costs go up as more people are getting more technologically challenging and expensive treatments (explained in source nr. 3).
Taking costs going up when more people get healthcare to automatically mean that socialism is bad, that is kind of a simplistic take to say the least.
Pardon me, but LOL. While there are other factors, none of them can account for such a vast per-capita increase. My health care premiums tripled since Obamacare started, even though I cut back the coverage quite a bit.
If you wanted me to see the per-capita increase in health care costs, and compare pre-Obamacare with post-Obamacare, perhaps you should have advised a different tactic—although, that would have bee a bit odd given your original point.
But if you want to argue Obamacare now, you are out of luck, you found somebody who is not a fan, and somebody who is personally out of health-insurance, somebody who lives in a community where lots of my neighbors are out of health-insurance, because Obamacare is simply too expensive and covers too little for people to want to opt for it. So you would be arguing with somebody that agrees with you. Perhaps a system which pays medical costs directly and universally insures all residents might actually be better than a system which subsidizes private health insurance companies.
1. A wider range of healthcare issues can be cured or repressed due to advances in medicines. This directly lead to more doctor appointments. 2. People life expectancy increased, but older people need more healthcare. 3. Mental healthcare stigmatization went away (mostly), and therefore more doctor appointments. 4. Due to the higher demand in healthcare and the control over supply, the provider cost is higher than inflation.
The key is to reduce the kind of shoes available. Everyone shall wear the state issued formal shoes and when they need to engage in the required daily sporting activity, shall wear the state issued canvas shoes.
I, too, would very much like to see this play out in practice. But I don't think it'll ever actually happen in real life, because it would likely dramatically reduce the size of government (which politicians are loathe to do) and economically hurt wealthy landowners the most.
Which ones? Perhaps you are mixing hierarchical systems with centrally planned ones
Having said that several avowed socialist states have attempted to centrally plan the economy, and their success or failure is a matter of highly disputed opinion - depending on what their aims, achievements, and outside opposition (and possible sabotage) were.
Some Socialists say it is possible: See "Towards a New Socialism" (1993). Some say that Capitalist corporation like Amazon or Walmart are already effectively achieving this ("The People's Republic of Walmart" (2019)
Others suggest models such as "negotiated coordination", "participatory economics", or "market socialism" will be able to accurately account for need, volume, value etc. But there are incredibly powerful interests that oppose any alternatives, and most of us are stuck playing their game by their rules.
The issue is that leaders and factions always emerge. Even if everyone could 'keep their excess labor', you get groups of people that position themselves to get higher value jobs or easier jobs.
As much as people claim this is not inevitable, I've yet to see this happen IRL or in history.
It may be inevitable that people may rise up to seek power over others, but the question is what is the best way to respond to this? Do we leave them to rule over others without restrictions, or do we limit the damage they can do? Do we reward this impulse of control of the few over the many to their general detriment, or do we treat it as a mental health issue (like sociopathy or hoarding)?
Just mention them. There is no need for citing a book that will take me a few months to read before I respond.
I have a feeling I know about the ones you are about to mention. They had leaders or factions that controlled the resources(not classless) or they only lasted for a few months or years before getting conquered.
As for scarcity: It seems to me from my research that it is most often the leaders and factions that create artificial scarcity in order to enforce their power, rather than there being a lack of resources in the first place.
If you're wondering why we don't see the other kind much - well, the socialist movements that won back in early 20th century were generally the most ruthless ones, whereas the more democratically minded movements (e.g. Luxembourgism or various anarchist groups) were crushed. So you had a kind of artificial selection for brutality to begin with - but then countries controlled by those winners would also subsidize similar movements elsewhere, and of course they demanded ideological conformance in return. This is largely why stuff like Marxism-Leninism and Maoism is still so pervasive on the left.
In theory, perhaps socialism doesn't require huge amounts of government power; or perhaps huge amounts of government power doesn't always lead to horrible outcomes. But that's just a theory and has little evidence to back it up at the scale of millions of people.
Bernie Sanders said "These days, the American dream is more apt to be realized in South America, in places such as Ecuador, Venezuela and Argentina, where incomes are actually more equal today than they are in the land of Horatio Alger. Who's the banana republic now?"[1] in 2011, less than a decade before collapse. If he can't tell the difference between a socialist utopia and a recipe for disaster, how is a layperson supposed to know?
Just like a tech startup: don't call your users stupid and keep pushing your theoretically-good product. Listen and try to understand why it's not working for them.
[1] https://www.washingtonexaminer.com/news/campaigns/sanders-di...
If incomes were equal, how could a Horatio Alger story possibly happen at all? Do people even think about what they say?
The man who "hijacked" the word socialism would probably be Marx himself, as he declared his theory to be the (scientific) socialism, as opposed to various (he said) "utopian" and "naive" thinkers who hadn't subscribed to views like historical inevitability of communism, or dictatorship of the proletariat. Then in the Eastern Bloc the local political systems were called "real socialism", i.e. the one put into actual functioning, on the road to future communism. So association of socialism with command economy is well established and not really one-sided ideologically, I think.
The terms to use if you want to distance yourself from that heritage would be 'social democracy' (if you mean the ideas that were partly implemented in capitalist Europe) or 'worker democracy', if you want something more akin to what the GP described. These ideas are easy to sympathize with on many levels, and what passes for "socialism" in the US is often just the not-really-disputed social contract on the other side of the pond.
Ultimately these ideologies advocate for reducing economics, to varying extents, to just democratic politics. Which is kind of boring: not necessarily meaning this as a bad thing. The calculation problem and related issues of organizing true command economy are more interesting as an abstract problems of engineering, organization etc., regardless of actually wanting this politically to happen. (Being formed in part by the Eastern experience, I am very much wary myself.)
That is a nice simplification, but it makes it sound like something that can just emerge gracefully within a market economy. There are employee-owned companies, for instance, and if that's all that's needed for socialism to work, then it would spread and show us all the benefits of socialism.
But the benefits are either not there or not amazing enough to spread. I'm left feeling like you left out the controversial parts, and I suspect that when you get into the details, there's lots of room for complicated power dynamics and ownership rules, perhaps much worse than non-socialist alternatives.
https://mcmillan.ca/insights/publications/budget-2023-employ...
I would expect there are similar barriers in many countries.
Socialism is just a word, you can define it however you like. In theory it can be some sort of vague co-op of co-ops. In practice it always leads to a centrally planned economy. There's a good reason for that. The ultimate root cause that generates socialist ideals is not the plight of the workers or anything so surface-level, it's the intuition that intellectuals should run society. Thomas Sowell has done a lot of excellent work elucidating this and explaining why it happens.
To try and summarize, socialism appeals to people who like the sound of the abstract ideas of intellectuals. If an intellectual posits a clever-sounding reorganization of society justified by high minded ideals, then this feels right to the socialist mind. The sort of people who most aggressively promote socialism are the sort of people who think society is ultimately pretty simple - after all, the way to cure all social ills is so simple it can be summed up in a single book or set of pamphlets. It can be understood and reorganized by a single mind. Marx was famously averse to detail about how communist societies would actually work in practice, as were all other socialists, but this didn't bother them because it didn't seem like you needed a lot of detail. Hence the "calculation debate" the article discusses, which kicked off only after communists gained power.
If you intuit that society is simple and the best minds can understand and reorganize it for the greater good, then a planned economy is the obvious next step. Why would you not plan it? The only possible justification would be if the planning process was too hard, but that would imply that society was too complex for any one mind or even a committee of minds to fully understand, and if you believed that, you wouldn't be a communist to begin with.
So socialism or communism invariably always leads to top-down authoritarianism in practice. Revealed preferences > stated preferences.
This is not the case. Marx and other writers repeatedly emphasize that the working class itself must take power and begin the process of getting rid of social classes altogether. They definitely did not advocate for a society run by highly educated intellectuals from the top-down. See “The Civil War in France”, where Marx discusses the Paris Commune - a working class uprising that was not lead by intellectuals.
> socialism appeals to people who like the sound of the abstract ideas of intellectuals. If an intellectual posits a clever-sounding reorganization of society justified by high minded ideals, then this feels right to the socialist mind.
This is just a description of zealotry and overoptimism in general - attitudes than can be found among proponents of any framework. Marx himself criticized earlier utopian socialist thinkers for trying to plan out an idealized society from their armchairs, rather than actively organizing with workers to create a better one. He saw theory and practice as deeply connected, and he definitely was not a utopian thinker.
> the way to cure all social ills is so simple it can be summed up in a single book or set of pamphlets. It can be understood and reorganized by a single mind.
Marx didn’t believe this. He was a prolific author and corresponded with many other contemporary socialist writers. He published a whole series of books just focused on analyzing capitalism, and he died before completing them. There is a wealth of Marxist writing and many conflicting strands - there is no “one mind” or “one committee” with the final say.
> Why would you not plan it? The only possible justification would be if the planning process was too hard, but that would imply that society was too complex for any one mind or even a committee of minds to fully understand, and if you believed that, you wouldn't be a communist to begin with.
There is a whole area of thought known as market socialism that rejects both capitalism and central planning. Central planning is not fundamental to socialism; it is simply one kind of economic strategy that could be used by a socialist society.
I would encourage you read accounts of socialist thought besides those written by a deeply conservative economist. Marx himself can be challenging to read, but David Harvey has a book called “A Companion to Marx's Capital” that helps explain some of the context.
Marx wrote a lot of things. How many times did this champion of the working class visit a factory? How much time did he spend in working men's clubs, talking to the miners? Did he ever go down a mine to investigate conditions for himself? Did he form a political party to try and put his ideas into practice?
If you read a biography of him you'll find the answer to all these questions is no. His friend Engels even offered to give him a tour of the factory he conveniently happened to own, and Marx didn't bother taking him up on it. He didn't need to, for he'd already learned everything he needed to know about the world from books written by other people. And thus he devoted his life to ... writing more books.
> Marx didn’t believe [society is simple].
Sure he did! He was advocating revolutionary violence to implement his ideas despite not having worked out the details of what a communist state would actually look like. His books focused almost entirely on why capitalism should be abolished, not what would replace it. To him, it was easy peasy. Overthrow the ruling classes by organizing a class of "professional revolutionaries", get them to take power then put the working classes in charge, everything is now great. Done.
> There is a whole area of thought known as market socialism that rejects both capitalism and central planning
There are books that contain every possible permutation of social concepts, but that doesn't mean they make sense or any significant number of people believe them. In practice there is no such thing as anarcho-communism beyond, perhaps, tiny groups of people who live in tents. And even then, it doesn't last. Invariably someone takes power and then starts issuing plans that have to be obeyed.
And how does all of this translate to him thinking that intellectuals should run society?
Also, he was politically active, but you know that since you read his biography...
He was politically active only in a very superficial way. He engaged in rhetoric, but that wasn't the same as engaging with democratic politics (which living in London he could have done).
However, if you'll notice, here on HN a lot of people calling themselves socialists don't believe in the idea of central planning, so maybe there's more to it than socialists are just a sort of person.
- Health authorities should run society and the economy during a pandemic.
- Government policy should be made by experts, not politicians.
- The EU's constant attempts to create national tech champions via grants.
- "Reparations"
- Net Zero
These are all examples of plans for top-down planning of society and the economy by supposedly rational and disinterested intellectuals. We don't use the exact term central planning for these things, but they have the same sort of effect.
Yes, on the internet you can find people who claim to be anarcho-communists, just like you can find people claiming to be a lot of extremely niche things. Good luck finding them in the world of real offline politics!
Definition of ad hominem: "directed against a person rather than the position they are maintaining."
My post: no specific person mentioned, it's all about a particular position.
That's a sugarcoated way of saying "imposing restrictions". You're not allowed to have private ownership of means of production. You're not allowed to just sell your labor without taking on risks.
You can practice socialism in a capitalistic society. You are forbidden to practice capitalism in a socialistic one.
No sane person believes that having option to sell your labor without taking risks is slavery.
If anything, slavery is being forced to be paid in the proceeds of a futile endeavor instead of just being paid how much you think you're worth.
People have different life circumstances and preferences, so naturally they want different risk options. Having better control over your risks is an indisputable benefit of capitalism.
Apparently, socialism ignores this benefit by assuming that people are robots that don't actually have different circumstances and preferences.
How many people really get paid how much they think they are worth under the current system? Not many I know.
How much does the person with the capital risk compared to the employee who might lose their home with the loss of their livelihood? Do most employees really believe that they have a rational and fair choice of the risks they enter into? (including the risk of surviving on a low income)
I guess I'm not meeting these swathes of workers completely satisfied with their wages, risks, and the system they live in.
I know plenty of Socialists who believe in different benefits for different levels of effort or danger, especially as in Capitalism most of those people are the most poorly paid at present.
You're misrepresenting what I said in order to produce a cliché leftie rant.
I never said current system is not exploitative (though I have no idea what this loaded term means: what is the measure and threshold for exploitation in the system that makes it exploitative? Was Gulag exploitative?).
What I said is having an option to get paid for your job without taking on risks is obviously not slavery.
> I guess I'm not meeting these swathes of workers completely satisfied with their wages, risks, and the system they live in.
Another boring strawman. I never said there are "swathes of workers completely satisfied with their wages". Nobody should be completely satisfied with anything, otherwise there will be no progress.
But we can judge the satisfaction with different systems based on immigration flow. Throughout human history, we have witnessed plenty of people wanting to immigrate from socialistic states to capitalistic ones. In the opposite direction - not so much.
It is admittedly not traditional chattel slavery but I happen to agree with Frederick Douglas that, "there may be a wages of slavery only a little less galling and crushing in its effects than chattel slavery, and that this slavery of wages must go down with the other." Which was a sentiment echoed by Abraham Lincoln.
I'm pretty lucky with my profession, but many many people feel coerced into a narrow range of job options, alienated from their work, and robbed of a significant part of the value they produce.
Note: In most first world countries in the world outside of America losing a job or ill health does not lead to potentially losing a home, or no longer having access to medicine or care. America is quite unique in that regard, and more similar to third world countries.
As for the "Gulag" America has a larger proportion in prison than Russia (or China) ever has (and I am far from a fan of those authoritarian countries).
"immigrate from socialistic states to capitalistic ones"
Most mass immigration is coming from people fleeing dictatorships and / or poor third world and often war-torn countries which are far from Socialist. In fact they are often capitalist dictatorships supported by America (sometimes with previous left-leaning democratic governments overthrown by America).
It is true that many of them migrate to the relative peace of places like America, but great numbers also migrate to neighbouring more left-wing countries in places like Africa and South America.
Although I don't consider China or Soviet Russia any more Socialist than most European countries which have Socialist inspired social programmes, there have been major mass migrations into Soviet Russia in the past (even from Americans during the Great Depression) and into China in more recent times (economic migrants from Africa especially). As for European countries with Socialist policies: they have millions of migrants per year, some as refugees, but many drawn by their "Social Democratic" ideals.
And many many people will feel that way under socialism because, for example, any form of freelancing is typically forbidden. Would you consider "he who does not work, neither shall he eat" a form of coercion?
> robbed of a significant part of the value they produce
So I joined a startup, but it failed in a few years. Apparently I created negative value and still got paid for it, therefore I robbed someone. Then I joined another startup, and it succeeded. This time someone robbed me. How exactly does socialism solve this weird robbery cycle? Ah yes, there are no startups in socialism. You can't be robbed if you have no wealth.
Maybe it's time for lefties to stop viewing every business interaction as "robbing", every salary as "slavery", every cheesy comment as "rape" and every disagreement as "genocide"?
> As for the "Gulag" America has a larger proportion in prison than Russia
Whataboutism isn't productive, America is not the only capitalistic country in the world. Also comparing US prisons to Gulag is laughable.
> Most mass immigration is coming from people fleeing dictatorships and / or poor third world and often war-torn countries which are far from Socialist
Here comes No True Scotsman. Isn't it a funny coincidence, that socialism and dictatorship usually go hand in hand? And what are the examples of countries that are close to Socialist?
> European countries with Socialist policies
What an obscure way to say "capitalistic". You do realize that none of them are even considering abolishing private ownership? And didn't you just say that Russia and China are far from Socialist? Well, those European countries are even further.
Assuming this is true then we have two economic systems in which people feel limited in their opportunities - albeit in different situations and for different reasons: the capitalist one by prioritising roles that have value to those with capital (corporations etc.), and the Socialist one by prioritising value to the community. I suppose it is a question then of where we individually find greater personal value and what fits in with our values.
> Would you consider "he who does not work, neither shall he eat" a form of coercion?
I would consider it a form of coercion, because artificially restricting access to food when it is plentiful is intentional cruelty. "Serve me or starve" is an abusive relationship. Where there is safety net - at least to the basics needed for life - people can make more rational choices, and hold out for better choices.
Note: This aphorism attributed to St. Paul seems to be diametrically opposed to the rest of the Bible, especially the teachings of Jesus as well as to basic human decency, and is one (of the dozens of) reasons I think Christians should reject Paul as an authentic apostle (as Jefferson, Shaw, Tolstoy, Ghandi, Kierkegaard & Sagan did).
> any form of freelancing is typically forbidden
I suppose this is question of what you mean by freelancing. There are always highly skills craftsman and experts in very specific fields whose work isn't limited to one workplace etc. But who is forbidding it? Are you mistaking Socialism for the authoritarian Soviet system?
> Apparently I created negative value and still got paid for it, therefore I robbed someone.
Value is very subjective in Capitalism. Luxuries may be cheaper than essentials (television vs house), some eccentric professions are valued far more highly than those necessary for human survival.
But a worker is almost always in a far more precarious position than an owner.
> there are no startups in socialism
Really? I see Socialism as the possibility for all sorts of start ups that would provide human benefit that no share holder looking for a profit would ever invest in, but would enrich humanity greatly.
> Maybe it's time for lefties to stop viewing every business interaction as "robbing", every salary as "slavery", every cheesy comment as "rape" and every disagreement as "genocide"?
If one has the basic assumption that value is created by the worker and that capitalism is taking that value unethically then robbing seems an appropriate word for it, likewise a system in which a worker's choices of employment and the wages from it are limited artificially to support this system then people may feel like serfs (although it could be argued that serfs had more capital and a higher return on their labour - at least in England after the Black Death when they were in a better bargaining position).
Who is saying cheesy comments are rape though? Who sees disagreements as genocide? Did those disagreements lead to actual deaths?
> comparing US prisons to Gulag is laughable.
As someone with family in the US prison I have become very familiar with its human rights abuses, which would not be tolerated in any other European country.
> Isn't it a funny coincidence, that socialism and dictatorship usually go hand in hand
I guess I wasn't clear. I was talking about capitalist dictatorships that people wish to escape from. See Pinochet's Chile, Putin's Russia, Orbán's Hungary, Erdoğan's Turkey for examples.
> What an obscure way to say "capitalistic".
As the meme goes - Socialism never works! But Norway is Socialist and they are doing great. They're not Socialist - they are Capitalist! The lets adopt their policies. No, that's Socialism!
These countries are Socialist when a Capitalist wants to criticise them and Capitalist when a Capitalist wants to praise or excuse them.
It is true that they are not wholly Socialist. They are "Social Democratic" (what Bernie Sanders calls "Democratic Socialism") But Socialist parties seeking to implement Socialist-inspired principles were the ones who usually introduced universal* healthcare, pensions, housing, vacations etc. This is because the concept of decommodification is integral to production for use and need (rather than profit). It is an underlying assumption about the worth of people that motivates the worker led, owned and shared workplace.
*free at the point of delivery for lower taxation by shared liability (public insurance)
> You do realize that none of them are even considering abolishing private ownership?
The abolishment of private property is Communist - not Socialist. Now, some Socialists are in favour of it, and most Communists (at least those who fit Marx's stateless, classless, moneyless definition) are Socialists too. Some of these European governments have a great deal of social housing, public land, public utilities etc. that was - at least in part - seen as progress toward minimising the negative effects of (rent seeking) private property and working toward it's elimination, but as I said that isn't strictly Socialism in itself.
In the modern world, capital is typically created by providing value to community. There are exceptions, of course, but nobody will defend those exceptions (i.e. inheriting wealth or committing crimes obviously doesn't provide value).
The problem with socialists is that nobody knows what is the "value to community" and how to measure it, yet everybody has a strong opinion on it. That's why socialists are typically dictators: you need the arrogance to think that you know what is better for community than the community itself.
> There are always highly skills craftsman and experts in very specific fields whose work isn't limited to one workplace etc. But who is forbidding it?
Socialism. There's plenty of debate on self-employment in socialism, and socialists always settle on one of two points: either self-employment is strictly forbidden, or it is only allowed if we have some regulations protecting workers (but those could be implemented in capitalism too, which makes socialism pointless).
> Value is very subjective in Capitalism
Value is subjective by it's nature, and capitalism recognizes that. I'm not interested in debating the downsides of labor theory of value which offers "objective" measurements - the only people supporting it are zealots.
> I see Socialism as the possibility for all sorts of start ups
You seem to blissfully ignore the challenges socialism imposes on start ups. To begin with: who provides the capital?
> These countries are Socialist when a Capitalist wants to criticise them and Capitalist when a Capitalist wants to praise or excuse them.
No, they are always capitalistic: all of them are in favor of private ownership and market economies. I don't care what Bernie calls them.
> The abolishment of private property is Communist - not Socialist
This is false. But I'm really curious, what is your definition of socialism?
This is the probably the best point to start from when discussing Socialism. So it was the point I started with:
"Socialism is about how workers organise their workplace (owning, managing and sharing the produce and profit of their labour)"
As the Oxford Dictionary says:
"a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole."
So Socialism is something very specific, but Socialists often associate themselves with other principles that they believe are in line with their moral values, see as a helpful strategy for achieving their ideals, or their Socialism is part of a larger political philosophy (Communism etc.) This association (and some detractors using the word Socialism to define everything they don't like) are what lead to confusion.
Socialists joke that detractors believe "Socialism is when the government does stuff, and the more stuff it does the more Socialist (or Communist) it is." But some commentators - see current popular right-wing American opinion pieces - really do seem to believe this.
There is no mention of state, government or rulers of any kind in most definitions of Socialism (most Anarchists are Socialists too). Of course some Socialists have believed that the state can act in the interest of the public by being stewards over these resources with the ideal of later devolving this to the communities and workers. Which has led to State Socialism (which Lenin called State Capitalism) on the one hand, and Social Democracy on the other. Some (like myself) think both strategies are flawed as do non-hierarchal Socialists (Anarcho-Communists, Syndicalists, Libertarian & Council Marxists, Democratic Confederalists, and maybe Agorists etc.)
There is also no mention of private - non-personal - property (although some Socialists like myself are against that too, but other Socialists see the issue as an irrelevance or inevitability).
Some see Socialism as sufficient in itself, others see it as part of the progress toward Communism (stateless, classless, moneyless as stated before).
Do you have a different definition of Socialism?
> Socialists joke that detractors believe "Socialism is when the government does stuff, and the more stuff it does the more Socialist (or Communist) it is." But some commentators - see current popular right-wing American opinion pieces - really do seem to believe this.
By your own words, the difference between socialist Norway and capitalist US is universal healthcare, housing, pensions... government does stuff!
You are laughing at caricature capitalists, but don't you see that you are a caricature socialist? Norway is socialistic when it suits you, even though it contradicts your own definition of socialism.
> So Socialism is something very specific, but Socialists often associate themselves with other principles that they believe are in line with their moral values
If KKK starts preaching green energy, no one will listen to them. If you really want to achieve social policies similar to nordic countries, stop mixing them with your harmful political ideology. Nobody wants universal healthcare if it comes with famine caused by central planning.
> Do you have a different definition of Socialism?
Yours is fine, except that it is impractical - it doesn't draw the line anywhere. It doesn't define socialism, it describes it. How do I tell whether state is capitalist or socialist? Can it be both?
Given that socialists aren't happy with freedom to practice socialism they have right now, my pragmatic definition is that socialism is a state in which social ownership of means of production is enforced, meaning private ownership is banned. Most socialists seem to defend such policies.
It doesn't suit me that Norway isn't fully Socialist. I'm glad that some policies started by Socialists have been implemented that offer some relief from the worst economic injustices of Capitalism, but I don't think it is sufficient or goes anywhere near far enough.
I agree that those seeking to introduce universal social programmes in America could use some better strategies. For example pointing out that Americans already pay twice toward healthcare in taxes as what Canadians do (3 x what some Europeans do), but are getting nothing in return for their high taxes most of their lives (if they don't qualify for medicare / medicaid or pay for exorbitant insurance on top of their taxes). But the right has done a good job of labelling any universal benefit - even if it saves people money - as Socialism, so maybe it is an unescapable label.
The United States has it's own social welfare programs. Some of which can be traced back to American Socialists. But I'd say the biggest of welfare program these days by expenditure is the American military, followed by corporate welfare in various forms (subsidies, overlooking tax evasion, government contracts, paying for externalities by taxation). It would be a stretch to call these Socialist, but they are definitely the government doing stuff, and I reckon have a lot in common with Lenin's state capitalism or even Mussolini's corporate fascism in my eyes.
Having said that Americans with a positive view of Capitalism has been going down, and a positive view of Socialism has been going up (especially among younger people). This seems to be true across most of Europe too, where it has never been as dirty a word as it is in the U.S.
Capitalism also suffers from the same broadness. I'd argue it only means "an economic and political system in which a country's trade and industry are controlled by private owners for profit." But many people who aren't private owners of industry consider themselves Capitalists because they work for wages, have a house, and go shopping for things.
I'll admit that people calling themselves Socialists have done some pretty dumb things (bad crop planning, playing with missiles), especially in the early days, and a few so-called Socialists who sought for power and gained it abused it (Lenin and Mao). Capitalism has had it's share of major problems too (slavery and imperialism for example), and has had horrible dictators all of its own (Pinochet and Putin for example).
I would argue that when Socialism has failed it has been in trying to be more Capitalist (Lenin & Mao's biggest critics were Socialists and his harshest acts were against Socialists, and his worst acts were either against them or in response to trying to out-Capitalist the West). I'd also argue that Capitalism's biggest issues are inherent to Capitalism - see the Iron Law Of Oligarchy & overthrowing peaceful democratic countries for the benefits of corporations for example.
As for questions of state enforcement - maybe I associate with a different set of Socialists and maybe a different group are getting airtime here in Europe where I'm living right now, but I'm not hearing many people on the left speaking about enforcing state Socialism and banning much of anything. Most avowed Socialists parties here (which number millions of supporters this side of the pond) aren't arguing for this.
The most radical Socialists I know (Anarchists like me) don't want a state at all, and do want to see an end to the Capitalism that is being enforced at the moment, but I recognise I am in a minority, and offer solidarity in areas I can find agreement with other Socialists, with whom I may share some general ideals.
If you view capitalism as a feedback control system, it's a system where there are many feedbacks with different lags. Such systems oscillate. They don't converge on some optimal point. That's well known.
US capitalism has so many monopolies and oligopolies that it doesn't act much like a free market any more. Three big banks, two big drugstore chains, three cellular providers... None of those look like a competitive market. The European Union did a study that concluded that price competition doesn't appear until there are at least four players of roughly comparable size. If you want a free market, you have to keep the players from becoming too big.
On the other hand, central planning within large companies is stronger than ever. WalMart and Amazon are very centrally controlled. This works much better than Gosplan ever did. The data is better and the lag is less. Gosplan had a monthly reporting cycle and an annual plan cycle. WalMart had a daily reporting cycle and a weekly plan cycle, and that was years ago.
China uses an opposite extreme - five-year plans. At one time they were mostly political statements. That hasn't been true in years. The 13th Five Year Plan (2016-2020) was pretty much accomplished.[1] The 14th Five Year Plan (2021-2025) is coming along reasonably well. Specific goals include 5G deployment to 56% of the population, and conversion to IPv6. Yes, IPv6 made it to the top level national strategy document. How those get turned into lower level tasks I don't know.
[1] https://www.uscc.gov/sites/default/files/Research/The%2013th...
[2] https://cset.georgetown.edu/wp-content/uploads/t0284_14th_Fi...
You can argue it has downsides, Google's brand dilution for example, but these are very rich and successful companies by any metric.
The core problem with central planning is handling change. If the requirements placed on an institution never change, then central planning eventually takes over because the plan is so stable that it can be managed centrally, and that may even have economies of scale. Businesses like Walmart are basically giant factories. Supermarkets are not a business that experiences great or rapid change. Tech firms in contrast experience and create change at a much faster rate, so central planning is more harmful there.
Economies as a whole are in near constant change. That's why centrally planned economies lose. They're always optimizing for yesterday's goals, like how many tonnes of steel can be produced per day, but can't react to changes like maybe now computers matter more than steel.
Costs associated with banking, drugstore purchases, and cell service make up an tiny proportion of total spending. Compare that to housing, education, and healthcare, which are the main drivers of inflation despite having many more than four players of comparable size.
People say healthcare and housing is expensive because you need it to live. You need food to live too, but food is so cheap as to be basically free in the US. (Food as in rice and beans, not Uber Eats.)
I'm not saying central planning is bad necessarily, but can it be a coincidence that healthcare, housing, and education are so expensive and also hugely "centrally planned"?
The government determines how many apartments get to be in your city (and they usually decide on a laughably small number).
The government decides who gets to practice medicine (and they make sure that the number is not very high [0]). They even decide to not let doctors in countries like India do radiology work in the US, just to boost American radiologist's pay.
As for education, most people go to public colleges where the government literally decides the prices! Not only that, but they generously offer "need-based scholarships" to people, after determining their willingness to pay by getting their family income.
So maybe central planning is the move, but it would be more compelling if the biggest expenses of American life didn't all seem to be caused by at-best incompetent central planning.
[0]: https://www.washingtonian.com/2020/04/13/were-short-on-healt...
How are you defining central planning? It seems like you mean “extensive government intervention and involvement”, which I don’t think is an accurate definition.
Using that definition, then food is also a “centrally planned” industry, since governments heavily subsidize dairy producers and farmers, leading to cheaper food products. Governments also are deeply involved in regulating and intervening in the banking and telecommunications industries, which you seem to imply are not “centrally planned” and so are more affordable.
So the minimum you need for a money-free central economy is to allow/force consumers to make tradeoffs in-kind between the products they want (far enough ahead of time for production pipelines to adjust!), in terms of the entire pipeline of resources each involves. This is, among other things, likely to be a UX disaster. Having a single unit, whether you call it money or not, is so much easier.
Which is maybe just a long way of saying: a central economy is still going to invent money, as a communication aid if nothing else.
That, of course, doesn't take advantage of the sensory and compute power of individual humans. You might not need to ship a new hammer from the nearest warehouse if a nearby hunk of metal will suffice. Or if a machine is broken, you might not need a technician to drive from the nearest city if your niece happens to know how to fix it.
Also, for central planning to work, it becomes obvious quickly that people need to do exactly what they're told. Ignoring the preferences of people and demanding they do as they are told looks a lot like slavery. Perhaps a comfortable and efficient slavery, but slavery none the less.
It's been tried. It's failed a lot. People find (weird, unpredictable, uncomputable) ways to rebel.
Also, you get around to it in your last paragraph, but I was implicitly avoiding designing a system isomorphic to slavery; I guess I'm trying to steelman central planning. Hence the requirement to take consumer preferences into account.
Check out https://theconversation.com/the-reinhart-rogoff-error-or-how... to learn how the 2010 paper that governments around the world have used to justify austerity measures omitted data from Australia, Austria, Belgium, Canada and Denmark. Once those countries are included, the result completely flips.
Woops guess all the major powers had an oppsie for the last decade.
Not really. A social science maybe. Most economics schools sit in the liberal arts departments of universities. Plenty of economists have egos big enough to talk like their work is science, but I'd challenge you to provide a modern example of an economist defending economics as an actual science.
Friedman is the most famous example of that, and he unfortunately managed to convince most of his kind that they were actually scientists. The few Econ PhD I know were definitely holding that view and one even compared people questioning the scientific nature of economic to anti-vaxxers.
It seems to be stuck at the "scale it up" stage. Attempts to scale it up are generally non-voluntary, and have bad outcomes. Even keeping a small group of loyal customers is challenging.
Seriously though, to your point, existing and historical communes require 100% voluntary buy-in to work. That doesn't scale beyond a couple hundred people. So, as you say, it becomes "non-voluntary" beyond a certain size, which is a nice way of saying it is made possible via force.
> "Assuming that individuals rationally assessed the marginal utility (or simply the benefit gained) of their decisions, the economy could be modeled as a system of functional equations. Using mathematical formulas, these equations could be solved to address imbalances in supply and demand and steer the economy toward equilibrium. In a way, neoclassical ideas suffused socialist rationales for economic planning with a kind of mathematical and scientific authority."
Look around. Are individuals rational in their decision making? Are the crypto boom and bust cycles rational? Was the housing market rational? Was the dot-com boom rational? Take away that and there's no longer any foundation for the 'mathematical and scientific authority' - and then, neoclassical economics becomes as nonsensical as Lysenko's 'blank slate' model of plant breeding in the Soviet Union was.
In practice socialist ideas and capitalist ideas have value in different contexts. A good balance can be found in John Kenneth Galbraith's work, such as:
https://en.wikipedia.org/wiki/American_Capitalism
There are a couple of basic concepts, such as the fact that markets fail miserably to provide optimal outcomes when there is no real competition ('natural monopoly' situations such as roads, water supplies, electricity grids, fiber optic trunks, etc.), and that business interests as well as labor unions conspire to control prices and wages. If the business interests or the labor unions get the upper hand, you tend towards authoritarian control of the facist or communist form, respectively. The optimal solution is thus a balance of power between competing interests.
Over four decades of neoliberal economic policy in the USA has upset that balance and made old-school state socialism much more popular with the general public than it was previously, as Galbraith warned about:
> "...private decisions could and presumably would lead to the unhampered exploitation of the public, or of workers, farmers and others who are intrinsically weak as individuals. Such decisions would be a proper object of state interference or would soon so become."
It would have been a near perfect piece covering these historic issues, if only .... That last paragraph... If only they didn't falsely asserts a broad generalization that is easily and provably incorrect. Its mistaken in its naivete, and the provided information doesn't support it.
Those of limited intelligence, when they can't win an argument on rational grounds tend to fall back to malign influence and flawed thinking and the conclusion is no different from a straw-man.
As a reader, do yourself a favor, and just skip that last conclusion paragraph. Everything else looks mostly correct.
If individuals back themselves into a corner in which they "have" to live in place XYZ and "have" to do career XYZ and so on and so forth, but are relying on others to make this work (e.g. they don't have wealth), then they're going to get nailed because they are working from a really bad negotiating position.
I don't see how socialism and unionizing etc fixes this because the prime mover has to be that people actually want to change the situation and put effort in to do so.
There needs to be a valve. Like, if I don't get paid enough as X, I go and work as Y. If rent gets too high in A, I go and live in B.
Economics is a meta-game, the game has changed significantly over the last 200 years.
But we are taught economics in a historical context, not in a future context, so we talk about ideas from generations ago.
I don't see socialism ever really being feasible or taking off, because capitalism does have so many advantages, and I feel like the pure socialism many advocate for is at odds with human nature.
The goal I think should be to try to negate the disadvantages as much as possible through regulation, and this is what places like the Nordic countries, Australia and NZ seem to be doing pretty successfully - not there isn't still mass room for improvement.
There's so many places in the US where the private markets are mis-organized and mis-regulated (healthcare, drugs, transportation and housing being the most obvious four) that's it's pretty obvious to find why younger folks are tending left.
I don’t think that many people are actually arguing for abandoning market economies (some are, but it’s a minority view); the major disagreement is the amount of regulation and social transfer that should be applied to a market economy.
The Communist writer known for adopting that passage of II Thessalonians as “the first principle of socialism” is Lenin (in The State and Revolution [1917]), not Marx.
Non-Leninist Marxists tend to not have a very high opinion of Lenin, in general.
“The socialist principle, "He who does not work shall not eat", is already realized; the other socialist principle, "An equal amount of products for an equal amount of labor", is also already realized. But this is not yet communism, and it does not yet abolish "bourgeois law", which gives unequal individuals, in return for unequal (really unequal) amounts of labor, equal amounts of products. This is a "defect" according to Marx, but it is unavoidable in the first phase of communism; for if we are not to indulge in utopianism, we must not think that having overthrown capitalism people will at once learn to work for society without any rules of law.” (Chapter 5, Section 3, "The First Phase of Communist Society")
You can’t say the same thing to the US, which already has an advanced economy with most agricultural/industrial production being heavily automated or offshored, and where a large portion of people are working unproductive bullshit jobs in order to just have a living wage.
A very large portion of Gen Z and some Millennials as well legitimately believe we live in a post-scarcity society where work is optional. I'm not sure if this is a result of an extremely privileged upbringing or an education system failure, but they hold these beliefs pretty firmly.
Not sure they can actually empirically justify them to any degree but there it is.
We do live in a society where we could absolutely house, feed, and clothe every person in the Western world without requiring them to pay for these things, and still be hugely net-positive on productivity.
Fortunately, we now have ample evidence that if you provide for people's needs, unless there is some very pressing reason not to (eg, sick, disabled, caring for children full-time, massively burnt out by our current stressful work environment), people still want to work. So we should absolutely be doing the above. It would benefit the whole society, and only hurt those who will no longer be able to control others by holding the threat of death by starvation and exposure over them.
Our media diet has changed substantially, and now any random idiot with a wildly improbable theory can share it with the world with no effort.
Populist stuff that seems to make sense on the surface always has the upper hand in an unmoderated debate.
However, we should keep in mind that this was tried in an age where that bureaucracy had to be operated using paper and typewriters. Whether or not you like the idea of a planned economy, you shouldn't ignore the possibility that it might actually be able to sustain itself once, e.g., mass electronic surveillance and AI enter the picture.
Central planning could work, if exact equality of outcome was the target, the range of commodities produced was restricted, and people were forbidden to trade goods amongst themselves (and very strongly punished for doing so.)
But, who wants to live like that?
I have a lot of hope though that it won't be tried. "It would just fail" is a bad argument against trying it because it sounds like you get another chance to do something else after.
The problem is that they aren't competitive because their planning process is too low bandwidth to incorporate change of any kind. They're working blind and the only way to make the thing work at all is to simply clone the non-planned economies seen elsewhere, which means they always lag behind. Eventually the citizens tire of their relative poverty even if it may have improved a bit in absolute terms.
Meanwhile, where are the real tech breakthroughs coming from? The tech industry, by and large, an industry that is flooded with academic refugees. Even biotech is a huge disappointment.
Science is on average immensely useful but in many cases too risky/costly for private buisness to fund it, given the current scale and power of private businesses. Such research can therefore not exist under the free market model and we have to use a different model. That's what we're doing while trying to improve the model.
Also, lately it feels like there's a huge misinformation problem created by public sector science. Viruses leaking from labs is only a tiny fraction of the problem and that's already bad enough.
What made the USSR fall behind was the cold war, meaning very little foreign trade and too much emphasis on military (and in the end, the gerontocracy, with people in charge all being too old to do anything, but this is related to their dictatorial nature, and not to the central planning).
Debating for a centralized economy is as useful as debating that a centralized internet will provide defense of freedom of expression.
Only wannabe totalitarians would do that.
Everything is slowly centralizing already - some markets remain to provide motivation, but the trend is in the central planning direction.
Given better technology, free markets will definitely die. It could be solved as directly as by overwriting the internal motivation through some brain implant, making people happy to work for the good of the system.
Markets are efficient, and technology for demand awareness and supply management can make them more so. But capitalism (as currently implemented, since the Commies threw in the towel) is IMO increasingly totalitarian. The state religion of the US of A wants to shove its nose into every nook and cranny of everyday life. If there's something that doesn't have a price... well now, to be "realistic", shouldn't it ??!
https://en.wikipedia.org/wiki/Project_Cybersyn
There is an argument to be made (and indeed it seems it has already, in this book : https://en.wikipedia.org/wiki/Towards_a_New_Socialism ) that with modern networking, data speeds and computing capacity, a centrally-planned economy could work.
With the minor assumption that P=NP
Sounds like some 5G level hype right there.
Ludwig von Mises' whole point is that you are working with unknowable inputs, so you can never calculate correctly. This is why a socialist, centrally planned economy can never work.
For example, people's preferences are unknowable before a transaction takes place. And, no, surveys don't work because what people say they want and what they actually spend their money on are different things.
No amount of computational power can create outputs for unknown and unknowable inputs.
That's the entire point of this tiny branch of math called probabilities though …
I’m not looking for corporatist or capitalist apologia. I’m looking for honest, good faith arguments against cooperatives and not arguments in favor of capitalism.
If we are going to accept that this (objectively, murderous) ideology is topical for serious discussion, registering our disgust with it and the its advocates should be included in the discourse. If only more people understood that the way they feel about conservative and even reactionary beliefs, many others feel about totalitarianism, its polite euphemisms, and its apologists.
The assumptions you make at the beginning are just that, assumptions with no rational backing.
Communication is necessary to have any kind of intelligent discussion, and taking part in a discussion doesn't accept anything by mere participation. Saying so doesn't make it so, and that argumentation structure tends towards inflexible dogmatic thought and polarizing psychological spirals.
At its core, in order to think you must risk being offensive, and in order to learn something you must risk being offended. Anything that interferes with that will often lead you to irrational thought and false conclusions.
Additionally, being able to discuss subjects which you do not agree with, while maintaining communication in a rational way is a very good indicator of intelligence, and anyone can do this if they want to.
Ideological indoctrination comes in all forms, and most importantly most of us don't have a choice about that since its inherent wherever we grew up.
If you can debate the merits and downsides, in an influential way that turns someone to your view point isn't that a win?
Aside from this, I agree with your sentiment, but you would have a much stronger argument if you don't give others such easy targets to discredit you.
If they can't win on rational grounds, they don't have any legs to stand on. Irrationality is after all not superior in any way to rational thought, and self-interest and necessity are the mother of all invention.
History has not been kind to socialism, and its been directly responsible for more death than any other form of economy in recent history.
This sounds interesting, but everything I've ever read suggested that this is a bleak landscape that no sane person should want to live in. If I decide I want to dabble in oil painting, I need only stop by Michael's or Hobby Lobby on my way home from work and buy those.
If I lived in the socialist paradise, assuming that any were manufactured at all, would I be put on a 3 yr waiting list, only to get three tubes of ugly colors, or would I instead find out that it is rationed out only to those who have (somehow) demonstrated talent in the past?
When filmmakers in the Soviet Union were unable to get the resources they needed, it wasn't always just that the communists wanted to carefully control something they saw as propaganda. Sometimes those resources just weren't manufactured. Or allocated sanely.
The examples of "total warfare mobilization proves that it is possible" are bizarre, given how awful conditions were for soldiers and civilians alike at those times. Planned economies only seem capable of making just barely enough of the most essential necessities for the groups considered the most important to those in charge.
It is difficult to believe that such a system will even perform well enough to make sure one person or another doesn't go without such simple necessities as water, energy, food, and cloth. Let alone the sort of minor luxuries we're all accustomed to.
I don't like my odds that I'll get any of the things I want under such a government. No thanks.
It is impossible to assign value to something in any prescribed way, as the value of anything is determined by me. This is why my wedding ring has extremely high value to me, and I would need a lot of money to part with it, well beyond its value as a “generic” gold ring, which is more than its value in atomic gold. You can further extend this to literally anything, but even to commodities, which are theoretically the easiest to assign “value” to as they are fungible.
It is a fool’s errand to try and plan an economy, and those who think they can, or believe they are currently doing so in any meaningful way, are mistaken.
Bait? Bait.
http://highscalability.com/blog/2014/4/7/google-finds-centra...
Or take the something like 90% of restaurants that fail within the first year. Are they not..?
You got to talk about the bath water if you want to talk about the baby
> No one is forcing you to buy things at Walmart
When Walmart comes into a small town and uses it’s economies of scale to force smaller stores to shut down because they have the ability to operate at a loss, is this choice?
Walmart has a board of executives that decide on the direction of the company, it’s a corporation the performs central planning in order to maximize profits.
You seem to have figured out though that markets don't work without competition. Luckily the grocery market, at least in most places, is robustly competitive. And the government should step in when that is not the case.
If the labor market is a monopsony, as it commonly is in small towns, the government should step in.
They do not. Cuba has yet to experience a famine despite being under a severe embargo for several decades.
Famines also happen under capitalism. There are multitude of famines in east Africa to choose from, death count is well over tens of millions. Outside of Africa, the Bengal famine happened under British rule, death count 1-4 million people. While socialism was gaining traction inside British isles at the time, their colonies kept being ruled by harsh free market advocates.
However blaming capitalism for the Bengal famine is unfair, where imperialism, colonialism, and racism is a much better explanation, similarly, blaming communism for the Great Chinese Famine in Mao’s China is unfair, when fascism is a much better explanation.
Famines aren’t the only man-made disaster out there. It is hard to blame anything but global capitalism for disaster such as the Bhopal disaster, where one of the largest cities in India was poisoned in a effort to maximize profits for shareholders. Thousands died.
Together the disaster of capitalism cause several orders more deadly than the disaster commonly attributed to communism.
Capitalism did not cause people to be greedy, they were already greedy. Capitalism just embraces our nature and aligns incentives while communism pretends people can be changed to not follow incentives.
Because the US has embargoed Cuba for decades to cause hunger and desperation:
> If such a policy is adopted, it should be the result of a positive decision which would call forth a line of action which, while as adroit and inconspicuous as possible, makes the greatest inroads in denying money and supplies to Cuba, to decrease monetary and real wages, to bring about hunger, desperation and overthrow of government. - https://history.state.gov/historicaldocuments/frus1958-60v06...
Citation needed on all your other claims.
https://www.eeas.europa.eu/cuba/european-union-and-cuba_en?s....
Also the embargo de jure excludes food and medicine (although de facto it is hard to export those to Cuba), but also subsidiaries of USA companies are also not allowed to trade with Cuba, so Canadian and EU companies which do business in the USA (which is almost everybody) are risking a lot by trading with Cuba, so in effect the embargo is somewhat extended by large parts of EU and Canada.
> Cuba has yet to experience a famine despite being under a severe embargo for several decades.
I honestly don’t know where you’ve heard this. I searched the news for a famine in Cuba, and nothing came up, not even unreliable sources. Where did you hear this?
Not to nitpick, but was Mao's China fascist, strictly speaking? I ask because the big 3 fascist regimes of the 20th century (Hitler's Germany, Mussolini's Italy, and Franco's Spain) were all stridently anti-communist, anti-collectivist, and anti-Marxist. You can see a lot of the other elements of many definitions of fascism in Mao's regime, but that anti-communist part is really hard to square. One definition I appreciated is that fascism is vocally and stridently anti-equality, and by that standard, Mao's regime is clearly not a fascist one, even as it just as strongly authoritarian as any self-described fascist regime.
I'm actually not prepared to say that communism or capitalism is more deadly, because I think the reality is that the people making decisions got to that place because of skill in political infighting, not superior judgement on the topic at hand.
That is, the reason planned economies do fail is not because planned economies must fail, per se. Rather economies are, of necessity, massively complicated things and its very difficult to account for every variable adequately whilst planning, to say nothing of the difficulty of conniving the appropriate carrots and sticks for every participant at every level, to convince all participants to follow the plan.
95% of what most Americans criticize as "the evils of communism" are, in fact, the evils of authoritarian systems; it just happens that the big authoritarian system that was in opposition to America for decades called itself communist. Much like North Korea calls itself "democratic".
And while fascism is, indeed, anti-equality, the inequality it seeks to foster is almost always between a cultural in-group and Everyone Else. Furthermore, fascism does not always seek to murder the Other; it also seeks to forcibly assimilate them.
Guess what Mao did in China: systematically eradicated massive swathes of Chinese culture—or rather, cultures, because there were many differences between what it meant to be, say, Han Chinese vs Mongolian or Tibetan. The Uyghur genocide that is ongoing today is just an extension of that—and yes, it fits quite well with fascist ideals.
Sure! I live in a small rural town with a poor public education system and no professional opportunities outside of manual labor. I had to leave high school to work to support my family. The most I can make is minimum wage, which means that I cannot afford basic necessities. What "better" jobs am I able to choose from? Or do I have to wait for "the government" to step in so my family doesn't starve?
Allowing poverty to exist really has nothing to do with capitalism the economic system and everything to do with the political climate in society. Capitalism is just free markets and property rights, it doesn't say anything about government redistribution. Getting rid of markets would not help poor people at all.
I would agree with most of what you've written if the price of goods at Walmart actually represented their true cost. But instead, Walmart relies on externalities (the most obvious one is their reliance on their staff being able to collect various forms of public assistance, but there are plenty more) in order to maintain their prices.
Unsurprisingly for an alumni of the Chicago school the author believes this is still an open question, however this article is kind of well written and everything up to the conclusion—that is the historical breakdown of this question—seems to indicate that socialism is good actually, and Laissez-faire capitalism is bad.
Ones that are in a different city, of course.
Acting like being in small town America is an economic tragedy is a gigantic insult to the millions of people who sacrificed everything to migrate to the developed world, and those people are largely extremely good at lifting themselves out of poverty when they arrive. Why are locals less economically mobile?
There has never been a more prosperous time to be alive than right now in western countries, we need to continue to work to make life better for everyone society, but there is no magic solution other than hard work.
There are many tings in here that should be addressed, including simple respect for other people, and recognition of varying economic status, and the reality of impoverishment.
However I want to address the migration question. As an immigrant my self I take offense that you suggest that people migrate to “the developed world” (ugh!) in search of prosperity. This is a great simplification, and kind of a regurgitation of a popular belief which isn’t true. Most people—including my self—migrate because of family, second is jobs and education, these are people that already have a job or have been admitted to school and come on a special worker or school visas. Majority of immigrants don’t sacrifice everything, just proximity to family and friends, and most use their existing wealth to make the migration as easy as possible. In fact demonstrating financial viability is a precondition for permanent residency, meaning by far majority immigrants who can’t afford to migrate, or don’t have a job or a scholarship awaiting them, are forbidden by law from staying.
Immigrants who sacrifice everything off course exists, and refugees in particular take great risks while migrating, but they are a minority, and there is not exactly prosperity awaiting them, rather, a hope for a safer place to live. Many refugees have decades of poverty awaiting them in their host country, the more social services they get, the easier it is for them to actually escape poverty.
https://www.dhs.gov/sites/default/files/publications/immigra...
But than again, listen to what you are saying. Do you honestly want to live in a society where people are asked to “sacrificed everything” just because they happened to be born and raised a poor part of the country? Would you honestly prefer people struggle all of their childhood and most of their lives as young adults, only to than be forced to abandon their entire family, just to have maybe a shot at a better life? It may just be me, but I honestly would prefer there to be regulations and social services in place such that these lives are made easier.
The top employers that have SNAP beneficiaries also include the USPS, Amazon, Home Depot, Publix, Uber, McDonalds, Krogers...
How can a central planner effectively determine prices across an entire economy? Price fixing has historically been disastrous, from Diocletian to the USSR. This is literally the definition of the calculation problem.
Contrast this to politicians and bureaucrats who may have additional political incentives towards kickbacks, corruption or other, non-market inefficient practices.
For a start, corporations are very small compared to states. Even Walmart, the world's biggest employer, is less than 1% the size of the US by headcount.
More problematic is that corporations plan to maximize profit. That's it. It's a comparatively trivial optimization goal compared to the multitude of ways of valuing things that exist in wider society - and yet, corporations still frequently fail to be profitable. OP's example about the wedding ring is a case in point. Walmart's Finance department would value that for its raw weight in gold only.
But even more worrying, corporations have a magic tool for maintaining order and efficiency: firing people. States can't do that, or at least, not states that you'd want to live in. Corporations are rigidly hierarchical. Corporations are not democracies. Imagine human rights as implemented by the HR department. Scaling up corporate processes to manage a whole country would result in a terrifying dystopia.
The Gulags: Let me introduce myself.
Deportation and capital punishment are real things, so I think your wrong.
Whatever _sentimental value_ he may hold for his ring has no bearing on any rational actors choice to buy the ring.
Apple, Microsoft, Walmart and, gee, I don’t know, any of the other F500 corporations don’t make it there because “they fail to value their products and services”.
They pay real people, real wages, to produce real things, that are sold further down the supply chain. These aren’t imaginary objects and figures.
At the top of the growth sigmoid, corporations always make the wrong planning choices, to avoid self-cannibalization of existing products and to protect existing internal power structures.
The same thing happens with centrally planned economies.
If the examples of large corporations planning a proportion of an economy count as an argument for why central planning could work, then surely the examples of actual, centrally-planned economies failing should count as arguments for why they don't. I mean, don't toss out the actual examples for the metaphorical ones.
I'm not blind to the many flaws of the soviet union, but it's a bit absurd to point to it as a failure of central planning.
If you try to extend "producing goods" to "every good possible for all people", it cannot possibly work, because a corporation cannot even satisfy the needs of consumers within their narrow band of production (or else competitors wouldn't exist, and further enhancements of products would be unnecessary).
Oh please, they get to rob workers of necessities of life and capitalize on their pity wages. Take a look at Walmart employees on food stamps and talk about producing value equal to more than the sum of the parts; the government is subsidizing their food.
2. in situations of monopoly or close to it, corporations do in fact indulge in central planning for an entire economy. You may choose to put your faith in the idea that their chasing profits mean that their decisions will be the ones we would make as a society, but there's no inherent reason for this to be true. There are often multiple pathways to the same profit, with different side effects and different levels of organizational commitment; as a society we might prefer a corporation to pick one route, but it picks the other.
Private entities are specifically exempted from political manipulation. Government makes the rules, but a private entity (barring a few special cases) is free to operate within the law without a bureaucrat embedded in the office. Therefore the society might want a corporation to make some decision, but generally it can’t force them to by direct action.
If every venture that involved gathering together a group of people to bring sufficient capital, labor and IP to bear on a problem or opportunity ALSO faced the personal ruin of its participants should it fail or cause injury or death or despoilment, it would be extremely difficult to convince such organizations to form.
It is vitally important for such organizations to have limited liability for their participants i.e. for society to indemnify the participants against potential harmful outcomes from their endeavor.
What you're describing is a buyer's market, which is only one case out of many.
I just don't understand how to square this
> because a corporation cannot even satisfy the needs of consumers within their narrow band of production (or else competitors wouldn't exist, and further enhancements of products would be unnecessary).
against the reality that there are monopolies that don't satisfy consumers and that some companies profitably degrade their products over time.
IMO the main cause of monopolistic behavior is government regulation rather than natural tendencies of the free market (but that's up for debate and my position is unpopular).
No we haven’t. Look at the list of Fortune 500 companies today vs 50 years ago. The landscape is completely different. IBM was the most innovative company in America and now it's seen as a dinosaur. Corporations die each year. It’s cutthroat; your business is more likely to fail than succeed. The idea that Nancy Pelosi and Mitch McConnell could do a better job planning the economy is laughable
They aren't planing anything, they are responding to the environment. Sometimes they get it right and profit, other times they get it wrong and fail.
The free market argument that the value of something is equal to it's price seems to me to be begging the question. It's essentially saying "the an object's market price equals it's value because I choose to say that an object's value is it's market price."
To quote the Prince of Egypt "A lake of gold in the desert sand is less than a cool fresh spring, and to one lost sheep a shepherd boy is greater than the richest king."
Ultimately the value of something is what someone is willing to assign to it, nothing has inherent value as far as humanity has been able to determine or agree on, so instead the market allows everyone the freedom to value whatever they would like at whatever they would like.
But if you have an alternative way of reconciling the water diamond paradox I'd be interested in hearing it.
Indeed, one could argue that capitalism (which explicitly allows for unlimited accumulation of capital) is detrimental to genuinely free markets for this exact reason: https://en.wikipedia.org/wiki/Free-market%20anti-capitalism
Food has more value to someone who is starving than to someone who is well fed; even if the well fed person is willing and able to pay more for it.
Well, that is meaningless unless you define what "accurately" means here. This word is carrying a huge amount of weight, and isn't capable of that at all. (And when doing that, keep in mind that "price" is not "value", and there is no reason at all to equate those two.)
I would love for OP to explain why central planning seems to work so well for private businesses but has no such hopes of achieving any success for the public.
It's like Insulin. It may only be worth $5/vial to drug companies, but it's worth $100/vial to consumers who don't want to die.
Organ donation is a good example we're we've said, "we cannot let a market solve this problem." Are there issues, with it? Sure, but only the extreme among us argue that organ markets would be an improvement. Every market is open to this critique to various degrees.
I am not sure “8 billion Turing machines” is intrinsically more efficient or accurate than “one really fast one.”
Also, worth mentioning that you would sell your wedding ring in a heartbeat if you needed to pay for food/healthcare/etc. Sentimental value is important you’re right, but in my experience (maybe not yours which is fair) - when the chips are down you do what you have to do to survive. The problem is, in the current system we value human life less and than market equilibrium, and that’s silly. We could feed every starving person on the planet… several times over… but we don’t because it’s not profitable. That’s objectively stupid.
Sure, but considering all the information you'd need to compute (I'd argue we're close but probably not there yet), is this okay? Are there disadvantages to this data collection? Do these downsides outweigh the upsides? I feel like these conversations are so difficult because everyone comes in with certain assumptions, assumes others have them (even if explicitly stated otherwise), or are dismissive of any other concerns. We need to be on the same page to have real conversations.
> arguments for a centrally planned economy
I actually think we're getting close to a point where a planned economy could be feasible. The problem with planned economies is that the economy is naturally chaotic (small perturbations result in large changes in outcomes). So to do this you need a pretty close eye and measurements of the economy. But looking at this requirement, we have to ask what actually needs to be given up. I'd argue that this is the reason that we should never have a planned economy. The solution space is complex and there are no globally optimal systems, so we need to pick what we care about. If you are about reducing harm from potential tyrants from abusing the population (or some subset) and/or privacy and security from governments (not just your own) then this is absolutely not a path we want to go down. Because high levels of surveillance maximize tyrant's power and maximize potential exploitation by adversarial governments.
And there lies the problem. Things that "look good on paper, but don't work in practice" are just things where on paper we haven't been nuanced. It is where on paper we've just had a myopic viewpoint, steamrolling your opinion, not seeking solutions. This is true outside economics and politics, but I think since it is a field that everyone feels qualified participate in and highly encourages blinders. We can't go about solving complex problems this way. We can't solve complex problems pretending all problems are easy and have precise solutions. Life is messy, and so are solutions.
So let's talk about what we actually care about and what our actual objectives are before we even attempt to start optimizing. I rarely see any discussion of objectives. It is fine to assume that people just want a strong economy and well off people, but there are many other variables that we either need to concern ourselves with or not, and we can't have these conversations without establishing our premises. They aren't obvious.
While it's true that a centrally planned economy may not ultimately have the same variety of goods, it's important to understand that a planned economy is not optimizing for that, and that parts of a regular economy (especially parts concerning national defense security and energy security) are already very highly planned)
> It is a fool’s errand to try and plan an economy, and those who think they can, or believe they are currently doing so in any meaningful way, are mistaken.
So were the people who thought cars couldn't be faster than horses or that computers couldn't beat humans at chess or generate deceptive but believable text output at a level of a 10-year old.
Please ignore the man enforcing property rights and contract law with a gun behind the curtain. He doesn't count, unless he tries to tax someone. Then he's the bad guy all of a sudden.
[1] https://en.wikipedia.org/wiki/Glass–Steagall_legislation
These obviously serve a goal, but if you're saying that they also cause inequality, what is the better solution? Do we remove all safety rails? Or are some seen as essential, so the debate isn't pro or anti regulation but merely which ones are worth the cost? etc
1) Company Complains about regulations 2) Gov Removes Regulations 3) Companies do dumb stuff 4) Gov Applies Regulations 5) People forget about dumb stuff 6) Return to step 1.
Case In Point: SVB
EPA - polluting for instance.
In 1969, the Cuyahoga River caught on fire in Cleveland just a few miles north of Cuyahoga Valley National Park.
When rivers start catching of fire the companies doing the polluting aren't really going to stop doing it and since most consumers live pay check to check they will generally chose the cheapest option available. even if they end up paying 10X the cost down the line.
edit: source = electricchoice.com
That said, zoning regulations in particular are a net negative, were mostly born out of racism in the US, and their purported objectives can be achieved better through other mechanisms - actually regulating externalities like noise and smell.
Personally I'm in favor of wealth and income limits, with anything past a threshold being redistributed or to fund UBI.
I however disagree, I think socialism has more than proven its merit, particularly if you—as the author of this article does—look at the history of the USA, beginning with the Gilded Age where laissez-faire capitalism caused an unprecedented inequality and poor labor conditions, only stopped by the great depression and the new deal which followed with its regulations as well as social programs. Now in the wake of Reaganomics (championed by a previous generation of the Chicago school) we seem to be flirting with a similar level of laissez-faire capitalism, deregulations and gutting of the social programs, we seem to be heading straight back to the inequality of the Gilded Age.
The Laissez-faire capitalism of the gilded age came crashing down in a spectacular depressions, the benefits, which only some could afford, were short lived when suddenly there weren’t any jobs. The New Deal gave people back their jobs so we could again afford the luxuries of past inventions.
You see. I too can spin a narrative where socialism brings all the good stuff and capitalism none.
and by the way, the oil for reading at night was only one of many many great benefits. Ford bought cars to the working class for example.
https://news.yahoo.com/super-richs-wealth-concentration-surp...