T Nation

Why Socialism Cannot Work.


#1

There's been a lot of debate about Socialism on the site. Let's make it a thread.

In a Socialist country, the government manages or controls the economy to some extent. This means that a Socialist politician's goal is the well-being of people of the country. Simple enough.

Now, suppose an inventor invents something that would vastly improve our lives in the long-run, but cause unemployment in the short-run. The Socialist politician must quash the invention, or he'd have to face a lot of angry unemployed voters. He must do this, or the voters will elect someone who will.

This means that, under a Socialist government, we'd have no cars, no computers, no electric lights, and a whole litany of things we take for granted. They would HAVE to be stopped or the government would topple. Remember, a Socialist government must stifle change, or face the voters wrath.

Thoughts?


#2

There's no need for the politician to attempt to quash the invention if he can play the politics right and show the people that this will help their lives. I think your basic premise is way off.


#3

The problem with socialism lies with the similar problems as capitalism. The exact example you describe occurs quite often in free-market economies. An inventor, uncapable of fully capitalizing on his invention, surrenders (voluntarily or under duress) rights and profits to other market entities (banks, investors, and competitors) and ends up "selling out" or making a product that is watered down or held back because of competition. mp3 and file-sharing is a very full example. Apple didn't invent music file sharing, but somehow they ended up in charge of the music file-sharing for profit "business", a very watered down version of the old Napster file-sharing we all new and loved. Now, you could argue that this was the result of more socialist means and motives (RIAA and the US government), but then you could further conjecture that it was poor Napster vs. rich RIAA, and we're back where we started from. The overall point being that the exact example I described which is very much akin to what you are describing under socialism happened in a free-market economy.

The problem with all government is foresight, one person, a group of people, the data, which can see the future the best? No one knows. The problem with socialism specifically (aside from above), is popularity. There will always be have and have nots, socialism didn't/doesn't solve this. Democracy (so long as it stays largely democratic) ensures that while there are haves and have nots, the haves that are running the show are the most liked. Free market economies foster this ideal by allowing haves and have nots to traipse across the poverty line (if only mentally), command economies don't allow for such co-mingling and socialism gives no regard to popularity.

My $.02, but I'm no political-economist.


#4

The fact that you mention "a socialist country" tells me you don't really understand what socialism (in the marxist sense) is, or you are choosing to use some other bizarre definition.


#5

command economy <> socialism.


#6

Suppose you worked for the gas company in the 1870's. Or suppose your bank owns thousands of gas company shares held in trust. Along comes Thomas Edison. What would you do, if you could?


#7

[quote]lucasa wrote:
The problem with socialism lies with the similar problems as capitalism. The exact example you describe occurs quite often in free-market economies. An inventor, uncapable of fully capitalizing on his invention, surrenders (voluntarily or under duress) rights and profits to other market entities (banks, investors, and competitors) and ends up "selling out" or making a product that is watered down or held back because of competition. mp3 and file-sharing is a very full example. Apple didn't invent music file sharing, but somehow they ended up in charge of the music file-sharing for profit "business", a very watered down version of the old Napster file-sharing we all new and loved. Now, you could argue that this was the result of more socialist means and motives (RIAA and the US government), but then you could further conjecture that it was poor Napster vs. rich RIAA, and we're back where we started from. The overall point being that the exact example I described which is very much akin to what you are describing under socialism happened in a free-market economy.

Where would the inventor be more likely to get his product out and make a fortune?


#8

The definition is in the top post at the opening of the thread.

What is a 'Marxist sense' of Socialism?


#9

I am reposting here a reply I made to you in the Bush/socialist thread, which appears to be dying. I only quote you above to get your attention. Repost, with a few additions, begins here:

I don't like this distinction of "state-capitalism" from communism/socialism. I think the only thing the idea of "state-capitalism" a-la Lenin shows is that pure communism doesn't work. There is no incentive to produce in a communist system, and all that "equality" has to be financed somehow. So, enter the government to force the labor, right? LBRTRN said it well in his post above. Left = more government control and right = less.

First, the accumulation of wealth by government is NOT capitalism, in the free market sense of the term. Again, as above, if the GOVERNMENT reaps all the rewards of production, the incentive of the individual to produce is sapped. It would seem that so-called "state capitalism" is a natural outgrowth of pure communism. I also thought that government-owned/controlled production was called fascism, but I don't care about word games.

Second, who decides what those human "needs" are? Are they determined by the government? Are they voted on? Is there a minimum of pre-determined "needs" that a person has? I have talked to numerous of your Cuban brethren who fled to the US. They have stories of how they ration friggin' toilet paper down there. Humans only "need" to take so many dumps, right? You get a certain amount of rice per month. You don't get red meat because the government has decided it's bad for you. There are government spies on the street ready to imprison dissenters. And please understand that this is second-hand, so you are free to correct me if I am wrong. But there must be SOME reason that people are risking their lives by crossing over to Miami on rafts made of bleach bottles and dental floss.

The communist system tries to force "equality" and "fairness," but it takes all the incentive out of producing anything, because there is no real reward. What makes this such a great system? I am seriously trying to understand where you are coming from.

Conversely, in a free market system, anyone can produce as much or as little as they desire or are able. A person can choose to run a business or work for one, but the incentive is there, primarily in the form of monetary gain. In my opinion, there is no fairer system, because you tend to be rewarded based on your output (I know there are exceptions, but the 35-year old with 4 kids working at McDonald's is a reflection of choices and habits too, just as is the fat man who gets short of breath getting out of his car, just as is the bodybuilder). There is equality of opportunity, but admittedly, not equal outcomes (Human beings are unequal in their endowments and will to achieve). Communism/socialism forces equal outcomes by bringning the top down.

In a free market economy, barring certain circumstances, individuals largely CHOOSE their outcome (I know many will disagree). Property and enforceable property rights make possible a wider and more productive division of labor, and therefore increase levels of productivity and prosperity. Encroachments on property result in loss of freedom and prosperity (as you probably know first-hand).

Also, a question: why, in your mind, does the Cuban system work (I am assuming you live there by choice and won't be washing up on Miami Beach any time soon)?

I am really not trying to be a prick. You seem like a very intelligent guy who knows why he believes what he believes and I want to better understand your positions.


#10

Purpose of production is to satisfy needs = socialism

Purpose of production is to accumulate wealth = capitalism


#11

One thing people do not do is differentiate between Communism, socialism, Marxism, etc. Stalinist Communism (which is what most of you see as socialism) is essntially state capitalism, and that is dooomed to failure. Most successful socialistic or social democrat countries have a mixture of free marketness in there (which I don't have a problem with)

Headhunter, you should have held off on this thread, I just wrote a big diatribe in the "Rich and poor" one, and I don't have time to do both of these!


#12

I don't know how to put this, but there are things that capitalism cannot do.

Sometimes, such as the case for a common military, the government steps in to provide those services.

Is that socialism? We pay taxes to the government for national defense. How horrible!

I can also see paying taxes to make sure every child has a chance at an education is a horrible thing as well. Damned socialism!

Also, I think the world would be a much better place if nobody could afford any type of serious health care. I mean, can't those person live on the street for the rest of their short lives, once they get injured? Damned socialism gets in the way again!

Although I agree that NASA is not the most efficient use of money on the planet, should there never have been any space initiatives? Should we have waited another thousand years for private industry to finally decide to take the risk?

What about the Internet? Without the government doing research with our hard earned tax dollars, it never would have been brought into existence.

Maybe if we could stop arguing comic book politics about the evils of socialism, taxation and so on, we'd see that there is no perfect system, and theoretically, governments are supposed to help overcome those imperfections.

However, perhaps the problem is that we don't really want "other people" to succeed. Health care, education, and so on makes it easier for people to get by in this world... and without them the rich would have even more advantages over the rest of us.

Yes indeed, we should argue for the benefit of the rich, because us poor folk certainly deserve no comforts! Damned socialism!


#13

I lived in Sweden for a year, which is run by Social Democrats. Taxation there is off the charts. However, there is no illiteracy, very little poverty, state-sponsored health care, and a general sense of well-being among the people. People there don't bitch about taxes like they do here because they see the results of what they pay. They also get mandatory 5 weeks vacation per year. If a couple, married or not, have a child, they get 12 months paid vacation to split between the two (so long as the father takes at least 3 months off).

Say what you will about socialism, but there are some very tangible benefits. I used to have a very different (and critical) view of socialism until I lived in a socialist country for awhile. Don't knock it until you've lived it.

Btw- I had no insurance for the first few months I was there. So I had to pay for an emergency root canal. It cost me $40.


#14

I would attribute the Soviet problem to be a result of an error by Lenin, not a flaw in communist theory. Lenin thought that after the revolution, there would be peace and communism would flourish. Marx believed that communism in one country was impossible, and it had to be a world-wide phenomenon (like the capitalism).

No incentive to work? People love status. In primitive communist societies (eg, BC natives), status was based on how much food was given by an individual to the rest of the village. People worked hard to provide the most food. I don't know what all this "equality" stuff is about. Don't confuse the abscence of social classes with equality.

No, it is capitalism in the state-administered sense of the word. If it was a free market, you would drop the "state-" from the name.

For state-capitalism to be an outgrowth of "pure communism", the existance of pure communism would be a prerequisite for the emergence of state-capitalism; it clearly is not. If you said state-capitalism was the result of a misguided attempt to accelerate the course of history, I would agree.

needs = desires

If I had to guess, I'd say that ina communist society, what needs you have satisfied would depend largely on status, but that's just a guess. Just for the record, Cuba is not a communist society, and didn't claim to be. It was a 3rd world country (meaning it was "neutral" in the Cold War, NOT poor).

This isn't because it's all you "need", it's because of scarcity. This is not even relevant, since Cuba has a market economy, but a large part of that scarcity is due to economic sanctions, misallocation of natural resources, ineffcient production, and government corruption. Some argue that these problems stem from Cuba becoming a parasitic nation. Rather than satisfying its own needs, it allowed the USSR to do so, in exchange for political and military support. As a mercenary state can't survive without a patron.

Yes, there are fewer scarcities in the US than in Cuba. The government also does unethical things to retain power. This has very little to do with communist theory.

I don't see the justification for these conclusions.

I would be pretty stupid to say that capitalism isn't a good system, and that it hasn't helped advance humanity. It was definately a step up from feudalism. But at some point, capitalism will stop fostering advancement, and will hold back development. This is when socialism will arise, and not a second earlier.

not having classes and forcing equal outcomes are two very different things.

In a free market economy, barring certain circumstances, individuals largely CHOOSE their outcome (I know many will disagree). Property and enforceable property rights make possible a wider and more productive division of labor, and therefore increase levels of productivity and prosperity. Encroachments on property result in loss of freedom and prosperity (as you probably know first-hand).

Also, a question: why, in your mind, does the Cuban system work (I am assuming you live there by choice and won't be washing up on Miami Beach any time soon)?

The Cuban system worked quite well. Cuba was a mercinary, and did a pretty good job for the USSR in exchange for money, power, prestige, technology, and pretty much anything else it wanted. I left Cuba shortly after Gorbachev's visit, right before the USSR fell. Since the fall of the USSR, the Cuban system has not worked well, for reasons mentioned previously. Moreover, while I believe it has some advantages, I don't think state-capitalism is a particularly effective economic system.

Don't worry about it. I really don't mind defending my position. In fact, I appreciate the challenge, since without it I would never know if my positions are justifiable.

Alex


#15

My thoughts are that you don't really understand what socialism means and that your premises and conclusions are invalid.

Yes, there needs to be some incentive for innovation to occur, and competition is one of the strongest catylists of innovation. But I think that as you get closer to the "socialist" or communist end of the spectrum, efficiency and effectiveness suffer far more than innovation. For example, the USSR was very innovative in those sectors of the economy that had incentive, such as military technology, but it was also very wasteful and could not meet the needs of the people.

Theoretically both ends of the spectrum should work, but in reality the most successful nations have had mixed economies (Sweden, USA, etc).

Anyway, the whole idea of a nation-state having its own distinct economy is becoming obsolete. International corporations and non-governmental organizations are the driving force behind a shift toward liberalism (no, not that kind), so if state socialism fails, I think it will be due to globalism and lack of government accountibility, not lack of innovation.


#16

fuck it, I am just going to post what I wrote here, as it seems more relevant.

Here:

Not that I don't appreciate your stories about getting to the American Dream and all that, but one day you will realize that you are the exception and not the rule. Some guys are just smarter than others, some are more charismatic, and these people will rise to the top. Unfortunately, that doesn't do a fucking thing for those of us that are not endowed with these gifts.

The great majority of men fall between a certain IQ, I bet, and a certain range of pay that they make. This is fine...if you are a white male.

The issue, at least in America, is that of the government and the bosses trying tooth and nail to destroy every movement that benifits the greater good- the lassiez faire capitalism that people talk about is the same shit that led directly to slavery, child labor, anti-union sentiment and strikenreaking, the House on Un-American Activities, COINTELPRO, and all the other wonderful things that the ruling class of the government has thrust on the country. It is powerful men trying to, simply said, get more power.

What infuriates me is that if you read any Early American litatuure, this is exactly what the point was of starting thi country- to destroy the hierarchy and make this a country where all men were equal. Read Crevocuer's "Letter from an American Farmer", Jefferson's "Notes on the State of Virgina", or anything of Thomas Paine. The intent was to make men truly control their own destiny. This no longer applies.

What has capitalism got us? The most powerful spot in the world? This is true, but it is now on the backs of the sweatshops that make all the things that Americans buy nowadays. There is an old saying "You can sheer a sheep many times, but skin'em only once". Well, we tryed to skin American labor, and they fought back with unions that can be quite powerful. So now, we send everything overseas where people will work for fifteen cents with no bathroom breaks. Do you think these people are retarded? What will happen if these people unionizes, and demand a human pay for their labor? Where does that leave America, who's minimum wage is not even enough for an American to remotely live off?

What has capitlism gotten us? The super rich, the middle class, and the ghettos. Ironic how the highest ones are predominantly white, while the bottom of the barrel is black.

You can not talk about the rich and the poor without mentioning race. America is a racist country, who's every aim for the past three hundred years has been keeping blacks down. Every time they organize, and a leader emerges, he is assasinated (iroically). When have you seen a KKK member assasinated? When does someone who supports the establishment get assassinated?

Capitalism has gotten us to the point where cops patrol the white neighborhoods, watching for every black face driving a shot to shit Hond Civic in the wrong place. It leaves the blacks down in the vallies of the cities like Paterson, where legendary housing projects are where whites fear to tread, and the sheriffs avoid.

And then, when the blacks make it to the top, and tell of the hellish world where they have come from, Wal Mart tells them that they won't carry the records because they are "obscene". No shit. What is obscene is that the educational systems in the ghettos are garbage, there is no incentive for them to do better, and they realize that the only way for them to "succeed" is in the drug trade. The Tookie Williams case is an example of this kind of thing. Brutality and physical strength is the measure of men in the poor neighborhoods, not how smart or educated one is (as in the upper classes). So why are you surprised when they start gangs that makes millions in the drug trade, then commit brutal murders to reinforce their dominance? America has given them no other options.

OF course, they could work at McDonald's and try to work their way out of it. But capitalism is about taking all you can for yourself- so why work at McDonald's when you can make a grand in a night selling? Capitalism at its finest.

I attack Conservative all the time for their "head in the sand" mentality. They come back with, "Well I made it" Good for you. Here's your monument. But very few of you have any idea what is really going on in the streets, and the mentality that the poor have.

Instead of starting wars that suck up billions, why don't we dump that money into education, and get these kids in the streets educated? Why not get them into college? That is where the good can be done. Not telling everyone to fuck off, when you are (as I am), essentially, a white male who has controlled everything since the inception of civilization.

Women, minorities, and all others who are not white males have started off on the bottom rung since this country was started. Capitalism has done nothing but exagerrate the differences, and make them larger.

Now, I don't know if socialism is the answer to the world's problems. For all I know, it could be an entirely different economic system that rises in the future. But all I can tell you is that if the new economic system doesn't somehow benefit the moneyed classes, then it will be crushed.


#17

Its funny but IMO american and asian capitalism has satisfied both requirements better than socialism


#18

Who decides what 'needs' are? Suppose I need a BMW and a condo on South Beach.

How does a capitalist accumulate capital without satisfying the needs of his customers? (in a mixed economy of course, he gets a gov't grant or uses some other evil device.)


#19

There seems to be some confusion as to what exactly it is we are talking about. Is the debate about Marx's theory or is it about how socialism has been implemented? Its been said that those are two very different things...and thats partially true. The real question is, does Marx's theory hold any water?

Marx's theory is really a theory of history. Given that, has history proven him right? I say no. I dont really have the time to write a detailed post so I'll steal from someone else. Sorry about the length but its good food for thought.

Kelley L. Ross, Ph.D. writes,

"When diehards say that Marxism has actually never been "tried" (despite what Lenin, Stalin, Mao, Castro, Ho, and Daniel Ortega thought they were doing), they don't understand that Marxism was not a rule for behavior or a program for action; it was supposed to be the theory of a deterministic mechanism that will produce the future, a theory of actions that will arise spontaneously because of historical circumstances -- although we can infer what kinds of actions people, including ourselves, will be taking -- after all, Marx said that the purpose of his work was to change the world, not just understand it. It in the theory, however, the world will change because of the objective economic conditions, not because of some decisions we make. This was not a theory about "human nature" or "human psychology" [1], but about how the mode of economic production (how goods and services are produced) determines all the other political, social, cultural, and moral structures of a society (thought some Marxists are uncomfortable with this in an absolute sense).

The needs of the "English petty bourgeois" are thus not "false needs" [2], however dismissive Marx sounds, but true needs in relation to a capitalistic mode of production -- needs which will change over time, in a historicist sense, as the mode of production changes. As a "science" of history, Marxism would succeed or fail to the extent that it could actually predict the evolution of production and its various effects.

Marx thought that as capitalism had replaced feudalism with a new mode of production, which was more productive and efficient, the same thing would happen to produce a replacement for capitalism. In the end, as the workers were impoverished (when capitalists drove down wages) and the number of capitalists dwindled (as competition was replaced by larger and larger monopolies), the capitalists would end up with no one to sell their goods to and nothing to do with the capital derived from their profits. This would produce increasingly severe credit and banking crises, until the proletariat would easily tip over the whole rotten structure and replace it with a classless society. The revolution would more or less happen of itself...

However, although nominal wages were falling in the United States from 1865-1897, real wages were rising, and there didn't seem to be a problem with over-production or with capital investment. Marx's own data showed rising real wages. Recognizing that things weren't going as predicted, Lenin (Vladimir Ulyanov, 1870-1924) proposed that colonialism and imperialism were relieving the stress on capitalism and had temporarily derailed history: Colonies were a safety valve for excess capital and over-production; and the exploitation of colonies enabled the capitalists to buy off the proletariat at home. Lenin's own data showed that most foreign investment was in other capitalist countries, and it is hard to imagine how an impoverished colonial population could buy things that the proletariat back home couldn't afford. Nevertheless, Lenin's theory at least addressed the issue...

When the Russian Revolution came, Lenin and his colleagues had to address the paradox that according to orthodox Marxism Russia was not ready for a real communist revolution, since it had never passed through the necessary stage of capitalism itself. Although developing quickly enough, and the fourth largest economy in the world just because of its size, Russia was still largely a feudal society. Lenin died before much sense could be made of the situation, especially when his programs caused the economy to collapse and he had to retreat from an attempt at pure communism into the semi-market economy of the New Economic Policy (the NEP).

Subsequently, Stalin (Iosif Dzhugashvili, 1879-1953) followed the principle that the Russian Revolution would substitute a benign replacement for capitalism, namely "socialism," which would do the same job of industrialization without capitalist exploitation. Meanwhile, the new Russian state, the Soviet Union, would fight against imperialism and work for de-colonization and national liberation. If imperialism and colonialism could be ended, then capitalist economies would revert to the dynamic described by Marx and communism would develop there in the natural way...

With the Great Depression, which looked like just the sort of credit and production collapse that Marx had predicted, and which gave many Westerners the impression that Stalin's programs were producing better results in the Soviet Union, things seemed to be getting back on track. Then, when capitalist countries joined in to help defeat what should have been their own best hope, fascism, things really started looking up. The post-war world then began to see the start of de-colonization. For fear of "neo-colonialism," newly independent countries were advised to nationalize foreign holdings and limit capitalist exploitation (i.e. foreign investment). Stalin's Five Year Plans were seen by people like the new Prime Minister of India, Jawaharlal Nehru (1889-1964), as the proper way to modernize an economy.

Over the years, however, the countries that took this kind of advice the most seriously experienced only failure and stagnation. Nehru's great plans in fact condemned India to many decades of little improvement in its standard of living. But India was in good shape compared to Africa. By the late 80's, most former African colonies had lapsed into military dictatorships under which the standard of living was actually lower than it had been when they were colonies. All the modernistic and socialistic rhetoric of the original leaders of African independence, like Kwame Nkrumah (1909-1972) in Ghana, had turned out to be nothing but a mask for incompetence, corruption, and naked power.

Instead of foreign investment, African leaders demanded foreign aid delivered directly to them. Most of that was either wasted on useless projects or diverted into their own pockets: leading to the bitter characterization of them as "Swiss bank account socialists."

Meanwhile, the once admired economy of the Soviet Union showed what it was truly made of: corruption, inefficiency, and irrationality on a vast scale. Although everyone expected that the Soviet Union's own economic statistics were unreliable, even the CIA greatly overestimated the size of the Soviet economy. Outside of Moscow and Leningrad, which were bad enough, the Soviet Union was virtually a Third World country.

One result today is that many who still admire Marxism and socialism have decided that it is virtuous to be poor, and that the ruined economy of a place like Cuba is a desirable "ecotopia" -- kinder to the environment than capitalism. This would be profoundly astonishing and mortifying to Karl Marx himself: the whole point about the evolution of communism is that it would be more productive and produce greater wealth for all than capitalism. A socialism that simply perpetuated poverty would be worthless -- a return, indeed, to what Marx called "oriental" despotism and a slave economy.

Why this all happened goes back to the simplest principles of economics: it was Adam Smith, not Karl Marx, who understood the mechanism of history."


#20

I'm often willing to go through people's posts, highlighting what I consider are mistakes. In this case, the author is not here to answer my challenges, so it seems like a waste of time. I will say, however, that the author does not seem to have a good grasp on dialectical materialism, and how it relates to Marxist theory.

It is food for thought only in that it provides good practice for finding weaknesses in an argument.