An article by a man who actually lived through socialism's effects.
Meaty quote:
Communists opposed both profit and competition. They saw profit-making as useless and immoral. In their view, capitalists did not work in the conventional sense. The real work of building the bridges and plowing the fields was done by the workers. The capitalists simply pocketed the company’s profits once the workers’ wages have been paid out. Put differently, communist believed that the capitalist class exploited the working class – and that was incompatible with the communist goal of a classless and egalitarian society.
But capitalists are neither useless nor immoral. For example, capitalists often invest in new technologies. Companies that have revolutionized our lives, like Apple and Microsoft, received their initial funding from private investors. Because their own money is on the line, capitalists tend to be much better at spotting good investment opportunities than government bureaucrats. That is why capitalist economies, not communist ones, are the leaders in technological innovation and progress.
Moreover, by investing in new technologies and by creating new companies, capitalists provide consumers with a mind-boggling variety of goods and services, create employment for billions of people, and contribute trillions of dollars in tax revenue. Of course, all investment involves at least some level of risk. Capitalists reap huge profits only when they invest wisely. When they make bad investments, capitalists often face financial ruin.
Unfortunately, communists did not share the above views and banned private investment, private property, risk-taking and profit-making. All large privately held enterprises, like shoe factories and steel mills, were nationalized. A vast majority of small privately held enterprises, like convenience stores and family farms, were also taken over by the state. The expropriated owners seldom received any compensation. Everyone now became a worker and everyone worked for the state.
[...]
I am sometimes asked why, if communism was so inefficient, it had survived as long as it did. Part of the reason rests in the brute force with which the communists kept themselves in power. Part of it rests in the emergence of smugglers, who made the economy run more smoothly. When, for example, a communist shoe factory ran out of glue, the factory manager called his contact in the “shadow” or “underground” economy. The latter would then obtain the glue by smuggling it out of the glue factory or from abroad. Smuggling was illegal, of course, but it was preferable to dealing with the government bureaucracy—which could take years. So, in a sense, communism’s longevity can be ascribed to the emergence of a quasi-market in goods a favors (or services).
Look at Venezuela. Look at North Korea, with its emergence of a quasi-market. Look at any country that insists on centralizing its economy, and on state management of major affairs, business or otherwise. Do these places look healthy to you? If not, then why, why do you continue to insist that communism and socialism are good things?
"If not, then why, why do you continue to insist that communism and socialism are good things?"
ReplyDeleteBecause the insisters are ignorant of history and economics 101. They also believe that human nature can be relied upon to cooperate according to the Marxist view, "From each according to his ability, to each according to his needs". Yeah; that could happen -- in Unicorn Heaven.
I am always surprised by your either/or when discussing capitalism/communism. A middle path seems entirely reasonable. I presume you appreciate public roads. In the US, I hope you agree that the government-run prisons are far better than the privatized hell-holes that were in vogue for a few years and now are being shut down. The FDA has its problems but I am glad there is a public agency regulating food safety....
ReplyDeleteAs a person more open to socialism, Venezuela is problematic. They democratically chose their mess, for crying out loud. What went wrong? On the other hand, it is not (or not merely) socialism that is destroying North Korea so its unqualified inclusion is deceptive.
I would suggest that greater socialism than the US prefers is the sweet spot where maximum benefits arise. Of course, that would also require 2) democracy, 3) a free press, 4) good education and 5) a sufficient military presence. The fifth isn't really required for a good test case, but it is required in general. Canada has the other four but is only kept afloat by neglecting the fifth.
If these five points (the first was a significant degree of socialism) were present in a single country, I guess we would then compare life-span. If there were a clear way to measure quality of life, I would add that, but I don't know how to make that rigourous or quantitative. Ah, what else you suggest comparing?
[Part 1 of 2]
ReplyDeleteBrian,
I don't think a middle path is reasonable, and when people try it, something always gets crushed under the wheels of "progress." China is ostensibly communist—at least, that's the rhetoric emanating from its government—but its market, while heavily managed and centralized in some respects, is distinctly capitalist, especially if we include China's open markets, the ones analogous to Namdaemun Market in Seoul. This is how people like Jack Ma, head of Ali Baba (orders of magnitude larger than Jeff Bezos's Amazon), have come into prominence. But what gets lost in this mixture of communism and capitalism? Several of the life-aspects you mentioned, most notably freedom of speech (and, by extension, thought). China's over-regulation of the capitalist undercurrent in its economy is also leading to what some see as a massive real-estate bubble.
What other mixed economies are there? We've kicked Scandinavia around before in previous exchanges, but here too, as some have noted, Scandinavia works because it's capitalist where it counts. At the same time, the "Nordic model" may not be the ideal one for other countries to pursue.
As for my Manichaean either-or perspective: (1) either-or is how this normally plays out in most countries (e.g., in Latin America, with its insanely total embrace of socialism to the exclusion of capitalism), and (2) I'm far from alone in this perspective, as the article I linked to shows. Nothing can convince me that socialism, communism, or any other form of central planning brings anything beneficial to the table. The cumulative effects of such policies can be seen all over the world and all throughout history. And it's legitimate to include North Korea in this discussion because, although NK is a "Kimist" regime with many cultic aspects, the economy is a standard, centrally planned thing, just as it is in many other countries, and sharing many of the basic traits of communism and socialism. There's nothing "deceptive" at all about roping NK into the discussion. Its failure has almost everything to do with central planning and the shunning of the free market. The totalitarian cultism of the country also fits very nicely with its economic model because both the cult and the economy are based on a denial of reality. More on that in a bit.
Public roads and government-run prisons aren't examples of socialism: they're examples of what's possible within a capitalistic, free-market system. Could the same be said if the tables were turned, and America's economy were dominated by socialism? Could there be private prisons and privately maintained freeways within a socialist context? No. Free-market capitalism, being flexible, allows for sharing and cooperative behavior, but that's not the same thing as allowing for socialism. To contend such a thing would be as ridiculous as saying that, when a mother forces her son to share a cookie with his sister, the mother is advocating communism.
[Part 2 of 2]
ReplyDeleteAnyway, I could go on and on about this issue, but what it comes down to, for me, is the impossibility of convincing me that socialism, communism, and any other form of centralization are ultimately successful in terms of raising the collective quality of life of a people. The free market has its faults, to be sure, but some of those faults are merely imagined, like the idea that profit always inevitably occurs at the expense of the less rich and the less powerful. Where free-market capitalism gets things right is in its superior understanding of human nature—or, really, of nature itself: it's all red in tooth and claw; life is a matter of competition much more than it's a matter of cooperation. Cooperative survival strategies have evolved in many different animals, it's true, but even then, those animals are collectively in competition with other animals—always in competition for space and resources. Socialists et al. see this fact and assume the pie is limited, and that's why their systems consistently fail. Free-market capitalists, by contrast, assume the pie can be grown. Note, too, that classism isn't eliminated in socialist (etc.) countries. There are still the poor, the marginal, and the underprivileged. Socialism makes poor assumptions about human nature and does nothing to eliminate the problems it purports to solve.
In the meantime, I tend to trust the word of people who've actually been through real socialism, communism, etc. From a consequentialist perspective, these paradigms are unworkable and, further, immoral. Certainly more immoral than capitalism is.
ReplyDelete"Public roads and government-run prisons aren't examples of socialism: they're examples of what's possible within a capitalistic, free-market system." The privatized prisons of the US are being shut down. They were monstrous in the way they worked. They were terrible failures.
As I reread this, I think you are making my point for me. A purely capitalistic system has faults that incorporating some socialist policies reduces. Within a capitalist system, incorporating some degree of socialism improves things. I see public roads and prisons as a socialist addition to a capitalist system It sure seems like we are arguing whether a country should be 70/30 capitalist or 60/40. Or possibly I am confusing libertarian positions with strong capitalistic positions.
Oh, and thanks for your wise words at my blog. Much appreciated.
[Part 1 of 2]
ReplyDeleteBrian,
As I said earlier, free-market capitalism is flexible enough to allow for different economic paradigms. Socialism, were it to dominate, wouldn't offer that kind of largesse to capitalism. You can share and redistribute within a capitalist system; you can't "go free-market" within a socialist system, except covertly. And such sharing and redistribution, within a free-market paradigm, doesn't qualify as "socialism" simply because it runs against the grain of capitalism.
As for the argument about federalizing prisons, etc.: are you honestly suggesting that federal prisons are anything less than cesspits of human-rights violations? This PDF from Human Rights Watch paints a grim picture of the US federal prison system. Sure, maybe that's a slight improvement over privatized systems, but not by much.
How about government monitoring of food quality? That's just as much of a joke. For example, fully half of US chickens—and we're talking about the ones that receive a USDA seal of approval—are rife with superbugs. The government's doing an awful job of keeping Americans safe and healthy.
Then, of course, there's the government's disaster management. Katrina and FEMA are what always come up in this regard: the government was utterly incompetent in handling that disaster.
I have very little trust in the government when it comes to anything aside from what a government should be involved in: protecting our borders, maintaining our freeways, prosecuting wars, and little else. Time and again, we see that it's the locals, not the feds, who know best how to handle local situations. In Katrina's case, over-reliance on government help, instead of having locally administered disaster plans in place, was a major cause of the Katrina-related death toll. Government, especially a government of a third of a billion people, tends to be cumbersome and incompetent. Leftist ideology tends to assume that government is efficient and competent, which is a laughable fantasy.
[Part 2 of 2]
ReplyDeleteLet's engage in a tu quoque fallacy and turn the question against capitalism. Does capitalism ever go off the rails? It does. Leftists love to talk about how US airline prices and services went haywire after deregulation of that industry (deregulation was partly Reagan's baby, partly the liberals'). True enough: capitalist businesses will provide a minimum of services and will jack up prices up to whatever level the market will bear, so this makes some sense. But even the airline situation was and is more complex than a simplistic "capitalism is bad when left alone." Because capitalism isn't bad when left alone: normally, when there's competition, prices go down, services improve, and things get better for the customer. However, when competition narrows from many companies to a few, counter-capitalistic economic forces take over, and that's what happened with the airlines. I'll concede, here, that the American tendency to engage in trust-busting, the breaking-up of monopolies and potential monopolies, is a good thing, to the extent that it prevents companies from reaching their logical conclusion: a monopoly.
So yeah, that's one of the ironies of capitalism: it can lead to monopolies, which reduce competition, which in turn make the environment less capitalistic. So I'm happy to admit that some regulation is welcome. Then again, when we speak of free-market capitalism, we're not implying that the markets are totally unregulated. Philosophically speaking, all true freedom comes with discipline, with constraints.
But this is utterly beside the original point I was trying to make when I first posted my link to the article by Marian L. Tupy. Tupy's point was about what happens when socialism is allowed to take over. It's never good. As I already acknowledged in my previous response to you, China has a strong economy (but a repressive society) thanks to its mixture of capitalism and communism. So a mixture of philosophies will result in something stronger than pure socialism could ever provide (cf. Venezuela), but no socialism at all would be better. US-style capitalism isn't pure capitalism as things stand, but terminologically speaking, it'd be wrong to label the non-capitalistic elements "socialism," even though this seems to be the devout wish of many American liberals, who honestly and openly do wish to change the US economy into something much more overtly socialistic.
In your Part One, you mention many good but individual examples. Katrina was terribly handled. (Digging into that subject and away from our discussion, I have read that basically every disaster requires a response by novices. That is people train for ten emergencies but the big local one is always different from what was trained for.) For this criticism to be valid for our discussion though, you need to look at perhaps ten disaster responses to find a pattern. A sample size of one is useless. Well, maybe it proved 'Brownie' wasn't up the the job, but it didn't mean the usefulness of a federal response group was wrong. The federal response to the threat of Ebola, much maligned by many on the right, worked pretty well.
ReplyDeleteThe response to segregated schools - forced integration - could only have been done by a federal government. Looking objectively at it, it seems as ruthless as some Soviet decree. Local people were forced into putting themselves in danger by attending schools where the other students, their parents and local government officials were all disapproving. And yet, I think it was the right thing to do. The locals, not the feds, were the problem.
American prisons have unique problems based on quantity. Still, the recent expose' on private prisons showed, or many suggested, they were worse.
I want a government to be as transparent and open as possible. This openness, or lack, is not a capitalist/socialist problem and I feel you are trying to connect them.
[Part 1 of 2]
ReplyDeleteBrian,
If you're going to create a rule in which I must now offer ten examples of every point I make, we're not going to get much further in this discussion. What's more, I'll have little choice but to hold you to the same standard: ten examples for every claim!
I'd agree that forcing society's hand with desegregation was, overall, a good thing. Same goes for making gay marriage the law of the land. In both of these cases, however, the nature of the problem was such that a state-by-state solution would have been impossible because of the "full faith and credit" clause in the US Constitution. It would make no practical sense for a gay couple to drive across the US and be considered legally married in New York, legally unmarried in Delaware, married in Virginia, etc. Once a gay couple is married, they're married in all states—period. The law now affirms that. Same goes for racial segregation: how can a black person go from state to state within the same nation, enjoying full rights in some states and only partial rights in others? That question was at the heart of the American Civil War. So, sure—forcing the people to do the right thing is, on occasion, called for. At the same time, as you yourself suggested, we should never mistake such forcing for democracy. It's not. Note, though, that all the forced changes were for the sake of increasing human liberty.
"The federal response to the threat of Ebola, much maligned by many on the right, worked pretty well."
Meanwhile, we've got labs mistakenly and sloppily transporting and mis-transporting deadly pathogens. This affects both public and private labs, but if the public labs are so much better, why are they involved in this mess at all? Merely being labeled "federal" doesn't make something more legitimate (see, again, my poultry example from earlier). More often than not, the federal government ruins whatever it touches. It's colossal, klutzy, and clueless.
[Part 2 of 2]
ReplyDeleteI don't think we had actually broached the topic of transparency, but yes, I do see it as more of a problem within the socialistic context than within the free-market capitalist context. True: government these days does seem (as commenter Nathan Bauman lamented) rather oligarchic, even in republics like the US; lack of transparency is increasingly a problem. What we're finding out these days, however, is that nothing is infallibly opaque: WikiLeaks and other organizations are gleefully turning out all sorts of dirty laundry, so politicians, with their cover now blown, have to decide whether to repent or to brazenly double down. Whatever the case, these organizations act as a corrective, and as a reminder that no one is completely safe from embarrassing exposure. The flip side, of course, is that too much transparency ultimately means a loss of privacy, as well as the inability to move in secret when necessary. A happy medium between privacy/secrecy and openness/transparency would be ideal. I think we had that once.
That said, all we have to do is look at the long, long roster of totalitarian nations to see how socialism and communism seek to eliminate transparency from the get-go. China routinely jails its dissidents; post-Soviet Russia has a problem with disappearing journalists; Cuba, North Korea, and Venezuela can't be trusted to tell their own citizens the truth. In open democratic societies, you can expect skewed, biased, propagandistic perceptions of reality, but you can also arrive at a closer approximation of the truth by paying attention to both sides of the ideological aisle; they serve as correctives for each other. I'd rather be in South Korea, watching the Chosun Ilbo and the Hangyeorae fighting it out, than in North Korea, listening to and reading only what the state provides. Socialism's a big loser here as well.