RSS 2.0 FeedSocialism — Bound To Work, When Properly Tried?
by Brad WarbianyDoug’s post last night on Venezuelan Socialism pulled a couple of true believers out of the woodwork to comment. Outside of the fun of watching one try to refute the others’ sarcasm (without realizing the sarcasm, of course), one trend was constant: the idea that socialism will work, if it is ever properly implemented.
However, if the powers that be do not start to make some meaningful reforms to ensure more equality by bringing the bottom up, then leaders of Chavez’s caliber will continue to pop up. Maybe Chavez will fail. He may become too power hungry and greedy. Still, one day a radical new thinker will come along that will finally topple the policies and power of the West. I hope it happens before the West ruins the global economy with free trade.
Viva la Revolucion!
That radical new thinker was Marx. It’s Marxism that revolutionaries have been trying— and failing— to implement for several generations. The Marxists believe that if they can find a leader who will honestly and forthrightly put into practice Marx’s true beliefs, we’ll usher in an new age of Enlightenment.
Those of us who believe in market economics, of course, think that’s a load of bull. After all, we have centuries of support for the contention that markets beat government action, and that the free market creates incentives that end up resulting in better outcomes than central planning.
The socialists leave out one crucial thing, though: the entire study of public choice theory. A Marxist system includes an implicit assumption that correct central planning can overcome market economics. What they forget is that politicians are also subject to incentives, and that those incentives quite often cause them to act opposite to the interests of the public. The people in power can change, but unless incentives change, the results will not.
A defender of the free market can claim that the incentives involved actually improve the well-being of the general public, because mountains of evidence have shown this to be true. A defender of socialism, however, claims that with the right leader or the right management, socialism will improve the well-being of the general public, despite mountains of evidence to the contrary. If socialists would take the time to understand the evidence, they would see that political systems which value liberty result in great outcomes, while political systems which value outcomes destroy liberty.
The difficulty with Marxism (aside from the obvious weakness of us never having seen it work properly) is the inherent weakness of its proponents to show that it *could* work, even hypothetically.
Comment by Ben — January 11, 2007 @ 5:56 amWhat you find is that Marxist advocates must, as Marx himself did, radically distort data, ignore reality, and create a revolutionary *mindset* rather than a properly functioning government.
Marx’s own mother is credited with the wish that “Karl would accumulate capital, instead of just writing about it.”
It’s true what you say that officials are also subject to incentives, and that is indeed part of the reason socialism fails. But I think the real problem is that efficient central planning is simply not possible. Socialism destroys price data, which means that the central planners are shooting in the dark for the most part. Prices are determined by who wants how many of what how badly. The best way to “calculate” prices is to put things in a store and see whether people buy them. If they buy them up quickly, your price is too low (becuase you underestimated how much people wanted them); if they don’t buy them, either your product is crap, or the price is too high. Capitalism has the virtue of keeping prices honest. It enforces reality. Under Socialism people are allowed to dream about what prices should be – but the truth is that prices just are what they are. People either want/need things or they don’t – and they either have enough things to trade for the things they want/need, or they don’t. The great irony of Socialism is that, for all its jabbering about the efficiency gains of central planning, it shoots itself in the foot by destroying the information (real prices) that is the absolute sine qua non of REAL planning. And that is why Capitalist economies are ultimately better “planned” (and therefore run better) than Socialist economies. True – Capitalist economies are not centrally planned – but they are planned all the same by all the individual businesses trying their best to maximize profit. These businesses has access to real price information, and thus are able to do their job more effectively.
I think this fact goes a lot further to explaining why Capitalism works better than the (indisputable) fact that the planners are themselves subject to incentives.
Comment by Ludwig — January 12, 2007 @ 6:44 amLudwig,
I completely agree. Great point.
Comment by Brad Warbiany — January 12, 2007 @ 6:56 amThe difficulty with anarcho-’whateverism’, and other types of ‘true’ libertarianism such as the non-aggression principle (aside from the obvious weakness of us never having seen it work properly) is the inherent weakness of its proponents to show that it *could* work, even hypothetically.
there ya go. Fixed it for you. Not much difference. There’s no evidence to suggest that any ‘pure’ economic theorum works. liberty based societies work better than others, but insisting that therefore, that 100% non coercion would be even better, is simpleminded as long as we do have governance in place that the LP has to deal with.
Comment by Timothy West — January 17, 2007 @ 5:18 amTim,
No argument here. I am not an an-cap, because while I think the situation would be ideal IF it worked, I don’t agree that it would have the stability necessary to remain better than a minarchist state.
Comment by Brad Warbiany — January 17, 2007 @ 9:00 pm