Socialism shifts wealth around at a loss.
Capitalism creates more.
Alice Smith @TheAliceSmith
Tweeted on August 20, 2022
[This is why socialism ends in universal poverty and capitalism (free markets) doesn’t appear to have an end.—Joe]
The View From North Central Idaho
Ramblings on explosives, guns, politics, and sex by a redneck Idaho farm boy who became a software engineer living near Seattle.
Perhaps that’s the TL:dr; version.
Socialism moves wealth around and does not create wealth. For true prosperity, you must promote the generation of wealth.
A truly horrifying take on socialism, for me, was a single line in Tom Clancy’s “The Hunt for Red October”: “In the Soviet Union, every worker is a government worker, and the workers have a saying: so long as the bosses pretend to pay us, we will pretend to work.”
This is not a recipe for creativity, nor for productivity, nor for generating wealth.
I’d like to be cautious about assuming that capitalism will inevitably lead to prosperity.
If communism had a prefect coordinator, that was sleepless, truly altruistic, truly genius, possessed perfect information gathered without cost and transmitted wise instruction with no delay or misunderstanding, it might work. This, of course, is flatly impossible, as Hayek wrote (and got him a Noble Prize). To approximate this Platonic ideal, communists implement vast bureaucracies to collect information imperfectly and at intrusive cost to productivity, aggregate that information and move it up levels of bureaucracy, losing whatever original fidelity along the way, then given to Top. Men. that, at best, make a vague decision about allocating work and resources and shove those instructions back down the bureaucracy, mutating and warping to the benefit of each bureaucrat in turn until finally the workers that are supposed to actually do work are instructed to make 10 tons of steel with 5 tons of ore and a heap of blackening potatoes. The entire concept of communism, ignoring for the moment its complete refusal to factor in human nature, requires crushing bureaucracy that throws friction into every possible task until only by superhuman effort (or more likely, cheating the system) does anything get done.
Capitalism isn’t immune from that, either, especially not in the corporations. Have you ever had a solid week of meetings, all kinds of discussions about what is to be done, and at the end of the week not a single erg of work has been done in the decided directions by anyone involved? X people by 40 hours in the week equals how many unproductive manhours? You all got paid; all of that expense just gets bolted onto the cost of the product.
Then, there is the reporting, gathering of data to provide the bureaucracy with the information needed to do its job. If this data can be pulled out of an existing dataset, automatically, where that data and equipment it is stored in was essential to doing the job in the first place, then the cost is minimal. But if you have to stop and pull out a piece of paper and make tally marks, or open up a browser and connect to the accounting system for fifteen minutes of transferring data from one thing to another thing, by hand, that’s friction, and friction is expense.
And, of course, we have the diktats of the Good Idea Fairy. Sure it’s only 2 hours per month of watching an un-skippable video with quizzes on the subject of Diversity, Equity and Inclusion. But how much productive time is lost because the programmer had to come out of the “zone” to deal with this interruption, and then how long is it going to take to get his head wrapped around all the essentials of his task so he can productively be back in the “zone”? Does the plumber need to worry about diversity? Does the lineman wish he has a whole lot of inclusion available when he’s up in a bucket by himself on a lonely road repairing a downed power line? Every hour of that mandatory training, you get paid for, and the end, that overhead gets bolted onto the price of the end product, or detracts from shareholder value.
Naturally, there’s the government bureaucracy, which isn’t any better just because it is democratic bureaucracy than a communist bureaucracy. The one-size-fits-none approach to ‘regulation’ is better described as ‘misregulation’ or ‘malregulation’. Regulate: verb, to cause to operate in a regular or predictable manner according to purpose. Haven’t seen much of that come out of DC in my lifetime.
Get right down to it, the point is bureaucracy isn’t free. The failure to recognize that leads to spiraling nonproductive costs where the parasite eventually consumes so much of the host’s effort that it can no longer move, dies, and the parasites roll off the corpse to glom onto whatever else is still moving in the area.
Of course, free markets cannot always result in prosperity. You could drop as many smart people as you wanted, with whatever existing tech and supplies they wanted on some barren rock composed of nothing but SiO2 and they would want a lift home after a quick tour of the planet. The natural resources for prosperity just aren’t available.
In less stark form, same sort of concerns exists in various countries and to a certain extent, this planet. Read the book The End of the World Is Just the Beginning: Mapping the Collapse of Globalization for this type of analysis of the major countries of earth. I have my doubts about the book in general because some of the things I know a lot about he gets wrong, but the concepts and how he approaches the problem space are worth thinking about.
Despite no guarantees of success, what we do know is that free markets have a track record of achieving prosperity for everyone better than any other system tried. Socialism, and all known forms of Marxism, also has no guarantee of success. With the current track record, it would be a safe bet to say that socialism is guaranteed to failed.
Hmmmm… Now seems like the time to make a blog post I have been thinking about for months.
I would posit that both are wonderful ideas. That sooner or later will turn to the crap we are living through right now. Many times worse. Man is fallen, and his corruption will turn to insanity.
As we see today.
As Timo pointed out, communism works. But only God could pull it off.
And capitalism works. But somehow, I don’t think Blackrock, Amazon, and Elon Musk are going to get us where we want to go.
Then the argument starts. That wasn’t true communism/capitalism/whateverism.
What we do know is that men following the written word. Bible/constitution. Has brought us to the highest living standard the world has ever seen.
I would also posit that if we kept to it, recognizing man’s flaws. Our children might stand a chance.
The truth is there is just no way to cure man’s boredom in this physical realm. And what each must give to make it work for everyone. Most don’t want to do, if someone tells them they don’t have to do it.
So, we end up killing each other over the “better”, idea. And pure laziness.
Man doesn’t work without God. As he barely works with him.
Insanity is man’s lifestyle. As is his denial.
Try as we will, it cannot be done on our own. And never could.
It’s kind of tough to promote the benefits of capitalism these days since we really haven’t seen much of it for DECADES. We have more of an oligarchical kleptocracy with massive amounts of regulatory burdens involved. Makes true
capitalism very very difficult.
Smith agrees with you in a tweet within a few hours of the one quoted here.
The problem with capitalism is capitalists (e.g. Gates, Fink, Bezos) but the problem with socialism is socialism itself.