To Olentzero and other true believers, communism is defined by its outcome. By definition, communism is a system in which the workers control the means of production, everyone is satisfied with their lot in life, there are plenty of goods to go around, and there are no evil capitalists siphoning off the ‘social surplus’ and exploiting the workers. The workers meet and determine the production schedule, and everyone’s happy with that, and everyone feels fulfilled. In fact, they’re so damned happy that the state just withers away and everyone just continues on working for the common good. The result is bliss on earth.
That is Olentzero’s standard for communism. Anything short of that is not communism, by definition. Any country that tries to organize society along these lines but fails is not communist. It is an unfalsifiable theory. There might be 100 worker’s revolutions over the next thousand years, and every one of them can end in misery, and communists will still be saying that ‘real’ communism has never been tried.
The flaw in this way of thinking is that it’s essentially a belief in a fairy tale. There is zero evidence anywhere that societies are capable of organizing using communist principles on anything larger than a local scale. There is MUCH evidence that such organizations don’t work, and can’t possibly work. They lack fundamental structures, information, and incentives required to organize economic activity.
I would point to the Soviet Union after Stalin as an example of an honest attempt to make communism work. The Soviet Union post-1960 still had plenty of repression, but it didn’t have mass terror. By and large, the people in charge were functionaries who honestly tried to make the economy work. The Soviet planning bureaus employed tens of thousands of people. They had supercomputers (or the Soviet equivalent) trying to calculate supply and demand. They had armies of actuaries pouring over millions of transactions in warehouses full of ledgers. They had theories of ‘scientific’ management of production. They worked damned hard at making communism work.
And they still failed. The only reason the economy worked at all was because a secondary economic structure evolved inside the communist structure. The equivalent of pay for performance developed over time through rewards for quota-matching, state homes, special stores, and limousines for successful people.
And then there was corruption. Corruption actually kept the system going. Black markets took some of the pressure off the inadequate state planning bureaus. Kickbacks and bribes and barter replaced nonexistent pricing structures.
And of course, there was still intimidation. You might not get hauled away and shot by the NKVD for being lazy as was likely to happen to slackers under Stalin, but you might find that you can’t get a car, that your family is always on the bottom of the list for an apartment larger than a shoebox, or that your kid’s application for higher education is denied. There was an oppressive state hanging over everyone, and everyone knew it. So people plodded along and did the minimum required to avoid the eye of the state commissars.
But this was still a real attempt to make things work. It wasn’t just a bunch of power-hungry zealots hiding behind the fig leaf of communism to purge their enemies. There were many true believers in the higher levels of the Soviet hierarchy, and they tried their best to make communism work.
So how come it didn’t work? It didn’t work because communism lacks two things critical to the organization of society: information and incentives. Central planners cannot possibly know the optimum mix of goods and services required for a society, because the knowledge required is local, and much of the knowledge doesn’t even exist until it is discovered through a process of bargaining.
Let’s say the state has 100,000 hammers to give out. Who should get them? If you simply ask people if they want a free hammer, everyone will say yes. And even if everyone wants the system to work and only wants to take a hammer if they believe they can make the best use of it for the state, they still don’t know who should get it. I have a hammer with a cracked handle. So I need a new one. But I don’t know if my neighbor has a hammer at all. Or perhaps neither of us have a hammer, but he needs one badly I don’t need one as much. How am I to know? How is HE to know? Economists call this ‘the coordination problem’, and communism has no good answer for it.
In a capitalist system, the information is revealed through negotiation and transmitted out of the local area through the price system. I think I need a hammer, so I offer a price for it. My neighbor needs it more, so he offers a higher price. Now I’m forced to actually decide how valuable a hammer is in comparison to all the other things I could buy with my money. Eventually, the price lands on something that closely represents a very, very complex set of choices - the price of hammers becomes the representation of the relative value people in society place on hammers relative to all the other goods and services available to them. And as conditions change and the demand for hammers goes up and down, prices change along with it and send signals to everyone in society that allows them to make efficient choices.
And, you don’t need a central planner to determine how many hammers to make. Producers look at the cost of hammer production, and the price people are willing to pay for them, and raise production if profit is to be had. If there is LOTS of profit, other producers jump into the market, and push the asking price down to the point where there is just enough profit to justify the level of production of hammers. The marginal businesses who weren’t very good at it leave the market. The rest of them start competing by improving manufacturing processes, innovating with new features or materials, etc.
All of this activity is driven by personal incentives - good hammer producers are rewarded, people who make good hammer consumption choices save more money for other things. All the incentives in the system drive everyone towards optimum behavior. No coercion is necessary. In fact, for the system to work best, you must keep coercion out of it. Everyone must be free to make their own choices.
Now, there are lots of ways markets can break down, but the basic notion of market-based allocation works because it aligns incentives with human nature and because it creates mechanisms by which information about supply and demand is created and transmitted to everyone who needs to act on it.
In communism, those mechanisms don’t exist. So the only way to incentivize someone is through force. And if you are forcing people to do things, you lose the information required to make central plans. The result is shortages and gluts. Misallocations of production which require increasing amounts of coercion to correct. Unintended consequences thwart the best intentions of central planners.
You eventually get exactly what the Soviet Union was in its last days - a society that was ostensibly ‘classless’, but which had class shot through it as everyone jockeyed for position in the hierarchy of power. A society of dull, drab daily lives as people kept their heads down to avoid the wrath of petty bureaucrats and local empire builders, and in which corruption, alcoholism, and mediocrity were part of the fabric of society. And an economy sputtering along with low levels of efficiency and a poor standard of living for the average worker.
And that’s the best you can hope for from communism. The lucky ones get to lead lives of dull gray mediocrity. The unlucky ones fill mass graves.