Asking what THE problem is with Communism is sort of like asking, “What is THE problem with being hit by a bus?”
Communism is an utter disaster for humanity, and it has nothing to do with whether people are good or bad, or whether greed is good or bad.
Communism is a disaster for many reasons. Sociological, mathematical, structural… It denies that humans respond to incentives. It confuses equality of opportunity with equality of outcomes, and therefore removes any incentive for the best and brightest to rise to the level of their ability. It is ignorant of the Pareto principle that 80% of productivity will come from 20% of the people. It rewards keeping your head down, and punishes risk-taking and innovation. To counteract these flaws, it introduces political incentives to replace economic incentives. It creates a privileged class not through money, but power and access to things controlled by the state that average people do not have access to.
Der Trihs says that the problem with markets is that only the connected people prosper. This is utter nonsense. But it IS true in Communist countries, or any country with strong central control. It’s true in the political class in any country. Look at the number of Kennedys, Bush’s, Rockefellers, and other dynastic families that have infused American politics for generations. In the Soviet Union, the son of a Politburo member had it made. If your dad was a local party official, you got things the other kids didn’t get, and you automatically got into the best schools.
But in the market, this isn’t true. I work in a large company, and I’ve seen many people rise and fall. I cannot think of a single person who got where they are due to connections, family background, or friends in high places. It’s a pure meritocracy. My own career has risen and fallen directly in proportion to my ability to do the job. No one has ever asked me who my parents are, or even what school I attended. And I’ve watched people I personally know very well rise to very high heights - million dollar salaries, control over a thousand people. In one case, the person was an immigrant who spoke with a thick accent and knew absolutely nobody. But man, he was good at his job. When I started working with him, he was just a technical lead of a small team. He now manages an entire division of the company.
I know a lot of the managers in this company, and to a person they work their asses off. One co-worker just went through a divorce because he was traveling so much for the company. Another has picked up his family and moved across the country twice to follow job opportunities as they were presented to him.
These are all good people. They are passionate about what they do, they work hard, they do their best to bring the value they were paid to bring. One of them expends great effort to motivate employees to be more charitable, and he has organized team outings for Habitat for Humanity and other causes he believes in. One of them is trying to champion environmental issues in the workplace.
Communism wouldn’t reward these people. The people who benefit the most are the drones who show up to work, do the absolute minimum, cut corners, keep their heads down, and go home as soon as the timeclock says they can go. Communist countries become dull, gray places with faceless bureaucracies and worker drones going through the motions. That’s one reason they can’t compete and why their standards of living eventually collapse.
But another big reason has nothing to do with people. It has to do with information. A modern economy is hellishly complex. A single simple product like a pencil can be the result of the coordinated efforts of dozens or even hundreds of companies and thousands of people. Millions of goods have to find their way to exactly the people who need them the most, at exactly the right time. There is simply no way a central authority can coordinate this. It is a problem of complexity, like trying to control the weather.
But it gets worse than that, because the information central planners need isn’t even available. It is created through the process of market transactions. You don’t know how much you value a hammer vs a screwdriver until you are forced to make a choice between them. The value of goods and services emerges through the process of millions of people bidding for them. Take away that process, and no one can know what society really needs. This is a core, fundamental flaw of any plan to eliminate market forces and substitute central control.
This is why the law of unintended consequences is so pervasive and so hard to thwart. Because the government is always making decisions with imperfect information, and once the decision is made, the people will respond rationally to it, and others will respond to their responses, and the cascading effects have consequences and are utterly unpredictable.
And we haven’t even started on the problems of corruption, regulatory capture, state monopoly and oligarchy, abuse of power, the co-opting of the apparatus of the state for partisan purposes, and other major flaws exhibited in all countries that attempt to implement Communist governments.