So, did I get it right?
Tris
“Even if you are on the right track, you’ll get run over if you just sit there.” ~ Will Rogers ~
Um, *Tris pretty impressive, actually.
there are no right and wrong anwers Tris (or Triskadecamus if you prefer)
What would the totalitarian commies do? Nevermind. They’d do the same thing as the capitalists only they wouldn’t have to pay for it.
Try substituting capitalism for communism. Changing economic systems along with entire cultures in one fell swoop is no easy task no matter what system your switching from or to.
A few east bloc countries such as Poland have elected communists after trying to institute capitalism. I bet while they hated the oppression from the communist government, old habits die hard, and they might feel more financially secure in a communist economy.
Clearly, I’m not getting my point across. I’m trying to start a thread on the specifics of how communism would be implemented. I want to know things like how information is transmitted through the society, how the planners in charge can figure out what everyone needs, how issues of social justice are meted out, how innovation happens, etc.
I thought we could take one specific area of the economy (I mentioned Gold, it can be anything) and try to nail down how that area of the economy would be managed under your ideal vision of communism. Then we can look at the plan and see if it makes sense.
Because these Communist debates never seem to go past the level of vague generalities. But the devil is in the details, and they never seem to be discussed.
For example, we started doing that in another thread. ‘Perspective’ started from the position that bureaucracy was unnecessary, and that the Soviet style of central planning was not a result of communism, but of totalitarianism. So we started hashing out some details of how things would actually work, and within a couple of messages ‘perspective’ had already proposed price controls, purchasing quotas, and other bureaucratic artifacts.
Societies have to have organization. They have to have means of tranmitting information about supply and demand. They have to have incentives, and solutions to the problem of laziness. But we never get to hear what those solutions would be under the ‘ideal’ communist system.
After we started down this path in the other thread, ‘perspective’ complained that it wasn’t fair because he couldn’t plan an entire economy, and the questions were too broad. Hence this thread, in which I tried to isolate out a very small part of the economy so that we could discuss it without distractions. Apparently, that’s not going to work either.
It’s not going to work because the only people who belive in communism are idealists who lack an understanding of how things actually work.
For example “society will reach a general consensus”. How does this happen in a society of millions? I can’t even get a room of a dozen clients to agree on a decision. Does everyone vote on every issue, even if it does not concern them? Not every decision is a Yea or Nay. Do we have an army of consultants and professional facilitators split the country into a hundred thousand breakout rooms to reach a consensus?
How are the benefits of this gold mine distributed? Does everyone receive an equal share of gold or do they get certificates they can trade for other stuff? Do you think you can distribute anything to millions of poeple without some kind of beurocratic process?
"It’s not going to work because the only people who belive in communism are idealists who lack an understanding of how things actually work.
"
Perhaps, but what you’ve shown is mainly that if a goldmine were to be run on democratic principles, voting rights had best be limited to those with some kind of demonstrable knowledge of and stake in the mines’ operations. In theory this might be like the way local school boards and other kinds of local government bodies are run.
Sam, I don’t doubt that you sincerely intended to offer a workable forum for discussion. But precisely because the devil is in the details, the devil is in the details ;). By which I mean we need to know more details about our communist economy and the world market for gold before we can sketch out operations.
I haven’t done that much reading on alternative strategies for industrial ownership; but I have come across some arguments for worker-owned cooperatives, and the retention of certain aspects of a market economy. That’s much less than you’re hoping for, I’m sure. If I can dig up a cite I will.
in all fairness, that should read how things actually work in a capitalist society.
Since you seem to know how things work. What’s your capitalist plan?
My main complaint actually is that this is all a game of make believe. Even as Triskadecamus provided details on an already narrowed situation, msmith537 demanded more. And as long as two sides are ideologically opposed the argument can just goes on and on. Since we don’t have any way to verify facts it’s just a matter of who wants to carry on the longest.
My plan is the guy who owns the land the gold is on sells it or leases it for as much as he can get. Some mining company buys it, hires a bunch of miners, placates some tree-huggers and sells the gold on the open market. Everyone is happy. Landowner’s get paid. The miners get paid. The mining company gets paid. The town that supports the mine gets a lot more business and taxes. Industries like jewlers and electronics manufactuers have a new source of raw materials. The only person who is unhappy is me since I now have to go to Tiffany’s to buy my girlfriend a big fat gold bracelet.
So some people make out a little better. So what?
It’s not make believe. Do you think that because you institute a new form of government that the entire world is going to change? Will communism suddenly wave it’s magic want so that we all become omnipotent regarding the value of products? Is there some magic red dust that will take away the need for distribution networks and data colection or controls or anything else that makes socety run? No.
All problems of turning resources into raw materials and distributing them are not going to go away under communism. The ownership structure will change. The controls that make sure people are working on the right projects will change. But the same basic questions will still need to be answered. Who makes decisions? How do we decide what to make? etc etc. If you think communism is a better system, you should at least have an idea of how these questions will get answered.
I’ll give you an example. In a US factory, a manager who represents the interests of the owners can fire a worker if he doesn’t perform. This power is restricted by the fact that it is not easy to replace a worker at the drop of a hat, but for the most part, either party can break the work arrangement at any time.
In a communist factory, I presume everyone has an equal share. So what happens if a worker is unable or unwilling to perform. Can they be fired? Do they even have to perform if they don’t want to? Who has the power to say “you aren’t doing your job”? Does the worker even have to care if someone says this to him? Peer pressure only works if you care what your peers think.
These are the kinds of questions that you need to address, otherwise you are simply for communism because it’s not capitalism.
But there isn’t just one guy. It’s covered by dwellings and light industry. You’ll have to deal with multiple owners. Some of them may have irrational attachments to their land and demand prices far above market value. If you bargain with them collectively will that cause the price to rise or fall? What if some competitor finds out about it and a bidding war ensues? What if the gold mine cuts part of the community in half? You may half to answer to a local government that wants to see that it’s community doesn’t dissappear. What if some of the mine is on public lands (city hall)?
It’s going to take a team of experts to carry this off. You will need lawyers, geologists, various people already in the mining company, maybe even urban planners, lobbyists, and psychologists. In other words you haven’t even begun a plan. You will need to consult various experts assemble them into a makeshift think tank and then read their reports and maybe make a decision from there. Even capitalist would probably need a bureacracy here.
There are many factors that could make this gold unminable under a capitalist society. The possible details go on and on.
Have you even been listening? That’s what I’ve been trying to say. I’m not expecting a magic wand. I’m expecting slow, organic experimentation and refinement from immediately achievable goals to larger ones. If, by experimentally verifiable results (not mere skepticism), and upper limit is reached that’s ok because I would still be working on cooperation and achieving at least in a limited sense an improvement in living cooperatively.
I can only address this from the idea of the co-op since I’ve seen it firsthand. How to handle people that don’t contribute is a detail handled differently by different coops. This is because the members of each co-op make their own decisions democratically. Benefits from a co-op generally come from active participation. So if you don’t contribute, you don’t recieve benefits. The matter of unsatisfactory contribution is probably industry specific and guidelines could depend upon the size of the co-op. I think the right may be reserved to reject certain people from the co-op and this would probably be done on a democratic basis.
I accept communism as a worthy goal to work towards largely because I’m not satisfied with the values and reality that our society manifests. I’m not voting for anyone with a communist platform. I’m not trying to get you to join a revolution. I’m working towards change with those that choose to help. If society granted me the powers of a despot, I would need to address those things, but somehow I don’t think I’m going to see that anytime soon.
Now we’re getting somewhere.
Perspective, I think what you don’t understand is that Capitalist economies are self-organizing. There IS no ‘master plan’, other than industrial policy applied to specific industries in very limited ways. And industrial policy is not an attribute of capitalism, but of socialism or fascism.
For example, if I discover gold and want to hire a bunch of miners, I just put an ad out, offering a certain wage, and I’ll either get the workers or I won’t. If I don’t, I have to raise the wage I’m offering, or offer some other benefit.
The wage I wind up paying will be set by millions of variables I don’t have to know about - the demand for miners, the cost of housing in the area, how my job compares to other similar jobs, etc. But I don’t need to know any of that, because the essential information for my purposes is carried in the price system - the price I have to pay for miners.
If other jobs open up elsewhere, they will be in competition with mine. My workers may choose to stay or leave, based on the new offers they are getting. If they stay, the new company will have to pay more for them in order to attract them away. That will affect his profits, and if the cost of labor is higher than what he can make by mining the gold, he won’t hire them.
And so it goes. I order mining equipment, which causes a slight increase in sales for the company, which causes them to ramp up more production. The increase in demand may cause the price to rise on the myriad of raw materials and intermediate products that go into that manufacture, causing slight changes in prices throughout the marketplace, which in turn subtly effects the behaviours of all companies involved. And if a company’s sales goes up, its stock will become more attractive, which will cause more investors to give that company their money to finance expansion.
As the effects of my gold strike ripple through the economy, each business affected receives most or all of the information they need through the price system. A manufacturer of ball bearings for truck axles doesn’t have to know about my gold strike - he just has to know that demand is up. This filtering and distribution mechanism for information is one of the things that makes Capitalism so efficient. Think of it like a neural network - instead of central planning and information bottlenecks, we have a massively parallel interconnected network of nodes that provide feedback to each other. The price system is the communications network. The nodes provide negative feedback, which makes the whole thing stable.
Now, in a Communist system, if I strike gold, I have to get some workers. But if there is full employment, those workers have to be taken off some other worthwhile venture. Absent a system of prices, how do you determine whether my gold mine is more valuable than other jobs? Who decides? And does the persion who decides have to factor in the price of housing being higher at my mine, which raises the state’s costs, and the added transportation costs, and how much demand there is for my gold, and the millions of other little details?
And if we start up my gold mine, who do I get the trucks from? I have to put in a request for a truck with someone who allocates the resources, but given that there aren’t enough trucks for everyone, how does he decide? And is he going to also increase orders for truck axles, and ballbearings, and grease, and tires, and increased production of rubber for the tires, and…
In the meantime, consumers of other rubber products, absent a price system, have no way of knowing that rubber is in shorter supply. In a capitalist system, prices will rise, which in part causes consumers to seek alternatives or conserve, until the increased prices stimulate production. In a communist system where everyone has a ‘right’ to these goods and demand is disconnected from cost, the end result will be a shortage of rubber. There are no free lunches. And of course, a shortage of rubber may in turn cause a glut of products that are only useful with rubber, like tire rims. By the time you’ve reached the 3rd and 4th order interactions, you have a completely intractable problem. That’s why one of the hallmarks of any centralized planning tends to be a series of shortages and gluts.
This is the issue I was trying to address in the OP, because it’s a rarely-talked-about flaw of communism. Central planning just can’t handle the informational requirements of an economy much bigger than a large Co-op. Communism doesn’t scale.
Informational requirements, some standard replies:
We’ll do it with computers.
And there’s no reason why a state-owned economy couldn’t use a price system.
And there’s no reason why a system that practiced economic democracy couldn’t use a price system.
Oh, um, and we’ll organize it so that the state only controls the “commanding heights” of the economy.
How can you have a price system, when people can’t keep the fruits of their labors and everyone earns the same amount of money? Note that if the central authority is the one setting the prices, you’ve gained nothing. The price system merely reflects the choices of millions of poeple. Take away the choice, and the prices are useless. That happens in Capitalist economies in cases of ‘market failure’ due to monopolies, government intervention, natural monopolies (like DeBeers Diamonds or Canada Nickel), etc. It also happens in Capitalist economies when inflation gets out of control or the regulatory structure fluctuates. These things distort prices and the information those prices contain, and hurt efficiency.
So just saying, “We’ll have prices” is meaningless. HOW will the price system work? Please explain how a state owned economy sets prices.
As for computers, does the phrase ‘garbage in, garbage out’ ring a bell? Again, prices are the physical manifestation of the desires and judgements of the people. How do you duplicate that with computers? How do the computers collect the information? How do they tell if the people entering the information are lying, in error, or just don’t care? Again, specifics please. “We’ll use computers” isn’t an answer to anything.
As for organizing the economy so that the state only controls the ‘commanding heights’ - again, how does that work? I thought Communism was supposed to be a classless society. How do you ensure that without micro-management? “Perspective” walked down this path and said that only income would be set by the government, but people were free to barter and trade with anyone they wished with that income. When I pointed out that some people will be better barterers and traders than others, and will therefore become wealthy, we started down the path of spending limits, quotas, and suddenly there was a big bureaucracy managing the ‘free trade’ within the country.
My position is that even if everyone in a Communist country is like Mother Theresa and honestly and sincerely wants the best for the country, it will rapidly devolve into exactly the kind of state that the Soviet Union turned into, perhaps minus some of the more horrible aspects. But it will still turn into a huge, oppressive, mind-numbing bureaucracy.
I would like to add an interesting case in point: Hillary Clinton’s health care task force. It started out with sweeping ‘big picture’ ideas that seemed rather simple, just like the debates over Communism generally are. But as they started working through the system, capturing exceptions, replacing market mechanisms, and setting up systems of information transfer and control, it became a monstrosity. As I recall, they were already up to over 700 pages of proposed regulations when the thing collapsed.
I have no doubts that the people on the task force were dedicated, intelligent, and wanted to do the right thing. They just got ensnared by the inevitable result of trying to centrally control something as complex as health care delivery. And even then, their system was only partially socialized, and only over a fairly narrow range of the economy. It was still a bureaucratic nightmare.
Ah, but in a capitalist system, the people living on the land and those who have businesses on the land typically own the land, and the state is obliged to recognize and protect that ownership. A communist system by definition doesn’t recognize private ownership.
Now, it’s certainly been true that the capitalist wealthy can afford to corrupt local law enforcement and the court system to screw the small land-owner, but the court systems in communist countries are hardly immune to corruption and political interference. The difference is that ideally in capitalism, the land-owner can hold out for a higher price, or simply choose not to sell. Ideally, under communism, the residents can be forcibly displaced if a greater need for the land can be shown. Their wants are only of secondary importance to the system as a whole. Trouble is, every individual represents a minority that can be screwed over if “the masses” decide their comfort is more important than the individual’s. Talk about Russian Roulette! The only safe solution is to try and lay low and not attract anyone’s attention. Forget about building something useful and valuable, because it can be seized at any time.
As for the profits of the goldmine, it is possible under capitalism that a land-owner can negotiate for shares of the goldmining operation and therefore can share in the profits. This was actually fairly common practice among people who staked land claims, then exchanged mining rights for mining shares when a mining company became interested in their holdings. The landowners could also just sell out for a lump sum, choosing not to take requity in a mining operation that may not pay off. The point is: in capitalism, they have choices, and under communism, they don’t.
Sam, you’re asking for something really complicated. Could you take some extremely basic example and map out how it works under a capitalistic system with regulations such as the US? Then maybe we can show a parallel under a communistic system
Perhaps so, Bryan dpending on how communism is defined (and I can think of no practical way to implement communism, except perhaps to proliferate worker-owned cooperatives). Nor is implementing communism my goal.
My point is and has been that, for the ra-ra-capitalism camp, debates about Communism vs. Capitalism end up as invidious comparisons in which any problems generated by capitalism are excused because Soviet-style communism would be worse. The truth is that there’s a lot of different ways to balance economic prosperity and social good and, on the whole, Western democracies–thank goodness–don’t give capitalism the free rein that Sam tends to idealize. Under European-style democratic socialism one can have choices and still have the benefits of broadly distributed prosperity and social welfare. I hope that I live long enough to see the US moving back in that sensible direction.
Sam, you must work for a very small company because no company I know of corresponds to the spontaneous, freeflowing energy that you–almost romantically–attribute to capitalism. Large corporations are very bureaucratic: they generate every bit as much paper as government commissions do. And then they shred it ;).
Actually, I work for one of the largest companies in the world. And sure, they can have similar problems. Our company handles that by splitting into autonomous business units, which in turn organize into smaller, semi-autonomous divisions. It actually runs with surprisingly little paperwork. Most large companies manage complexity the same way that object-oriented programming does - by encapsulating business functions into smaller units, and then reducing the information flow between units so that the complexity remains hidden.
That works in a business because information really only has to flow up and down the tree. It doesn’t really need lateral communications (i.e. between two business units). In an economy, information has to travel between all involved actors. That’s a much more difficult thing to achieve.
Also, what corporations are attempting to achieve is extremely narrow compared to even a smallish economy. And even a large company is small compared to a central bureaucracy.
Mandelstam: I’m not trying to cast moral judgements. This argument has nothing to do with social justice or morality. I’m talking about capitalism purely from the standpoint of the efficient allocation of resources. Whether <i>efficiency</i> is the proper measure of an economy or not is a wholly different debate.
I’m not sure who’s been making excuses or brushing aside the problems created by capitalism. I’m not, certainly. Sure, capitalism lends itself to corruption and cruelty, but guess what? So does every other economic theory. Capitalism at least offers certain advantages.
As an example, in my city there is a housing shortage. July 1 is the traditional lease expiry date and news reports of families who were unable to secure new housing are already splattered across the local media. Under true capitalism, the problem is self-correcting. Increased demand drives rents up, which encourages the building of new rental units. Over time, too many units are built, demand falls, prompting rents to fall, and the rate of building slows down. Trouble is, people who live in rental units are the majority of voters in this city and as such, they have many laws favoring them. As a result, no-one wants to build new rental units because it puts them at a significant disadvantage. The result is a serious housing shortage and the only real way to fix it is to deregulate the system and make it easier for landlords. By catering to the needs of the majority, the government has succeeded in making the situation comfortable for many but intolerable for some. Expand this imbalance to hundreds of industries and you have communism; there is no encouragement to build or innovate because the builder gains no benefit from his labour, except in some vague warm “glowy” feeling of working for his fellow man, which to a communist promoter seems to be reward enough.
Sam: I was providing some standard replies. I’ll leave it to others to pick up the ball from here. I don’t have a dog in this fight.
I would like to add an interesting case in point: Hillary Clinton’s health care task force…
Wow, that’s a piece of revisionism. I seem to recall the plan collapsed due to it not passing through Congress; I wasn’t aware that Hillary threw up her hands when the report grew too long.
C’mon 700 page reports are a dime a dozen in any endeavor run by committee.
Furthermore, the Clinton plan involved an extension of managed care; it was designed to provide universal coverage as well as cost controls.
And we both know of countries with single payer plans, where health care really is run by a central planner. In a fairly efficient manner, relative to the US, I might add.