OK, let’s sum up. Some are saying the problem with Communism is something inherent in human nature (that we’re congenitally greedy bastards, won’t innovate without financial incentive, or similar). This is outside the scope of my question, so let’s skip that part. Others are saying that the problem with Communism is that true prices aren’t known under the system. Let’s stick with that explanation for now.
I feel Sam Stone said it best:
Couldn’t prioritizing be a feature within the system? Couldn’t a product have an artificial price attached to it, based on the amount of labour and raw materials needed to produce it, thus giving each citizen the opportunity (nay, necessity) to prioritize?
I really appreciate all the replies. You’ll have to understand that my knowledge of economics is virtually nonexistent.
What you have described is the cost to build something - not it’s value. Its value is determined one way only - by measuring it against the willingness to give up wealth to have it. This forces you to make choices between options.
If you want a good summation of it, read George Orwell’s “Animal Farm” it’s only a little over 100 pages, and is a satirical allegory. Orwell was a Socialist, however, IIRC, despised how it had been executed.
The problem with an argument like this, of course, is that it begs the very questions it purports to be answering.
For example, the first paragraph says: “No system has ever been created that can meet the various demands of the market more efficiently than the market iteself.” That’s all well and good, but this assumes that the ultiimte goal of your economic system is maximum efficiency. I’m not arguing that efficiency is necessarily a bad thing, only that a goal of efficiency is a human one that can exist independently of the economic system used to achieve it.
What many people–both economists and non-economists–forget is that there are two aspects to any economic system: normative and positive.
The normative aspects are the ones that come out of our moral, ethical, and political desires for society. Basically, they involve asking ourselves what the goals of our economic system are. For a capitalist, the goal might be efficiency, whereas for a socialist a more important goal might be equality.
Once we have decided on the normative goals of our economic system, we then use positive economics in an attempt to achieve those goals. And the economic choices we make when doing this often differ depending on our normative goals. This does not mean that economics is simply relativistic or hocus-pocus. Microeconomic principles related to issues of scarce resources, marginal costs, opportunity costs, supply and demand, etc. all apply, whether our goal is efficience or equity or something else. It’s just that we use these principles in ways that privilege different outcomes, depending on our goals.
This, by the way, is not radical economic theory or anything. Anyone who’s spent any time looking over the past century of issues of the American Economic Review (it can be deathly dull, believe me) will have come across a similar argument heaps of times. The best economists–capitalist or socialist or communist or whatever–are those who acknowledge that there is a normative aspect to their social science, rather than pretending that our society runs on positive economics alone.
The second paragraph quoted above says: “The inherent flaw of communism is that it takes away freedom.” Sure, that might generally be true. But, depending on the normative goals that have been set, this might not be an economic flaw at all. It is definitely, IMO, a social and political flaw. But that’s a different question. And countries with centrally directed, authoritarian government have also shown that they can actually be quite economically efficient, especially over the short term.
I’m not saying that i support the communist model. I certainly oppose it very strongly in its 20th century, Soviet-style manifestations. But assuming that efficiency is the only economic goal of a society is to ignore the important normative aspects of any economic system.
Yes. I think a lot of dubious assumptions are being made here about the importance of various mechanical and administrative problems with economic systems that do not follow a market ideal.
The real problems is human nature, which is why your attempt to artificially guillotine this debate, throwing away the correct answer is a mistake.
Human beings have been small tribe/extended family creatures for most of their existence on the planet. The whole concept of nations and cities as units is very very recent on an evolutionary timescale. Our brains are just not built to act like ants, working hard towards abstract goals for the overall good of a very large group.
But while I’m on the subject, to all those free market groupies who say “you’ve gotta have prices” and “you’ve gotta have freedom” to achieve economic success, I say one word: ants.
By any absolute measure of economics, ants and their ilk are the most successful animal on the planet. And they have a system far nearer communism than capitalism.
The reason it works for them and not for us is because they are ants and we are humans, and we are built different.
Prices and freedom and markets are just quibbling details that we would work out if we had the right sort of brain to do so.
Ants do not have economics. They gather food for the colony, they eat the food, and then excrete what they can’t digest. They do not trade with neighboring colonies. They do not have treaties with other colonies. There are no ant Walmarts. There are no ant accountants or governmental ministers to ensure that crops total balances out or that care of the elderly retired ants are taken care of. There is no ant health insurance, clinincs, hospitals, or planned parenthoods.
They have one big mama ant that makes a lot of siblings - which is the colony. The colony is one big happy - for an ant anyway - RELATED family. They are all sisters working together to ensure that there genetic material gets carried on into future generations.
Ants act like ants becuase they are ants. If we had different brains we wouldn’t be human and our discussions here would be moot.
As for the other posts that characterize humans as greedy, self centered, individualistic, etc. - How are we any different from all of God’s other critters? All critters look out for no. 1 (including the immeadiate family group). Where we perceive altruistic behavior in other creatures it is for the immeadiate family grouping and not for the species as a whole. A pride of lions is not going to hunt less to ensure that there is sufficient food for the other prides. An individual gnu is not going to eat less so that the whole herd can have an equal - or adequate - share of food.
Two things: this is not a debate, and it wasn’t a mistake, it was deliberate. I had already heard the “it’s human nature” explanation, but had the impression that the problem was considered more basic than that, and had to do with economics itself. That’s why I framed the question thusly.
Maybe I don’t understand your system. You want to put artificial prices on things, which are just the cost of making them. How do people pay for them? Do they have jobs? If they have jobs, who decides how much they should be paid?
And if everything is priced at just its cost, you have a problem. Since you are not adjusting prices for demand, you will wind up with gluts and shortages. After all, an ugly painting costs just as much to make as a brilliant one. An uncomfortable car costs as much to make as a comfortable car.
There is much more information you are missing. For instance, let’s say you build a crappy car. But it’s the only car available, so everyone buys one. You’re selling out, so it looks like you are meeting demand. But you’ll never know if people would like something else better. The state as car manufacturer has no incentive to compete with itself. This is why communist countries tend towards ugly concrete apartment blocks - there is no incentive to do better.
Princhester said:
This is a total non-sequitur of an argument. We need economics because we are NOT ants. We do not behave instinctually. We need to make rational choices. That requires information. We need to deal with each other. That means information must be transmitted between us. The price system is the data bus of our economy. Rip it out at your peril.
Let’s say that you are the head of the Central Shoe Plant in Russia. The central planners set your production goals. Let’s say the goal is to produce three thousand pairs of shoes. You, wanting to make your life easier make three thousand pairs of mens size 9 1/2 black shoes. Let’s suppose they tell you to make various womens and mens shoes. You make 2,999 pairs of mens shoes, and one pair size 6 womens pumps. Let’s say they want you to make ten thousand pounds of shoes. You make 2,500 pairs of shoes that weigh four pounds a pair.
It’s not your problem that nobody can wear your shoes, or that you have hundreds of pairs of shoes that won’t fit most people. You are probably delivered piles of leather that is unsuitable for shoes because the tanners are told to make x pounds of leather and deliver it to you. You have to look at the leather and figure out some way to make shoes out of it. Of course, if you got some really good leather, you might sell it on the black market for some cash, since you’re not really paid well, and you have no repercussions if the shoes you make last only a month before they fall apart.
Of course this leads to shortages of shoes, because Communism is worried about meeting production quotas, not the demands of the consumers.
Although there are pretty well developed models for alot of markets on supply/demand. The trick would be for the government to operate in such a way that they are using the same kind of test marketing and production planning as private companies do to successfully compete. Balances between production cost, storage costs, and consumption rate are pretty well understood. Competition could be transfered to different research departments/agencies to develop the best , or longest lasting product.
Something inherent in logic, perhaps? What I wanted to get at was whether Communism was considered fundamentally flawed, or just flawed with regard to humans.
Communism doesn’t work for ants, either. What ants practice isn’t “communism.”
In any event, if you wanted to compare an ant colony to humans, the appropriate comparison is not the ant colony to a national economy, but the ant colony to a human family. A colony is just a family, after all. Like an ant colony, a human family is not a “capitalist” or “communist” unit.
I think the main flaw in Communism is that instead of a market (which is really a system of communication between buyer and seller), the “wants” of society are supposed to come from something called the “dialectic”. Just waht this “dialectic” is is open to interpretation…but it results in erroneous information.
The market has proven to be the best way of telling suppliers what people want to buy…and all of the Communist regimes (even Cuba!) have allowed at least token markets to function.
The big joke in Soviet Russia was how the governemnt would determine how many pairs of shoes, styles,colors, etc. were to be produced. The shoe factories would dutifully produce the targetted amounts of shoes, which NOBODY would buy! The governemnet would then import shoes from Italy, Hungary, Poland, etc…and the russian made shoes would allbe dumpedin a landfill!
Efficienecy indeed! :smack:
Read “The Virtue of Selfishness,” a collection of essays by Ayn Rand; she wrote others. Also, “Atlas Shrugged,” illustrating the same economic values in novel form. Easy to understand (the concepts, not the length, which bites). Ignore “The Fountainhead,” it’s out in left field, economics-wise.
I didn’t say it was. I just said it was a system nearer communism than capitalism. It is a system where individual ants work entirely for a system far too complex and large for them to understand, on the basis that this is for the overall good.
Such a system works for ants because they don’t think, they just do, and evolution has ironed out the wrinkles such that the system does work.
Such a system doesn’t work for humans because we don’t do anything unless we think it is going to be to the fairly direct benefit of ourselves and our nearest and dearest. And we are not far seeing enough to be able to visualise the “fairly direct benefit” that might theoretically derive from working hard at being an inconsequential cog in a very very large communist machine that we do not understand.
Whether we could get a communist system to work, if everybody suddenly became highly and unfailingly motivated to do so is a moot point because it will never happen. There will never be an experiment to test whether such a system might work, because the whole thing falls at the first economic hurdle namely motivating humans in circumstances not suited to the human mind. We will never even get to the second hurdle, namely the problems that Sam Stone and others have outlined.
Those that say it would fall at the second hurdle without experimental proof are IMHO selling the ingenuity of the human race short and/or so locked into particular normative assumptions they can’t see they’re making assumptions, let alone begin to see if there might conceivably be a way around the problems.
Princhester, I find it telling that you accuse others of “selling the ingenuity of the human race short” and being “so locked into particular normative assumptions they can’t see they’re making assumptions”, when you yourself say it’s impossible for a human to “do anything unless we think it is going to be to the fairly direct benefit of ourselves and our nearest and dearest”. Don’t you think that’s a pretty big assumption right there?
