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I think a major problem with communism isn't that it's so difficult to determine what needs to be produced, but that changing resource allocation becomes a poli

I think a major problem with communism isn't that it's so difficult to determine what needs to be produced, but that changing resource allocation becomes a political problem. In a capitalist system, if something looks like it's going to be a big economic hit people are ready to sell off other assets and pour billions of dollars into it. Under communism, there's a guy who doesn't want to lose funding for his department who might have more power than his rivals. To make a techie metaphor, it's why a lot of people have moved to the cloud: you can choose whatever resources you want on the fly, instead of having to battle IT. To go off on a tangent, I think there's a huge false choice between "free market economic policy" and "bureaucratic centralized economies." If we could just create a market that has an incentive structure that buoys the poor up instead of pushes them down, it would be huge. People still buy and sell based on prices, but we introduce slightly different weighting.

nickff 6y ago
Many of us think that that freer markets do buoy up the poorer, I think Schumpeter put it well: >"Electric lighting is no great boon to anyone who has money enough to buy a sufficient number of candles and to pay servants to attend them. It is the cheap cloth, the cheap cotton and rayon fabric, boots, motorcars and so on that are the typical achievements of capitalist production, and not as a rule improvements that would mean much to a rich man. Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort."
- thesz 6y ago
  I think it is a moot argument if you know the history of silk and nylon. Nylon stockings were on par and better than silk stockings until they pushed silk stockings out of market. Then they became what we know them today - wear once or twice and buy new.
  - nickff 6y ago
    You’re missing the point; Nylon stockings did not exist until capitalists invented and popularized them. Only the rich had silk stockings in 1900; now anyone can get a superior product!
    - pietrovismara 6y ago
      It's ridicolous to suggest that nylon stockings could have been invented only under capitalism. Plenty of inventions and discovery happened also under communism.
      - emteycz 6y ago
        Yeah, but only focusing on the largest of megaprojects, and even that failed horribly after some time. Products for the normal people were of horrendous quality and mostly no innovation happened.
        thesz 6y ago
        I think I should point your attention to the MIR (МИР, Машина для Инженерных Расчётов - Engineer's Computer) [1] and Setun [2]. [1] https://en.wikipedia.org/wiki/MIR_(computer) https://en.wikipedia.org/wiki/MIR_(computer) [2] https://en.wikipedia.org/wiki/Setun https://en.wikipedia.org/wiki/Setun The first one had pretty much high level language programming circa 1965 (Elbrus came later and iAXP432 much later). The second one used ternary logic which is closer to exp(0) and is more efficient. The "products for people" innovation in USSR was to make sure that everyone has heated home - and heating was centralized in USSR (and now in Russia too), which made it much cheaper and affordable. It was in different direction and without pervasive advertising. PS Many inventions happened also before capitalism.
        nickff 6y ago
        Inventions are one thing, but mass availability and affordability are another. I recall seeing an interview with Mikhail Gorbachev where he talked about how embarrassing it was that the Soviet Union could send men to space, but failed to produce pantyhose (of quality , in quantity).
- randmeerkat 6y ago
  What about the blue collar workers that are living in RVs in the Bay Area? Are they buying silk socks? I feel like capitalism is overly celebrated by those who benefit from it, to their detriment. The meritocracy is failing, capitalism is failing, and I’m concerned about will replace capitalism if we continue to brush off the harsh realities of its failings.
  - chordalkeyboard 6y ago
    Our perspective is that others are prevented from enjoying those same benefits by the regulatory interference that is ostensibly intended to help them. We don't see it as capitalism failing, but the regulatory state failing and capitalism being distorted thus. we are also concerned about capitalism's replacement. except we fear the continued suppression of market action to lead to authoritarian totalitarianism because the regulatory state appears to have been captured by oligarchs.
    - randmeerkat 6y ago
      Thank you for your honest perspective, I’ll spend some time contemplating it.
    - Ar-Curunir 6y ago
      Capitalism requires the state to function. If you don’t have violent enforcement of property rights, how will capitalists make money?
      - chordalkeyboard 6y ago
        Violence as a tool exclusive to the state is a social construct much like property and so I expect the norms surrounding private property to be maintained like other constructs, through intentioned participation.
  - barry-cotter 6y ago
    > What about the blue collar workers that are living in RVs in the Bay Area? Not a failure of capitalism. If you make building more housing illegal the price of the existing stock will get bid up. Remember, Tokyo has grown 50% in population over the last two decades and rent and house prices have been basically flat throughout. Zoning makes housing expensive, not capitalism.
- asdfman123 6y ago
  Yes, we've all heard that one before. I'm hardly anti-capitalist.
- amirkdv 6y ago
  There are two separate issues here, and the distinction is often missed. It is one thing when commodification brings to the masses what was once accessible only to the rich. It is an entirely separate and independent thing to make the economy more egalitarian, and some would argue just. Capitalism seems to consistently do the former phenomenally well and make the latter catastrophically worse. I think that's why we keep having absurd arguments about "the poor having microwaves" while we live in a grotesquely unequal society.
  - danielheath 6y ago
    Once upon a time, free-market capitalism did the 'make egalitarian' part just fine. In the 1960s, the USA had a 91% marginal tax rate for the highest income bracket (91% of income over 200k went to the government). In 2019 it's 37%.
    - Gibbon1 6y ago
      Something I picked up that seems to have been dropped down the memory hole. Under Truman the US was running a hot consumer command economy from the end of WWII to the mid 50's. In some ways very much like China is doing now. Also mid 1980's to 2000 saw the depression era limits on accumulating wealth via pure capital machinations removed one by one. Were now in the reverse situation. from 1950. Where it was possible to make money producing consumer goods and impossible to make money via rent seeking. Now rent seeking is how you make money. And it's obvious looking at the government response to the 2008 financial crisis and the pandemic this year that's being enforced via policy.
    - asddubs 6y ago
      I think part of the problem is that money is a proxy for political power, causing a tendency for legislative devolution like you describe
  - avereveard 6y ago
    there will always be some resource scarcity, and there's no egalitarian economy that resulted in increased availability of luxuries across the board, on the contrary, all attempts at egalitarianism just pushed the average luxury availability to the people down.
mehrzad 6y ago
What you are describing is often called market socialism and it is something very much worth considering, at least the libertarian socialist models of it. https://en.wikipedia.org/wiki/Market_socialism https://en.wikipedia.org/wiki/Market_socialism https://en.wikipedia.org/wiki/Left-wing_market_anarchism https://en.wikipedia.org/wiki/Left-wing_market_anarchism https://en.wikipedia.org/wiki/Mutualism_(economic_theory) https://en.wikipedia.org/wiki/Mutualism_(economic_theory)
- asdfman123 6y ago
  Thanks for that.
einpoklum 6y ago
> but that changing resource allocation becomes a political problem. Resource allocation is always a political problem. (On a large-scale, anyway.) > In a capitalist system, if something looks like it's going to be a big economic hit people are ready to sell off other assets and pour billions of dollars into it. 1. In a Capitalist system, most people have little assets; and most assets are under the control of a minority (which becomes relatively smaller over time. 2. A "big economic hit" is not necessarily in people's interests anyway. 3. The USSR was not a Communist society (and didn't claim to be). It was ruled by "The Communist Party" but that's really not the same thing. > there's a guy who doesn't want to lose funding for his department who might have more power than his rivals Not entirely different from divisions within a large corporation who vie for funding and/or power over their peers. (And the managers of such divisions.)
- chordalkeyboard 6y ago
  > In a Capitalist system, most people have little assets; and most assets are under the control of a minority (which becomes relatively smaller over time. do you have any evidence for this?
  - averros 6y ago
    In a socialist system ALL assets are controlled by small cadre of Party plutocrats.
  - cbnotfromthere 6y ago
    Asking for evidence from Bolshies is futile. Let me provide the evidence for the opposite: the US stock market capitalization grew at a higher rate than US population.
  - Ar-Curunir 6y ago
    Uh, the world as it is right now?
    - chordalkeyboard 6y ago
shirakawasuna 6y ago
Communist systems took poor and often feudal countries or colonies and made them into regional powers or superpowers. The liberal narrative that we've reached the end of history because of their "failure" is absurd in the extreme, particularly given the outside pressures and violences they (usually) weathered. Instead of, "what's wrong with communism!?", we should be asking, "if communism doesn't work, why was it necessary for capitalist countries to direct the entirety of their foreign policies into violence and sanctions against communists in their own communist countries and anyone who so much as requested aid from them, despite capitalist countries refusing to supply such aid?" The reality is that communist countries actually did work and worked better than the prior state those countries were in, but were targeted for systematic erasure by the rest of the planet. When communist countries fell, life did not get better for those who lived there. It got worse. Pensions were privatized or canceled. Public programs eliminated. Promises of multi-party democracy were amended to disclude communists or anyone like them, with violence. Quality of Life indicators plunged and with no option to return to the former system (a certainly authoritarian condition imposed by the newly-in-power, Western-supported governments), these countries languished for decades and were and continue to be subjected to new depravities and exploitation even as they claw back some semblance of dignity. Look at polling in the former Eastern Bloc. In Russia. In China. It's still very popular and it's not because of the chauvinist (and often contextually racist) idea they're all brainwashed goons. They saw the changes and often have a critically supportive view of a return. They say that most things were better, but acknowledge those that were worse, and when they say they'd support a return it's not to an identical state, just a similar one. But their political systems prevent this. One must wonder why.
- chordalkeyboard 6y ago
  > Instead of, "what's wrong with communism!?", we should be asking, "if communism doesn't work, why was it necessary for capitalist countries to direct the entirety of their foreign policies into violence and sanctions against communists in their own communist countries and anyone who so much as requested aid from them, despite capitalist countries refusing to supply such aid?" The Cold War would be an answer, unless you somehow deny that communists were equally dedicated to subverting and overthrowing the west. > The reality is that communist countries actually did work and worked better than the prior state those countries were in I disagree that this is a valid generalization. There may have been some Pareto improvements and its clear that certain people benefitted and others did not. > When communist countries fell, life did not get better for those who lived there. It got worse. This is because the centrally planned economy depleted vast amounts of capital in their desperate struggle to keep the economy moving and competitive with the west. > They say that most things were better, but acknowledge those that were worse, and when they say they'd support a return it's not to an identical state, just a similar one. But their political systems prevent this. One must wonder why. Cynically I could offer the same answer a communist would offer when asked why people weren't permitted to own factories in the Soviet Union: because that would put "the wrong people" in charge of the means of production. Less cynically, its not clear how a centrally planned economy would know how to correctly allocate resources, so there's no reason to return to the central planning model in the absence of a solution to the problems that caused it to fail in the first place.
andrepd 6y ago
It is also a political problem in capitalist societies. Look no further than the military-industrial complex.
tsimionescu 6y ago
More importantly, there is a false choice between socialism + central planning on one hand, and capitalism + free market on the other. In fact, all mainstream socialists and Marxists today are in favor of some kind of free market. Also, none of the centrally planned, soviet style economies had any feature of socialism - they were capitalist societies, where all of the power was concentrated in the hands of those who controlled capital. Sure, workers were paid lip service, but their power and control over their work was in fact even less than in the European or American capitalist countries. They were just as much socialist countries as they were democratic - in that it was simply a title they assigned to themselves, void of any meaning whatsoever. The main difference between an actual socialist market-based economy and the capitalist market-based economy that we have today would be that essentially all enterprises competing on the market would be co-ops, where workers democratically decide how the company is run and get to share the profits (and losses), instead of getting a pre-determined (sometimes negotiated) wage.
- zozbot234 6y ago
  > all enterprises competing on the market would be co-ops, where workers democratically decide how the company is run and get to share the profits (and losses), instead of getting a pre-determined (sometimes negotiated) wage. The problem with co-ops, partnerships and the like as a firm structure is that (1) they can't easily provide access to outside capital. Maybe they can issue debt, but that comes with a lot of drawbacks wrt. equity investment. (2) most workers have their job as their main source of income, so they don't actually want to incur the excess risk that's inherent in "sharing in the profit (and losses!) of their firm" because that literally means putting all your eggs in one basket. Outside investors can incur that risk more easily, whether by diversifying it away or by investing only part of their assets in a risky endeavor. "All enterprises as co-ops" is a nice idea but doesn't actually work in the real world. Co-ops and partnerships are totally fine for very low capital intensity businesses like law firms, but quite unsuitable elsewhere.
  - tsimionescu 6y ago
    Co-ops have rarely been tried out, so you really can't say that with that authority. There are also many ways for a co-op to organize, the pure profit-sharing model is probably not the most popular for the reasons you outlined. For example, the largest company in the Basque region of Spain is the Mondragon corporation, a 12—billion euro yearly revenue, 60 years old federation of co-ops with about 81,000 members+employees, working in industry, finance, retail, and knowledge - hardly low-capital areas. They are currently the 10th largest company in Spain. They do have traditional employees as well as worker-owners, and there are concerns about the percentages of each, but overall they are a true co-op at a huge scale, proving that it can be done. If there were government policies to encourage this type of business, especially by providing better credit access, and if this was closer to the beaten path, I don't see any reason that it couldn't be at least a major part of the economic landscape, even if not easily becoming dominant.
pnathan 6y ago
It's also the case that, in practice, we regulate and politicize much - maybe all - of the free market. So really, we're not having an argument about "Free market vs total centralized system", it's "how much centralization is appropriate". So maybe we don't today need to work with the Department of Widget creation, but we need to hire lobbyists for the Senate Committee on the Widget Sector. I'm not prepared to say that informing/influencing/steak-dinnering the Senators' aides is per se better than having a nasty political fight in the Company Of The People. The history of the US farm bill and food safety is a great example of how we don't have a genuine free market in the US. I don't argue for a free market, by the way. Regulation has done a great deal of good. It's just very important to speak with care about topics, and use words that are true to the reality.
- rstuart4133 6y ago
  > It's also the case that, in practice, we regulate and politicize much - maybe all - of the free market. Do we? Perhaps you do in the US. Where I live, Australia, it's true most of the noise from the echo chamber is about what sort of regulations to impose on markets. But if you stop and look, they are invariably markets that aren't functioning well. The classic things that we appear to be always arguing about are things like power, landline internet, and water. But that isn't a surprise - they are the things that tend towards monopoly, so the market for those things is always broken or teetering on the edge of broken. We are now seeing the same effect for internet search and social media, where again network effects drive the markets towards monopoly. At the other end of the scale, here in Australia we've toyed with creating market's to solve political problems. One perennial problem in the driest continent on the planet is water. So they created a market based on virtual water, so rather go and haggling with your local pollie for water access right you have to buy it. It's been pretty successful from what I can tell, but now there are political stouches over how much virtual water there is. I guess that the water market could be viewed as yet more rules imposed by a central authority, as indeed could rules about regulating monopolies, and rules about truth in advertising and honouring warranties and the like. But I think that's miss leading. Rules about truth in advertising are really about setting up the conditions a market needs to flourish - equal access to information from the buyer and seller. While politicking on those rules is indeed a discussion about rules being imposed by a central authority, the purpose of those rules is to enable efficient decentralised decision making, not about "how much centralization is appropriate"

nickff 6y ago

Many of us think that that freer markets do buoy up the poorer, I think Schumpeter put it well: >"Electric lighting is no great boon to anyone who has money enough to buy a sufficient number of candles and to pay servants to attend them. It is the cheap cloth, the cheap cotton and rayon fabric, boots, motorcars and so on that are the typical achievements of capitalist production, and not as a rule improvements that would mean much to a rich man. Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort."

thesz 6y ago
I think it is a moot argument if you know the history of silk and nylon. Nylon stockings were on par and better than silk stockings until they pushed silk stockings out of market. Then they became what we know them today - wear once or twice and buy new.
- nickff 6y ago
  You’re missing the point; Nylon stockings did not exist until capitalists invented and popularized them. Only the rich had silk stockings in 1900; now anyone can get a superior product!
  - pietrovismara 6y ago
    It's ridicolous to suggest that nylon stockings could have been invented only under capitalism. Plenty of inventions and discovery happened also under communism.
    - emteycz 6y ago
      Yeah, but only focusing on the largest of megaprojects, and even that failed horribly after some time. Products for the normal people were of horrendous quality and mostly no innovation happened.
      - thesz 6y ago
        I think I should point your attention to the MIR (МИР, Машина для Инженерных Расчётов - Engineer's Computer) [1] and Setun [2]. [1] https://en.wikipedia.org/wiki/MIR_(computer) https://en.wikipedia.org/wiki/MIR_(computer) [2] https://en.wikipedia.org/wiki/Setun https://en.wikipedia.org/wiki/Setun The first one had pretty much high level language programming circa 1965 (Elbrus came later and iAXP432 much later). The second one used ternary logic which is closer to exp(0) and is more efficient. The "products for people" innovation in USSR was to make sure that everyone has heated home - and heating was centralized in USSR (and now in Russia too), which made it much cheaper and affordable. It was in different direction and without pervasive advertising. PS Many inventions happened also before capitalism.
        nickff 6y ago
        Inventions are one thing, but mass availability and affordability are another. I recall seeing an interview with Mikhail Gorbachev where he talked about how embarrassing it was that the Soviet Union could send men to space, but failed to produce pantyhose (of quality , in quantity).
randmeerkat 6y ago
What about the blue collar workers that are living in RVs in the Bay Area? Are they buying silk socks? I feel like capitalism is overly celebrated by those who benefit from it, to their detriment. The meritocracy is failing, capitalism is failing, and I’m concerned about will replace capitalism if we continue to brush off the harsh realities of its failings.
- chordalkeyboard 6y ago
  Our perspective is that others are prevented from enjoying those same benefits by the regulatory interference that is ostensibly intended to help them. We don't see it as capitalism failing, but the regulatory state failing and capitalism being distorted thus. we are also concerned about capitalism's replacement. except we fear the continued suppression of market action to lead to authoritarian totalitarianism because the regulatory state appears to have been captured by oligarchs.
  - randmeerkat 6y ago
    Thank you for your honest perspective, I’ll spend some time contemplating it.
  - Ar-Curunir 6y ago
    Capitalism requires the state to function. If you don’t have violent enforcement of property rights, how will capitalists make money?
    - chordalkeyboard 6y ago
      Violence as a tool exclusive to the state is a social construct much like property and so I expect the norms surrounding private property to be maintained like other constructs, through intentioned participation.
- barry-cotter 6y ago
  > What about the blue collar workers that are living in RVs in the Bay Area? Not a failure of capitalism. If you make building more housing illegal the price of the existing stock will get bid up. Remember, Tokyo has grown 50% in population over the last two decades and rent and house prices have been basically flat throughout. Zoning makes housing expensive, not capitalism.
asdfman123 6y ago
Yes, we've all heard that one before. I'm hardly anti-capitalist.
amirkdv 6y ago
There are two separate issues here, and the distinction is often missed. It is one thing when commodification brings to the masses what was once accessible only to the rich. It is an entirely separate and independent thing to make the economy more egalitarian, and some would argue just. Capitalism seems to consistently do the former phenomenally well and make the latter catastrophically worse. I think that's why we keep having absurd arguments about "the poor having microwaves" while we live in a grotesquely unequal society.
- danielheath 6y ago
  Once upon a time, free-market capitalism did the 'make egalitarian' part just fine. In the 1960s, the USA had a 91% marginal tax rate for the highest income bracket (91% of income over 200k went to the government). In 2019 it's 37%.
  - Gibbon1 6y ago
    Something I picked up that seems to have been dropped down the memory hole. Under Truman the US was running a hot consumer command economy from the end of WWII to the mid 50's. In some ways very much like China is doing now. Also mid 1980's to 2000 saw the depression era limits on accumulating wealth via pure capital machinations removed one by one. Were now in the reverse situation. from 1950. Where it was possible to make money producing consumer goods and impossible to make money via rent seeking. Now rent seeking is how you make money. And it's obvious looking at the government response to the 2008 financial crisis and the pandemic this year that's being enforced via policy.
  - asddubs 6y ago
    I think part of the problem is that money is a proxy for political power, causing a tendency for legislative devolution like you describe
- avereveard 6y ago
  there will always be some resource scarcity, and there's no egalitarian economy that resulted in increased availability of luxuries across the board, on the contrary, all attempts at egalitarianism just pushed the average luxury availability to the people down.

mehrzad 6y ago

What you are describing is often called market socialism and it is something very much worth considering, at least the libertarian socialist models of it. https://en.wikipedia.org/wiki/Market_socialism https://en.wikipedia.org/wiki/Market_socialism https://en.wikipedia.org/wiki/Left-wing_market_anarchism https://en.wikipedia.org/wiki/Left-wing_market_anarchism https://en.wikipedia.org/wiki/Mutualism_(economic_theory) https://en.wikipedia.org/wiki/Mutualism_(economic_theory)

asdfman123 6y ago
Thanks for that.

einpoklum 6y ago

> but that changing resource allocation becomes a political problem. Resource allocation is always a political problem. (On a large-scale, anyway.) > In a capitalist system, if something looks like it's going to be a big economic hit people are ready to sell off other assets and pour billions of dollars into it. 1. In a Capitalist system, most people have little assets; and most assets are under the control of a minority (which becomes relatively smaller over time. 2. A "big economic hit" is not necessarily in people's interests anyway. 3. The USSR was not a Communist society (and didn't claim to be). It was ruled by "The Communist Party" but that's really not the same thing. > there's a guy who doesn't want to lose funding for his department who might have more power than his rivals Not entirely different from divisions within a large corporation who vie for funding and/or power over their peers. (And the managers of such divisions.)

chordalkeyboard 6y ago
> In a Capitalist system, most people have little assets; and most assets are under the control of a minority (which becomes relatively smaller over time. do you have any evidence for this?
- averros 6y ago
  In a socialist system ALL assets are controlled by small cadre of Party plutocrats.
- cbnotfromthere 6y ago
  Asking for evidence from Bolshies is futile. Let me provide the evidence for the opposite: the US stock market capitalization grew at a higher rate than US population.
- Ar-Curunir 6y ago
  Uh, the world as it is right now?
  - chordalkeyboard 6y ago

shirakawasuna 6y ago

Communist systems took poor and often feudal countries or colonies and made them into regional powers or superpowers. The liberal narrative that we've reached the end of history because of their "failure" is absurd in the extreme, particularly given the outside pressures and violences they (usually) weathered. Instead of, "what's wrong with communism!?", we should be asking, "if communism doesn't work, why was it necessary for capitalist countries to direct the entirety of their foreign policies into violence and sanctions against communists in their own communist countries and anyone who so much as requested aid from them, despite capitalist countries refusing to supply such aid?" The reality is that communist countries actually did work and worked better than the prior state those countries were in, but were targeted for systematic erasure by the rest of the planet. When communist countries fell, life did not get better for those who lived there. It got worse. Pensions were privatized or canceled. Public programs eliminated. Promises of multi-party democracy were amended to disclude communists or anyone like them, with violence. Quality of Life indicators plunged and with no option to return to the former system (a certainly authoritarian condition imposed by the newly-in-power, Western-supported governments), these countries languished for decades and were and continue to be subjected to new depravities and exploitation even as they claw back some semblance of dignity. Look at polling in the former Eastern Bloc. In Russia. In China. It's still very popular and it's not because of the chauvinist (and often contextually racist) idea they're all brainwashed goons. They saw the changes and often have a critically supportive view of a return. They say that most things were better, but acknowledge those that were worse, and when they say they'd support a return it's not to an identical state, just a similar one. But their political systems prevent this. One must wonder why.

chordalkeyboard 6y ago
> Instead of, "what's wrong with communism!?", we should be asking, "if communism doesn't work, why was it necessary for capitalist countries to direct the entirety of their foreign policies into violence and sanctions against communists in their own communist countries and anyone who so much as requested aid from them, despite capitalist countries refusing to supply such aid?" The Cold War would be an answer, unless you somehow deny that communists were equally dedicated to subverting and overthrowing the west. > The reality is that communist countries actually did work and worked better than the prior state those countries were in I disagree that this is a valid generalization. There may have been some Pareto improvements and its clear that certain people benefitted and others did not. > When communist countries fell, life did not get better for those who lived there. It got worse. This is because the centrally planned economy depleted vast amounts of capital in their desperate struggle to keep the economy moving and competitive with the west. > They say that most things were better, but acknowledge those that were worse, and when they say they'd support a return it's not to an identical state, just a similar one. But their political systems prevent this. One must wonder why. Cynically I could offer the same answer a communist would offer when asked why people weren't permitted to own factories in the Soviet Union: because that would put "the wrong people" in charge of the means of production. Less cynically, its not clear how a centrally planned economy would know how to correctly allocate resources, so there's no reason to return to the central planning model in the absence of a solution to the problems that caused it to fail in the first place.

andrepd 6y ago

It is also a political problem in capitalist societies. Look no further than the military-industrial complex.

tsimionescu 6y ago

More importantly, there is a false choice between socialism + central planning on one hand, and capitalism + free market on the other. In fact, all mainstream socialists and Marxists today are in favor of some kind of free market. Also, none of the centrally planned, soviet style economies had any feature of socialism - they were capitalist societies, where all of the power was concentrated in the hands of those who controlled capital. Sure, workers were paid lip service, but their power and control over their work was in fact even less than in the European or American capitalist countries. They were just as much socialist countries as they were democratic - in that it was simply a title they assigned to themselves, void of any meaning whatsoever. The main difference between an actual socialist market-based economy and the capitalist market-based economy that we have today would be that essentially all enterprises competing on the market would be co-ops, where workers democratically decide how the company is run and get to share the profits (and losses), instead of getting a pre-determined (sometimes negotiated) wage.

zozbot234 6y ago
> all enterprises competing on the market would be co-ops, where workers democratically decide how the company is run and get to share the profits (and losses), instead of getting a pre-determined (sometimes negotiated) wage. The problem with co-ops, partnerships and the like as a firm structure is that (1) they can't easily provide access to outside capital. Maybe they can issue debt, but that comes with a lot of drawbacks wrt. equity investment. (2) most workers have their job as their main source of income, so they don't actually want to incur the excess risk that's inherent in "sharing in the profit (and losses!) of their firm" because that literally means putting all your eggs in one basket. Outside investors can incur that risk more easily, whether by diversifying it away or by investing only part of their assets in a risky endeavor. "All enterprises as co-ops" is a nice idea but doesn't actually work in the real world. Co-ops and partnerships are totally fine for very low capital intensity businesses like law firms, but quite unsuitable elsewhere.
- tsimionescu 6y ago
  Co-ops have rarely been tried out, so you really can't say that with that authority. There are also many ways for a co-op to organize, the pure profit-sharing model is probably not the most popular for the reasons you outlined. For example, the largest company in the Basque region of Spain is the Mondragon corporation, a 12—billion euro yearly revenue, 60 years old federation of co-ops with about 81,000 members+employees, working in industry, finance, retail, and knowledge - hardly low-capital areas. They are currently the 10th largest company in Spain. They do have traditional employees as well as worker-owners, and there are concerns about the percentages of each, but overall they are a true co-op at a huge scale, proving that it can be done. If there were government policies to encourage this type of business, especially by providing better credit access, and if this was closer to the beaten path, I don't see any reason that it couldn't be at least a major part of the economic landscape, even if not easily becoming dominant.

pnathan 6y ago

It's also the case that, in practice, we regulate and politicize much - maybe all - of the free market. So really, we're not having an argument about "Free market vs total centralized system", it's "how much centralization is appropriate". So maybe we don't today need to work with the Department of Widget creation, but we need to hire lobbyists for the Senate Committee on the Widget Sector. I'm not prepared to say that informing/influencing/steak-dinnering the Senators' aides is per se better than having a nasty political fight in the Company Of The People. The history of the US farm bill and food safety is a great example of how we don't have a genuine free market in the US. I don't argue for a free market, by the way. Regulation has done a great deal of good. It's just very important to speak with care about topics, and use words that are true to the reality.

rstuart4133 6y ago
> It's also the case that, in practice, we regulate and politicize much - maybe all - of the free market. Do we? Perhaps you do in the US. Where I live, Australia, it's true most of the noise from the echo chamber is about what sort of regulations to impose on markets. But if you stop and look, they are invariably markets that aren't functioning well. The classic things that we appear to be always arguing about are things like power, landline internet, and water. But that isn't a surprise - they are the things that tend towards monopoly, so the market for those things is always broken or teetering on the edge of broken. We are now seeing the same effect for internet search and social media, where again network effects drive the markets towards monopoly. At the other end of the scale, here in Australia we've toyed with creating market's to solve political problems. One perennial problem in the driest continent on the planet is water. So they created a market based on virtual water, so rather go and haggling with your local pollie for water access right you have to buy it. It's been pretty successful from what I can tell, but now there are political stouches over how much virtual water there is. I guess that the water market could be viewed as yet more rules imposed by a central authority, as indeed could rules about regulating monopolies, and rules about truth in advertising and honouring warranties and the like. But I think that's miss leading. Rules about truth in advertising are really about setting up the conditions a market needs to flourish - equal access to information from the buyer and seller. While politicking on those rules is indeed a discussion about rules being imposed by a central authority, the purpose of those rules is to enable efficient decentralised decision making, not about "how much centralization is appropriate"