7 ms·

Overcoming Bias: ‘The Profit’ Socialism Challenge

29 points by hirundo 5y ago

quantified 5y ago
Capitalism vs socialism isn’t about the existence of that capital, just who owns and how decisions are made. In all the cases of the mismanaged businesses, they were being mismanaged under capitalism and a new manager came in, was competent and was heeded. I guess the premise here is that “capitalism better because competent managers rarer than incompetent managers” and “incentives of money alone are better than incentives that include dysfunctional personal relationships”. Since “socialism” seems ill-defined (or has several different definitions), seems difficult to say whether it would provide better outcomes. Authoritarian “people’s republic of X”-style didn’t provide good outcomes. Seems like that was due to authoritarian politics getting in the way of actual business. I haven’t seen the show, but why would workers who own a stake in the viability of the company voting on management have not worked? If track records of management outcomes were available like sports statistics, there’d be something better than rhetoric to guide voting.
- asdff 5y ago
  Irrespective of flavor of socialism, just logically capitalism does not make any lick of sense unless you are among the capital class already who benefits from scraping the barrel of revenue to collect an amount as profit. The fact that there exists a profit margin and businesses cannot operate at cost is why manufacturing in China is used in the west vs western manufacturing, since businesses operating at cost can offer product at cost vs cost*profit_margin so these businesses are always more competitive than western counterparts who have to pay for someone else's profit margin down the entire supply chain.
  - dantheman 5y ago
    I'll take the vast improvement of living standards under capitalism over those found in socialist countries. Are you arguing that the rapid decline in poverty in China due to capitalism is a bad thing?
    - galdauts 5y ago
      I'd like to add that there are different flavours of both capitalism and socialism. The kind of disaster capitalism practiced in Russia and other former Soviet Union countries in the 90s certainly didn't lead to an improvement of living standards for quite a long time, if even. China also presents a case of state capitalism where companies are strictly controlled by the government as evidenced by the recent set of regulations published a few weeks ago and many companies are owned by the children of party members.
    - asdff 5y ago
      I'd argue that what we see in terms of living standards in ostensibly socialist countries is much more due to corruption of office, which happens here too, vs the way that profit is shared among a business. Three of my city councilmembers have been indicted by the FBI for corruption in the last three years. Luckily in the U.S. the levers of power are pulled by more people dispersed across a larger bureaucracy, so corruption of office can only affect so many things, vs somewhere like PRNK or KSA where there is absolute rule. There are plenty of businesses that run on a more socialist model even within capitalist countries. They are owner operated and share profit amongst the cooperative, are often successful and have motivated employees who work longer tenures than your average employee at a company where they don't see any share of the profit for their hard work.
  - phonypc 5y ago
    Sorry, what? You think Chinese manufacturing businesses aren't making a profit?
    - quantified 5y ago
      And there is no contradiction between socialism and making a profit. Any enterprise owned under any organization, directed by any structure, could make a profit. What you do with those profits becomes interesting, if they exist.
    - asdff 5y ago
      They make a profit at the end of the supply chain, but all their materials are sourced at cost since the state is running the company. US companies have to pay profit all down the supply chain, which is why there is such an advantage to being able to vertically integrate your supply chain in the US. In China, is essentially all vertically integrated already.
  - r3trohack3r 5y ago
    > scraping the barrel of revenue I believe the idea behind capitalism is exchanging value for value (private property and the ability to exchange it). Someone sitting back and skimming a tax off the top of others property, without providing value, doesn’t seem to be compatible with the philosophy.
    - asdff 5y ago
      What is a whale shareholder playing tennis off of their dividends and doing no 'work' toward their investment beyond looking at their quarterly statement if not someone skimming off the collective pot of profit generated by labor for their own personal hedonism? We have a lot of dragons in society who are celebrated for their difficult job of sitting comfortably on their pile of gold. Not sure why.
- malwarebytess 5y ago
  > Authoritarian “people’s republic of X”-style didn’t provide good outcomes. Except, you know, China.
  - rsj_hn 5y ago
    China did well after adopting a capitalist economic model. Not so well after adopting a communist economic model. Over 50 million dying just from starvation is basically the worst you can possibly be. Insane top down command like killing all the sparrows or collectivizing farms, or pulling nails out of furniture so that little villages can make steel describes the insanity of that approach. It had a shelf life of about 40 years. They still maintain the party dictatorship. Really what matters for dominance is a disciplined party apparatus that seizes power in some kind of coup or revolution and then rules the country with an iron fist. The party may use a justification of envy -- appealing to people's anger that others have more than they do -- or it may use religion, or moral arguments, or national pride arguments. But those are all instrumental to the underlying aim of power. Once you are in power, you can impose capitalism or communism or some mix. If communism doesn't work, you can discard it and look for something better. It's interesting that many on the left just dropped working class issues like a used shirt and refocused on race with extreme ease. For me personally, that's how I distinguish between a group that wants power as opposed to a group that is advocating for some policy profile. If they can switch out the policy profile and replace it with something different, then they were never that interested in policy to begin with.
    - kaibee 5y ago
      Tbh, I have no idea who 'on the left' you could be talking about (except Sinema I guess)? The labor side of the Democratic party has been enemic for the last 50 years.
    - door103 5y ago
      > China did well after adopting a capitalist economic model. Not so well after adopting a communist economic model. Let's be clear here -- regardless what you think of the Chinese government, they are far from a "capitalist economic model". Many major industries are nationalized, the state plays an enormous role in the economy. 60% of their economy by market cap is state-owned. It isn't Soviet-style or Mao-era socialism, but it is still a very different system than western capitalism. It's similar to the NEP era in the USSR (1921-1928)
- bobcostas55 5y ago
  >Capitalism vs socialism isn’t about the existence of that capital, just who owns and how decisions are made. You can't just assume the existence of capital. It's not an exogenous variable.
  - rsj_hn 5y ago
    Capital is anything that creates wealth. Therefore if the society has wealth then it must have capital. Thus capital is one of the pillars on which civilization stands. People can argue who has control over capital, and what kinds of property rights are allowed, but the existence of capital is presupposed by all economic theories. I recommend Sydney Homer's A History of Interest Rates in which he traces interest rates from neolithic period up to the 20th Century. If you want to know what interest rates were charged in the time of ancient Egypt, or early African societies, or Native American tribes, or whatever happened to those French rentes, then this is the book for you. Here are some excerpts: - - - - - - Paleolithic man went out to find his food. Neolithic man produced his own food through agriculture and animal culture. His capital took the form of seeds, improved tools, and especially herds of animals. Capital accumulation led to a great increase in population and the opening up of vast new areas in Asia and Europe. Such capital permitted the further accumulation of possessions, the support of chieftains, and the building of cities. Cattle breeding has supplied us with many financial terms used in later money economies. For example, there is our own word capital and our term pecuniary, from pecus, meaning a “flock” in Latin. Sumerians used the word mas for calves and for interest. The Egyptian term ms, meaning interest, is derived from the verb msj, which means “to give birth.” Early Greeks, in fact, valued their precious metals in terms of cattle. [...] In Namaland, in Southwest Africa, cattle and beads were the original currencies. Debts were incurred in cattle (no rates quoted), and the difficulty of repayment often led to cattle raids into neighboring states. [...] In the French Sudan cattle were used until recently as currency for large transactions. Cattle loans were granted free of interest, but if a cow which was lent had a calf, the calf and the cow was claimed by the creditor. Similarly, in Uganda and French Equatorial Africa cattle and sheep were the bases of credit. In the former the creditor expected every third new birth as interest. In Northern Siberia, at least until recently, domesticated reindeer served as money. Loans were granted in reindeer. Among the Kirghiz of Siberia, horses and sheep served as money and were loaned out. The usual interest for such loans was 100%. - - - - - - Homer, Sidney; Sylla, Richard. A History of Interest Rates (Wiley Finance) (p. 53-58). Wiley. Kindle Edition.
- 7sidedmarble 5y ago
  Remember not a single of the Communist experiments of the 20th century started as already democratic, Western style societies. Russia and China were not developed countries prior to communism. They didn't have what we would consider the rule of unarbitrary law. Marx and Engels saw socialism as the next step a society would move into after capitalism. They predicted this had to rest on the foundation of a society which had already experienced it's 'bourgeois revolution', meaning power had to leave the aristocracy and be in the hands of the capital owning class. They saw democracy as a necessary step for a society to progress to socialism. There is no great examples of this in the 20th century. If you read even a little Marx, how could you ever expect the kind of society he describes without first having democracy? Socialism is based on one concept: democracy in the work place. If democracy does not exist in the first place, the endeavor will always be doomed.
  - quantified 5y ago
    Probably greed and sociopathy doom those collectivist experiments. Economic and political systems need to work with humans as we are, not as we idealize them.
    - 7sidedmarble 5y ago
      What if we are already living in a time where rich Western countries could experience post-scarcity if we just allocated resources and priorities differently? If we're not there yet, what do we do when we are? To me socialism is just an inevitability. We will eventually reach post-scarcity. I think if we can examine the current system and find so many ethical problems... It's worth asking ourselves what we could do to get to that ideal star trek society faster.
    - bccdee 5y ago
      Probably the fact that these societies arose from violent revolutions doomed them. Revolutions tend to lead to authoritarian governments, because if you can take over the whole country with your army, you don't really need democracy to legitimize you. I could easily cite Chile, Guatemala, Nicaragua, EL Salvador, Argentina, Bolivia, Paraguay, and countless other 20th century totalitarian regimes as instances where "capitalist experiments were doomed by greed and sociopathy." Very easily, given that these regimes were backed by American capitalist business interests. But realistically? When you're strong enough and ruthless enough to take over an entire country, you're probably more interested in power than in ideology, one way or another.
jancsika 5y ago
> It is the capital that Marcus has to offer that makes business owners listen to him It would be fun to take on the challenge of converting the author to socialism, but I'm not sure if the author is making the call at the end of the article in good faith. Related to what I quoted-- many, perhaps the majority, of reality shows don't rely on offers of capital injections to improve the social problems that plague business owners. Gordon Ramsey usually breaks through because he's loudly yelling his credentials at some stubborn restaurant owner. Or the bar rescue guy is yelling to the entire staff that the bartenders were stealing drinks to the tune of tens of thousands of dollars (as well as yelling his credentials to them). I mean they obviously tie in ads for various products that they give away to the owners, but a) that's never central to the business and b) I don't think they do that on every single show like that. Human credibility and peer pressure exist in a socialist setting. That in no way is an argument for socialism, but it is at least an argument that one of the author's premises is probably mistaken-- i.e., that the guru needs capital in order to convince a failing owner to turn their business around. So, would the author care to refine the argument? If so I'd be willing to take the challenge further.
- cscurmudgeon 5y ago
  > converting the author to socialism Only religions need converting. The rest should use logic-based arguments. Conversion talk springs up only when there is a lack of logic or rationality.
  - mensetmanusman 5y ago
    Politics is preference, logic is sometimes useful in determining your preference…
frebdo 5y ago
More reactionary garbage.
a_shovel 5y ago
The author lists some proposed socialist solutions that he has heard of, and then dismisses them with a simple, unexplained "I just can’t see those processes going well". If he won't tell us his problems with those explanations, how could someone address them? Apart from that, the rest of the article is just a description of a TV show, the challenge itself, and praise for capitalism. Very shallow IMO.
viburnum 5y ago
The Hungarian economist János Kornai wrote about this. Socialist firms face what he called a soft budget constraint (In this case the soft budget constraint isn’t provided by the central government but by sentimental families). The problems are well understood but they have some advantages. It’s easy to end unemployment. Japan used something like a soft budget constraint during its postwar boom so its domestic firms could massively invest more in innovation and scale up production. Socialists in Sweden were also similarly concerned with efficiency issues as early as the 1920s, which is why they chose to focus on the welfare state and labor rights instead. The flip side is a hard budget constraint leaves resources idle — unemployment. So you get a different kind of inefficiency. Mixed economies direct which inefficiencies they can live with based on actual human needs.
g42gregory 5y ago
> I’ve heard that, under socialism, workers would vote on who they want to be managers... I grew up under socialism and wanted to mention that author "heard" very, very wrong. Under socialism, the Party bosses will decide who will be the managers. The person's qualifications and achievements will be largely taken into consideration, together with their loyalty to the Party, who their parents are, friends in high places who vouched for them, favors that need to be returned, etc... Not that much different from the capitalism. The process author describes, is what happens when you are thinking to become a socialist society. Everything looks fantastic then. But actual socialism comes with removal of democratic safeguards and somewhat totalitarian government (how else would you confiscate private property from citizens?). Once the new, socialist, management is in place, they quickly realize that it's nice to be at the top. Next, they turn their attention to the authors like this (who threaten their permanent place at the top) and quickly "dispose" of them. There is a sweet irony in this process, but it is of little consolation for the rest of the population, who will suffer for the next 70 yrs until the country goes back to the capitalism.
- AnimalMuppet 5y ago
  > The person's qualifications and achievements will be largely taken into consideration, together with their loyalty to the Party, who their parents are, friends in high places who vouched for them, favors that need to be returned, etc... Not that much different from the capitalism. One's loyalty to the Party is not often taken into consideration under capitalism.
- malermeister 5y ago
  This actually happened in Yugoslavia - keyword "worker self management". I'm not denying your experience, there were lots of terrible regimes calling themselves socialist, but it's wrong to generalize from that.
  - g42gregory 5y ago
    I am not familiar with the particulars of the Yugoslavia's "worker self management". But I can certainly say how Yugoslavia socialist experiment ended: 1. Brutal civil war with lots of people dead and country spitting apart. 2. All individual sub-countries going back to the capitalist system.
dsr_ 5y ago
A possible scenario, as a socialist experiment in a generally capitalist society -- The first step is to get all workers together to explain their co-ownership status. They need to figure out a new set of governance rules. Working at the firm is ownership of a share of the firm; the share is a vote and an equal claim to profit. The second step is to ask which goods they are making that benefit the community, and in what ways? If they are making nothing useful, it's time to figure out what can be made with minimal changes to the equipment and materials available. Now that they know what they are making and how they are governing themselves, they need to have new operating rules. How do they assess the need for new co-workers? How do they assess current productivity? What non-production jobs are necessary, and which ones are largely about enforcing rules that no longer apply? Then comes the long haul of self-assessment and discussion with the community: are these the right goods? Are they being produced both efficiently and humanely? What changes need to be made? Capitalist firms usually rely on a triplet of marketing, sales-people and consulting. Marketing is a mix of research and pushing opinions; sales tends to be overly-optimistic; many companies don't value feedback from their consultants. It should come as no surprise that cooperative ventures have more degrees of freedom than capitalism's traditional central-control and fiefdoms; more decision have to be made, and this can be slower.
diob 5y ago
Everyone is socialist to a certain degree. The only argument is how much. No one is going to say we shouldn't work together as a society. It's literally just a determination of how much.
kgarten 5y ago
Isn't the best way to stay profitable to cut labor costs? To be profitable is often related to not paying a fair price for the resources you are using ... See climate change etc.
tomlockwood 5y ago
There are innumerable examples of people pursuing quality, efficiency and work satisfaction, over profit. We exist on a news site where one of the most upvoted articles is about reading Hegel. I'd invite the author to imagine a world where someone can take pride in having a clean and efficient shop, for the joy of it. Did the author write their article with the intent of some kind of "value-increasing"? And, what is the "value" we are increasing? Maybe I want to run a shop that enables my local community members to not have to travel to the next town over for sanitary items - even if they are bulky and don't make a huge profit. Maybe what I value is seeing kids come into my store and purchasing that one icy-pole they like, that I've stocked for years. Or maybe wanting just a few more dollars, is the only way.
- bitcuration 5y ago
  Bingo. Value, bottomline... it's about time to re-exam these assumed awards for what it really is and is it the same as everyone has assumed, and furthermore are these the right award worth all cost to pursue? Have we missed anything more profound more impactful but lack of immediate satisfactory of value, bottomline?
deleted 5y ago
[deleted]
sharemywin 5y ago
I hate the capitalism versus socialism debate. as if there are only two ways to organize human behavior and exchange. wikiepdia is a non-capitalistic entity that seems to work pretty well. a lot of insurance companies are organized under mutual companies which are "owned" by the members. I'm curious to see if any crypto utility tokens work out on any kind of scale.
ineptech 5y ago
He's talking about small retail businesses, like furniture stores. Who on earth is out there talking about socializing retail furniture? I have a high general opinion of the author, but this essay is on the level of, "Capitalism == $900/dose insulin, why do you hate poor people?" Capitalism vs socialism is a debate that hinges on specifics, not generalities. Are we building a library or a yacht? Socialism works really well for one of those and not the other. Anybody who waxes rhetorical about why one is better than the other in airy abstract terms is pushing an agenda.
cardanome 5y ago
The post makes a very good point for 19th century style capitalism. These days most key industries are dominated by a few monopolistic corporations. (Yes, I will ignore the difference between oligopoly and monopoly because it does not matter for the point I am making.) For those corporations being efficient does not matter as much as playing their market advantages right. That is why FAANG can pay tech workers ridiculously high wages. That is why Oracle cares more about its law department than its tech department. They reality is, you can't build the next Google. There is no way to build a search engine that would be able to compete with it, that would require huge capital. In fact for most start ups the the end game it to be bought by one of the monopolists. Going from your parents garage to international tech company is not realistic anymore, the wild west era of tech is over. So what is the solution? One might think splitting up the big monopolist and restore the good old free market but honestly yes that might help short term but the reality is, our world is more complex than the 19th century. Providing a general purpose search engine for the web does require a certain concentration of capital. A social network is only useful if it is used by a critical mass of people. Outside of software it is even more obvious. Tackle the semiconductor shortage in your own backyard? Yeah nah. We have to accept we don't live in a world of free market capitalism anymore and can't go back. We need to think about how to move forward.
alexashka 5y ago
> In fact, I’m so impressed with how well The Profit scenarios illustrate the value of capitalism Huh? It's competence he's impressed with. Capitalism ain't got a thing to do with it. You can have incompetent buffoons hold power in capitalist systems, you can have incompetent buffoons hold power in socialist systems. Feel free to add other political systems, it's competence and alignment among members that matters, nothing else. You know how you are impressed with a family that gets along and does good things for the community? It's not capitalism, it's competence and alignment. Repeat after me, competence, alignment. If people understand this much, politics will fix itself - you don't need to spend any time worrying about the boring details or fill your head with social 'science' (it is not science, it is bullshit).
bccdee 5y ago
> In fact, I’m so impressed with how well The Profit scenarios illustrate the value of capitalism that I now build upon it a challenge to socialists: please describe in detail how The Profit style enterprise reform would happen under socialism. It probably wouldn't. So what? Is the argument here really "an economic system is only viable if it can accommodate CNBC's The Profit?" A society with a different economic system would have different structures in place for reforming failing businesses. For instance — off the top of my head — conditional grant or loan programs that oblige the recipient to seek professional management counselling, perhaps. They might work better, or they might work worse. But they wouldn't be The Profit. That said, I don't think that this sort of enterprise reform happens much under capitalism, either. Sure, it happens on one reality TV show, but that's not a real data point. Consider this claim made in the article: > Another lesson from The Profit is that firm problems are personal problems. The son who can’t step out from the shadow of the father and the father who can’t let go. The two brothers who haven’t gotten over the death of their father and the problems this creates in the firm they have inherited. The siblings who are still fighting to get their parent’s attention. This is reality TV! The episode where the problem arose from zoning laws or product/market fit didn't get produced. You can't draw conclusions from something which is designed primarily to be dramatic and entertaining, rather than to provide a realistic survey of the problems faced by small businesses. If this kind of investment were especially profitable, lots of people would be doing it, and we'd be able to point at the statistical impact it has on small businesses instead of appealing to a TV narrative about it.

29 points by hirundo 5y ago

Capitalism vs socialism isn’t about the existence of that capital, just who owns and how decisions are made. In all the cases of the mismanaged businesses, they were being mismanaged under capitalism and a new manager came in, was competent and was heeded. I guess the premise here is that “capitalism better because competent managers rarer than incompetent managers” and “incentives of money alone are better than incentives that include dysfunctional personal relationships”. Since “socialism” seems ill-defined (or has several different definitions), seems difficult to say whether it would provide better outcomes. Authoritarian “people’s republic of X”-style didn’t provide good outcomes. Seems like that was due to authoritarian politics getting in the way of actual business. I haven’t seen the show, but why would workers who own a stake in the viability of the company voting on management have not worked? If track records of management outcomes were available like sports statistics, there’d be something better than rhetoric to guide voting.

asdff 5y ago
Irrespective of flavor of socialism, just logically capitalism does not make any lick of sense unless you are among the capital class already who benefits from scraping the barrel of revenue to collect an amount as profit. The fact that there exists a profit margin and businesses cannot operate at cost is why manufacturing in China is used in the west vs western manufacturing, since businesses operating at cost can offer product at cost vs cost*profit_margin so these businesses are always more competitive than western counterparts who have to pay for someone else's profit margin down the entire supply chain.
- dantheman 5y ago
  I'll take the vast improvement of living standards under capitalism over those found in socialist countries. Are you arguing that the rapid decline in poverty in China due to capitalism is a bad thing?
  - galdauts 5y ago
    I'd like to add that there are different flavours of both capitalism and socialism. The kind of disaster capitalism practiced in Russia and other former Soviet Union countries in the 90s certainly didn't lead to an improvement of living standards for quite a long time, if even. China also presents a case of state capitalism where companies are strictly controlled by the government as evidenced by the recent set of regulations published a few weeks ago and many companies are owned by the children of party members.
  - asdff 5y ago
    I'd argue that what we see in terms of living standards in ostensibly socialist countries is much more due to corruption of office, which happens here too, vs the way that profit is shared among a business. Three of my city councilmembers have been indicted by the FBI for corruption in the last three years. Luckily in the U.S. the levers of power are pulled by more people dispersed across a larger bureaucracy, so corruption of office can only affect so many things, vs somewhere like PRNK or KSA where there is absolute rule. There are plenty of businesses that run on a more socialist model even within capitalist countries. They are owner operated and share profit amongst the cooperative, are often successful and have motivated employees who work longer tenures than your average employee at a company where they don't see any share of the profit for their hard work.
- phonypc 5y ago
  Sorry, what? You think Chinese manufacturing businesses aren't making a profit?
  - quantified 5y ago
    And there is no contradiction between socialism and making a profit. Any enterprise owned under any organization, directed by any structure, could make a profit. What you do with those profits becomes interesting, if they exist.
  - asdff 5y ago
    They make a profit at the end of the supply chain, but all their materials are sourced at cost since the state is running the company. US companies have to pay profit all down the supply chain, which is why there is such an advantage to being able to vertically integrate your supply chain in the US. In China, is essentially all vertically integrated already.
- r3trohack3r 5y ago
  > scraping the barrel of revenue I believe the idea behind capitalism is exchanging value for value (private property and the ability to exchange it). Someone sitting back and skimming a tax off the top of others property, without providing value, doesn’t seem to be compatible with the philosophy.
  - asdff 5y ago
    What is a whale shareholder playing tennis off of their dividends and doing no 'work' toward their investment beyond looking at their quarterly statement if not someone skimming off the collective pot of profit generated by labor for their own personal hedonism? We have a lot of dragons in society who are celebrated for their difficult job of sitting comfortably on their pile of gold. Not sure why.
malwarebytess 5y ago
> Authoritarian “people’s republic of X”-style didn’t provide good outcomes. Except, you know, China.
- rsj_hn 5y ago
  China did well after adopting a capitalist economic model. Not so well after adopting a communist economic model. Over 50 million dying just from starvation is basically the worst you can possibly be. Insane top down command like killing all the sparrows or collectivizing farms, or pulling nails out of furniture so that little villages can make steel describes the insanity of that approach. It had a shelf life of about 40 years. They still maintain the party dictatorship. Really what matters for dominance is a disciplined party apparatus that seizes power in some kind of coup or revolution and then rules the country with an iron fist. The party may use a justification of envy -- appealing to people's anger that others have more than they do -- or it may use religion, or moral arguments, or national pride arguments. But those are all instrumental to the underlying aim of power. Once you are in power, you can impose capitalism or communism or some mix. If communism doesn't work, you can discard it and look for something better. It's interesting that many on the left just dropped working class issues like a used shirt and refocused on race with extreme ease. For me personally, that's how I distinguish between a group that wants power as opposed to a group that is advocating for some policy profile. If they can switch out the policy profile and replace it with something different, then they were never that interested in policy to begin with.
  - kaibee 5y ago
    Tbh, I have no idea who 'on the left' you could be talking about (except Sinema I guess)? The labor side of the Democratic party has been enemic for the last 50 years.
  - door103 5y ago
    > China did well after adopting a capitalist economic model. Not so well after adopting a communist economic model. Let's be clear here -- regardless what you think of the Chinese government, they are far from a "capitalist economic model". Many major industries are nationalized, the state plays an enormous role in the economy. 60% of their economy by market cap is state-owned. It isn't Soviet-style or Mao-era socialism, but it is still a very different system than western capitalism. It's similar to the NEP era in the USSR (1921-1928)
bobcostas55 5y ago
>Capitalism vs socialism isn’t about the existence of that capital, just who owns and how decisions are made. You can't just assume the existence of capital. It's not an exogenous variable.
- rsj_hn 5y ago
  Capital is anything that creates wealth. Therefore if the society has wealth then it must have capital. Thus capital is one of the pillars on which civilization stands. People can argue who has control over capital, and what kinds of property rights are allowed, but the existence of capital is presupposed by all economic theories. I recommend Sydney Homer's A History of Interest Rates in which he traces interest rates from neolithic period up to the 20th Century. If you want to know what interest rates were charged in the time of ancient Egypt, or early African societies, or Native American tribes, or whatever happened to those French rentes, then this is the book for you. Here are some excerpts: - - - - - - Paleolithic man went out to find his food. Neolithic man produced his own food through agriculture and animal culture. His capital took the form of seeds, improved tools, and especially herds of animals. Capital accumulation led to a great increase in population and the opening up of vast new areas in Asia and Europe. Such capital permitted the further accumulation of possessions, the support of chieftains, and the building of cities. Cattle breeding has supplied us with many financial terms used in later money economies. For example, there is our own word capital and our term pecuniary, from pecus, meaning a “flock” in Latin. Sumerians used the word mas for calves and for interest. The Egyptian term ms, meaning interest, is derived from the verb msj, which means “to give birth.” Early Greeks, in fact, valued their precious metals in terms of cattle. [...] In Namaland, in Southwest Africa, cattle and beads were the original currencies. Debts were incurred in cattle (no rates quoted), and the difficulty of repayment often led to cattle raids into neighboring states. [...] In the French Sudan cattle were used until recently as currency for large transactions. Cattle loans were granted free of interest, but if a cow which was lent had a calf, the calf and the cow was claimed by the creditor. Similarly, in Uganda and French Equatorial Africa cattle and sheep were the bases of credit. In the former the creditor expected every third new birth as interest. In Northern Siberia, at least until recently, domesticated reindeer served as money. Loans were granted in reindeer. Among the Kirghiz of Siberia, horses and sheep served as money and were loaned out. The usual interest for such loans was 100%. - - - - - - Homer, Sidney; Sylla, Richard. A History of Interest Rates (Wiley Finance) (p. 53-58). Wiley. Kindle Edition.
7sidedmarble 5y ago
Remember not a single of the Communist experiments of the 20th century started as already democratic, Western style societies. Russia and China were not developed countries prior to communism. They didn't have what we would consider the rule of unarbitrary law. Marx and Engels saw socialism as the next step a society would move into after capitalism. They predicted this had to rest on the foundation of a society which had already experienced it's 'bourgeois revolution', meaning power had to leave the aristocracy and be in the hands of the capital owning class. They saw democracy as a necessary step for a society to progress to socialism. There is no great examples of this in the 20th century. If you read even a little Marx, how could you ever expect the kind of society he describes without first having democracy? Socialism is based on one concept: democracy in the work place. If democracy does not exist in the first place, the endeavor will always be doomed.
- quantified 5y ago
  Probably greed and sociopathy doom those collectivist experiments. Economic and political systems need to work with humans as we are, not as we idealize them.
  - 7sidedmarble 5y ago
    What if we are already living in a time where rich Western countries could experience post-scarcity if we just allocated resources and priorities differently? If we're not there yet, what do we do when we are? To me socialism is just an inevitability. We will eventually reach post-scarcity. I think if we can examine the current system and find so many ethical problems... It's worth asking ourselves what we could do to get to that ideal star trek society faster.
  - bccdee 5y ago
    Probably the fact that these societies arose from violent revolutions doomed them. Revolutions tend to lead to authoritarian governments, because if you can take over the whole country with your army, you don't really need democracy to legitimize you. I could easily cite Chile, Guatemala, Nicaragua, EL Salvador, Argentina, Bolivia, Paraguay, and countless other 20th century totalitarian regimes as instances where "capitalist experiments were doomed by greed and sociopathy." Very easily, given that these regimes were backed by American capitalist business interests. But realistically? When you're strong enough and ruthless enough to take over an entire country, you're probably more interested in power than in ideology, one way or another.

jancsika 5y ago

> It is the capital that Marcus has to offer that makes business owners listen to him It would be fun to take on the challenge of converting the author to socialism, but I'm not sure if the author is making the call at the end of the article in good faith. Related to what I quoted-- many, perhaps the majority, of reality shows don't rely on offers of capital injections to improve the social problems that plague business owners. Gordon Ramsey usually breaks through because he's loudly yelling his credentials at some stubborn restaurant owner. Or the bar rescue guy is yelling to the entire staff that the bartenders were stealing drinks to the tune of tens of thousands of dollars (as well as yelling his credentials to them). I mean they obviously tie in ads for various products that they give away to the owners, but a) that's never central to the business and b) I don't think they do that on every single show like that. Human credibility and peer pressure exist in a socialist setting. That in no way is an argument for socialism, but it is at least an argument that one of the author's premises is probably mistaken-- i.e., that the guru needs capital in order to convince a failing owner to turn their business around. So, would the author care to refine the argument? If so I'd be willing to take the challenge further.

cscurmudgeon 5y ago
> converting the author to socialism Only religions need converting. The rest should use logic-based arguments. Conversion talk springs up only when there is a lack of logic or rationality.
- mensetmanusman 5y ago
  Politics is preference, logic is sometimes useful in determining your preference…

frebdo 5y ago

More reactionary garbage.

a_shovel 5y ago

The author lists some proposed socialist solutions that he has heard of, and then dismisses them with a simple, unexplained "I just can’t see those processes going well". If he won't tell us his problems with those explanations, how could someone address them? Apart from that, the rest of the article is just a description of a TV show, the challenge itself, and praise for capitalism. Very shallow IMO.

viburnum 5y ago

The Hungarian economist János Kornai wrote about this. Socialist firms face what he called a soft budget constraint (In this case the soft budget constraint isn’t provided by the central government but by sentimental families). The problems are well understood but they have some advantages. It’s easy to end unemployment. Japan used something like a soft budget constraint during its postwar boom so its domestic firms could massively invest more in innovation and scale up production. Socialists in Sweden were also similarly concerned with efficiency issues as early as the 1920s, which is why they chose to focus on the welfare state and labor rights instead. The flip side is a hard budget constraint leaves resources idle — unemployment. So you get a different kind of inefficiency. Mixed economies direct which inefficiencies they can live with based on actual human needs.

g42gregory 5y ago

> I’ve heard that, under socialism, workers would vote on who they want to be managers... I grew up under socialism and wanted to mention that author "heard" very, very wrong. Under socialism, the Party bosses will decide who will be the managers. The person's qualifications and achievements will be largely taken into consideration, together with their loyalty to the Party, who their parents are, friends in high places who vouched for them, favors that need to be returned, etc... Not that much different from the capitalism. The process author describes, is what happens when you are thinking to become a socialist society. Everything looks fantastic then. But actual socialism comes with removal of democratic safeguards and somewhat totalitarian government (how else would you confiscate private property from citizens?). Once the new, socialist, management is in place, they quickly realize that it's nice to be at the top. Next, they turn their attention to the authors like this (who threaten their permanent place at the top) and quickly "dispose" of them. There is a sweet irony in this process, but it is of little consolation for the rest of the population, who will suffer for the next 70 yrs until the country goes back to the capitalism.

AnimalMuppet 5y ago
> The person's qualifications and achievements will be largely taken into consideration, together with their loyalty to the Party, who their parents are, friends in high places who vouched for them, favors that need to be returned, etc... Not that much different from the capitalism. One's loyalty to the Party is not often taken into consideration under capitalism.
malermeister 5y ago
This actually happened in Yugoslavia - keyword "worker self management". I'm not denying your experience, there were lots of terrible regimes calling themselves socialist, but it's wrong to generalize from that.
- g42gregory 5y ago
  I am not familiar with the particulars of the Yugoslavia's "worker self management". But I can certainly say how Yugoslavia socialist experiment ended: 1. Brutal civil war with lots of people dead and country spitting apart. 2. All individual sub-countries going back to the capitalist system.

dsr_ 5y ago

A possible scenario, as a socialist experiment in a generally capitalist society -- The first step is to get all workers together to explain their co-ownership status. They need to figure out a new set of governance rules. Working at the firm is ownership of a share of the firm; the share is a vote and an equal claim to profit. The second step is to ask which goods they are making that benefit the community, and in what ways? If they are making nothing useful, it's time to figure out what can be made with minimal changes to the equipment and materials available. Now that they know what they are making and how they are governing themselves, they need to have new operating rules. How do they assess the need for new co-workers? How do they assess current productivity? What non-production jobs are necessary, and which ones are largely about enforcing rules that no longer apply? Then comes the long haul of self-assessment and discussion with the community: are these the right goods? Are they being produced both efficiently and humanely? What changes need to be made? Capitalist firms usually rely on a triplet of marketing, sales-people and consulting. Marketing is a mix of research and pushing opinions; sales tends to be overly-optimistic; many companies don't value feedback from their consultants. It should come as no surprise that cooperative ventures have more degrees of freedom than capitalism's traditional central-control and fiefdoms; more decision have to be made, and this can be slower.

diob 5y ago

Everyone is socialist to a certain degree. The only argument is how much. No one is going to say we shouldn't work together as a society. It's literally just a determination of how much.

kgarten 5y ago

Isn't the best way to stay profitable to cut labor costs? To be profitable is often related to not paying a fair price for the resources you are using ... See climate change etc.

tomlockwood 5y ago

There are innumerable examples of people pursuing quality, efficiency and work satisfaction, over profit. We exist on a news site where one of the most upvoted articles is about reading Hegel. I'd invite the author to imagine a world where someone can take pride in having a clean and efficient shop, for the joy of it. Did the author write their article with the intent of some kind of "value-increasing"? And, what is the "value" we are increasing? Maybe I want to run a shop that enables my local community members to not have to travel to the next town over for sanitary items - even if they are bulky and don't make a huge profit. Maybe what I value is seeing kids come into my store and purchasing that one icy-pole they like, that I've stocked for years. Or maybe wanting just a few more dollars, is the only way.

bitcuration 5y ago
Bingo. Value, bottomline... it's about time to re-exam these assumed awards for what it really is and is it the same as everyone has assumed, and furthermore are these the right award worth all cost to pursue? Have we missed anything more profound more impactful but lack of immediate satisfactory of value, bottomline?

deleted 5y ago

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sharemywin 5y ago

I hate the capitalism versus socialism debate. as if there are only two ways to organize human behavior and exchange. wikiepdia is a non-capitalistic entity that seems to work pretty well. a lot of insurance companies are organized under mutual companies which are "owned" by the members. I'm curious to see if any crypto utility tokens work out on any kind of scale.

ineptech 5y ago

He's talking about small retail businesses, like furniture stores. Who on earth is out there talking about socializing retail furniture? I have a high general opinion of the author, but this essay is on the level of, "Capitalism == $900/dose insulin, why do you hate poor people?" Capitalism vs socialism is a debate that hinges on specifics, not generalities. Are we building a library or a yacht? Socialism works really well for one of those and not the other. Anybody who waxes rhetorical about why one is better than the other in airy abstract terms is pushing an agenda.

cardanome 5y ago

The post makes a very good point for 19th century style capitalism. These days most key industries are dominated by a few monopolistic corporations. (Yes, I will ignore the difference between oligopoly and monopoly because it does not matter for the point I am making.) For those corporations being efficient does not matter as much as playing their market advantages right. That is why FAANG can pay tech workers ridiculously high wages. That is why Oracle cares more about its law department than its tech department. They reality is, you can't build the next Google. There is no way to build a search engine that would be able to compete with it, that would require huge capital. In fact for most start ups the the end game it to be bought by one of the monopolists. Going from your parents garage to international tech company is not realistic anymore, the wild west era of tech is over. So what is the solution? One might think splitting up the big monopolist and restore the good old free market but honestly yes that might help short term but the reality is, our world is more complex than the 19th century. Providing a general purpose search engine for the web does require a certain concentration of capital. A social network is only useful if it is used by a critical mass of people. Outside of software it is even more obvious. Tackle the semiconductor shortage in your own backyard? Yeah nah. We have to accept we don't live in a world of free market capitalism anymore and can't go back. We need to think about how to move forward.

alexashka 5y ago

> In fact, I’m so impressed with how well The Profit scenarios illustrate the value of capitalism Huh? It's competence he's impressed with. Capitalism ain't got a thing to do with it. You can have incompetent buffoons hold power in capitalist systems, you can have incompetent buffoons hold power in socialist systems. Feel free to add other political systems, it's competence and alignment among members that matters, nothing else. You know how you are impressed with a family that gets along and does good things for the community? It's not capitalism, it's competence and alignment. Repeat after me, competence, alignment. If people understand this much, politics will fix itself - you don't need to spend any time worrying about the boring details or fill your head with social 'science' (it is not science, it is bullshit).

bccdee 5y ago

> In fact, I’m so impressed with how well The Profit scenarios illustrate the value of capitalism that I now build upon it a challenge to socialists: please describe in detail how The Profit style enterprise reform would happen under socialism. It probably wouldn't. So what? Is the argument here really "an economic system is only viable if it can accommodate CNBC's The Profit?" A society with a different economic system would have different structures in place for reforming failing businesses. For instance — off the top of my head — conditional grant or loan programs that oblige the recipient to seek professional management counselling, perhaps. They might work better, or they might work worse. But they wouldn't be The Profit. That said, I don't think that this sort of enterprise reform happens much under capitalism, either. Sure, it happens on one reality TV show, but that's not a real data point. Consider this claim made in the article: > Another lesson from The Profit is that firm problems are personal problems. The son who can’t step out from the shadow of the father and the father who can’t let go. The two brothers who haven’t gotten over the death of their father and the problems this creates in the firm they have inherited. The siblings who are still fighting to get their parent’s attention. This is reality TV! The episode where the problem arose from zoning laws or product/market fit didn't get produced. You can't draw conclusions from something which is designed primarily to be dramatic and entertaining, rather than to provide a realistic survey of the problems faced by small businesses. If this kind of investment were especially profitable, lots of people would be doing it, and we'd be able to point at the statistical impact it has on small businesses instead of appealing to a TV narrative about it.