There is no doubt it fails, there is a long list of examples. The most recent attempt to make it work seems to be happening now in Venezuela where Chavez is planning to nationalize everything. It is doomed to failure.
This happens despite the good intentions of its proponents. Let's give them the benefit of the doubt, for the time being, and assume that they really wanted to help their community solve its problems. The obvious way to do this is to take control of all the assets of the community and make all the important decisions about who gets what.
Unfortunately this destroys the wealth in the community. This automatically happens when all the assets are nationalised. With government owning everything and no possibility of any other owner, nothing has value. None of the government assets can be sold, none bought. This destroys the private sector and government has to provide all the ideas and energy needed to drive the economy along. But they do not know how to do this.
Reward cannot be used to encourage people to work hard as this is contrary to the socialist ideals. Those who are inclined to innovate can only do this in the underground economy. The majority of people prefer not to get involved with illegal activity and simply do what they must to survive. Oppression reigns.
The central decision making structure of socialist/communist regimes simply cannot make the right decisions quickly enough to make the economy work. The big advantage that capitalism has is that it distributes responsibility and decision making away from a central authority and allows people to get on with adding value to their lives in whatever way they can.
Capitalism's big disadvantage is that not everyone is capable of being successful at doing this. Many people seem to need to be told what to do as they are either unable or unwilling to make good decisions themselves.
In many cases it is fear that blocks their ability to make good decisions. Fear holds them back.
Socialism/communism fails because of its inability to make decisions. Capitalism is partially successful because it gets past this problem, but it is held back because many people are unable to make good decisions in its relatively high stress environment.
The next innovation in social/political structures must get beyond this restraint.
Subscribe to:
Post Comments (Atom)
2 comments:
Why do communists/socialist have difficulty making decisions? Surly this is the principles of socialism (workers owning the means of production) are not incompatible with the Darwinian style management of capitalist systems.
Surly you could have two state owned companies competing to provided a good service?
Why does socialism preclude awards? Even in communist Russia the people who were remarkable were awarded with larger houses and better food? Or is this a misapprehension of mine?
Most criticism of socialism/capitalism comments on the human failings of the people that administer them. Instead of doing this I am looking at the problems created by the organizational structure.
The difficulty in decision making comes out of the centralized decision making structure that socialism generates.
Socialism can adopt "capitalist" structures and reward systems - China has done this, but it cannot at the same time follow the basic doctrine " From each according to his ability, to each according to his needs!"
Post a Comment