[Sceptic]

How is the socialist government going to allocate scarce economic goods without a mechanism such as money prices to co-ordinate the factors of production and provide the producers with market signals to indicate the most efficient recipe of production?

How do they intend to increase internal pressure within the co-operative firm to force the producers to allocate their resources (namely investment) more efficiently without the test of profit v loss?

How is the socialist government going to maximise productivity when the producers know they will be stripped of their assets if they are too successful and investors have no confidence in investment?

How does the socialist government expect to meet consumer standards when public investment in projects are objectively determined by purely rational, scientific and algorithmic procedures rather than subjectively determined by ordinally ranked subjective preferences of the consumer by the law of diminishing marginal utility (as would be the ultimate determination for the allocation of goods in the market)?

How does the socialist government expect to measure the embodiment of labour within a commodity by which they hope to allocate labour vouchers during the transitional phase to communism (the dictatorship of the proletariat) and again, how does this objectively determined whim meet the efficiency of money (the equilibrium price which can only be objectively determined organically in the market place)? What are your thoughts on marginal utility theory?

If you are a socio-anarchist, then why do you honestly believe the community board could centrally plan an economy on a more localised level any better, regardless of whether or not you believe the process would be non-hierarchical? And why do you not believe it would not become hierarchical and authoritarian given the necessity for specialisation?

To all: why not just drop post-scarcity socialism and use the more realistic (and persuasive) arguments as proposed by market socialism (if that is not you're stance)?

[Tainari88]

Sceptic,

These are all fine questions--but what you should do is look at the evolution of production in the first place. Many thousands of years ago small Ice Age tribes or bands of people who were hunter-gatherers did not need all this complicated stuff to get their basic needs met. So why does the current system require such things? And why? That will lead you to re-evaluate why currency was invented, why trade had to be regulated and standardized, why regulations for products were established, how mass production changed the face of the economy, etc. ?

Once you understand WHY it got more complex then you can understand how socialism can create a more efficient system of production than just free market capitalism. The ultimate goal of an advanced society is to be able to provide very well advanced technological tools and production values to meet all of the basic needs of the entire planet without falling out of balance. What impedes that are the present systems lack of being able to cooperate for mutual benefits. Too many small elite groups wanting to control and distribute the excess produced by the many yet denied to the many. And that is the tough one. How to get the resources and services to be geared towards a system that is incredibly inclusive and not exclusive. It is very very challenging. Who knows? Give it another 5 thousand years or so...and there might be a solution to it. But socialism is a great step forward.

But, in terms of specifics of the economic policies you mention.....one has to look at a wide host of factors that influence a market. Many businesses fail in capitalism for a wide range of reasons. Production and overhead costs are prohibitive. Wages are not low or high enough...etc. etc. Inflation effecting stabilizations of the currency. Lack of investment in adequate amounts. A lot of complex things. But ultimately it has to do with the VALUES the society places on economic theories.

[Sceptic]

The socialist economy cannot fail but it would be a less productive system relative to capitalism and all communities would need to be autosufficient; this would lead to mass starvation.

what you should do is look at the evolution of production in the first place.

I will address said points but they are (without trying to be overly blunt) irrelevant when considering the fact that the question of economics is concerned with the present and not the past. Economic history is concerned with the development of an economy over a said period of time and statistical/empirical evidence that is deduced from economic history can be used to back up economic statements but the economic statement must first be made in a debate. The statement must also tackle the logic of the opposing argument (or, in this case, address said questions). I have seen no attempt thus far to address said question.

Many thousands of years ago small Ice Age tribes or bands of people who were hunter-gatherers did not need all this complicated stuff to get their basic needs met.

That’s because there economy was significantly less complicated. I am debating in my mind whether they actually had a gift economy (as is credibly suggested by some on the left) or whether they maintained some sort of barter system – effectively exchange (which would be the most effective strategy, in my opinion, of dealing with non-productivity within a community). I don’t much about anthropology though and will leave his question unanswered but the underlying principle is that you cannot altruistically link billions of strangers and motivate them to co-operatively produce without a reward that can be objectively evaluated (pricing mechanism).

To illustrate my point further, it is important to note that most economic processes in both the nomadic and (primitive) agricultural systems are in fact autosufficient in one way or another – the men within said community will chop down trees for huts, divvy up or share land for farming purposes and expend their labour on hunting expeditions (there is very often a sexual division of labour as well which gives the women the opportunity to specialise in domestic labour – a crucial aspect of a developing society is specialisation since it gives the producer a greater opportunity to be more productive, since it is better to be a master of one than a jack of all trades. Even if your expertise lies in multiple fields to do so would be time consuming and require much ‘gear shifting’. The division of labour means one can actually transfer their labour output into one field into a diversity of other, completely different fields).

Now, a productive system must either be autosufficient or dependent on others in society. The ‘I, Pencil’ prose (I don’t know if you have read it) illustrates this point perfectly: to produce a pencil, I must have wood, lead and rubber; to have wood, lead and rubber, multiple persons must expend their labour chopping down trees (for both wood and rubber), mining lead and transporting them to me; to chop down trees requires a saw and further expenditure of labour, to transport labour requires ships/lorries/etc. and also requires labour expenditure; to have a saw requires further mining of steel, to have the expenditure of labour requires the exchange of goods and services (in return for labour) and to have ships/lorries/etc. requires the further construction of ships/lorries/etc. with even more materials (steel, wood, oil, I could go on)) and you get the point. The family tree carries on, and every successive branch does not end, rather new branches are spouted from the old branches and they can (theoretically but not practically) be traced to the initial combination of labour and land to produce a capital good; since every good in the process was produced by natural resources (or other previously produced capital goods) and labour and every good in the process can yield a return for the duration of said capital goods (since all capital goods inevitably depreciate in value), every good is a capital good, until we get to the pencil which is consumed directly and therefore a consumer’s good (unless you consider the fact it can be used to make another consumer’s good such as a drawing which can be sold on the market or directly enjoyed).

There is a great picture in Rothbard’s Man, Economy and State book that summarises this algebraically; you essentially have the two arrows (one labelled labour, the other labelled land) pointing to C, or capital good/producer’s good, with two further arrows extending to another C, etc. until you have the final consumer’s good.

Each stage in production can be motivated (and subsequently co-ordinated) altruistically (by charity) or by profit (though charity can, praxeologically be considered ‘profit’ – it does, after all constitute a psychic gain).

In the primitive tribe, the extended family unit prevails and every individual knows and loves the other one, like part of a family, so the concept of a gift economy is far more prevailing. Even if we consider that each individual would act charitably in the complex economy of strangers from completely contrasting, often antagonistic religious and cultural back grounds, every individual still needs a market to compare the process in which they produce and a test, such as profit v. loss to know whether the process can be objectively evaluated as ‘efficient’. The process is ‘efficient’ if there is a market for said goods and the producer does not allocate more resources than the optimum amount required to produce the marginal product. Basically, the producer requires an objective pricing mechanism to place on the resources allocated (investment) and the items sold, simple as. Labour vouchers do eliminate the problem of greed in co-ordinating the factors of production but greed is not my main beef with socialism; the system simply cannot rationally measure fleeting ordinal preferences (well, nothing can, really but the market adequately demonstrates into which resources the buyers are willing to put their money where there mouth is).

It is for that reason I argue all economic activity in a socialist community would have to be localised and autosufficient; to produce something as simple as a pencil, no-one could rely on trade and everyone in said community would have to mine all their own lead, steel and chop down their own trees in said community or use the durable, but constantly depreciating-in-value-until-they-are-useless, capital goods produced yesterday by capitalism to obtain their own pencils. This is why socialism inevitably ends up in state capitalism (a market, but one burdened with heavy regulations and progressive taxation) since people need money to transfer their productivity into another form to receive their wealth (i.e. they need to exchange and they need a universal medium of exchange to satisfy their wants). Furthermore, no-one in the community would have incentive to produce too much of the wealth they do produce since they would fear their assets would be stripped from them; the overall community would be poorer and as a result, themselves but most people cannot produce entirely for the sake of the commune, regardless. The free rider problem remains since without a price mechanism the community have no means of efficiently weasling out the less productive (the 'lazy'). Even if they could determine said people, they could not effectively motivate them; I'm sure we can talk about exile or peer pressure but those remain ineffective and bureacratic techniques to deal with vast quantities of people who would be unwilling to work 'hard' (and there is no such black and white distinction between 'productiveness' and 'laziness', might I add, all things being relative).

Once you understand WHY it got more complex then you can understand how socialism can create a more efficient system of production than just free market capitalism.

I am pro-capitalist but I do not advocate laissez-faire.

What impedes that are the present systems lack of being able to cooperate for mutual benefits. Too many small elite groups wanting to control and distribute the excess produced by the many yet denied to the many. And that is the tough one. How to get the resources and services to be geared towards a system that is incredibly inclusive and not exclusive.

Completely disagree and capitalism is a highly inclusive system. With the invention of the internet, millions of ordinary laymen were able to gain an ever increasing amount of equity shares in the market – yes this was followed by the dotcom bubble but my point obtains; capitalism ironically democratises the market and equalises wealth distribution which is a goal of socialism (well the national dividend – equal wages are not a universal goal among socialists as far as I have interpreted the ideology since many socialists have the honourable goal of directly rewarding productivity, even if they reject the labour expenditure of the capitalist). Also consider that it is actually centralisation of the means of production into the hands of the state (nationalisation) that inevitably trends towards majority exclusion, not decentralisation of power from the state into private market entities. If any system is non-inclusive, I would argue it is inevitably socialism (and as stated before, the commune is most likely to become autocratic due to the unstability, in my opinion, of direct democracy).

But, in terms of specifics of the economic policies you mention.....one has to look at a wide host of factors that influence a market. Many businesses fail in capitalism for a wide range of reasons. Production and overhead costs are prohibitive.

If the costs exceed the profit then it is not worth investing in said cause. Think about this in terms of household finances; you would not desire to go into huge debt spending more than your income on chocolates, vanilla ice cream or alcohol and the fact that you cannot allocate resources on wasteful outcomes by incurring the costs on the nation (hence directing the wealth of a nation on wasteful outcomes) is an incredibly good thing. Businesses must gamble their own money. Governments, however, can actually use public investment (and I fully support this) by using market initiatives...but only when there is a market.

Wages are not low or high enough...etc. etc.

But what mechanism will you use to determine the ‘correct’ wage?

Inflation effecting stabilizations of the currency.

Overly interventionist monetary policy can certainly increase the likelihood of monetary policy. So can a deregulated ‘gold standard’ (or any other decentralised banking system), in my opinion, though. I have no alternative but every successive economic development made is improving the banking system and the present day system is far more stable than it was in the 19th Century.

Lack of investment in adequate amounts.

Again, money is more likely to motivate the optimum amount of investment (so not too much and not too little) than an authoritarian central planning agency. Ironically, many of your arguments are examples of what happens under an excessively hampered market (essentially socialism since socialism inevitably trends towards state capitalism as it did in the soviet union).

But ultimately it has to do with the VALUES the society places on economic theories.

How so? Also how do you explain this: http://www.google.co.uk/imgres?imgurl=h ... x=97&ty=76 ? If your answer is third world exploitation, I can save you breath: if that were true, the majority of America’s (the richest nation in the planet) trading links would not be with other wealthy nations such as Japan, Hong Kong, European countries and the UK but with poorer nations such as Africa, etc. Yes there are multi-national corporations which have wreaked havok in Africa (e.g. Shell and the decade long oil spills in the River Delta, Nigeria) but it does not account for our wealth (and interestingly enough, the finger of blame can be pointed towards corporatism. Also, if western courts were to allow some sort of international Lockean Homesteading principle to be applied in individual cases, entrepeneurs could make a profit by suing said corporations in their home countries on the behalf of Nigerian locals for environmental damages to their property).

[Sceptic]

I'm surprised that socialists do not give the issue of economic calculation, which I consider to be the crucial economic flaw in their theory, much thought...

[Tainari88]

Sceptic ultimately the values implied in capitalism in all its forms is what creates a deep and difficult to conquer divide in resources, power and wealth distribution. Everyone has to be in total agreement about how to distribute all the wealth otherwise the chasms between the have not societies i.e. the Third World and the First World will always clash. And those societies with more wealth and power will leverage their way out of being just with the societies whom might possess the raw materials or the minerals, etc. that are necessary for capitalism to grow. Without growth, new markets and constant production in place, capitalism reaches a critical stage and collapses routinely. That is the pattern. It always has been.

Wealth is not created in a vacuum Sceptic. Human beings are the key to wealth. They always have been. Almost every aspect of wealth are human beings placing a value on something...whether that be a service, or a resource, or a material good or intellectual property rights or some such VALUE. For me capitalism is ancient and its flaws can't be conquered either by your style of capitalism or the laissez-faire kind. It is all based on a system that is inherently flawed and won't work without a complete and absolute change on a fundamental level. That is the truth. If you think only capitalism creates wealth you are wrong. Human beings create wealth. Capital is just an invention by human beings who lived within a certain historical context. When that historical context is no longer relevant and capitalism no longer fulfills the needs for the vast majority. It will be altered irrevocably or scrapped for another system with a different name and different economic concepts. That is a fact. That you might accept that as a pro-Capitalist or not, is of no interest to me.

Capitalism arose out of the inefficiency and obsolescence of feudalism. Capitalism existed and then socialism became necessary to keep it from creating social revolutions based on economic disparity. The state was used as an instrument to regulate the market. If you leave the market without any state regulation you get the banking scandals like Goldman Sachs and etc. That is not new. The original regulations were put in place around the 1912 or so era in the USA. Because the Robber Barons of capital etc. if left to their own devices wreak havoc on working people. And they create social instability as a result.

There is no pussyfooting around that fact Sceptic. Capitalism is a flawed concept. What keeps it afloat is that the state sucks off of it and gives the average peon or worker some kind of flotation device to keep themselves from absolute destitution.

It is obvious that what works is to have massive amounts of people making extremely complex decisions on how to redistribute the entire enchilada. And that is difficult as hell. The old system of capitalism is well known and not wealth producing for the majority of the poor on the planet. You might think the fault is due to the poor nations. It is not. It is due to the need of capitalism to create a consumer market and if the worker is not a good consumer because of uneven access and lack of distribution of wealth and concentration of the wealth in small elite groups....you have lack of balance. And that is the FLAW. Call it what you will but it is the essence of capitalism Sceptic. There is nothing to be seen as salvageable from it.

[Sceptic]

@ OP:

I am not trying to defend capitalism (state capitalism, laissez-faire capitalism or any other form of capitalism - I am at no doubt that capitalism has its flaws, although by and large I maintain it as the most productive and most ethical system); I am asking you and any one else to defend socialism. As a utilitarian, I would be a socialist myself if I was convinced it was a more productive systematic reorganisation of the economy; I am not convinced.

My crucial problem with the system is how does the state efficiently reallocate goods and services without a price mechanism and what incentive do people have to produce. I have no doubt that people can theoretically produce wealth under socialism but I believe it would have to be autosufficient and incredibly unorganised (without the guiding hand of the market or co-ordination motivated by greed) for the reasons I outlined above. One thing you don't seem to realise is that the relationship between the bureacrat and the means of production is hegemonic and unguided by systematic market signals; the relationship between the entrepeneur and the means of production is earned (the entrepeneur must prove himself) and entirely dominated by market mechanisms. The entrepeneur cannot force his subjective whims onto society and finds his way observing objective market processes; the bureacrat is part of a monopoly on law and more than able to do so. Finally the bureacrat, good intentions or no good intentions has no process to guide himself.

Finally 'wealth' in a metaphysical context cannot be produced under socialism; 'wealth' is only produced when it is the product of a consenting exchange or voluntary relationship for all purposes practical and economic. You can't dig a field of holes, force me to pay for the service then argue that wealth has been produced. The infrastructure for the market, however, can be provided by the state but its function cannot extend beyond that.

[Ombrageux]

Sceptic - I like your mode of though. More generally however, I would ask the question: Is there such a really existing thing as "Socialism"? Is it not a chimera like the Libertarians crusade for a Utopian laissez-faire society?

In general, might not all developing/industrializing countries be described as mixed economies with a combination of state intervention/control/regulation and autonomous markets? All "capitalist" countries have industrial policies, subsidies, tariffs, welfare states, certain public monopolies and so on. Even in the former "Communist" countries - where outright state control of industry and agriculture can exist - informal, black and "grey" markets inevitably emerge. Indeed, if people in the Communist countries could not bend the rules, have their personal "private" vegetable garden, or produce artisanal wares for trade, it is unlikely they would have survived for as long as they did!

Hence I would say the debate should never be about attaining a qualitatively different Socialist or Libertarian society. They are chimeras, dangerous mirages cynically exploited by politicians. The Socialist mirage is well and truly dead. The Libertarian one is alive and kicking in America and may well ruin that country completely. The debate should simply accept the mixed market economy and argument should be focused on what combination of market mechanisms and public action will produce the outcomes we want (growth, social security, a safe environment, food security..).

[Sceptic]

I like your mode of though. More generally however, I would ask the question: Is there such a really existing thing as "Socialism"? Is it not a chimera like the Libertarians crusade for a Utopian laissez-faire society?

I agree with the general idea of your overall post. In my opinion, a healthy and stable economy incorporates themes from a variety of conflicting ideological positions; freedom to gain wealth and civil liberties (e.g. to drink, smoke and ‘consume’ as you feel) ‘moderated’ by some interventionist policies to correct market failures, provide health and safety regulation, labour laws, universal health and education but all well contained within the barriers of a fiscal conservative policy.

It is prudent here to define ‘socialism’; I define it as the transitional phrase (although this was not how Marx or others originally defined it, it has become the contemporary usage amongst academics) to communism, a revolutionary phrase in which the State is seized by a vanguard party, all means of production are nationalised into the hands of a central planning agency and managers/bureaucrats are either assigned according to intelligence and ability to operate upon a basic objective framework (as determined by the planning committee) or workplace management is democratised and each and every workplace is a co-operative. Most large scale decision making is co-ordinated by the state, however, possibly on the basis of merit. Communism is the final stage by which point money has been abolished, and over geographical territories, the means of production are decentralised into localised governments and ‘community’ control over local industry is on a decentralised and non-hierarchical basis, a ‘stateless’ society on Marxian terms.

All "capitalist" countries have industrial policies, subsidies, tariffs, welfare states, certain public monopolies and so on.

They are still ‘capitalist’ in so far as the capitalist mode of production prevails; I define this as state capitalism or corporatism. The idea of Socialist economic policy is based around first and foremost revolutionising the capitalist mode of production, in my opinion but I am also tackling the absolutist ‘abolish markets’ post-scarcity type Socialism. I am asking those socialists (mainly out of interest to hear their responses to this kind of thing) how they would replace markets and prices, basically.

Hence I would say the debate should never be about attaining a qualitatively different Socialist or Libertarian society. They are chimeras, dangerous mirages cynically exploited by politicians. The Socialist mirage is well and truly dead. The Libertarian one is alive and kicking in America and may well ruin that country completely. The debate should simply accept the mixed market economy and argument should be focused on what combination of market mechanisms and public action will produce the outcomes we want (growth, social security, a safe environment, food security..).

My point is that the users on here clearly subscribe to a ‘qualitatively different’ (to use your terms) Socialist society since they are posting on a Socialist forum. I agree though that in contemporary terms ‘Socialism’, ‘Libertarianism’, etc. do not exist, the real debate is between a conflicting array of state capitalist ideologies which all adhere to a basic neoclassical economic framework. But you never know; the Socialists *might* have something ‘better’ hence why I am asking these questions. Basically, I am interested in understanding what mechanisms would replace the pricing mechanism provided by markets (in a post-scarcity communist society, not under market socialism) and so far, I have heard none. I am deadly serious when I say ‘I will support whichever economic system leads to the greatest outcome’. Also, Libertarianism is at odds with Republican style ‘thou shalt not abort thy baby’ ultra-conservative traditionalism in the US it seems so maybe the two will ‘cancel each other out’, so to speak. Having said that, I’d like to see the US ‘try out’ Libertarian economic policy while I observe the ‘effects’ from a safe distance (the UK, hehe).

[daft punk]

How is the socialist government going to allocate scarce economic goods without a mechanism such as money prices to co-ordinate the factors of production and provide the producers with market signals to indicate the most efficient recipe of production?

Well, you dont get to that stage overnight. First you start off by taking over the biggest companies. You work towards improving the lives of workers. You might make public transport free, also healthcare, education etc.

You have planners to work out how much stuff to produce. These planners can coordinate across a range of industries.

It would be generations before you got to a point where there was no money.

Here in the UK we have already had lots of industry nationalised, it was not perfect, but it was no disaster. In fact most of the public would like to see the utilities re-nationalised. It is totally stupid to privatise something like electricity, and employ thousands of people competing to sell you the exact same electricity.

How do they intend to increase internal pressure within the co-operative firm to force the producers to allocate their resources (namely investment) more efficiently without the test of profit v loss?

Socialism isnt about co-operative firms really, although some might exist. If you are asking how innovation implementation would be encouraged, a good place to look is here

Socialism and Innovation
http://people.umass.edu/dmkotz/Soc_and_ ... ion_02.pdf

How is the socialist government going to maximise productivity when the producers know they will be stripped of their assets if they are too successful and investors have no confidence in investment?

Most small companies would carry on as before. They are free to make a profit as long as they pay their workers a decent wage and do not threaten redundancies. If they are too successful would they be nationalised? Thats an interesting one. Its possible. However if it was suspected that they were deliberately holding back on needed investment, they would be nationalised anyway.

How does the socialist government expect to meet consumer standards when public investment in projects are objectively determined by purely rational, scientific and algorithmic procedures rather than subjectively determined by ordinally ranked subjective preferences of the consumer by the law of diminishing marginal utility (as would be the ultimate determination for the allocation of goods in the market)?

Have you been reading a text book on economics? Chuck it in the bin, they are worthless. See the link I gave you. You would have consumers represented on the boards of companies, on the bodies which organised R&D, the bodies which approved innovation measures, and the bodies which implemented them. Something like that anyway.

How does the socialist government expect to measure the embodiment of labour within a commodity by which they hope to allocate labour vouchers during the transitional phase to communism (the dictatorship of the proletariat) and again, how does this objectively determined whim meet the efficiency of money (the equilibrium price which can only be objectively determined organically in the market place)? What are your thoughts on marginal utility theory?

I am not an economist. I support the Socialist Party in England. One of their former members, not deceased, taught economics to Ed Milliband, so I guess they have thought about such stuff.

If you are a socio-anarchist, then why do you honestly believe the community board could centrally plan an economy on a more localised level any better, regardless of whether or not you believe the process would be non-hierarchical? And why do you not believe it would not become hierarchical and authoritarian given the necessity for specialisation?

I am a socialist not a socio-anarchist

To all: why not just drop post-scarcity socialism and use the more realistic (and persuasive) arguments as proposed by market socialism (if that is not you're stance)?

I'm not really sure what market socialism is.

The socialist economy cannot fail but it would be a less productive system relative to capitalism and all communities would need to be autosufficient; this would lead to mass starvation.

You need to support a statement like that. I could explain quite easily why a socialist system would be more efficient than a capitalist one. Read the paper at the link I gave you, it's not long. It explains how a democratic socialist economy would implement innovation in a better way than either capitalism or Stalinism (the system in the so-called communist countries).

There is no pussyfooting around that fact Sceptic. Capitalism is a flawed concept. What keeps it afloat is that the state sucks off of it and gives the average peon or worker some kind of flotation device to keep themselves from absolute destitution.

If you are lucky.

As a utilitarian, I would be a socialist myself if I was convinced it was a more productive systematic reorganisation of the economy; I am not convinced.

It is quite easy to prove that democratic socialism would be more efficient than capitalism. Three examples:

1. Pharmaceuticals. 50% of the price is manufacturing and R&D, ie necessary. 50% is marketing and profit, ie unnecessary. And the manufacturing and research costs would come down as you would have, say, 3 teams of researchers per area of research, pooling their knowledge, instead of 7 or 8 doing it in secret and therefore duplicating.

2. Russia's economy grew faster than America's. Faster than any country in the world (except maybe Japan which was assisted by America) up to the end of the 1960s. And this was despite losing 20 million people in WW2, despite the unnecessary cold war lunched by America, despite being ruled by a grotesque dictatorship which concentrated all planning in it's hands, thereby creating huge inefficiencies. Socialism needs democracy like a machine needs oil. In 1918 Lenin said that their country was a million times more democratic than any capitalist country. Socialism devolves decision making to the lowest possible levels, while democratically planning the big picture via elected people at the 'top'.

3. The nationalised healthcare in the UK is a third of the cost of the private healthcare in America, despite the PFI scam, creeping privatisation, despite trick by governments to look good while actually being harmful. And we live just as long.

In fact Cubans live as long as Americans, and their health costs I think are something like 5% of Americas.

[Dave]

It is quite easy to prove that democratic socialism would be more efficient than capitalism. Three examples:

1. Pharmaceuticals. 50% of the price is manufacturing and R&D, ie necessary. 50% is marketing and profit, ie unnecessary. And the manufacturing and research costs would come down as you would have, say, 3 teams of researchers per area of research, pooling their knowledge, instead of 7 or 8 doing it in secret and therefore duplicating.

The high profitability of pharmaceuticals significantly derives from overly generous intellectual property protections for that sector. This does not show that socialism is more efficient.

2. Russia's economy grew faster than America's. Faster than any country in the world (except maybe Japan which was assisted by America) up to the end of the 1960s. And this was despite losing 20 million people in WW2, despite the unnecessary cold war lunched by America, despite being ruled by a grotesque dictatorship which concentrated all planning in it's hands, thereby creating huge inefficiencies. Socialism needs democracy like a machine needs oil. In 1918 Lenin said that their country was a million times more democratic than any capitalist country. Socialism devolves decision making to the lowest possible levels, while democratically planning the big picture via elected people at the 'top'.

A less developed country growing faster than a developed one, let alone faster than the global leader, is not impressive at all. In the postwar era most Western European economies grew faster than America as well, and some faster than the USSR (e.g. Portugal...until the Communist coup). After converging their growth rates leveled off. Soviet growth rates leveled off well before convergence their economy suffered from severe shortages and low quality goods, hardly an impressive showing. In fact, during the 1980s the United States grew faster than the USSR.

The rest of your post is democracy masturbation which doesn't even deserve a response. Lenin is a great democrat now?

And really, could you socialists please stop whining about the Cold War? You lost, get over it. States are not magically going to stop competing for influence and power because of your precious socialism.

In fact Cubans live as long as Americans, and their health costs I think are something like 5% of Americas.

Ignoring the vast wage differentials between the countries, do you think lifespan only relates to healthcare?

Surprisingly, I agree with Ombrageaux in this thread. The mixed economy is the model that should be accepted as the baseline.

[Sceptic]

@DaftPunk - I will reply to your post in a sec but it seems to come from a 'watered down' democratic socialist perspective, shall we say. When I refer to socialism, I am usually referring to the revolutionary Marxian model. Also many of those citations (e.g. healthcare) are examples of social democracy, I would say. To add on to Dave's points about healthcare, I would also point out that (a) I trend towards an NHS (though I am open to alternatives), (b) US healthcare is massively subsidised - it is hardly the free market healthcare its cracked up to be, (c) you are effectively saying that 'well public provision in a given service is more desirable than private provision therefore public provision is most likely more desirable all around the economy' - which isn't really very sensible.

Surprisingly, I agree with Ombrageaux in this thread. The mixed economy is the model that should be accepted as the baseline.

And me! I support the mixed economy as well!

[daft punk]

The high profitability of pharmaceuticals significantly derives from overly generous intellectual property protections for that sector. This does not show that socialism is more efficient.

Well whatever you say we would have pharmaceuticals at less than half the cost in a socialist society. Property rights are something which works AGAINST innovation implementation, as they restrict the use of an idea.

A less developed country growing faster than a developed one, let alone faster than the global leader, is not impressive at all. In the postwar era most Western European economies grew faster than America as well, and some faster than the USSR (e.g. Portugal...until the Communist coup). After converging their growth rates leveled off. Soviet growth rates leveled off well before convergence their economy suffered from severe shortages and low quality goods, hardly an impressive showing. In fact, during the 1980s the United States grew faster than the USSR.

This is partially true, Russia started from a low base, but it nearly caught up with America.

The rest of your post is democracy masturbation which doesn't even deserve a response. Lenin is a great democrat now?

Russia was highly democratic in 1919. But the other parties were treacherous, and so were gradually banned. The main coalition partner, LEFT SR party, walked out of government in 1918 over Lenin's plan for peace.

What happened was all the other parties became saboteurs and fought with the Whites and so on. You dont grant your enemy in a was democratic rights, they are fighting you. But many of their members, and some of the anarchists, joined the Bolshevik party. That is how the one party state evolved. The Mensheviks werent banned until 1921. As I say the main other party WALKED OUT.

And after 1921 here was just one party, the problem was that thousands of careerists flooded in, the enemy really, more or less. The old elite from the Tsar's regime, rotting away the party from the inside.

Lenin and Trotsky warned that the party was in danger of bureaucratisation, and not just the party. Lenin could see that the communists were being fooled by the bureaucrats and specialists. He could see a dander of the Bolshevik culture being overwhelmed by petty bourgeois culture.

When he died and Trotsky was ill, Stalin simply went with the flow. Socialism is impossible in a backward country in isolation, and the German and Hungarian revolutions had been crushed, so degeneration was more or less inevitable. Stalin just went for it in a particularly brutal way, especially after 1928 and even more after 1934 when he became a fully conscious anti-socialist and ordered the Comintern to suppress revolution world wide, starting with Spain.

And really, could you socialists please stop whining about the Cold War? You lost, get over it. States are not magically going to stop competing for influence and power because of your precious socialism.

I lost? You think I supported Russia? Critically maybe, but calling for a political revolution.

Truman started the cold war purely to have a reason for military intervention. Stalin was trying to stop all the revolutions in Eastern Europe (and failing). He wanted to be America's ally.

If you dont understand this, check the facts. Stalin failed to stop the Greek Communists battling the royalists, so Truman gave up on him.

The reason these countries had revolutions when Stalin wanted them to be capitalist is because the masses were rising up in every country after the war, and for other reasons. In many countries, the capitalist class had collaborated with the Nazis, and they were rejected by the masses as a result. In Poland they had not collaborated, but been almost wiped out by the Nazis.

In backward countries, socialism is impossible (if they are isolated), but also you find capitalism is not possible either, so they get stuck in a sort of semi-feudal rut, dominated by foreign capitalism. The capitalist class is just too small and feeble to play an independent role, to break with feudalism and to fight on foreign domination.

Ignoring the vast wage differentials between the countries, do you think lifespan only relates to healthcare?

The fact is they do a good job on limited resources. They have more doctors per head than America.

Yes there is more than just healthcare. In America the lovely capitalists target children with cunning advertising for junk food and sweets and fizzy drinks. The junk food is deliberately made easy to swallow with hardly any chewing (adult baby food) and is as addictive as heroin, causing rats to overeat even when subject to electric shocks.

@DaftPunk - I will reply to your post in a sec but it seems to come from a 'watered down' democratic socialist perspective, shall we say. When I refer to socialism, I am usually referring to the revolutionary Marxian model. Also many of those citations (e.g. healthcare) are examples of social democracy, I would say. To add on to Dave's points about healthcare, I would also point out that (a) I trend towards an NHS (though I am open to alternatives), (b) US healthcare is massively subsidised - it is hardly the free market healthcare its cracked up to be, (c) you are effectively saying that 'well public provision in a given service is more desirable than private provision therefore public provision is most likely more desirable all around the economy' - which isn't really very sensible.

I am a revolutionary Marxist actually. Yes British healthcare is social democracy, but its an example close to socialism you might say, something that people can understand as a concrete example. What percentage of America's healthcare is private?

What I am saying is that a democratic planned economy would be more efficient, and that it could ensure distribution was much more equitable.

I support the nationalisation of the top 200 companies in the Uk, or top 500 in America. Without compensation unless need can be proven.

I would want to eliminate unemployment by creating millions of jobs, and when everyone had everything they needed, and production was running smoothly on green energy, cut the working week.

First task- retool the weapons factories to make stuff for green energy and green public transport. Build millions of desperately needed houses. Make them energy efficient and build them to last, not like the shit the capitalist firms put up.

[WorkandUnite]

How is the socialist government going to allocate scarce economic goods without a mechanism such as money prices to co-ordinate the factors of production and provide the producers with market signals to indicate the most efficient recipe of production?

Socialism has money and operates similarly as a market, except that a market operates on what is of market value, rather than what is of use-value. Economic planning assesses the needs of a population and allocates resources in order to meet those needs.
WorkandUnite wrote:
How do they intend to increase internal pressure within the co-operative firm to force the producers to allocate their resources (namely investment) more efficiently without the test of profit v loss?

There is no private investment in socialism. The people will decide what is valuable in order to produce according to use, not market trends. Workers work in coalition with a syndicate or soviet to determine the appropriate "investment." Profit and loss is not important, because needs will be provided, and sustainability is really more important then profit per se.
Quote:
How does the socialist government expect to meet consumer standards when public investment in projects are objectively determined by purely rational, scientific and algorithmic procedures rather than subjectively determined by ordinally ranked subjective preferences of the consumer by the law of diminishing marginal utility (as would be the ultimate determination for the allocation of goods in the market)?

This isn't true at all. The only difference between capitalist standards and socialist standards are whether that consumer standard actually improves the product dramatically for everybody, or whether it's a market scheme to make other technologies obsolete. It also prevents companies from creating a defective product for the sake of market incentives (like the everlasting lightbulb).

Quote:
How does the socialist government expect to measure the embodiment of labour within a commodity by which they hope to allocate labour vouchers during the transitional phase to communism (the dictatorship of the proletariat) and again, how does this objectively determined whim meet the efficiency of money (the equilibrium price which can only be objectively determined organically in the market place)? What are your thoughts on marginal utility theory?

Socialism operates on a monetary system.
Quote:
If you are a socio-anarchist, then why do you honestly believe the community board could centrally plan an economy on a more localised level any better, regardless of whether or not you believe the process would be non-hierarchical? And why do you not believe it would not become hierarchical and authoritarian given the necessity for specialisation?

Alienation must be confronted before any classless stateless society can exist. This takes another thread to discuss, because it's not about "hierarchy or authoritarianism", those are social constructs that have risen with the concept of private property, not natural human divisions.


To all: why not just drop post-scarcity socialism and use the more realistic (and persuasive) arguments as proposed by market socialism (if that is not you're stance)?

Realistic by what means? Socialism is realistic, 1/3 of the world was socialist at one point in time. Scarcity is a result of the market, not a reaction to it. Just because the resources aren't sufficient to provide for a pathetically wealthy individual to continue his lifestyle, doesn't mean that socialism won't provide for the needs of others. It very much will, has, and does even today. Russia was better as the USSR then before or after. Literacy rose, mortality rate decreased, and standard of living rose as well. After its collapse, Russia's standard of living, literacy, and mortality rate worsened. Just because the country wasn't as "middle class" as the US, which benefits from imperialism, does not mean it was better than the government before it.-

This is from a member of Socialist Empire.

[Sceptic]

Good answers from WorkandUnite.

Socialism has money and operates similarly as a market, except that a market operates on what is of market value, rather than what is of use-value. Economic planning assesses the needs of a population and allocates resources in order to meet those needs.

Ok, I was specifically referring to post-scarcity socialism in the post, so socialism at the stage where money has been abolished in favour of labour vouchers during the transition phase to communism but I will answer this anyway. The Marxian concept of ‘use value’ is somewhat vague and abstract in itself; by Marxian analysis, the commodity in the market has ‘use value’ in so far as it is useful. It holds true that when a commodity is the object of a voluntary exchange it must be useful to the purchaser, ex ante (i.e. before the exchange is made). But there is no objective ‘useful’ or ‘not useful’. You are going to have to clarify how economic planning assesses and meets the needs of ‘a population’ (‘the population’ not being a homogenous entity in and of itself with each and every member having the same needs and desires). In a market, the commodity is simply useful if it becomes the object of exchange.

There is no private investment in socialism. The people will decide what is valuable in order to produce according to use, not market trends. Workers work in coalition with a syndicate or soviet to determine the appropriate "investment." Profit and loss is not important, because needs will be provided, and sustainability is really more important then profit per se.

Note that I made no such statement about private investment but investment itself, i.e. the setting aside of resources, signifying a forgo in present consumption, in favour of future expenditure on capital (capital being that physical entity used as a factor of production). Investment itself signifies a risk. Under socialism government intends to invest goods. Note that I made a reference to a ‘more [efficient] investment’. I believe that investment under capitalism (all things being equal – so there are, of course more than likely to be exceptions to this rule when other variations are taken into account) is more likely to be efficient because the producers (that includes the entrepreneurs and managerial elite) will have to gamble with their own savings.

Respectfully, profit and loss is very important. If the consumer considers the purchase of a consumer item more importantly than the purchasing power of their wallet in other fields, then they are likely to purchase that consumer item and make an intrinsic profit. It is helpful to clarify what is meant by ‘profit’; profit is merely the exchange of a less satisfactory state of affairs for a more satisfactory state of affairs. Thus in the former example, the consumer profits, since the consumer item is valued more than the price (or other goods forgone), ex ante and all things being equal (ceteris paribus). Thus, for the producer to increase his or her exports (an increase in money, signified by a forgoing of goods and services – hence exports), he must first please the consumer. Under socialism, and you proved this in the above quotation, the producer is no longer seeking to directly benefit the consumer (the only other person who is involved in the exchange, ceteris paribus) but to benefit a, quite frankly, bureacratic legislation of ‘[w]orkers in coalition with a syndicate or soviet’ who then ‘determine the appropriate investment’ on behalf of the consumer. Why, ceteris paribus, are these syndicates and soviets of workers who are by no means involved in the exchange between the producer and consumer in a stronger position to determine what is right for the consumer? I am not saying that they are never in a stronger position, by the way – this depends on the knowledge they possess - (not a free market Libertarian by any stretch) but I value the importance of the gain made from voluntary interpersonal exchanges most highly. Sometimes, in some industries there is a greater information assymetry and the producer has significantly knowledge about the product than the consumer – which can most certainly warrant government intervention. Also, could you please define sustainability and clarify how it is not a form of profit?

This isn't true at all. The only difference between capitalist standards and socialist standards are whether that consumer standard actually improves the product dramatically for everybody, or whether it's a market scheme to make other technologies obsolete. It also prevents companies from creating a defective product for the sake of market incentives (like the everlasting lightbulb).

How will you measure the improvement of the product ‘for everybody’? Also, people do indeed indirectly benefit from catallactics since the production of wealth (by the way, ‘wealth’ can only be produced from a voluntary interpersonal exchange, since there is no objective way of determining whether government produces ‘wealth’ – that is whether it has a value by the individuals involved in the process). In some ways I agree with the rest of the post since there are certainly problems with information asymmetry. All I can say is that there is also information asymmetry between government and people which won’t go away with socialism. Finally any democratic accountability (labour unions, syndicates, etc.) of government in adjusting the market to meet ‘consumer standards‘ is likely to create greater problems since government is not the consumer.

Another point is that, the business is accountable to its share holders. To become a share holder, you must first purchase equity shares (i.e. shares in the ownership of a business) – which raises invesment funds for the business in return for a long-term source of dividends or speculative gains in later selling the shares at a higher price on the market. This means that the profitability of the business (and remember the business can only be profitable if it meets consumer standards) is determined by the shareholders – who are gambling with their own money. When a public actor invests in a project, they are gambling with tax revenues so they do not have the same interest to meet standards.

Alienation must be confronted before any classless stateless society can exist. This takes another thread to discuss, because it's not about "hierarchy or authoritarianism", those are social constructs that have risen with the concept of private property, not natural human divisions.

Hierarchy and authoritarianism are indeed social constructs but they are naturally reocurring and self-evident regardless of any attempts at social engineering. I find any notion that communism is stateless to be an absurd concept given the central planning powers granted to local governance. The authority granted to the capitalist by the wage labourer is voluntary (albeit restricted by ‘coercive’ physical restraints on the wage labourer by his environment – but it is false to try and distinguish a form of positive ‘liberty’ that relates to a physical mastery of one’s environment, in my opinion) and, in turn, the capitalist is accountable for by the consumer in some way.

Realistic by what means?

Realistic in that factors of production need to be co-ordinated by self-interest and equilibrium market prices as a simplified and epistemological substitute for any lack of knowledge on behalf of the producer about the market in a broader context. I am saying that market socialism is more realistic than post-scarcity socialism. But it would still be restricted by lengthy bureacratic processes involving unions & consumer goods, overarching regulations, malinvestments by the public sector and (lack of) free movement of labour between syndicates and lack of entrepreneurship as well as lack of confidence in private investment due to excessive power to strip away potential gains.

Socialism is realistic, 1/3 of the world was socialist at one point in time.

Could you clarify the statement ‘1/3 of the world was socialist at one point’. Anthropologically, tribal communities had a more simplified economy than modern day societies (see exchanges with the user Tainairi88).

Scarcity is a result of the market, not a reaction to it. Just because the resources aren't sufficient to provide for a pathetically wealthy individual to continue his lifestyle, doesn't mean that socialism won't provide for the needs of others.

I find excessive materialism disagreeable also. But to become that wealthy, you must have either engaged in fraudulent or otherwise criminal behaviour (which needs to be dealt with in a court of law) or you have produced wealth that was beneficial to other people who were willing to part with money (remember that money is just numbers printed on a piece of paper backed by wealth – whether goods or services). Also, many rich people actually store works of art and valuable luxury items and keep buildings and other capital investments as a source of wealth that is not inflationary (like money) and can be put to good work by future generations. Are their intentions noble? Its hard to say but pursuing self-interest can be of use to others in any case.

It very much will, has, and does even today. Russia was better as the USSR then before or after. Literacy rose, mortality rate decreased, and standard of living rose as well. After its collapse, Russia's standard of living, literacy, and mortality rate worsened. Just because the country wasn't as "middle class" as the US, which benefits from imperialism, does not mean it was better than the government before it.

Lets not forget that beforehand, Russia was a feudal empire (so I would expect its condition to improve), that during its years of ‘socialism’ it was (as Dave correctly identified) a developing nation and that, actually, markets were actually used after 1921 (though heavily regulated). Also, it does not surprise me that such a turbulent collapse of the Soviet state would generate great economic and social unrest for many years to come, just like the French Revolution.

[daft punk]

Socialism is realistic, 1/3 of the world was socialist at one point in time.

No country has ever been socialist. Lenin said Russia would only be socialist in their children's or grandchildren's times, and that it would need help from socialist revolutions in more advanced countries. Unfortunately the 1919 revolution in Germany was crushed, and I think Stalin played a role in betraying the 1923 German revolution. Russia was an isolated backward country, so socialism was impossible, so after Lenin died and Trotsky elbowed to one side, the revolution degenerated as the Russian middle class took over the party and the bureaucracy.

If a third of the world had been socialist, then socialism must be rubbish because it didnt spread and survive.

Truth is, people like Mao and Castro never even intended socialism. And Stalin fought AGAINST socialism/socialist revolutions around the world.

[Phred]

No country has ever been socialist.

Really? I guess that could be the case, since no country has ever been 100% scrupulously Laissez-faire Capitalist either. The USA is the country that came closest to 100% Capitalism, even if only for a while. Of which country could the same be said on the Socialist side? What is the Socialist analog of early USA?

I've always been curious about Socialists' views on this question. Would you guys help satisfy my curiosity by answering the following question?

Stipulating that no country has yet been 100% scrupulously Socialist, which country in your opinion came closest to that ideal, in the same way that early USA came closes to the Capitalist ideal? Have there been any others? Have there been enough that you could list in order of fidelity to the Socialist ideal, say, half a dozen or so in descending rank? I pose these questions not just to daft punk, but to all Socialists who have been reading this thread. I'd like very much to compare and contrast the lists you each come up with. It should be an interesting exercise.




Phred

[Vera Politica]

Phred,

The majority of Marxists and socialists would not agree with Daft Punk on many issues -- this being yet another one of them. That no country has never been socialist is preposterous and you need not engage in a quarrel over this fact.

[Phred]

The majority of Marxists and socialists would not agree with Daft Punk on many issues -- this being yet another one of them. That no country has never been socialist is preposterous and you need not engage in a quarrel over this fact.

My bad. It was careless of me to presume that just because someone represents himself as a Socialist, he actually fits the necessary criteria. Seriously... I am not being facetious or sarcastic here, I really did make an unwarranted assumption that daft punk's Socialist credentials were unchallenged.

However, I am still anxious to learn which countries come/came closest to meeting the Socialist prerequisites. Clearly, if it is preposterous to say no country has ever been Socialist, then it logically follows that at least one country must be Socialist, or at the minimum must have been Socialist for at least some part of its history. Accordingly, let me modify my request to this -

Which countries in your opinion can/could properly be called Socialist? If there is just one which meets/met all the essential prerequisites, could you note it but also list a few others which come/came closest to meeting all the prerequisites? I pose these questions not just to Vera Politica or daft punk, but to all Socialists who have been reading this thread.



Phred

[Fitzcarraldo]

which country in your opinion came closest to that ideal

Prussia in the ethical, not economical meaning, 'came closest'.

[Eauz]

Hence I would say the debate should never be about attaining a qualitatively different Socialist or Libertarian society. They are chimeras, dangerous mirages cynically exploited by politicians. The Socialist mirage is well and truly dead. The Libertarian one is alive and kicking in America and may well ruin that country completely. The debate should simply accept the mixed market economy and argument should be focused on what combination of market mechanisms and public action will produce the outcomes we want (growth, social security, a safe environment, food security..).

Whatever the structural philosophy of society ends up being, I think that some drastic changes will be brought about in the next 10 - 20 years. The combination of market and government has shown that it can't fully function, through numerous booms and busts. Now that we have seen that governments are bailing out corporations, with our own taxes, who in turn pay their CEO's and others with that same money, while tossing regular employees on the street. In addition, the big 3 car companies received bailout money and were unable to save many of the jobs, but nevertheless, it still left some people wondering why their money bailed out a specific corporation, while they didn't bail out other industries? With more costs being put upon the general population, while the corporate taxes continue to go down, is only encouraging corporations to do what they want, as they know that they won't have to pay the costs, the regular employees will. No matter if one is a socialist, a libertarian or a liberal, in the end, you're pissed about how you are being asked to support higher costs of living and higher taxes, while those who can take on these higher costs are given the benefit. We've seen markets completely destroy savings and the instability has scared off the desire of investors. We are starting to see the reality of markets, that they are a structured form of dictatorship within our lives.