Socialism, Merits and Flaws

Discussion in 'Archive: The Senate Floor' started by Jedi Merkurian, Mar 20, 2009.

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  1. Jedi Merkurian Episode VII Thread-Reaper and Rumor Naysayer

    Manager
    Member Since:
    May 25, 2000
    star 6
    Alrighty then. This particular term has been thrown around a lot lately in the U.S., usually as a hue & cry against the policy direction of the current Executive & Legislative branches of the government. It seems like with every new initiative from the Obama Administration or Congress, there's a kneejerk reaction of "oh noes teh soshelizm" as though the dangers are completely self-evident. Call me clueless, but here's my question:

    How is socialism inherently bad?

    Now, for sake of full disclosure, I'm an Obama supporter and have been since the primaries. However, I'm not so far up his dookie chute that I consider him to be infallible. I recognize that it's entirely possible that some of the policies he's enacted will have utterly disastrous results.

    So let's talk about it. How is socialism good? How is it bad?
  2. Blithe Force Ghost

    Member Since:
    Jun 24, 2003
    star 4
    First, I think that before we discuss socialism, we need to be sure we understand what socialism really is. We need a good sense of the definition, or at least the spirit of the definition.



    Obviously, the exact definition can very. This is in no small part do to the evolution of socialism over time.

    The general premise, however, is that a collectivist state will forego self-interest in favor of a statist allocation of resources. The needs of the many are important as focus of the economic and social structure. In theory, one can be certain that certain needs of the general welfare will be met, at least to some degree, through this system.

    In that sense, the good thing about socialism is its inherent concern for the welfare of its population as a whole. The concern of whether or not it is the state's ethical duty to look after its own is irrelevant; it the fact that it does provide where there are needs that is the key focus. Many enjoy the benefits of state-provided health care, retirment funds, pensions, transportation, and more even in the U.S. It is understood that these luxuries will be magnified in a socialist economy.

    If well funded through high taxation, especially of corporate profits, the proper kind of welfare state can be, in theory, provided to the people. There are many examples around the world of this approach seeing some level of success. Given the enormous cost of such social needs, however, the opportunity cost of a largely socialist system is a large standing military. One cannot have both guns and butter, right? That might be the first detriment in the system, depending on the situation.

    Socialism's biggest threat, and depending on the type of collectivism being implemented, and its biggest failing, is the inability to efficiently allocate resources.

    The invisible will allocate resources efficiently throug the price mechanism, but dealing with the short-term pressures of this correction is often something that statist structures are not willing to cope with, resorting to market interference, which can be harmful.

    Price controls, if carelessly used, almost always result in shortages or a surplus. The most common problem with wage controls -- and this can be seen today, to an extent, with the minimum wage -- is that they usually create a higher inflation rate, and additional unemployment in the overall economy.

    Lastly, the most commonly understood danger is excessive taxation, the price tag of the so-called "welfare capitalism," which can stifle economic growth, and if severe enough, destroy incentives, and prevent certain markets from even developing properly.

    These issues obviously vary from government to government. Some may be more or less prevalent then others.
  3. Ender Sai Chosen One

    Member Since:
    Feb 18, 2001
    star 9
    Of course socialism fails to allocate resources effectively. It denies the fundamentals which allow for growth and progress. Firstly, it's not able to be meritocratic. Secondly, by having the state in control of the means of production there is no scope for competition. Thirdly, by the second point, incentives are gone because there's no reward for taking a risk and you can't have incentives in socialism because it becomes unequal. Finally, risk is minimal because of the need to maintain the status quo.

    Socialism is predestined to failure, because those who advocate do so because they don't understand capitalism and what they know scares and concerns them. Humans are individuals and need to be given the freedom to flourish accordingly.

    ES
  4. DarthLowBudget Force Ghost

    Member Since:
    Jan 17, 2004
    star 5
    I also think its important to point out that Obama's policies aren't actually "socialist", if anything they're just examples of social democracy.
  5. Ender Sai Chosen One

    Member Since:
    Feb 18, 2001
    star 9
    No, they're not, and really Americans need to experience the world more if they think they are. Obama's just a left of centre leader, he's not a socialist, a communist, or a porn star.

    ES
  6. Game3525 Force Ghost

    Member Since:
    Jun 25, 2008
    star 4
    But that is not what Rush tells me!:(
  7. Ender Sai Chosen One

    Member Since:
    Feb 18, 2001
    star 9
    Rush and his dittoheads ought not use words they don't understand.

    ES
  8. DarthLowBudget Force Ghost

    Member Since:
    Jan 17, 2004
    star 5
    Maybe I should have said "closer to social democracy". Obviously on the spectrum of world politics, Obama's not very leftist at all. That fact just makes the "socialism" attack even more sad.
  9. Ender Sai Chosen One

    Member Since:
    Feb 18, 2001
    star 9
    Oh, for sure. I have a really handy internal mechanism which switches off my attention to a conversation the second an American says socialism. So much better that way.

    ES
  10. SuperWatto Manager Emeritus

    Member Since:
    Sep 19, 2000
    star 5
    I don't know, guys - I've always understood that when all production is in the hands of the government, it's communism; and that when you have a welfare state properly set up, that's socialism.

    And I don't know what's wrong with that... It may not be your personal preference, but it certainly is sustainable.
  11. GrandAdmiralPelleaon Force Ghost

    Member Since:
    Oct 28, 2000
    star 6
    I like the way E_S has this idealized version of capitalism in mind, and thinks that socialism is full of flaws but capitalism isn't. People need to flourish, lol. As if the free market is 'free'. ;) I'll propose that humans are fundamentally not 'individuals' in a strict anarcho-capitalist interpretation, but in reality are social animals that will always form collectives. Capitalism will never work when the playing field is so uneven, neo-liberalism ends in an exploitative system. Foucault also springs to mind, thank you for redestributing my time, baby.

    EDIT: Also, communism would be that the control of production is in the hands of the workers ( and would be a stateless society actually). Even the USSR never claimed that they had reached the 'stadium' of communism. If I remember correctly, they only got to the stage of 'advanced socialism'.

  12. Ender Sai Chosen One

    Member Since:
    Feb 18, 2001
    star 9
    You understood wrong then, Superwatto. Sorry.

    ES
  13. SuperWatto Manager Emeritus

    Member Since:
    Sep 19, 2000
    star 5
    I guess. Am I confusing it with social democracy, or with the social democrats' sell-out of their ideals in the Nineties?
  14. Ender Sai Chosen One

    Member Since:
    Feb 18, 2001
    star 9
    Well if I have an idealised version, you have a complete misunderstanding of it GAP.

    Please explain how the points I raised earlier are not valid, and use examples. Not rhetoric.

    ES
  15. Sven_Starcrown Jedi Youngling

    Member Since:
    Mar 10, 2009
    star 4
    ,,I'll propose that humans are fundamentally not 'individuals' in a strict anarcho-capitalist interpretation, but in reality are social animals that will always form collectives."

    social animals ?

    Predators?
  16. GrandAdmiralPelleaon Force Ghost

    Member Since:
    Oct 28, 2000
    star 6
    Please explain how I have a 'complete misunderstanding' of capitalism. You're talking about an idealized version of capitalism that doesn't exist in reality, one that can be put on par with communism. Works in theory, maybe. In reality, there's no such thing as a free market, and the ability to 'take risks' as you so eloquently put it, is not given to everybody. I know the great 'liberal' dream ( erm, don't confuse this with O'Reilly liberals) is a level playing field after which everything is played out correctly. But studies have shown that social mobility, in the US as in Europe (as down under) is hardly what one can expect from a risk-gain society - it's pitiful really-. Higher education isn't accessible in such a way that everybody gets a fair use from it. Basic services aren't provided at an equal rate, so you have an intrinsicate unequal starting position that doesn't allow for the 'free market' to excerise any of it's 'correcting' features in a way that advances society as a whole.

    Not that I'm defending 'socialism' as such here, I would however agree that in a parliamentary democracy the 'socialist' wing would need to be sufficiently strong to counter-act the gravest excesses of neo-liberal policy, e.g. healthcare, affordable schooling and housing, etc. I think poignant examples of the benifits of keeping the divide small, are to be found in the Scandinavian countries.

    The tired argument that posits the need of 'competition' or 'gain' for progress, to me, sounds rather hollow. It's a complete reduction of humanity to its worst aspect, that gain can only be made at the cost of another. Not to mention that coupling 'innovation' to 'material gain' is in reality hardly fair.

    I'd like to scrap the 'predator' metaphore. Please stop, I have to hear that enough coupled with the phrase 'Islam is ...'. It's not all that deep, and the idea that humans are in se, individualistic and ego-centric is a tired one. Obviously, if you're going to reward those attributes, they're going to come out sharp. Economic reduction, how very Marxist of you, anyway.

    :0

    Please do, by the way, posit here your understanding of the intrinsicate qualities of our current economic system. Or are you waxing about the just as utopian anarcho-capitalist / Libertarian school of economics?

  17. Lowbacca_1977 Force Ghost

    Member Since:
    Jun 28, 2006
    star 6
    I'm reminded of the story from a few weeks ago where Obama was asked if he was a socialist by a reporter from the New York Times, and he actually called the reporter back to try to further answer the question (without, imo, answering the question) as he tried to distance himself from the term.
    http://www.nytimes.com/2009/03/08/us/politics/08callback.html

    Personally speaking, while I tend to be very opposed to gov't trying to run industry because I think it leads to some of the problems that Ender's already mentioned, I think that the one exception I would hold is that I do support the government providing education. I'd like to see a school voucher added in so that there's competition as well, but I do think that providing everyone with an education is key (even though there are som major failings with how its happening) and I generally take the view that by giving everyone access to an education, it then opens the door to improvement and what they do after that education (or if they opt against the education) is their choice and its up to them to deal with the fallout.
    Granted, I do also take the view that while I think a basic college education should be available to everyone without it requiring debt (by basic, I mean, a bachlor's somewhere. Not that you can go to Harvard for free. Or even something state run like UCLA) but by restricting what majors it applies to. I think if its a useful major, its a net good to support the people doing those majors, but I don't see a need to do the same for majors where there's not neccessarily a societal need for those majors.
  18. LostOnHoth Chosen One

    Member Since:
    Feb 15, 2000
    star 5
    I know where you're coming from Watto. I was thinking a similar thing - perhaps what we are referring to is a form of democratic socialism, like all of the European countries that have elections and private enterprise etc, but also have high taxes which go towards subsidizing education, medical care, unemployment benefits etc. I guess any left wing type political party (the various incarnations of the Labour or Labot party, democratic social parties etc) espouse a form of socialism, but perhaps not exactly what is being discussed in this thread.
  19. Ender Sai Chosen One

    Member Since:
    Feb 18, 2001
    star 9
    I've no need, you've very eloquently shown it in the text that follows, which smacks of someone who's not only never worked for a company in their life but takes a perverse pride in not having done so int he same way someone can never try, say, an exotic vegetable on the grounds 'they know they wouldn't like it.'

    Swanning about a campus reading the works of others who swanned about campus for longer than necessary is also a poor substitute for reality and experience.

    Of course it's not given, this isn't feel good hug time at kindergarten. If you want the reward, you have to make the sacrifice which I understand isn't to your way of thinking but I fail to apologise for this. Look at any number of people who have made themselves rich through business and find me someone who had everything handed to them on a plate.

    It doesn't exist. They took the risks, they put it on the line, and they profited. It doesn't always happen, of course, but nor should it. Again, the real world, not campus.


    This would be an example of the "not understanding capitalism" thing, right here. It is a level playing field that doesn't ultimately pull the rich down and prop the poor up. Opportunity is based off circumstance and luck which are, more often than not, colourblind and class insensitive.

    I specifically requested no rhetoric.


    And yet if you contrast what neoliberalism and socialism have done to enhance the quality of life globally, you'll find socialism heavy on the talking but light on results where neoliberalism has employed capitalism to increase the standard of living not just in major emerging, transitional economies such as China and India but has been the greatest contributing factor to the normalisation of the gini coefficient.

    This is where I think you fail hardest, and your complete lack of experience in the world outside a sheltered and slanted viewpoint shows. As well as your complete misunderstanding of capitalism.

    Here's how it works, and yes I'm using basic terms but that's because these are basic concepts you should know but didn't because the course in Congolese Liberation Theory seemed so much more radical...

    Th
  20. Ender Sai Chosen One

    Member Since:
    Feb 18, 2001
    star 9
    Linked to innovation, and a critical failing of socialism (by holding the means of production) is the issue of capital raising. A stock market is completely contrary to socialist principles, so raising capital has to come from the state and tax rather than from institutional (primary market) and individual (secondary) investors.

    Once you have an IPO and take a company public, you're also enhancing the prospects for wealth creation amongst the general populace who will be exchanging trading shares (and other financial instruments). Again, risk and reward come into it - though GAP, I dare say I could guess what you think a stock market is for, and how wrong that guess might be - you put up $10,000 of your savings for shares, you expect a positive return.

    You simply cannot achieve this in a socialist system, because you are effectively subsidising businesses which make profit essentially redundant. Citizens therefore can enjoy uniform levels of mediocrity together, hooray!

    ES

  21. GrandAdmiralPelleaon Force Ghost

    Member Since:
    Oct 28, 2000
    star 6
    You're so cute when you you get condescending. First of all, I actually have worked for a couple of companies before, even if I do study - Although I can't say it really helps, just confirms my Society of the Spectacle viewpoint, really-. Not to mention that I've got quite a few friends that are either your classical proletarian (I love to use this term, even if Marx was so wrong about 'm) or your classical entrepreneurs (Omg, I actually do get around and off the Campus). Secondly, aren't you a government employee? What is your understanding of the harsh realities of the market? Your text by the way, does smack of somebody who got everything handed in life, but doesn't realize that not everybody gets the same lovely chances they got. Maybe you should have taken that class on Congolese economics.

    Again, outside of your little circle of friends, there seems to be a world of people that do not have the ability to even try and take these risks. Obviously, you aren't familiar with them. Ever spent some time in the real third world? Of course you haven't. See, I can make presumptuous claims as well. Sweet. In reality, and this has been proven by study, the amount of people that actually 'get rich from the bottom up' are exceptions. This has nothing to do with idealized 'hard work' my friend. Or taking the right opportunities. You really think that the correct schooling and netwerking system is open to everybody? Hah, you're an even bigger dreamer than I am. Most of the managers of companies got everything handed to them on a plate. I know that's not how you think it works, but in reality, that is the case. Social mobility is a sham. Why do you think that we haven't moved an inch in that area in 60 years of educative democratization.


    lol, it's not a level playing field if I don't start with the same oppertunities you do. The fact that you can't see that, does explain your ardent support.

    It's also very 19th century. Opportunity is based on the right connections, the right schooling and access to it. Maybe you'd know that if you had an inkling of the world that exists outside of your social circle.


    Oh boy, if you think that's rhetoric, you should read my articles in the magazine I am an editor of. ;) I wasn't even trying there. Can I interest you in some texts by Vaneigem, maybe?


  22. Gonk Jedi Grand Master

    Member Since:
    Jul 8, 1998
    star 6
    Please note where applicable if these questions already came up, but in response to Ender_Sai:

    Of course socialism fails to allocate resources effectively. It denies the fundamentals which allow for growth and progress. Firstly, it's not able to be meritocratic. Secondly, by having the state in control of the means of production there is no scope for competition. Thirdly, by the second point, incentives are gone because there's no reward for taking a risk and you can't have incentives in socialism because it becomes unequal. Finally, risk is minimal because of the need to maintain the status quo.

    Firstly, I disagree that socialism is inherently not able to be meritocratic. It is still capable of this through freedom of the press provided they have access and capacity to critize the Socialistic institutions and those in them. And this is also capable through arms of the press that are themselves funded by the government, provided they are given inependant reign.

    The other points 2, 3 and 4 I grant but with the following caveats:

    1. There are areas in society where such things are not desirable. How and where are things for people to decide themselves but they may or may not apply to Health Care, Power Generation, Law and order (via Military or Police), and other examples.

    2. Capitalism without certain government controls is just as self-defeating. The problem with this is that as obvious as they seem, those fighting for 'socialism' in the United States, at least, find that they're simply not obvious, or at least that they're not expressed as much by thier opponents. These would include:

    a) "Dickensian Economics": This is where common laws we have today don't apply. They range from things as simple as child labor laws to the ability of workers to unionize. Without some of these abilities, the middle class suffers because it shrinks.

    b) Lack of professionalism not mandated by success: This is not quite the same as the above, and can be thought to apply to the current mortgage crisis situation. The very atmosphere of competition in many way, without proper regulation, CREATED this situation. My own country avoided it and -- although they might stipulate it was government regulation -- much of it was through a lack of competitory nature with the banks themselves. The government regulations were more a result of the Banks failing to push against them than a wise government decision to keep them. And yet, these regulartions can be said to have played a role.

    Even without organizations precisely breaking the law -- or in fact only taking advantage of those who, by standards of the marketplace have only themselves to blame -- the market can still put itself at risk in its own search of profit without government controls that have long-term goals in mind. So even taking away lawbreaking and all notion of moralistic behavior, without forms of regulation there can still be scenarios where the persuit of profit becaomes self-defeating.

    c) Danger of Monopoly: The market does not self-regulate again Monopoly, and Monopoly itself causes many of the same lack of competition and meritocracy, because the weight of monopoly can crush competition before it has a chance to reasonably compete, whether by driving them out of business or by buying them out (the former has no winners other than the Monopoly, the latter only a couple). Without a government presence to force the breakup of a Monopoly, this becomes an inherent danger.

    There may be other issues, but the three above are most prominent in my head at the moment.
  23. anidanami124 Force Ghost

    Member Since:
    Aug 24, 2002
    star 6
    Competition is when Company A and Company B produce the same or similar good and compete to make theirs better for the consumer on a variety of factors. This is where innovation comes in, because you are looking for an edge on your competitor. Again, you're free to disagree so long as you accept you're wrong to do so.

    In order to either diversify the good or service you provide, there's an inherent risk which is why there has to be a greater reward. This is why innovation needs an incentive like material gain. Unlike in the realm you inhabit, with it's carefree and irresponsible simplicity, real lives are at stake in companies - the jobs of employees, of other companies which depend on your business, shareholders etc - so it's less of an insolated splash and more of a series of consequential ripples. So if you gamble you need something to pay off those people having been put at risk etc.


    This may very well shock you E_S but I agree with ever thing you just said there. ;)

  24. Gonk Jedi Grand Master

    Member Since:
    Jul 8, 1998
    star 6
    The thing is though that the model of competition and innovation works very nicely for a lot of industries -- the IT industry, telecommunications, raw materials, luxury goods, all sorts of things. But it breaks down when you start to get into the realm of what people consider "essential services".

    Earlier I gave the example of Health Care, Public Safety and Power Generation. Another example might be transportation infrastructure.

    In some cases -- such as in the case of public safety -- government monopoly is almost entirely mandated in all cases: and to the extent it isn't in that case extends only to proponents of the right to bear arms. In others it's highly used by most countries. In others a government branch is built in (News Services for instances like the BBC and CBC) to exist alongside the private sector, though without the intention to compete.

    What do you begin saying when one person starts getting a better quality of an "essential service" than another person? and what do you begin saying when those essential services become scarce? What are you advocating as a logical end?

    If it's not an essential service, well then all is well and good. My computer monitor or radio don't have to adhere to socialist principles or anything. And I think the default position on any industry has to be the capitalist marketplace.

    But it's not like we can just pick one or two industries and throw the rest of them into the stock market.
  25. Ender Sai Chosen One

    Member Since:
    Feb 18, 2001
    star 9
    I'm an investment banker GAP and have been for a year now, as the profile indicates.

    So having seen managers who didn't get stuff handed to them on a plate, I'm going to go with my original assessment - you're just simply too inexperienced to comment and are basing your assumptions - which is all they are, albeit heavily rheotical ones - on what someone else has told you to think.

    And by the way, working for companies doesn't mean asking if someone wants fries with that.

    Gonk, to a degree I concede you're correct on point one but even still, if the merit is really just the allocation of praise for which a company can bask for its socialist goodness, is it really a meritocracy? Can you have a meritocracy that's inherently fair, because even if the meritous acts/behavior/outcomes were justly and fairly achieved the allocation of merit ends up being a preferential allocation which is inherently un-socialistic in nature.

    You're correct about the need for certain non-profitable essential services to be provided but this is where we thank JS Mill for taking the redeeming qualities of socialist thought and ditching the idealised rubbish which has no place in reality.

    I agree to a point about monopolies although in pure capitalism a monopoly couldn't exist because of pure competitive theory. This is of course only in theory.

    Power generation I'd argue would be better off completely de-nationalised to allow for competitive growth in alternative energy markets.

    ES
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