"Deep" thoughts on Socialism and Capitalism... (Split from retux thread)

[Caine]

Minimum wage, minimum pension and/or minimum subsistence income would be good indicators...

If you mean guaranteed minimum wages, enforced by law then there is an important downside to that. A minimum wage puts up a major threshold to start working. It creates an artificial barrier for human employment which drives up unemployment.
Also, cost of living needs to be factored in, so these metrics would need to be normalized to purchasing power. Currency itself has no real value, it is an enabler to exchange things that do.

I consider for example "access to free health care" and "access to free education" benefits that by their very existence count towards improved standard of living.

Very good point. Though health care and education are far from free (as in beer). In my opinion access to affordable (basic) health-care is more important than free health care in general.

I also question to what degree this health-care should be available. It sounds harsh, but should a society finance super expensive treatment which extends someones life expectancy from one to two months.

I think not. If a person can personally pay for it or can freely convince others to pay it for them then there is nothing wrong with it.

In other words, I have nothing against voluntary opt-in social democracy-like constructions. It's when it is imposed that I start to have doubts.

 

[comradekingu]

[citation needed] Where is your data from?

You could just as easily say having people work in dead-end jobs for no pay means there is less incentive to automate them.

There are real experts who decide who lives and dies in the real world of how hospitals are run. Free service doesn't mean free bar.

Social democracy is opt-in. Unless you somehow remove yourself from what makes it democratic.

Without a minimum wage and the ability to "convince others to pay" you round up quite a few individuals whom I'd like to know your thoughts on.

 

[Caine]

[citation needed] Where is your data from?

I assume this refers to my statement on minimum wages. It is a mental simulation using supply and demand. If some piece of work needs to be done but the minimum wage is higher than the viable market-price of that product than the product is not economically viable and thus will never make it to market.
Likewise, creating technological innovation to automate production of an unmarketable product is risky. In the Netherlands most people seem to play it safe. Startups are not really appreciated here and people running their own businesses are viewed by many as anti-social bastards. The US climate is quite different from that.

You could just as easily say having people work in dead-end jobs for no pay means there is less incentive to automate them.

You make it sound as if people are forced to take dead-end jobs. They are free to quit them, just as they are free to start for their own. Perhaps I give people too much credit and should just assume that the majority are a bunch of incapable idiots, but that's a more glum view on humanity than I prefer to take.

Social democracy is opt-in. Unless you somehow remove yourself from what makes it democratic.

I don't understand your statement. A social democracy is not an opt-in, you are born into one. At no point do you have the right to opt-out and fend for yourself, since it cannot exist without roaming off the income of all those who would opt-out if they had the chance. Democracy is dictatorship of the majority unless you have a very, very carefully crafted constitution to guard against wrongful ruling. I'm not so convinced that we do.

Without a minimum wage and the ability to "convince others to pay" you round up quite a few individuals whom I'd like to know your thoughts on.

Round up? I'm not exactly sure what you mean here. I think you are asking what to do with people who remain unemployed and cannot cater to themselves.

So first of all, social security is nothing more than state-run insurance against loss-of-income. This can be handled through a free market mechanism and if anyone ever worked before he could have insured himself for such cases (failing to do so means accepting the consequences). Second, if you are on the streets you would have to rely on charity for survival (or be part of the social opt-in sub-community which will exist if all the people are so social as they claim to be).

<edit>Just ran into this interview of Penn Jillette, which seems contextually relevant.</edit>

 

[bzar]

Though health care and education are far from free (as in beer).

Do you mean they always have associated costs? Sure, it always costs at least time, materials or money to do anything, but the point is if the cost should be direct. Libraries offer their books for free though they are not free to run. People accept the associated costs because there's value in removing consideration for money for basic services. If, for example, there was a bill to offer basic level tax-payed broadband internet for every finnish home with a reasonable cost, like 20€ or 50€/year/person, I'd gladly pay that even though I'd probably still use a commercial service to get a better one. It would be great that any service could assume the availability of an internet connection, ISPs would have to compete against a 0€ basic-level connection, part of the money would go toward maintaining internet infrastructure and everyone here could share the benefits of the available services and information. There's value in raising the minimum bar.

So first of all, social security is nothing more than state-run insurance against loss-of-income.

It only seems that way if you only consider people that could afford such an insurance and don't consider the fact that insurance companies try to profit off their clients. A state run social security works to provide citizens a better minimum quality of life. An insurance company works to part people from their money on the gamble that they know better.

Try to insure yourself against unemployment and other things social security takes care of the second after you get out of school for the amount of money you pay in taxes at that time that goes to providing social security. I think you won't get a deal

 

[comradekingu]

If your matter of choice only exists on a personal level, you are still free to be a self-sufficient farmer.

The income you are allowed to have before paying taxes is also sustainable to make a living off.

On a bigger scale you need examples of why things are viable for the common man, to whom social democracy belongs.

 

[klapse]

The amount of economic ignorance here is depressing, but about average for a technical forum.

 

[bzar]

The amount of economic ignorance here is depressing, but about average for a technical forum.

So is the amount of smugness it seems

At least point to something specific as an example.

 

[Binky]

Plenty of people here explaining why extreme cases don't work.

Full-out capitalism tends to result in lots of powerless, overworked, underpaid pseudo-slaves to the super-rich minority.

Full-out socialism tends to result in people having no incentive to work hard, and low productivity (resulting in poor living standards)

The best approach is somewhere in the middle.

Where, exactly, in the middle is hard to say, and people will have different views.

In my view, the fundamental problem is that wealth enables higher-earning, creating a positive feedback loop. The job of a government is to dampen that feedback loop so that citizens gain weath and power in direct proportion to the amount (and quality) of the work they do. (People won't work without a reward)

Unfortunately, such a balance is extremely difficult to achieve.

 

[ekianjo]

Where, exactly, in the middle is hard to say, and people will have different views.

The balance is when you keep power decentralized.

Once you start relying on a central authority to regulate and control everything, no matter in which system you want to be, you slip easily to pseudo dictatorship where the marging to change things is extremely limited for common folks. That's why the best thing is to have a "weak" central authority, so that Freedom cannot be tampered with. 

 

[ekianjo]

Most of the social democratic parties -- e.g. (New) Labour, PS, SPD, etc -- have betrayed their original ideology and have been implementing neoliberalism with varying amounts of social rhetoric.   There are various other ideologies that are socialist. Besides the reformists, there are also revolutionary ideologies. I'm a democratic socialist myself.

For me what you say _wb_ is pretty strange. You are a person who understands clearly the benefits of FOSS and the philosophy behind it, yet when it comes to politics you are basically an advocate of dictatorship. And yes, I do not use that word slightly, because socialists of any style are all partisans of mighty Central State controlling everything and pushing their agenda to the general folks. 

It seems so much contradictory, I can't begin how much brain-washing you must have had in your political life to be able to handle such extreme positions when it comes to software and politics. And don't take this personally, I honestly think you are a good person and I really appreciate you being part of the Open Pandora community. 

This being said, you're not the only one. RMS is following the same tendency, leaning very much towards the "Red" side of the political spectrum while completely missing the point that he would never have had the freedom to develop the things he did in the kind of State he wishes to be in. 

No matter how you look at it, Socialism is not about Freedom. It needs to crush individuals to put its policies in place. And what follows (dictatorship, mass enslavement camps (Goulags), political police, no freedom of the press) are not "unintended consequences" coming from good ideals, they are precisely what is needed, in the very end, to achieve those "ideals". That is why there is no example of an actual, democratic socialist country.   

And oh, for the sake of the discussion, the world is not separated only between "Capitalism" and "Socialism". This is very reductive. "Capitalism" is FIRST an economic principle, not a political one (you can derive political principles from it but that's not the point of Capitalism in the way it's structured). If you want to talk about political ideologies, there are many different ideologies which are compatible with "Capitalism" and embed other ideals on top of that. Otherwise, it's like comparing an OS with a file system. You should be talking at the same level to have a proper discussion here. 

 

[DrHAX]

All I can say is after living in a city where people are over the top liberal to the point of having communist ideologies without realizing it (and glorifying the government in such a way as well) and seeing how much flak and issues are caused and how my once "home" neighbourhood is now collapsing due to the current amazing political shift that's focused entirely all on how unequal things are for people of colour, and how there's gonna be protesters there soon.... and how I'm realizing I truly hate our world global economy..

I realize deep down in side I would rather just declare F the world and acquire some land by a river and live of it, Yes i'd be reverting back to pre 1500's setting, more realistically to  almost viking era really,(maybe not I am rather mechanically inclined so I'd find a way to use said river for power...) but honestly with how much crap we put up with and how little reward we seem to get.. I'd rather just work my ass off gathering food for my little abode and go to sleep knowing I'm making my life with my own hands, rather then getting in debt and constantly worrying about money.

I used to be heavily involved in studying politics, economics and I understand sociological impacts and I see through many of the things... the sad thing is i could never do what I mentioned in the paragraph above because even if I acquired land such as I stated... I wouldn't have money and therefore I would lose the land due to not paying taxes.... We have to pay for the right to live, and I don't think any modern, past or present system will change that.

 

[Klumpen]

Plenty of people here explaining why extreme cases don't work.

Full-out capitalism tends to result in lots of powerless, overworked, underpaid pseudo-slaves to the super-rich minority.

Full-out socialism tends to result in people having no incentive to work hard, and low productivity (resulting in poor living standards)

The best approach is somewhere in the middle.

Where, exactly, in the middle is hard to say, and people will have different views.

In my view, the fundamental problem is that wealth enables higher-earning, creating a positive feedback loop. The job of a government is to dampen that feedback loop so that citizens gain weath and power in direct proportion to the amount (and quality) of the work they do. (People won't work without a reward)

Unfortunately, such a balance is extremely difficult to achieve.

+1

 

[klapse]

I will drop a bit of history here today....

And oh, for the sake of the discussion, the world is not separated only between "Capitalism" and "Socialism". This is very reductive. "Capitalism" is FIRST an economic principle, not a political one (you can derive political principles from it but that's not the point of Capitalism in the way it's structured).

Socialism - as promoted by the advocates thereof - also is an economic system: namely, central state control over the means of production. There is only one decider of what gets produced, where, when and how, for the entire nation.

At the onset of the 20th century, many economists were pro-socialist and argued that socialism could out-compete free-market capitalism. They claimed that this would be due to efficiencies of scale, removal of redundancy, elimination of profits and so-on.

The arguments promoting socialism as an economic policy were challenged on various grounds for decades, but finally were utterly smashed by Ludwig von Mises in 1920, when he published Economic Calculation in the Socialist Commonwealth. The core point of the treatise is that socialism removes the price mechanism from the production process. Factories to not buy their 'production factors' (like steel, copper, tin, nuts and bolts, etc) on the marketplace. Instead, all production factors are allocated by state decree. This makes it impossible to know what the relative costs of those factors are, what the costs of alternate means of production are and ultimately, whether the value of the outputs of a production process is higher than the value of the inputs.

For example, the state cannot determine whether it is cost effective to build car bodies out of fiberglass rather than steel (as was the East German Trabant), or whether producing an additional 10,000 cars is more valuable to the end-consumer than shifting those resources to building more tractors for farms - because the vital information of prices has been taken-out of the system.

The original article from 1920 is available as pdf and epub - download at https://www.mises.org/library/economic-calculation-socialist-commonwealth 

 

[Caine]

Libraries offer their books for free though they are not free to run.

I always had to pay membership fees for the library (though they were still subsidized). There was nothing free about it. That said, they are disappearing at a rapid rate as they have proven to be unwilling to follow into the digital age. The typical lack of innovation that I've grown to expect from non-commercial parties.

If, for example, there was a bill to offer basic level tax-payed broadband internet for every finnish home with a reasonable cost, like 20€ or 50€/year/person, I'd gladly pay that even though I'd probably still use a commercial service to get a better one.

If there was a tax-payed broadband internet for every home, then there would not exist a better one through commercial service. There would simply be no rational economic argument to start offering one. Since there would be no faster internet there also would not be any services which require the faster internet and so forth... This way the entire economy spirals downwards.

If your matter of choice only exists on a personal level, you are still free to be a self-sufficient farmer.

The income you are allowed to have before paying taxes is also sustainable to make a living off.

This is in fact not true. It is impossible in social-democracies to be self sustaining due to the presence of wealth and property taxes. You cannot be self-sustaining without wealth and/or property as you would have to pay rent for the property. Due to this taxation, self-sustainability is not sufficient as you also need to make sufficient profit each year to pay off those taxes. Given the size of land one would require to be completely self-sustaining, the property taxes in the Netherlands would exceed the barrier of tax-free income. Thus being a self-sufficient farmer requires you to run a successful farming business.

For me what you say _wb_ is pretty strange. You are a person who understands clearly the benefits of FOSS and the philosophy behind it, yet when it comes to politics you are basically an advocate of dictatorship. And yes, I do not use that word slightly, because socialists of any style are all partisans of mighty Central State controlling everything and pushing their agenda to the general folks.

It is not so strange to me that these two are often combined (I'm not implying this holds for _wb_, he can comment on that himself). A lot of FOSS supporters as well as socialists gravitate towards those born out of an anti-corporate attitude. You know, the childish notion that all form of business is evil and corporations are there to scam you out of your money, existing solely to exploit people and so forth... (the usual nonsense).

The full explanation is available as pdf and epub - download at https://www.mises.org/library/economic-calculation-socialist-commonwealth 

Thanks for the link. So far it's quite an interesting read.

 

[ekianjo]

Socialism - as promoted by the advocates thereof - also is an economic system: namely, central state control over the means of production. There is only one decider of what gets produced, where, when and how, for the entire natio

I am not debating that. Of course Socialism, by itself, imposes a certain form of Economic structure. But the root of Socialism is Political -> the clash of classes, etc... There is an ideology that goes beyind the economic principles.

Capitalism as an economic theory is pretty much agnostic in terms of politics. As long as a number of factors are met (such as the Freedom to invest, to establish private and public corporations, to be able to yield the benefits of your work, and a relative freedom of trade), you could have any political system on top of that. Obviously not Socialism, but we see various degrees of welfare states around the globe which allow Capitalism to operate (more or less depending on the barriers they erect). There are also dictatorships with Capitalism principles (Singapore is a good example) so again there is no relationship between Capitalism and Democracy. That's why it's not really proper to compare Socialism and Capitalism on the same level.

 

[Hồng Thất Công]

Capitalism as an economic theory is pretty much agnostic in terms of politics. As long as a number of factors are met (such as the Freedom to invest, to establish private and public corporations, to be able to yield the benefits of your work, and a relative freedom of trade), you could have any political system on top of that. 

Ah!  I get it now.  Linux is Capitalism and Windows is Socialism, because in Linux, you can have any deskop GUI (xfce, lxde, fluxbox, etc) you want on top, while in Windows, you are forced to a single GUI Microsoft gives you  

 

[ekianjo]

Capitalism as an economic theory is pretty much agnostic in terms of politics. As long as a number of factors are met (such as the Freedom to invest, to establish private and public corporations, to be able to yield the benefits of your work, and a relative freedom of trade), you could have any political system on top of that. 

Ah!  I get it now.  Linux is Capitalism and Windows is Socialism, because in Linux, you can have any deskop GUI (xfce, lxde, fluxbox, etc) you want on top, while in Windows, you are forced to a single GUI Microsoft gives you

That's one way to see things

 

[vcoleiro1]

I think that neither a pure capitalist society nor a pure socialist society would be perfect. Rather, a balance of both is probably best.   

In some areas capitalism works best, in others a more socialistic approach is needed. 

 

[klapse]

I think that neither a pure capitalist society nor a pure socialist society would be perfect. Rather, a balance of both is probably best.   

In some areas capitalism works best, in others a more socialistic approach is needed. 

Most people believe that "some things need to be handled by government". But maybe that's just thinking within the box of the status-quo. Consider:

• A Soviet Communist in the 50's would have claimed, "We need the government to make shoes" -- but we all know that the free market can provide better shoes, cheaper.
• A German today might state, "We need the government to provide education" -- but private schools in Germany turn-out better results than state-run schools.
• A US-American might say, "There's no substitute for government courts" -- but in fact an increasing number of legal disputes are being settled by private arbitration.
• A UK citizen might think, "We need the State to provide health care via the NHS" -- but countries like Germany have better levels of service and less waiting times and less service-rationing with private insurance and private medical practices.

Maybe we should consider more deeply whether a truly free market - with its price discovery, competition, enterpreneurship, crowdfunding, innovation, branding, private certification and online-reviews - can do a better job of providing goods and services than a state-run bureaucracy.  There is a wealth of literature that explores these possibilities at http://mises.org

 

[diligentcircle]

they are disappearing at a rapid rate as they have proven to be unwilling to follow into the digital age

Unwilling, or unable? The copyright industry has a huge tendency to quash any attempt to give people digital copies of works; if they can't use copyright directly, they use it together with digital restrictions (which effectively grant publishers the power to create laws thanks to certain WIPO treaties). I honestly don't see how it's possible for any library to completely "follow into the digital age" today without fighting a constant, quite possibly losing battle with the copyright industry.

If there was a tax-payed broadband internet for every home, then there would not exist a better one through commercial service. There would simply be no rational economic argument to start offering one. Since there would be no faster internet there also would not be any services which require the faster internet and so forth... This way the entire economy spirals downwards.

Are you presuming that a local monopoly run by the state is worse than a local monopoly run by a business interest? Local business-owned monopolies on Internet services abound in the United States, and the lack of economic incentive to compete with these local monopolies is exactly why most of us are stuck with slow Internet speeds: because there's virtually no competition, there's no incentive for the ISPs to upgrade their infrastructure. Whether it's economically viable to compete with a local monopoly has absolutely nothing to do with who is running the monopoly.

If the local monopoly is a public option, you can at least expect its infrastructure to be upgraded for reasons other than financial interest, i.e. it will be done even if it's a monopoly. It may not be perfect, but it's a hell of a lot better than being pretty sure you're going to get no upgrades at all in the foreseeable future.