As you can imagine I get into numerous debates with advocates of socialism. While I think Ludwig von Mises demonstrated that socialism will always fail in his book Socialism: An Economic and Sociological Analysis the debate will continue to rage on for eternity. One thing I often bring up is the conditions experienced in socialist countries like the former Soviet Union, communist Cambodia, North Korea, etc. When I bring this up the devout socialist I’m debating is always quick to rebute my statement by claiming those countries didn’t implement socialism correctly. I’m willing to conceded this point but when I make the same argument about capitalism the devout socialism will usually argue that America proves capitalism can’t succeed.
Here’s the thing, if you are going to use the argument that socialism hasn’t succeeded because it wasn’t implemented correctly you must also recognize that argument regarding capitalism. The United States isn’t a capitalist country, it’s a fascist country that married the state and private corporations long ago.
14 thoughts on “Implementation of Socialism and Capitalism”
Here’s the thing: Neither you nor the socialist is willing to concede that neither of these systems in and of themselves work even when implemented supposedly correctly.
They don’t. Socialism because it provides no incentive, and capitalism because it destroys the social fabric and creates social Darwinism. Each when implemented supposedly correctly remove basic positive human traits and essentially remove any balance.
You are entirely incorrect here. Capitalism fosters an environment of cooperation where making the customer happy is the determining factor in whether or not you succeed. If anything capitalism actually enhanced social cooperation as business owners are incentivized to make their customer happy in every regard. A good example of this is Apple and their push towards being environmentally friendly. Why do they care about the environment? They probably don’t, but their customers do and some of their customers may very well decided to choose an Apple computer over an HP because they want to support Apple’s environmentalism.
This is also why business owners are often prominent individuals in communities. Many business owners donate great deals of money to charities, partially because doing so improves their status in the community and that improvement can bring in new customers.
Neither capitalism nor socialism removed any basic positive human traits. Both systems rely on the fact that people choose to cooperate with one another as opposed to existing in isolation. The primary difference is that capitalism incentivizes cooperation through self-interest while socialism incentivizes cooperation through altruism. As humans are, in general, self-interested creatures (as are most creatures) socialism ends up failing due to the fact it attempts to fight human nature.
Sorry, but no. You make a number of assumptions which simply don’t pan out in the real world. Firstly, there is no incentive for a large corporation in a “correctly implemented” capitalist economy to be cooperative. It’s tendency should be toward monopoly since the goal of the corporation is to make as great a profit as possible, nothing more, nothing less.
Secondly, there is no incentive for a large corporation in a “correctly implemented” capitalist economy to care about the social or physical welfare of any of the members of the society – again, because the primary goal of the organization is to make profit.
Your argument about Apple is simply incorrect. While Apple has now decided to support environmentally friendly policies, it has existed and prospered for years without doing any such thing. Even if their recent conversion is because of the PR issue, there would be no PR issue if there were no information on the detrimental environmental policies of building MACS, PCs and IPADs, information which comes not from capitalism but from government and civic organizations.
Nor has the recent public dissemination of that information effected their profit margins in any appreciable way. People simply don’t care enough as long as it is not in their backyard.
While that may be a condemnation about people in general ( and it is), it also proves that this simply isn’t an issue. Given the economic realities, neither you nor I have any idea why Apple has undertaken its environmentally friendly policies. To state that they have done so simply because they wish to win over a few more customers is way too simplistic.
Apple works very hard to be a monopoly. Something similar to Standard Oil before it was broken up by anti-trust rules.
As for local business owners being prominent – the police chief is also prominent, as are the ministers in town, leaders of civic organizations, teachers, etc. Prominence is not an indicator that “true” capitalism somehow is better or that it does not remove any basic human trait.
Both capitalism and socialism remove basic human traits: socialism – the desire to strive; capitalism – empathy. Both attempt to fight human nature by removing parts of what makes us Human. Simply because you disagree that “true” capitalism is just as extreme and unyielding as the extreme of “true” socialism does not make it so and your arguments in no way have given any evidence to the contrary.
Wait… how do you get corporations and “correctly implemented” capitalism (or as I advocate entirely free-market capitalism)? Corporations are entities granted limited liability by the state. By definition in order for corporations to exist the state must exist to grant the limited liability privileges. As a voluntaryist I would point out that state interference is the problem, it’s what breaks capitalism. Namely limited liability removes many of the potential failure scenarios a business would normally fail. My favorite example would be oil companies who are granted limited liability for any damages caused by oil spill. In a free-market capitalist system oil companies would be responsible for the entire cleanup costs of any speaks, something that would have likely bankrupted BP after the Gulf oil spill.
Even if your goal is to establish a monopoly it’s an impossible goal to achieve without a state to grant it. Rothbard goes into great detail about monopolies in his treatise Man, Economy, and State. To summarize, it’s always in the interest of another entity to compete with an established monopoly. As a rule monopolies are slow and cumbersome entities that do not evolve because no need to do so exists. Because of this new competitors can enter the market easily and succeed by providing a better product or the same product at a lower price. A good example of this is the personal electronics market. No phone manufacturer has been able to obtain a monopoly or even get close to obtaining one because there is money to be had in competing in that market.
You’re assuming that making a profit and concern for social and physical welfare are mutually exclusive goals when in fact the opposite is true. Capitalism is nothing more than individuals trading goods and services for other individuals’ goods and services. In other words it’s nothing more than a method of dividing labor. Those goods and services will involve things people need for survival (food, water, shelter, etc.) and wants beyond that (phones, automobiles, firearms, etc.). If you’re a farmer you want people to buy the food you produce and in that way you are interested in their well being (that and dead people don’t trade so you have an interesting in customers staying alive).
I wasn’t aware that organizations like Greenpeace, one of the most outspoken critics of environmental concerns, were government organizations. Likewise Consumer Reports, a leading source of product reviews, is also an entirely private entity. The government actually provides very little information regarding environmental and product review information.
The information you mention is another service and people are willing to pay to receive that information. In the case of Greenpeace they receive funding from individuals who are concerned about environmental issues to investigate those issues.
First of all I will point out that Apple actually reduced their environmental impact so you shouldn’t expect their profits to be harmed in the example I gave. Furthermore you also seem to be missing a key piece of information, value is subjective and ordinal. Each individual desires different things so some will want environmentally friendly products while others couldn’t care less. Values are also ordinal, which is to say somebody may value owning an iPad more than they value environmental issues whereas another will value environmental issues more than an iPad. You can’t say “people” don’t care as if a group of people is a single entity, you can only say some individuals don’t care. But as Apple and many other companies are working to reduce the environmental impact of their products a large enough number of people must care.
Regarding environmental issues I will urge you to read my article on capitalism, property rights, and environmentalism. Another part of ensure environmental protect is the removal of state graned limited liability and reinstating absolute property rights so property owners can sue polluters for damages.
Standard Oil was never a monopoly:
Way to try to put words in my mouth. I didn’t say business owners being prominent members of society was an indicator of “true” capitalism, I said capitalism leads them to become prominent members of society by providing for the wants of the members of that community. That’s not to say members like police officers can’t become prominent members of society, they also provide a service (although they actually maintain a state granted monopoly on that service so there is no way to know if they provide it well or efficiently).
I find it rather hilarious that you accuse me of not giving any evidence while you yourself have also given no evidence. This time around I have provided some material for you to read but I also want to point out that if you’re demanding empirical evidence you’re demanding the impossible. Studying social science doesn’t lend itself to empirical studies and must be approached using the praxeological method. As I’v noted above, you have several misunderstandings regarding capitalism. It would be worth your time to read Ludwig von Mises’s Human Action to gain an actual understanding of the subject matter.
Here are some tennets of capitalism you should consider:
The worst kind of customers are the dead kind.
The easiest way to raise profits is to get more customers.
Killing customers is the worst way to do business.
If it makes the customer happy you should try to do it.
Angry customers are almost as bad as dead customers.
Safe products keep your customers alive and happy.
High prices mean fewer sales and angrier customers this is bad for profits.
Treat your labor force well happy workers are more productive this is good for profits.
Socialism does not encourage any of the above, the state controls consumprion and production and can ignore profits since they tax the value from you anyways. Socialism only survives by the threat of violence and its use to take the liberty of those subjected to it.
Huh? Accuse me of putting words in your mouth but do the same first. My point about Apple was that if their environmental impact were an issue, those who care about this issue would have copped to it much earlier and their profits would have been significantly lower. They weren’t.
I didn’t know the word “civic” meant “government.”
So according to you, there are no corporations in a “correctly implemented” capitalist system? Ignore the question of legal liability for a moment, do you consider that there would be no tendency towards larger entities of specific economic control? Arguing that capitalism is nothing more than individuals trading goods and services ignores the complexity of creating products in a modern world. Perhaps when existence was subsistence level this view of capitalism made sense, but we are way beyond that.
As for monopoly – The telephone companies are actually a very good example of the problem of monopoly. AT&T was broken up because it was a monopoly into some 30 smaller entities. Since that breakup, the one constant has been a greater consolidation of service providers. So, if anything, service has become more erratic and costs have continued to rise even though breaking up the monopoly was supposed to bring competition and better service. You can argue this has to do with regulations, but you can also argue that this has to do with the inexorability of capitalism.
Nor is competing against a monopoly as simple, again, as you make it sound. One need only look at the costs involved in trying to compete with Apple or any of the major computer brands. That does not mean there will be no niche markets for smaller brand products, but it’s certainly not competition.
As to the argument that I am assuming that making a profit and concern for social and physical welfare are mutually exclusive – again, you over-simplify. No, they are not, but fairly recent history does show that social and physical welfare do take a back seat in any consideration. Union Carbide in Bhopal, India. Killed 100,000 people with a chemical spill. Union Carbide in the US had a minor blip in it’s stock price as a result. Same company, just the impact was not local or national, so no one cared enough for it to make any economic impact on the company. This particular bit of human behavior plays out again and again, including with the BP spill in the gulf. You put the blame on government for limiting liability, yet BP appeared to have no problem ignoring the spills impact and misleading not only the government but the public as well about the impact of the spill. And it continues to do so to this day while BP has returned to profit, the physical and social welfare of the Gulf be damned.
I have to ask – What exactly do you consider the point of capitalism? It appears you give it a mystical importance that it simply does not have. Believing that capitalism will provide for the wants and needs of everyone and create civil society is simplistic. Believing that the state is completely unnecessary is simplistic.
I think both you and Zerg commit a logical fallacy – that there are only two possibilities: extreme capitalism or extreme socialism, and that extreme capitalism is the way to go. That’s just not so.
You learn something new every day. Kidding. While civic doesn’t always mean government in modern usage is generally does. The definition of civic:
Note the “esp. its administration” which would be the city’s government. It’s similar to how “state” and “government” are used interchangeably even though they don’t necessarily mean the same thing.
As a voluntaryist, no. My definition of “correctly implemented” capitalism is a system where the state is entirely uninvolved in economic affairs. Ultimately this means there would be no state at all, but theoretically I suppose it’s possible to have a state that doesn’t interfere in any way with economic matters.
That would be ignoring corporations entirely as a corporation is, by definition, an entity granted limited liability.
Capitalism is nothing more than trading goods, the complexity of manufacturing those goods has no bearing on such facts. Let’s assume we have a factory that manufactures computers. The factory employs 100 individuals, all of home trade their labor for money. Factories generally don’t start with raw resources so the factory is also going to be trading with other businesses to obtain required resources (silicon, gold, copper, plastic, or already assembled parts). Eventually the factory will crank out complete computers that will be traded to individuals. Even the most complex good is manufactured through trade performed by individuals.
I never argued that larger entities don’t exist, that’s not what corporations even are (you can have a corporation of one individual for instance), but even larger entities are nothing more than groups of individuals who have come together for some reason or another.
AT&T was a state granted monopoly, which was my point when I said:
Anyways let’s continue:
Actually it’s entirely about regulations because telecommunications is market that is tightly controlled by the state through the Federal Communications Commission (FCC). What is the one thing a telecommunication companies needs today? Spectrum. How does one obtain spectrum? By bidding on it when the FCC holds an auction. Who are you bidding against? Multi-billion dollar corporations.
Through the monopolization on spectrum the FCC is created an artificial barrier to entry in the telecommunications market. Because of this barrier, which is the expense of obtaining a license to use spectrum, no new competitors can enter. There is no way a new company is going to be able to outbid the likes of Verizon, AT&T, Google, etc. when those companies can literally throw billions of dollars away without worry. The lack of competition in telecommunications proves my whole point, which is capitalism hasn’t even been given a chance to work because the state has been constantly interfering with economic matters.
Wait… you’re trying to say it’s difficult to compete against a monopoly and your evidence is Apple? Let’s consider how many competitors Apple has: Dell, HP, Acer, Asus, Apple, HTC, Samsung, Google, Microsoft, Toshiba, Nokia, LG, Lenovo, etc., etc. New companies are popping up in the person electronics market every day. If that isn’t a competitive market I don’t know what is.
I will refer you to Zerg539’s comment regarding that incident as I have no familiarity with it (something I will correct mind you).
Of course they have no problem ignoring the spill, the state has protected them against consequence. You keep brining up the profit motive of capitalism but ignoring the consequences. The reason BP doesn’t care is because they are shielded from a great deal of liability.
Once again we come back to the fact capitalism involves self-interest. When the state protect you from potential consequence you don’t give a shit what happens. If you are held entirely responsible for your misdeeds you do care what happens.
Case in point, if BP were made to front the entire cost of cleanup they would have done things far differently. First they likely wouldn’t have ignored the notable problems that lead up to the spill and second they would have move quickly to contain the spill because every ounce of oil that escaped that area was potential property damage that would have cost them money. The willingness to act irresponsible has nothing to do with capitalism but the nature of limited liability. It’s like dumping waste into a river, if the state protects you from property damage claims from those living on the right why are you doing to care? If the state doesn’t protect you and every person living on the river can sue you for the damaged you causes why would you dump waster into the river?
The point of capitalism is to divide scare resources in a peaceful manner. As capitalism rewards those who have fulfilled the wants of individuals it rewards those who have, according to individuals, made proper usage of said resources. It’s an alternative to force.
I never said it provides for the wants and needs of everybody, but it is the best system to provide for the wants and needs of individuals.
Believing that the state is at all necessary is simplistic.
I know what I did there was pretty clever, what with making a statement with zero backing argumentation.
The state is force and as a voluntaryist I oppose the initiation of force. The reason I desire a capitalistic society free of the meddling of states is because my primary desire is a society where the initiation of force isn’t legitimized. Capitalism has the benefit of being a voluntary system where the initiation of force is never necessary (that’s not to say some won’t use it, some people are violent psychopaths (and many of them hold public office), but it’s never necessary). Not surprisingly the non-violent system is also the system that is most successful at providing for the wants and needs of individuals.
Actually no. I acknowledge there are other systems such as mercantilism, crony capitalism, fascism, communist, etc. The problem is they rely on a state, which is a necessarily violent entity, and therefore is undesirable in my eyes. If you read through my posts you’ll notice I’ve said many times that there are better systems, for example returning to a strictly constitutional government is far better than what we have now. Saying I only believe there are two possibilities is demonstrably false based on my writings alone.
First off the BP oil spillnwas never as dangerous as.it was made out to be in fact most of the.oil disappeared due to natural processes. The majority of damage caused was from mandated clean up procedures and beurocratic hurdles that preveted proper cleanup from ever occuring. Thendispersants the EPA mandates be used on spills make the oil even more toxic and water soluble poisoning more than just the seabirds and other wildlife which come into direct contact with the spill. And when the law limits liability for a disaster to a few million dollars dont be surprised if a company skips out on a few billion dollars in liability. BP might have been responsible for the spill but the government was responsible for the disaster.
The Union Carbide disaster was exascerbated by the horrible state of the Indian government and economy. Plus 100,000 people did not die a little over 3,000 did mostly due to the slow response to the disaster and a severe lack of medical facilities to treat casualties. This is what happens when you tell a company that this is all you are responsible for nothing more.
Now find me a single instance where runaway capitalism has starved millions to death, locked up thousands in gulags, or confiscated the property of an entire country, prevented lifesaving treatment for a disease due to a beurocratic choice irregardless of the ability to pay. Infact just find me a single god damned instance of a government led and funded enterprise being on budget on schedule and more efficient than a provate enterprise. Note NASA does not count because when you pt
Since I had a touch screen problem and posted early. When you put that many geniuses together they will occasionally pull something off. And if Socialism worked the USSR would still be going strong and China would never have allowed the capitalists to come in and save their economy.
Okay, so you’re not a deep thinker and seem to believe that ridiculous talking points are legitimate argument.
I could spend my time showing you that your opinions on the BP oil spill are wrong, but I think not, as you don’t really care anyway.
As to the USSR being an example of “correctly implemented” socialism – again, I think not.
And, by the way, you have managed to completely miss my point.
So reread what was written by both the author and myself, and then come back if you can manage to stay on topic.
Oh, and you are correct about the death toll in the Union Carbide disaster.
I confused injuries with death toll numbers.
And there’s the rub. Capitalism as you define it is completely voluntary and is a non-violent system. But that’s not so because your form of perfection doesn’t exist. The minute you involve people, you have unknown variables.
A modern society such as ours, whether we like it or not, requires more than your altruistic definition of capitalism to survive, grow, and prosper. While I agree that the state has been interfering in economic matters, I disagree that it has no cause to do so in some instances.
Take broadband spectrum for example. How, pray tell, without regulation would we even have spectrum? Imagine the cacophony of multiple companies competing over the same spectrum range.
Or, going back to BP, what’s to make them front any cost, let alone the entire cost, of cleanup without force of some sort? Certainly, they may lose customers in the Gulf region, but what about the rest of the country or world? I wouldn’t hold my breath that the market would take care of it for us.
And, yes, there are new personal electronics companies popping up every now and again (you forgot Sony, btw), but there are fewer and fewer directly taking on the companies you mention in the silos they hold sway in.
Don’t misunderstand, I agree with having as little government regulation in personal and economic affairs as possible. But, as you yourself point out, there are psychopaths, and unfortunately, according to psychiatric literature, many of them are in places of major economic power in the private sector. Saying that capitalism has the benefit of being a voluntary system where the initiation of force is never necessary is a wonderful pie in the sky dream but it certainly isn’t realistic based on human nature. We could continue this by discussing all the wars fought over scarce resources. You would tell me that these were fought because correctly implemented capitalism was never practiced. I would argue that it has nothing to do with whether or not correctly implemented capitalism was practiced or not.
It’s all a great thought experiment which cannot happen.
Which brings me back to my initial criticism. You saying that capitalism has never been correctly implemented is no different from a socialist saying that socialism has never been correctly implemented, and both of you are wrong.
It doesn’t exist at the moment, which is something I’m working to change. Something attainable not existing isn’t an argument against advocating for that thing, if that were the case we’d still be subjects to the British crown.
Which is what the entire tradition of Austrian economics is about. Humans, as rational actors, can not be reliably predicted and therefore centralized control is impossible. Only you know what you want and only I know what I want so we must be left to our own devises in attaining those things. In other words there must be a free market where people are free to choose what they want.
How do we have spectrum without regulation? I’m not sure if you’re aware of this but the state didn’t create spectrum, it has always been there and only needed to be put to use.
You appear to be caught in a common trap, one where you believe the way things are done now is the only way things can every be done. This is what the state wishes you to believe but it’s not true, humans are innovative creatures who managed to overcome shortages, hardships, and every other problem thrown at us. In the case of spectrum we don’t really need to worry about it. The spectrum shortage has lead humanity to innovate again and that innovation is twisted waves that allow the transmission of multiple signals in the same spectrum simultaneously.
As BP has caused damage to property they are the initiators of violence and therefore it is within the property owner’s right to use force if necessary to make BP front the cost of righting their wrong.
You seem to ascribe some kind of magical property to the market. The market isn’t some kind of nebulous entity or an invisible hand, it’s us. We are the market. When you say the market can’t take care of something you’re saying we can’t take care of something. At the moment this is partially true as the state prevents us from taking care of the problem caused by BP, which is why I want to eliminate the state.
I didn’t list many companies, hence why I ended the list with etc. Also I’m not sure what you mean by the last part, there are fewer companies competing in these markets? Most personal electronics companies are fairly new. Heck HTC started in 1997 and only entered the Android market in 2009. New companies are popping up all the time and companies that have previously been involved in other markets jump into new markets quite often (Amazon for example started off only selling books, now they sell everything and even entered the hardware market with their Kindle e-reader).
Psychopaths in the private sector can be dealt as private actors are far more restricted in what they can do. Unlike the state, a private entity must obtain its funding through trade. Since they must obtain funding through trade they must continue keeping people happy or their funding is cut off. Furthermore private entities don’t claim a monopoly on the initiation of violence, only the state does that.
Under capitalism initiating violence never is necessary. That doesn’t mean violence will never happen. As you’ll notice I specifically use the term initiation of violence instead of just saying violence. The use of violence to defend yourself against an aggressor is legitimate. Under a capitalist system violence is never necessary, but if it is used the target of said violence has every right to defend themselves. Under a state you have no right to defend yourself against the state (if you don’t believe me try defending yourself against police officers who wrongly raid your home because they had the wrong address, even if you survive you’ll be imprisoned for your actions). This is because the state claims a monopoly over violence and that is the key problem. Furthermore it must initiate violence to exist.
There is the key difference, under capitalism the initiation of violence is never needed whereas the initiation of violence is always needed by a state.
That was exactly the point of my post chief. I did say I conceded the fact that socialism has never been implemented correctly, which it hasn’t if you’ve actually read any literature from socialist philosophers.
Actually we’re both right in the regard. Perhaps you need to actually read up about the different philosophies because if you believe either capitalism or socialism have been property implemented you’re entirely incorrect.
The very same thing was said before the start of the Revolutionary War. Britain was the most powerful empire in the world at the time, many people said it would be impossible for the colonists in America to gain independence. Guess what? America won its independence.
Let’s also remember Iceland, a country that enjoyed 300 years of peaceful statelessness. Likewise medieval Ireland [PDF] and even the Old West [PDF] of the United States had many aspects of a stateless society. So your statement that such a goal can never be achieved is wrong, it has been achieved before and for great lengths of time (Iceland was a stateless society longer than the United States has even existed).
I should have finished my thought:
You’re both wrong, not because what you believe is wrong, but because what you believe cannot exist in reality.
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