Quote:
Originally Posted by Kenneth-Kaunda
Communism - much criticised by the Western countries but could it work given the right situation?
|
A lot of sheer ignorance on this thread. I'll do my best to counter-socialize all of the propaganda, disinformation and misinformation to which you've been exposed.
For starters, no State has ever used Communist property theory.
Remember your ECON 101 class. Communism, Socialism and Capitalism are property theories....
they are not economic systems. Those theories only posit who should own or control Capital -- cash, credit, labor, land (when used to produce goods or provide services), tools, vehicles (when used to produce goods or provide services), machinery, equipment, natural resources, raw materials and semi-finished goods --- like valves, printed wire boards, motors, adaptors, couplings, etc (that is to say "parts" that when assembled result in a finished product).
Capitalism -- individuals control Capital
Socialism -- a group controls Capital -- note that the agent of Socialism is often government or bureaucracy, but it can be unions, cartels, associations, the military or any other group.
Communism -- Capital controlled by the people-at-large
Is a publicly traded corporation Capitalist or Communist?
Communist -- who owns the Capital? The people do. Granted, the "people" are limited to specifically share-holders, but anyone can be a share-holder. And yes, it's also true that amongst the share-holders, some share-holders are more equal than other share-holders, since "equality" is apportioned by the number of shares owned.
Nearly all countries use an hybrid Capitalist-Socialist theory -- including the US.
While property theories argue who should control Capital, Economic Systems attempt to answer three basic questions:
1] What should be produced?
2] How it should be produced?
3] For whom it should be produced?
The three economic systems in use today are: Free Market, Command and Traditional. The answer to each of those three questions is the economic system itself.
Example:
What should be produced? The [Free] Market will decide. Or the Command Group will decide. Or Tradition will decide.
Is there a demand for corn? Yes. The Free Market demands corn, so it should be produced.
How should the corn be produced? The Free Market demands organic corn, and corn grown using neo-traditional farming methods, and apparently the Free Market also demands genetically engineered Franken-Corn that contains fish ass.
For whom should the corn be produced? The Free Market says corn should be produced for pop corn, for corn-on-the-cob, for ethanol, for alcoholic beverages, for animal feed, for succotash, cream of corn, canned corn, corn relish, corn flakes, corn meal, corn flour, corn starch, light corn syrup, dark corn syrup, high fructose corn syrup and many other things.
In the Command Economic System, those questions are answered not by the Market, but rather by the Command Group. The Command Group is often the government or bureaucracy, but not always.
Is there a demand for tomatoes? Yes, but the Command Group might decide that tomatoes
should not be produced. The Command Group might reason that the tomatoes are costly to produce, do not have a good shelf-life, and cannot be exported, so producing tomatoes results in a net loss. The time, effort, money and resources would be better spent producing something that is more profitable.
How should the corn be produced? The Market demands organic corn, but the Command Group might decide that there is no benefit to producing organic corn, and only permit corn produced using neo-traditional farming methods or worse than that, only produce genetically modified corn.
For whom should the corn be produced? The Command Group might decide that the people can eat genetically engineered Franken-Corn that contains fish ass, and the Command Group can eat organically grown corn.
Note that while the Command Group is often government or bureaucracy, it can be any group. Unions are a Command Group. Instead of letting the Market determine wages, unions command what wages shall be paid. Cartels are Command Groups and often dictate what is produced as well as the price.
The American Hospital Association is also a Command Group. Instead of letting the Free Market set the price for open-heart surgery, the AHA dictates what that price will be. For example, in the Cincinnati MSA, the true cost of open-heart surgery is $13,000 but the AHA artificially inflates the price to $26,000 to $41,000 (depending on the hospital).
Obviously, you can see how harmful propaganda and disinformation are. You are being lied to, and because you are being lied to, you cannot see the Truth, and as a result, you make bad decisions....like Obamacare.
Traditional Systems are still used by tribal groups in the Americas, Africa and Asia. It is Tradition that decides what is produced, how it is produced and for whom it is produced, and that is based on local customs.
Quote:
Originally Posted by Kenneth-Kaunda
People say that if there is no incentive then no-one will work - but surely that is wrong.
|
Only the form is wrong. An accurate statement would be:
"If there is no incentive to work, then many people will not work, or will not put for much effort."
You have people right now who have no desire to work and only desire to take money from other people to fund their life-styles.
Quote:
Originally Posted by Kenneth-Kaunda
I imagine some kind of wage and price controls would be needed, and some limitations on freedom, but what are the main problems in stopping it from working?
|
And why do you imagine that?
You imagine that because you have been a victim of propaganda and disinformation.
We know that if you take Capitalist property theory and pair it up with Market Economics, it works. We also know that if you employ Socialist property theory with Market Economics, it works. Can you use Communist property theory with Market Economics?
Absolutely, yes.
Now you have something new to think about.
Quote:
Originally Posted by Kenneth-Kaunda
All big industries could be nationalised and the smaller ones would have to abide by specific regulations - ie: laws against hoarding , speculating, and wages etc..
What will go wrong here?
|
Everything.
The Invisible Hand rules. You cannot violate the Laws of Economics. In the end, the Free Market always wins. Always. It is undefeated, and there is nothing you could ever possibly do to defeat the Free Market.
The issue of who owns Capital doesn't really matter -- so long as you comply with the Laws of Economics. The State can surely own natural resources, but the minute the State sets wages below Market rates, or above Market rates, or prices that are below or above Market prices, then you have failed. An host of problems will besiege you.
The issue with Unions is not so much that they exist, rather the issue is that Unions violate the Laws of Economics. Unions threaten, coerce and intimidate employers to pay above Market wages.
How'd that work out for everyone?
A combination of very bad Foreign Policy and Unions has created a situation in which Americans are over-paid, and so America cannot compete globally, and what is happening? The Invisible Hand is forcing a correction -- the Free Market is winning at your expense.
Communist property theory could work, under certain conditions.
Public utilities are communistic. Who owns them? The people. Granted ownership is limited to a select group of people, namely to those people served by the utilities, but that does not contradict Communist theory.
How'd that work out for everyone?
Well, in the case of electricity, the people violated the Laws of Economics, because the people did not want to pay Market rates for electricity. The situation now is that your electrical grid is antiquated and obsolete. You main stations, sub-stations and switching stations contain a mix of technology from the 1920s to the first decade of the 21st Century --- obviously in some parts of the US like the Southwest where growth did not really take place until the 1970s the technology in those systems is a mix of 1960s, 1970s, 1980s, 1990s and 2000 technology, but it needs to be upgraded/replaced nonetheless.
So you thought you would save $0.03/kilowatt-hour. Did you?
It is estimated to cost $3.5 TRILLION to fix your electrical grid.
You don't have the money now, and you never will.
You must remove all of the technology from the 1920s to the 1990s and replace it with modern technology, and you must replace the thousands of miles of high-tension power lines, and you must replace all of those transformers -- the big cylinder thingies -- you see sitting atop telephone poles, and you have to replace all of the thousands and thousands of miles of wiring right up to every home and business in the US -- but you do not have to rewire any homes or businesses.
By the way, it takes about 6-8 months to make one of those transformers.
Until you spend the money to upgrade your electrical grid, you will continue to experience minor blackouts and brown-outs. They will become more frequent. And with each passing year, it costs more to fix.
So in the end who wins?
The Free Market.
Hopefully people and government will learn a valuable lesson (but I doubt it).
Economically...
Mircea