One socialist's hypothesis for why socialism didn't catch on

[PyramidHead]

Ah, socialism. Always the perfect system until somebody screws it up by trying to make it apply to reality.

Or as E.O. Wilson, an entomologist specializing in ants said about socialism, "Wonderful theory, wrong species". He thought socialism was a great system for ants, not so much for humans.

I tend to agree with Wilson. The failure of socialism is that it does not fit with the nature of humanity. Humans care about their own reward for their labor more than benefiting others by their labor. Humans work harder when they are rewarded for that work.

To that, I would argue that the current system is therefore a very bad way of satisfying the nature of humans, in that the vast majority of labor produces rewards that do not accrue back to the people doing it. If anything, the thrust of socialism is to make work more rewarding, not less, by creating conditions where its immediate impact on daily prosperity is obvious rather than just increasing the stock price of whatever corporation one works for.

If they receive the same reward regardless of the amount of their labor then they do as little as possible. There was an old Soviet Russian expression "they pretend to pay us and we pretend to work". This is the bain of socialism, free riders.

Nothing in the definition of socialism requires that nobody should be rewarded for their work proportionally. It just says that, in particular, the person who should not be rewarded for their work is the capitalist who purchased it. Everything else can be hashed out by the workers in a democratic fashion. What's your objection to letting the people who actually do the work decide how they should be rewarded for it?

Also, when do you think capitalism originated in human history, and what system do you think best describes the way things were handled before then? Before we started hoarding and stockpiling grain stores, when everybody had to work together to survive, were those centuries an exception to human nature that we grudgingly tolerated until capitalism finally freed us to pursue our individual fortunes sometime in the 1300s?

I always hear this human nature argument and it always sounds like a cop-out. Are greed and the pursuit of personal gains the only human traits? I would say cooperation and empathy are also part of human nature, as well as one other thing that always goes unmentioned in these discussions: humans get an enormous emotional and psychological reward from feeling like they are in control of their own future. When a situation arises that reveals they have more power, voice, and influence then they originally believed, it feels awesome and compounds upon itself to inspire more such activity. The concept of social freedom is a strategy of leveraging that feeling in as many people as possible, and in a context that is beneficial for humans rather than each in opposition to the others.

 

[skepticalbip]

To that, I would argue that the current system is therefore a very bad way of satisfying the nature of humans, in that the vast majority of labor produces rewards that do not accrue back to the people doing it. If anything, the thrust of socialism is to make work more rewarding, not less, by creating conditions where its immediate impact on daily prosperity is obvious rather than just increasing the stock price of whatever corporation one works for.

If they receive the same reward regardless of the amount of their labor then they do as little as possible. There was an old Soviet Russian expression "they pretend to pay us and we pretend to work". This is the bain of socialism, free riders.

Nothing in the definition of socialism requires that nobody should be rewarded for their work proportionally. It just says that, in particular, the person who should not be rewarded for their work is the capitalist who purchased it. Everything else can be hashed out by the workers in a democratic fashion. What's your objection to letting the people who actually do the work decide how they should be rewarded for it?

Also, when do you think capitalism originated in human history, and what system do you think best describes the way things were handled before then? Before we started hoarding and stockpiling grain stores, when everybody had to work together to survive, were those centuries an exception to human nature that we grudgingly tolerated until capitalism finally freed us to pursue our individual fortunes sometime in the 1300s?

I always hear this human nature argument and it always sounds like a cop-out. Are greed and the pursuit of personal gains the only human traits? I would say cooperation and empathy are also part of human nature, as well as one other thing that always goes unmentioned in these discussions: humans get an enormous emotional and psychological reward from feeling like they are in control of their own future. When a situation arises that reveals they have more power, voice, and influence then they originally believed, it feels awesome and compounds upon itself to inspire more such activity. The concept of social freedom is a strategy of leveraging that feeling in as many people as possible, and in a context that is beneficial for humans rather than each in opposition to the others.

You are seeing the world through class warfare glasses. People are first individuals and their first concern is personal. Only someone dedicated to class warfare worries about what is in the pocket of someone else, like those "rich fuckers" you are concerned about. For most people the concern is what is in their pocket. Once they have enough in their pocket to take care of their family then they can offer help to others.

I would think that history can tell us more about the efficacy of socialism than ideology can tell us. The workers of the old USSR told us the problems.

 

[Max Rockatansky]

I'm reading an interesting book by Axel Honneth called The Idea of Socialism: Towards a Renewal. He lays out the history of socialist thought and pinpoints three ways that early socialists set themselves up for failure:

1. They assumed that all of the problems of society were caused by the capitalist economy, and thus a perfect society could be built by changing to a socialist economy, with no need to account for other functional spheres of life such as governance or family structures. They thought that liberal conceptions of individual rights would become superfluous once workers banded together and took control of economic production for mutual goals. He speculates that this is why centrally planned economies were sometimes seen as the most obvious path to the goals of socialism, when experimenting with different models might have proven more effective.

2. They pinned their hopes on a pre-existing population of outraged industrial workers who were (they assumed) chomping at the bit for an opportunity to overthrow their masters and wrest control of the economy--and therefore society itself, related to the previous point--from their grasp. In other words, it was simply taken as an obvious truth that everybody in the working class was already socialist. When the post-industrial economy arose in the last century, this assumption quickly proved detrimental, as white-collar jobs provided a relative degree of comfort for enough people that socialist thought was denied its captive audience. Translating the ideals of socialism to the new economic styles of post-WWII civilization simply wasn't given enough priority, so they were lost in the noise of history.

3. Strongly influenced by philosophical notions of inevitability in human progress, especially by Hegel, early socialists were convinced that they weren't actually pushing forward a strategy which should be evaluated among others, and accepted if it turned out to be something workable; they pre-supposed that the arc of human evolution was heading towards a socialist utopia in the near future regardless of what anybody had to say about it, so political action was often undertaken reluctantly. For, if they acknowledged that socialism was not the inexorable destination of human civilization, it would mean socialism was just a normative theory that could be accepted or rejected depending on one's moral views.

Honneth then sets out to suggest ways that socialism could be revived in this day and age without falling into the same problems. Basically, he recommends open experimentation with different models, integration into spheres of public life other than just production, and above all else adherence to the principle of free communication. His view is that the early socialists weren't totally wrong about the arc of history, but rather than specifically slouching toward socialism, history has tended to gravitate towards the struggle of voiceless groups in society making their voices heard. Restoring the value of democratic "will-making" to the concept of socialism, which often outright decried democracy in governance as something we need to transcend as a species, should be a guiding principle.

The goal of socialism as it became known was specifically aimed at the means of production, but perhaps this was a mistake owed to getting too caught up in the technological marvels of the industrial revolution; perhaps the goal should be returned to its original conception of reconciling the contradictory aims of the French Revolution, which placed importance on liberty, fraternity, and equality. Socialism is correct that the liberal notion of negative freedom, as an individual right that can only be infringed upon by others or by government, creates a tension between these three values, leading as it does to a lack of fraternity and equality to secure private liberty. Social liberty, in which each person's freedom is mutually dependent on everyone else's and participation in society rather than withdrawal from it produces the most freedom for its members, could be a better organizing principle for socialism. All of the usual tenets of worker ownership and collective rule flow naturally from there, but there are no longer any restrictions on how to best realize social liberty because it is not considered a purely economic problem, and even in economic terms it remains open to experimentation.

I usually don't have much patience for utopian ideas of any stripe, and I doubt this would ever get socialism any serious traction in the near future, but I agree with Honneth about the flaws in how it was envisaged and implemented in the past.

Honneth's book is poppycock mainly because he makes false assumptions such as blaming capitalism for the failure of socialism. That's like saying fascism failed because of democracy so if only we could get rid of democracy......

The problem with socialism is that it's trying to exist in a world of limited resources. It can work on a village/tribal level where everyone is involved, but when it tries to exist in a social environment requiring representatives at a regional or higher level it starts to fall about as the leadership seeks to reallocated distribution of limited resources.

Look at the "Star Trek" universe as a model of socialism; no one lacks food, shelter or other necessities. Of a person wants to smoke pot and play the guitar in their apartment all day, they can since energy is unlimited and they have a replicator (3D printer) for all of their needs and wants. However, if they want to better themselves, become a doctor or join Star Fleet, they have to earn it in a merit based system. The "Star Trek Universe" model can exist in a society were energy is unlimited coupled with replicators to supply all desired resources.

In Fareed Zakaria's book, "The Post-American World" he points out that democracy can only exist if the per capita income is above a certain level. The idea that socialism can only exist with certain limitations such as unlimited resources is an extension of that idea.

Lastly, nothing involving human beings can be perfect, but we can certainly strive to make things better for everyone.

 

[Harry Bosch]

To that, I would argue that the current system is therefore a very bad way of satisfying the nature of humans, in that the vast majority of labor produces rewards that do not accrue back to the people doing it. If anything, the thrust of socialism is to make work more rewarding, not less, by creating conditions where its immediate impact on daily prosperity is obvious rather than just increasing the stock price of whatever corporation one works for.

If they receive the same reward regardless of the amount of their labor then they do as little as possible. There was an old Soviet Russian expression "they pretend to pay us and we pretend to work". This is the bain of socialism, free riders.

Nothing in the definition of socialism requires that nobody should be rewarded for their work proportionally. It just says that, in particular, the person who should not be rewarded for their work is the capitalist who purchased it. Everything else can be hashed out by the workers in a democratic fashion. What's your objection to letting the people who actually do the work decide how they should be rewarded for it?

Also, when do you think capitalism originated in human history, and what system do you think best describes the way things were handled before then? Before we started hoarding and stockpiling grain stores, when everybody had to work together to survive, were those centuries an exception to human nature that we grudgingly tolerated until capitalism finally freed us to pursue our individual fortunes sometime in the 1300s?

I always hear this human nature argument and it always sounds like a cop-out. Are greed and the pursuit of personal gains the only human traits? I would say cooperation and empathy are also part of human nature, as well as one other thing that always goes unmentioned in these discussions: humans get an enormous emotional and psychological reward from feeling like they are in control of their own future. When a situation arises that reveals they have more power, voice, and influence then they originally believed, it feels awesome and compounds upon itself to inspire more such activity. The concept of social freedom is a strategy of leveraging that feeling in as many people as possible, and in a context that is beneficial for humans rather than each in opposition to the others.

I'd like to unpack the below definition of socialism: "It just says that, in particular, the person who should not be rewarded for their work is the capitalist who purchased it. Everything else can be hashed out by the workers in a democratic fashion. What's your objection to letting the people who actually do the work decide how they should be rewarded for it?"

There are several reasons why not allowing investors to be rewarded for their purchase would cause a system to fail. The first and easiest reason is that the company would run out of capital. I'm in investor. I invest to make money. If I were not allowed to realize a "reward" for my investment, I'd invest in real estate or overseas. I'd invest in something that wants my money. Companies must have capital to survive. Capital mostly comes from three sources: Equity (investors cash); bank loans; and profit retention. The problems with banks is that they will generally only invest in companies that are doing well. The typical deal is that the company must be profitable, have a strong ownership/management team, and be highly deleveraged (generally defined as $3 of equity for every $1 of debt at the very least). As you can see, banks aren't going to lend to companies with no equity. If you don't have skin in the game, you won't get a loan. Profit retention doesn't work as well either because cash lags profit. As a company grows, they pay their expenses up front, but they don't realize their cash until they are paid in cash down the road. Therefore, as a company grows, it's cash flow is pushed out. Anyway, for these reasons, an economy will die out over time if their companies can't attract enough capital or investments.

 

[untermensche]

This thread will get bogged down unless you define the Author's definition of socialism. I'd recommend that you define how he defines socialism and then ask people on side quests to go to another thread. I tried to find his definition, but failed.

It's the standard definition, I would guess, since his book is primarily a historical overview. Workers decide what happens to the value created by their labor, instead of capitalists, and when workers have to decide as a group which route is best, the decision gets made on the basis of what's best for their shared goals instead of what's best for somebody's bottom line. He keeps returning to the concept of social freedom as a regulating principle, which everything hinges on. If you need a definition, it might be that socialism is a way of organizing the economy and society in order to maximize social freedom. And social freedom is the kind of freedom that, in theory anyway, is actually compatible with fraternity and equality, unlike the liberal freedom that is prioritized in capitalist societies. Rather than each person being an autonomous entity who must view everyone else as competitors or obstacles, each person's freedom is maximized by participating in a community of sympathetic actors with common aspirations and interdependent contributions.

Where has that existed?

 

[Harry Bosch]

This thread will get bogged down unless you define the Author's definition of socialism. I'd recommend that you define how he defines socialism and then ask people on side quests to go to another thread. I tried to find his definition, but failed.

It's the standard definition, I would guess, since his book is primarily a historical overview. Workers decide what happens to the value created by their labor, instead of capitalists, and when workers have to decide as a group which route is best, the decision gets made on the basis of what's best for their shared goals instead of what's best for somebody's bottom line. He keeps returning to the concept of social freedom as a regulating principle, which everything hinges on. If you need a definition, it might be that socialism is a way of organizing the economy and society in order to maximize social freedom. And social freedom is the kind of freedom that, in theory anyway, is actually compatible with fraternity and equality, unlike the liberal freedom that is prioritized in capitalist societies. Rather than each person being an autonomous entity who must view everyone else as competitors or obstacles, each person's freedom is maximized by participating in a community of sympathetic actors with common aspirations and interdependent contributions.

Where has that existed?

How about the Basqe region in Spain?

 

[untermensche]

The Anarchists are the only people that have come close to creating a society along those lines.

That is why knowing what specific societies this alleged knowledge of socialism arises from is essential.

 

[PyramidHead]

The Anarchists are the only people that have come close to creating a society along those lines.

That is why knowing what specific societies this alleged knowledge of socialism arises from is essential.

Knowledge about specific socialist societies is not what is being discussed, but rather how socialism should best be pursued in a future society. In other words: what is the goal of socialism, is it a good goal, can it be implemented, and how should it be implemented if so. The author also mentions the Paris Commune, but I don't know anything about that.

 

[PyramidHead]

You are seeing the world through class warfare glasses. People are first individuals and their first concern is personal. Only someone dedicated to class warfare worries about what is in the pocket of someone else, like those "rich fuckers" you are concerned about. For most people the concern is what is in their pocket. Once they have enough in their pocket to take care of their family then they can offer help to others.

Sure, you're not wrong about any of that. The argument of socialism is that it's a better way for people to have enough to take care of their families, so if we're just talking human motivations here then it shouldn't automatically favor the system we have. You might disagree that such a thing could ever happen, but I'm only saying your argument about human nature doesn't fly because capitalism is obviously not letting everybody take care of their own, much less others.

I would think that history can tell us more about the efficacy of socialism than ideology can tell us. The workers of the old USSR told us the problems.

Hence the OP, which purports (in the book I'm reading) to have identified the ways that socialism was misapplied in the places that something like it appeared on a large scale. The USSR also accomplished amazing things even as it fizzled out, and many Russians still prefer their lives under the old regime. It's not as simple as looking for countries with "socialist" in their names, or looking for self-described socialist leaders, and checking to see whether they are better off than everyone else, because capitalism is a global phenomenon that has not been kind to its alternatives.

 

[PyramidHead]

I'm reading an interesting book by Axel Honneth called The Idea of Socialism: Towards a Renewal. He lays out the history of socialist thought and pinpoints three ways that early socialists set themselves up for failure:

1. They assumed that all of the problems of society were caused by the capitalist economy, and thus a perfect society could be built by changing to a socialist economy, with no need to account for other functional spheres of life such as governance or family structures. They thought that liberal conceptions of individual rights would become superfluous once workers banded together and took control of economic production for mutual goals. He speculates that this is why centrally planned economies were sometimes seen as the most obvious path to the goals of socialism, when experimenting with different models might have proven more effective.

2. They pinned their hopes on a pre-existing population of outraged industrial workers who were (they assumed) chomping at the bit for an opportunity to overthrow their masters and wrest control of the economy--and therefore society itself, related to the previous point--from their grasp. In other words, it was simply taken as an obvious truth that everybody in the working class was already socialist. When the post-industrial economy arose in the last century, this assumption quickly proved detrimental, as white-collar jobs provided a relative degree of comfort for enough people that socialist thought was denied its captive audience. Translating the ideals of socialism to the new economic styles of post-WWII civilization simply wasn't given enough priority, so they were lost in the noise of history.

3. Strongly influenced by philosophical notions of inevitability in human progress, especially by Hegel, early socialists were convinced that they weren't actually pushing forward a strategy which should be evaluated among others, and accepted if it turned out to be something workable; they pre-supposed that the arc of human evolution was heading towards a socialist utopia in the near future regardless of what anybody had to say about it, so political action was often undertaken reluctantly. For, if they acknowledged that socialism was not the inexorable destination of human civilization, it would mean socialism was just a normative theory that could be accepted or rejected depending on one's moral views.

Honneth then sets out to suggest ways that socialism could be revived in this day and age without falling into the same problems. Basically, he recommends open experimentation with different models, integration into spheres of public life other than just production, and above all else adherence to the principle of free communication. His view is that the early socialists weren't totally wrong about the arc of history, but rather than specifically slouching toward socialism, history has tended to gravitate towards the struggle of voiceless groups in society making their voices heard. Restoring the value of democratic "will-making" to the concept of socialism, which often outright decried democracy in governance as something we need to transcend as a species, should be a guiding principle.

The goal of socialism as it became known was specifically aimed at the means of production, but perhaps this was a mistake owed to getting too caught up in the technological marvels of the industrial revolution; perhaps the goal should be returned to its original conception of reconciling the contradictory aims of the French Revolution, which placed importance on liberty, fraternity, and equality. Socialism is correct that the liberal notion of negative freedom, as an individual right that can only be infringed upon by others or by government, creates a tension between these three values, leading as it does to a lack of fraternity and equality to secure private liberty. Social liberty, in which each person's freedom is mutually dependent on everyone else's and participation in society rather than withdrawal from it produces the most freedom for its members, could be a better organizing principle for socialism. All of the usual tenets of worker ownership and collective rule flow naturally from there, but there are no longer any restrictions on how to best realize social liberty because it is not considered a purely economic problem, and even in economic terms it remains open to experimentation.

I usually don't have much patience for utopian ideas of any stripe, and I doubt this would ever get socialism any serious traction in the near future, but I agree with Honneth about the flaws in how it was envisaged and implemented in the past.

Honneth's book is poppycock mainly because he makes false assumptions such as blaming capitalism for the failure of socialism. That's like saying fascism failed because of democracy so if only we could get rid of democracy......

The problem with socialism is that it's trying to exist in a world of limited resources. It can work on a village/tribal level where everyone is involved, but when it tries to exist in a social environment requiring representatives at a regional or higher level it starts to fall about as the leadership seeks to reallocated distribution of limited resources.

Look at the "Star Trek" universe as a model of socialism; no one lacks food, shelter or other necessities. Of a person wants to smoke pot and play the guitar in their apartment all day, they can since energy is unlimited and they have a replicator (3D printer) for all of their needs and wants. However, if they want to better themselves, become a doctor or join Star Fleet, they have to earn it in a merit based system. The "Star Trek Universe" model can exist in a society were energy is unlimited coupled with replicators to supply all desired resources.

That's kind of a funny thing to say, because a basic problem with our economy today is that we are generating resources far beyond what any of us could possibly eat, consume, wear, or occupy in our lifetimes. Yet, simultaneously there are those with not enough food, clothes, or shelter. This is not a resource shortage. If anything, now is the era that we can look back on the extraordinary innovations and surpluses created by capitalism and use them to argue that we should transition to a society where these surpluses get fairly distributed to the people whose work created them (or, in the case of basic necessities, those who need them most), instead of just the ones who were lucky enough to be born into a social stratus capable of funding their creation. We have ample technology to create a comfortable life for everyone, we just choose not to do so because some insist on having a level of luxury light years removed from what the average person has ever seen. This unequal distribution of the fruits of human progress throughout the last century is what naturally happens when workers with no choice except to sell their labor to survive inevitably end up making more than is needed in the market, but that extra value is mostly or entirely pocketed by whoever initiated the work, rather than the people who did the work.

 

[Max Rockatansky]

The Anarchists are the only people that have come close to creating a society along those lines.

That is why knowing what specific societies this alleged knowledge of socialism arises from is essential.

When? Where? How long did they last before being wiped out?

 

[PyramidHead]

To that, I would argue that the current system is therefore a very bad way of satisfying the nature of humans, in that the vast majority of labor produces rewards that do not accrue back to the people doing it. If anything, the thrust of socialism is to make work more rewarding, not less, by creating conditions where its immediate impact on daily prosperity is obvious rather than just increasing the stock price of whatever corporation one works for.

If they receive the same reward regardless of the amount of their labor then they do as little as possible. There was an old Soviet Russian expression "they pretend to pay us and we pretend to work". This is the bain of socialism, free riders.

Nothing in the definition of socialism requires that nobody should be rewarded for their work proportionally. It just says that, in particular, the person who should not be rewarded for their work is the capitalist who purchased it. Everything else can be hashed out by the workers in a democratic fashion. What's your objection to letting the people who actually do the work decide how they should be rewarded for it?

Also, when do you think capitalism originated in human history, and what system do you think best describes the way things were handled before then? Before we started hoarding and stockpiling grain stores, when everybody had to work together to survive, were those centuries an exception to human nature that we grudgingly tolerated until capitalism finally freed us to pursue our individual fortunes sometime in the 1300s?

I always hear this human nature argument and it always sounds like a cop-out. Are greed and the pursuit of personal gains the only human traits? I would say cooperation and empathy are also part of human nature, as well as one other thing that always goes unmentioned in these discussions: humans get an enormous emotional and psychological reward from feeling like they are in control of their own future. When a situation arises that reveals they have more power, voice, and influence then they originally believed, it feels awesome and compounds upon itself to inspire more such activity. The concept of social freedom is a strategy of leveraging that feeling in as many people as possible, and in a context that is beneficial for humans rather than each in opposition to the others.

I'd like to unpack the below definition of socialism: "It just says that, in particular, the person who should not be rewarded for their work is the capitalist who purchased it. Everything else can be hashed out by the workers in a democratic fashion. What's your objection to letting the people who actually do the work decide how they should be rewarded for it?"

There are several reasons why not allowing investors to be rewarded for their purchase would cause a system to fail.

You changed the subject. I have nothing against rewarding investors for their investment. I am saying that investors should not be rewarded for the work done by the workers.

The first and easiest reason is that the company would run out of capital. I'm in investor. I invest to make money. If I were not allowed to realize a "reward" for my investment, I'd invest in real estate or overseas. I'd invest in something that wants my money. Companies must have capital to survive. Capital mostly comes from three sources: Equity (investors cash); bank loans; and profit retention. The problems with banks is that they will generally only invest in companies that are doing well. The typical deal is that the company must be profitable, have a strong ownership/management team, and be highly deleveraged (generally defined as $3 of equity for every $1 of debt at the very least). As you can see, banks aren't going to lend to companies with no equity. If you don't have skin in the game, you won't get a loan. Profit retention doesn't work as well either because cash lags profit. As a company grows, they pay their expenses up front, but they don't realize their cash until they are paid in cash down the road. Therefore, as a company grows, it's cash flow is pushed out. Anyway, for these reasons, an economy will die out over time if their companies can't attract enough capital or investments.

A society with a fully socialist economy will have no investors and no capital, as far as I understand it. These seem to be problems of the capitalist model, in which the only behavior that makes sense is for a slim minority of the population to control the livelihood of everyone else through their private pursuit of money. If all the work that needed to be done was planned, executed, and distributed among society in a democratic way, the problem never even comes up.

 

[skepticalbip]

You are seeing the world through class warfare glasses. People are first individuals and their first concern is personal. Only someone dedicated to class warfare worries about what is in the pocket of someone else, like those "rich fuckers" you are concerned about. For most people the concern is what is in their pocket. Once they have enough in their pocket to take care of their family then they can offer help to others.

Sure, you're not wrong about any of that. The argument of socialism is that it's a better way for people to have enough to take care of their families, so if we're just talking human motivations here then it shouldn't automatically favor the system we have.

You are taking about what socialism's ideal is - a better way care for people. Reality never can compete with some idealistic dream. Reality is that people don't behave and are not motivated the way socialism's dream assumes. Free riders are a problem no attempt at implementing socialism I have heard of has been able to solve. Well, except for Pol Pot - he just summarily eliminated free riders and it seems to have worked until Viet Nam stepped in and stopped it.

How does the author of that book you are referencing suggest free riders should be dealt with and how does he suggest identifying them?

 

[PyramidHead]

You are seeing the world through class warfare glasses. People are first individuals and their first concern is personal. Only someone dedicated to class warfare worries about what is in the pocket of someone else, like those "rich fuckers" you are concerned about. For most people the concern is what is in their pocket. Once they have enough in their pocket to take care of their family then they can offer help to others.

Sure, you're not wrong about any of that. The argument of socialism is that it's a better way for people to have enough to take care of their families, so if we're just talking human motivations here then it shouldn't automatically favor the system we have.

You are taking about what socialism's ideal is - a better way care for people. Reality never can compete with some idealistic dream. Reality is that people don't behave and are not motivated the way socialism's dream assumes. Free riders are a problem no attempt at implementing socialism I have heard of has been able to solve. Well, except for Pol Pot - he just summarily eliminated free riders and it seems to have worked until Viet Nam stepped in and stopped it.

So... what's so bad about free riders, compared to some people having not enough to survive while just a few have way more than they need? I'll take a system that can't deal with free riders over one that can't keep its citizens fed, clothed, and sheltered.

 

[skepticalbip]

You are taking about what socialism's ideal is - a better way care for people. Reality never can compete with some idealistic dream. Reality is that people don't behave and are not motivated the way socialism's dream assumes. Free riders are a problem no attempt at implementing socialism I have heard of has been able to solve. Well, except for Pol Pot - he just summarily eliminated free riders and it seems to have worked until Viet Nam stepped in and stopped it.

So... what's so bad about free riders, compared to some people having not enough to survive while just a few have way more than they need? I'll take a system that can't deal with free riders over one that can't keep its citizens fed, clothed, and sheltered.

You don't seem to understand the meaning of the term, "free rider". Back to the workers in Soviet Russia and their, "they pretend to pay us and we pretend to work". That is free riders. They are not producing anyway near what they could but are still the same burden on society's resources. Free riders reduce the production because they get by with as little work as they can so everyone has less since little is produced. This is a major problem in Cuba and a big reason the rationed food is barely sufficient to feed Cuban families who's big calorie intake has to be in sugar since they don't have enough other high calorie food. Free riders are not just a small part of the labor but pretty much the norm.

In Cambodia under Pol Pot, workers were constantly monitored and were executed if the overseer decided that they weren't working hard enough. Free rider problem solved because everyone was in fear of being labeled as a slacker. Consequently they produced a hell of a lot of rice.

 

[Harry Bosch]

I'd like to unpack the below definition of socialism: "It just says that, in particular, the person who should not be rewarded for their work is the capitalist who purchased it. Everything else can be hashed out by the workers in a democratic fashion. What's your objection to letting the people who actually do the work decide how they should be rewarded for it?"

There are several reasons why not allowing investors to be rewarded for their purchase would cause a system to fail.

You changed the subject. I have nothing against rewarding investors for their investment. I am saying that investors should not be rewarded for the work done by the workers.

The first and easiest reason is that the company would run out of capital. I'm in investor. I invest to make money. If I were not allowed to realize a "reward" for my investment, I'd invest in real estate or overseas. I'd invest in something that wants my money. Companies must have capital to survive. Capital mostly comes from three sources: Equity (investors cash); bank loans; and profit retention. The problems with banks is that they will generally only invest in companies that are doing well. The typical deal is that the company must be profitable, have a strong ownership/management team, and be highly deleveraged (generally defined as $3 of equity for every $1 of debt at the very least). As you can see, banks aren't going to lend to companies with no equity. If you don't have skin in the game, you won't get a loan. Profit retention doesn't work as well either because cash lags profit. As a company grows, they pay their expenses up front, but they don't realize their cash until they are paid in cash down the road. Therefore, as a company grows, it's cash flow is pushed out. Anyway, for these reasons, an economy will die out over time if their companies can't attract enough capital or investments.

A society with a fully socialist economy will have no investors and no capital, as far as I understand it. These seem to be problems of the capitalist model, in which the only behavior that makes sense is for a slim minority of the population to control the livelihood of everyone else through their private pursuit of money. If all the work that needed to be done was planned, executed, and distributed among society in a democratic way, the problem never even comes up.

Well, I'm trying hard to not derail your thread! How the socialist system, how would the investor be rewarded? Please keep in mind that there are two types of investors: passive and non-passive. Passive owners have no say in the operations of the company. Vested owners do have a say in operations. Correct me if I'm wrong, but it seems like you are saying that profit would not be paid to investors? Again, most owners would flee if they were never paid any distributions. Most passive investors invest because they need their investments to make a return for them either for future retirement, college, or whatever.

I will agree with untermensh that the examples of a successful socialist society are very rare. However, there are plenty of examples of command economies and they always result in far less resources to be shared.

 

[Trausti]

You are taking about what socialism's ideal is - a better way care for people. Reality never can compete with some idealistic dream. Reality is that people don't behave and are not motivated the way socialism's dream assumes. Free riders are a problem no attempt at implementing socialism I have heard of has been able to solve. Well, except for Pol Pot - he just summarily eliminated free riders and it seems to have worked until Viet Nam stepped in and stopped it.

So... what's so bad about free riders, compared to some people having not enough to survive while just a few have way more than they need? I'll take a system that can't deal with free riders over one that can't keep its citizens fed, clothed, and sheltered.

You don't seem to understand the meaning of the term, "free rider". Back to the workers in Soviet Russia and their, "they pretend to pay us and we pretend to work". That is free riders. They are not producing anyway near what they could but are still the same burden on society's resources. Free riders reduce the production because they get by with as little work as they can so everyone has less since little is produced. This is a major problem in Cuba and a big reason the rationed food is barely sufficient to feed Cuban families who's big calorie intake has to be in sugar since they don't have enough other high calorie food. Free riders are not just a small part of the labor but pretty much the norm.

In Cambodia under Pol Pot, workers were constantly monitored and were executed if the overseer decided that they weren't working hard enough. Free rider problem solved because everyone was in fear of being labeled as a slacker. Consequently they produced a hell of a lot of rice.

Very true. A study of domestic Soviet life / economy is one of absenteeism and poor / low quality production. But where the Soviets permitted a modicum of capitalism - 3-4% private agricultural plots - those "capitalists" outperformed that state by a factor of 12.

 

[ruby sparks]

Ah, socialism. Always the perfect system until somebody screws it up by trying to make it apply to reality.

I hear it worked at least fairly well in Baltimore in the 1980's.

 

[ruby sparks]

Anyhows, my favourite is a blend of socialism and capitalism, preferably moderate in both cases. It's almost impossible, I think, to arrive at a defensible overall position for just one of them.

 

[Max Rockatansky]

Anyhows, my favourite is a blend of socialism and capitalism, preferably moderate in both cases. It's almost impossible, I think, to arrive at a defensible overall position for just one of them.

The best government/economic system human society seems to offer is a capitalist republic with a socialist safety net for the elderly, infirm and children.