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

[PyramidHead]

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.


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.

Yeah, the whole point I think is that there are no more investors period. If something needs to be done, everybody in society "invests" in getting it done, finds the best people to do it, and when it's done everybody who produced it reaps whatever benefits come from selling it. You're talking about things like future retirement, college, etc. that are already theoretically taken care of under socialism.

 

[skepticalbip]

Hmmmm... this thread seems to have almost experienced a sudden death..

I was still curious if that book managed to find a solution for the free rider problem. It was a problem that Karl Marx recognized as a system killer but could never solve so he just finally ignored it and assumed that everyone would work their butt off just for the sake of being able to work their butt off for the glory of socialism. Capitalism came damn close to solving it and did to the point that it isn't really a meaningful problem. Capitalism's solution is to base reward such as a job, salary, salary increases, advancement (which brings a bump in salary) all based on individual productivity and value to the company.

 

[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.

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

Look it up.

 

[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.

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.

The goals of which brand of socialism?

Where?

You're trying to chop down a redwood with a feather.

Too big a topic.

Nothing productive will come from it.

How about an simple examination of power structures and a moral evaluation of them?

 

[Canard DuJour]

Hmmmm... this thread seems to have almost experienced a sudden death..

I was still curious if that book managed to find a solution for the free rider problem. It was a problem that Karl Marx recognized as a system killer but could never solve so he just finally ignored it and assumed that everyone would work their butt off just for the sake of being able to work their butt off for the glory of socialism. Capitalism came damn close to solving it and did to the point that it isn't really a meaningful problem. Capitalism's solution is to base reward such as a job, salary, salary increases, advancement (which brings a bump in salary) all based on individual productivity and value to the company.

The Soviets were obsessed with rewarding productivity and basically outlawed free-riding. Since everyone had to have a job, workplaces were often seriously overmanned (hence "we pretend to work etc"). Marx didn't write about any system but capitalism, where he thought the free riders were the capitalists.

 

[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.

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.

Scandinavia!

 

[Harry Bosch]

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.

Scandinavia!

Ruby and Max: did you read the first post? Please start from the beginning. This thread is about specifically about Axel Honneth and his book The Idea of Socialism: Towards a Renewal. We are discussing the classic pros/cons of classic socialism. You are just derailing the thread if you just start comparing it to the Scandinavia.

 

[ruby sparks]

Sorry.

Just socialism. No hybrids. Got it.

 

[Max Rockatansky]

Scandinavia!

Ruby and Max: did you read the first post? Please start from the beginning. This thread is about specifically about Axel Honneth and his book The Idea of Socialism: Towards a Renewal. We are discussing the classic pros/cons of classic socialism. You are just derailing the thread if you just start comparing it to the Scandinavia.

First, Scandinavia is a region, not a country. None of those countries are socialist. They're capitalist parliamentary constitutional monarchies albeit with a large socialist safety net. Capitalism pays for the socialism. No capitalism, then those socialist programs would collapse.

Examples --
Norway: https://www.cia.gov/library/publications/the-world-factbook/geos/no.html

Sweden: https://www.cia.gov/library/publications/the-world-factbook/geos/sw.html

 

[Axulus]

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.

If you are rewarded the same amount whether you contribute capital to an endeavor or not, there is no incentive to contribute capital = minimal capital per worker = everyone is poor.

 

[untermensche]

If you are rewarded the same amount whether you contribute capital to an endeavor or not, there is no incentive to contribute capital = minimal capital per worker = everyone is poor.

A society needs a source of capital.

It can be a kind of deliberate return to the jungle where individuals fight individually for capital.

Or it could be something rational.

Like maybe government banks that lend capital to groups of workers with schemes.

 

[Axulus]

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.


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.

Yeah, the whole point I think is that there are no more investors period. If something needs to be done, everybody in society "invests" in getting it done, finds the best people to do it, and when it's done everybody who produced it reaps whatever benefits come from selling it. You're talking about things like future retirement, college, etc. that are already theoretically taken care of under socialism.

Doesn't work well at all. That is a command economy where the state decides what "needs" to be done. The state is horrible at determining what needs to be produced. It leads to extreme shortages and surpluses. Additionally, it leads to a stagnant economy. Risky innovation is rarely funded by the state: what politician wants to take the risk of blame for a failure? Also, how can a bureaucrat possibly have the technical and business knowledge needed to predict what new technologies and products are promising that the public might be interested in buying? Or which production methods are worth the cost of investing in? Things that have never been tried? They don't. Many more bad decisions will be made and such an economy will not be very dynamic and will lack growth.

 

[Axulus]

If you are rewarded the same amount whether you contribute capital to an endeavor or not, there is no incentive to contribute capital = minimal capital per worker = everyone is poor.

A society needs a source of capital.

It can be a kind of deliberate return to the jungle where individuals fight individually for capital.

Or it could be something rational.

Like maybe government banks that lend capital to groups of workers with schemes.

Why do the banks have to be "government banks"? Regular banks will loan money to a group of workers who need money for a company if the loan is low risk and the company has assets to pledge. The state banks in China make a lot of bad loans, for example.

Note that this ability for worker owners to borrow money from banks already exists in capitalist economies. When banks are run by the government, you can get your economy into some really bad situations. They will be run based on political considerations: making lots of bad loans to favored political groups and to keep the economy from entering recession.

Also, what do you do when a group of workers wants to create or expand a company and they allow a passive investor 10% of profits in exchange for capital? Perhaps the government bank said no to their loan request. Are you going to have the boot of big government stomp out such arrangements?

 

[untermensche]

If you are rewarded the same amount whether you contribute capital to an endeavor or not, there is no incentive to contribute capital = minimal capital per worker = everyone is poor.

A society needs a source of capital.

It can be a kind of deliberate return to the jungle where individuals fight individually for capital.

Or it could be something rational.

Like maybe government banks that lend capital to groups of workers with schemes.

Why do the banks have to be "government banks"? Regular banks will loan money to a group of workers who need money for a company if the loan is low risk and the company has assets to pledge.

No they don't.

They lend to individuals that will run their company in a dictatorial fashion to maximize profits.

Worker run companies will give more to themselves and have smaller profits.

Banks don't like that.

Not in the man-made jungle called capitalism.

 

[Axulus]

Why do the banks have to be "government banks"? Regular banks will loan money to a group of workers who need money for a company if the loan is low risk and the company has assets to pledge.

No they don't.

They lend to individuals that will run their company in a dictatorial fashion to maximize profits.

Worker run companies will give more to themselves and have smaller profits.

Banks don't like that.

Not in the man-made jungle called capitalism.

False. Banks look for sufficient cash flows to service the loan and competent management that will work to prevent cash flows from dropping to critically low levels. They don't assess whether or not management will maximize future cash flows. You do realize banks give out loans to non-profit organizations, including governments, right? That right there completely refutes your silly claim.

 

[Harry Bosch]

Why do the banks have to be "government banks"? Regular banks will loan money to a group of workers who need money for a company if the loan is low risk and the company has assets to pledge.

No they don't.

They lend to individuals that will run their company in a dictatorial fashion to maximize profits.

Worker run companies will give more to themselves and have smaller profits.

Banks don't like that.

Not in the man-made jungle called capitalism.

False. Banks look for sufficient cash flows to service the loan and competent management that will work to prevent cash flows from dropping to critically low levels. They don't assess whether or not management will maximize future cash flows. You do realize banks give out loans to non-profit organizations, including governments, right? That right there completely refutes your silly claim.

As a former banker, I've also lent to ESOPs, 501c3s, churches, and worker owned companies (not all worker owned companies are ESOPs).

 

[untermensche]

Why do the banks have to be "government banks"? Regular banks will loan money to a group of workers who need money for a company if the loan is low risk and the company has assets to pledge.

No they don't.

They lend to individuals that will run their company in a dictatorial fashion to maximize profits.

Worker run companies will give more to themselves and have smaller profits.

Banks don't like that.

Not in the man-made jungle called capitalism.

False. Banks look for sufficient cash flows to service the loan and competent management that will work to prevent cash flows from dropping to critically low levels. They don't assess whether or not management will maximize future cash flows. You do realize banks give out loans to non-profit organizations, including governments, right? That right there completely refutes your silly claim.

You realize banks are huge corporations within the capitalist system?

They have a very strong interest in maintaining the current system.

And very little interest in people wanting to change things.

This is just the real world.

And for above: what size and type of worker owned company did you lend to?

 

[Harry Bosch]

False. Banks look for sufficient cash flows to service the loan and competent management that will work to prevent cash flows from dropping to critically low levels. They don't assess whether or not management will maximize future cash flows. You do realize banks give out loans to non-profit organizations, including governments, right? That right there completely refutes your silly claim.

You realize banks are huge corporations within the capitalist system?

They have a very strong interest in maintaining the current system.

And very little interest in people wanting to change things.

This is just the real world.

Banks aren't out there trying to "maintain the system". They are just like you and I, they are trying to earn a living, feed their families.

 

[untermensche]

False. Banks look for sufficient cash flows to service the loan and competent management that will work to prevent cash flows from dropping to critically low levels. They don't assess whether or not management will maximize future cash flows. You do realize banks give out loans to non-profit organizations, including governments, right? That right there completely refutes your silly claim.

You realize banks are huge corporations within the capitalist system?

They have a very strong interest in maintaining the current system.

And very little interest in people wanting to change things.

This is just the real world.

Banks aren't out there trying to "maintain the system". They are just like you and I, they are trying to earn a living, feed their families.

They also have to justify their actions.

Many of them actually see capitalism, a bunch of powerful dictatorships, as a good and moral system to support.

They are 100% behind capitalism and behind great men like Donald Trump.

 

[Harry Bosch]

Banks aren't out there trying to "maintain the system". They are just like you and I, they are trying to earn a living, feed their families.

They also have to justify their actions.

Many of them actually see capitalism, a bunch of powerful dictatorships, as a good and moral system to support.

They are 100% behind capitalism and behind great men like Donald Trump.

They don't see it as good and moral. They more see it as working, proven, and a means to end.