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What's wrong with socialism, economically?

DisKamper
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8/28/2015 6:06:12 PM
Posted: 1 year ago
Since there is one about communism, I'll ask about the related socialism. Specifically, I'll ask about market socialism since it's more clear why non-market socialism doesn't work, and the flaws of market socialism will probably apply to all socialist economic systems. To start, let's agree on a common definition, since it may mean many things to different people.

Market socialism is a type of economic system involving the public, cooperative or social ownership of the means of production in the framework of a market economy. (Wikipedia)

To clarify, what this means in practice, profits are distributed given to the government, distributed to citizens (who are considered owners), given to employees (in addition to their regular salaries), or some combination of these.
Lee308
Posts: 53
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8/28/2015 9:57:10 PM
Posted: 1 year ago
I am forced at gun point to give money to those that don't deserve it, just like WELFARE in the USSA today.

I HATE being forced at gun point to pay for welfare!
Lee308
Posts: 53
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8/28/2015 9:58:51 PM
Posted: 1 year ago
Let me add, just like union's, why work hard, no reason to do so, you get paid the same, regardless of if you are qualified or not.
So those that can do stuff, pay for those that are to stupid to do stuff.
DisKamper
Posts: 63
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8/29/2015 3:10:24 AM
Posted: 1 year ago
At 8/28/2015 9:57:10 PM, Lee308 wrote:
I am forced at gun point to give money to those that don't deserve it, just like WELFARE in the USSA today.

I HATE being forced at gun point to pay for welfare!
Let me add, just like union's, why work hard, no reason to do so, you get paid the same, regardless of if you are qualified or not.
So those that can do stuff, pay for those that are to stupid to do stuff.

Did you post in the wrong place? I'm not sure how this is quite relevant. Market socialism and welfare and labor unions are all different topics.
riveroaks
Posts: 265
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8/29/2015 4:58:20 AM
Posted: 1 year ago
At 8/28/2015 6:06:12 PM, DisKamper wrote:
Since there is one about communism, I'll ask about the related socialism. Specifically, I'll ask about market socialism since it's more clear why non-market socialism doesn't work, and the flaws of market socialism will probably apply to all socialist economic systems. To start, let's agree on a common definition, since it may mean many things to different people.

Market socialism is a type of economic system involving the public, cooperative or social ownership of the means of production in the framework of a market economy. (Wikipedia)

To clarify, what this means in practice, profits are distributed given to the government, distributed to citizens (who are considered owners), given to employees (in addition to their regular salaries), or some combination of these.

This is a lot of gobblygook.

Not sure where you got your straw-man definition.

Try Websters Dictionary next time for openers if you cannot do better than this.
DisKamper
Posts: 63
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8/29/2015 4:59:39 PM
Posted: 1 year ago
At 8/29/2015 4:58:20 AM, riveroaks wrote:
At 8/28/2015 6:06:12 PM, DisKamper wrote:
Since there is one about communism, I'll ask about the related socialism. Specifically, I'll ask about market socialism since it's more clear why non-market socialism doesn't work, and the flaws of market socialism will probably apply to all socialist economic systems. To start, let's agree on a common definition, since it may mean many things to different people.

Market socialism is a type of economic system involving the public, cooperative or social ownership of the means of production in the framework of a market economy. (Wikipedia)

To clarify, what this means in practice, profits are distributed given to the government, distributed to citizens (who are considered owners), given to employees (in addition to their regular salaries), or some combination of these.

This is a lot of gobblygook.

Not sure where you got your straw-man definition.

Try Websters Dictionary next time for openers if you cannot do better than this.

Market socialism isn't on Websters. I am quite sure that my definition is reasonably accurate, but if you have any objections please state them explicitly. Here's what it says on Wikipedia:

"Market socialism is a type of economic system involving the public, cooperative or social ownership of the means of production in the framework of a market economy. Market socialism differs from non-market socialism in that the market mechanism is utilized for the allocation of capital goods and the means of production.[1][2][3] Depending on the specific model of market socialism, profits generated by socially owned firms may variously be used to directly remunerate employees, accrue to society at large as the source of public finance, or be distributed amongst the population in a social dividend.[4]"

If you think I am making things up, please offer your own specific, precise definition.
bballcrook21
Posts: 4,468
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8/29/2015 8:43:14 PM
Posted: 1 year ago
No form of Socialism is better or as good as any form of Capitalism. There are two main types of Socialism, being Democratic Socialism and National Socialism. Great examples of National Socialism would be the Nazi Party.

Democratic Socialism is very vague. It is rather hard to look at one nation and see it as a Democratic Socialist state. There is a great misconception in which many left-wingers label Scandinavian nations as Democratic Socialist, which they are not.

Ultimately, there isn't one great type of government, and the only way to fix this issue is anarchy. If you do not want to resort to great idealism such as anarchy, then you need the next available option, which is a Democratic Republic, with a Capitalist economy.

If you take a look at China, their economic growth increases tremendously in the 1980's when they started to incorporate more Capitalist policies.

The topic of this forum is Socialism on its own, but I will resort to explaining Democratic Socialism as I am sure everyone knows how bad National Socialism is for the economy. High taxes, extensive restrictions, and governmental interference in the economy does nothing but hurt it. The more business freedom there is, which you cannot have under Socialism, the stronger the economy will be and the faster it will grow.
If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand. - Friedman

Underlying most arguments against the free market is a lack of belief in freedom itself. -Friedman

Nothing is so permanent as a temporary government program. - Friedman

Society will never be free until the last Democrat is strangled with the entrails of the last Communist.
DisKamper
Posts: 63
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8/29/2015 9:08:16 PM
Posted: 1 year ago
At 8/29/2015 8:43:14 PM, bballcrook21 wrote:
No form of Socialism is better or as good as any form of Capitalism. There are two main types of Socialism, being Democratic Socialism and National Socialism. Great examples of National Socialism would be the Nazi Party.

Democratic Socialism is very vague. It is rather hard to look at one nation and see it as a Democratic Socialist state. There is a great misconception in which many left-wingers label Scandinavian nations as Democratic Socialist, which they are not.

Ultimately, there isn't one great type of government, and the only way to fix this issue is anarchy. If you do not want to resort to great idealism such as anarchy, then you need the next available option, which is a Democratic Republic, with a Capitalist economy.

If you take a look at China, their economic growth increases tremendously in the 1980's when they started to incorporate more Capitalist policies.

The topic of this forum is Socialism on its own, but I will resort to explaining Democratic Socialism as I am sure everyone knows how bad National Socialism is for the economy. High taxes, extensive restrictions, and governmental interference in the economy does nothing but hurt it. The more business freedom there is, which you cannot have under Socialism, the stronger the economy will be and the faster it will grow.

True, the type of government can certainly impact the economy; I think we can assume a democratic system. I agree that high taxes and gov't interference tend to hurt the economy. Yet, these are often found in welfare state type systems rather than market socialist systems. Indeed, market socialism retains the free-market structure of a free-market capitalist system- the only difference is business ownership. I'm curious exactly why when profits (not salaries) are distributed among gov't/employees/people the economy doesn't work.
bballcrook21
Posts: 4,468
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8/29/2015 9:51:16 PM
Posted: 1 year ago
Because distribution does not work. When you collect all income and then redistribute it evenly that is grounds for corruption. There is no incentive to work harder or create a better product if someone else will decide your income and refuse to increase it. Better work should equal higher earnings.
If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand. - Friedman

Underlying most arguments against the free market is a lack of belief in freedom itself. -Friedman

Nothing is so permanent as a temporary government program. - Friedman

Society will never be free until the last Democrat is strangled with the entrails of the last Communist.
DisKamper
Posts: 63
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8/29/2015 11:03:52 PM
Posted: 1 year ago
At 8/29/2015 9:51:16 PM, bballcrook21 wrote:
Because distribution does not work. When you collect all income and then redistribute it evenly that is grounds for corruption. There is no incentive to work harder or create a better product if someone else will decide your income and refuse to increase it. Better work should equal higher earnings.

The point with corruption applies to taxation in general- there is always a scope for corruption. There is corruption even in capitalism. Plus, not all income is collected at all- only profits. Salaries are for the most part untouched.

To your second point, this is about market socialism. Prices/salaries are determined by the market- not the government. Better products translate to higher prices on the market, retaining the incentive to do better work. The difference is that business owners can't profit as much- which doesn't impact the incentives for working at all.
ax123man
Posts: 317
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8/30/2015 1:19:36 AM
Posted: 1 year ago
At 8/29/2015 11:03:52 PM, DisKamper wrote:
At 8/29/2015 9:51:16 PM, bballcrook21 wrote:
Because distribution does not work. When you collect all income and then redistribute it evenly that is grounds for corruption. There is no incentive to work harder or create a better product if someone else will decide your income and refuse to increase it. Better work should equal higher earnings.

The point with corruption applies to taxation in general- there is always a scope for corruption. There is corruption even in capitalism. Plus, not all income is collected at all- only profits. Salaries are for the most part untouched.

To your second point, this is about market socialism. Prices/salaries are determined by the market- not the government. Better products translate to higher prices on the market, retaining the incentive to do better work. The difference is that business owners can't profit as much- which doesn't impact the incentives for working at all.

Some of the literature I've read on market socialism has a central planner setting initial prices and then the same planners adjusting them based on supply & demand. This is quite different than a real market economy. Even your wikipedia article talks about various forms of market socialism. So the devils in the details and I can't really comment too much without seeing a specific proposal.

The main issues I see, in general, with market socialism have to do with profit incentives and the inability of lower level managers to make decisions because they don't control resources - central planners do.
riveroaks
Posts: 265
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8/30/2015 2:31:59 AM
Posted: 1 year ago
At 8/29/2015 4:59:39 PM, DisKamper wrote:
At 8/29/2015 4:58:20 AM, riveroaks wrote:
At 8/28/2015 6:06:12 PM, DisKamper wrote:
Since there is one about communism, I'll ask about the related socialism. Specifically, I'll ask about market socialism since it's more clear why non-market socialism doesn't work, and the flaws of market socialism will probably apply to all socialist economic systems. To start, let's agree on a common definition, since it may mean many things to different people.

Market socialism is a type of economic system involving the public, cooperative or social ownership of the means of production in the framework of a market economy. (Wikipedia)

To clarify, what this means in practice, profits are distributed given to the government, distributed to citizens (who are considered owners), given to employees (in addition to their regular salaries), or some combination of these.

This is a lot of gobblygook.

Not sure where you got your straw-man definition.

Try Websters Dictionary next time for openers if you cannot do better than this.

Market socialism isn't on Websters. I am quite sure that my definition is reasonably accurate, but if you have any objections please state them explicitly. Here's what it says on Wikipedia:

"Market socialism is a type of economic system involving the public, cooperative or social ownership of the means of production in the framework of a market economy. Market socialism differs from non-market socialism in that the market mechanism is utilized for the allocation of capital goods and the means of production.[1][2][3] Depending on the specific model of market socialism, profits generated by socially owned firms may variously be used to directly remunerate employees, accrue to society at large as the source of public finance, or be distributed amongst the population in a social dividend.[4]"

If you think I am making things up, please offer your own specific, precise definition.

Well in that case I have never heard of your definition.

Not even sure if it has any usefulness.
DisKamper
Posts: 63
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8/30/2015 5:41:43 AM
Posted: 1 year ago
At 8/30/2015 1:19:36 AM, ax123man wrote:
At 8/29/2015 11:03:52 PM, DisKamper wrote:
At 8/29/2015 9:51:16 PM, bballcrook21 wrote:
Because distribution does not work. When you collect all income and then redistribute it evenly that is grounds for corruption. There is no incentive to work harder or create a better product if someone else will decide your income and refuse to increase it. Better work should equal higher earnings.

The point with corruption applies to taxation in general- there is always a scope for corruption. There is corruption even in capitalism. Plus, not all income is collected at all- only profits. Salaries are for the most part untouched.

To your second point, this is about market socialism. Prices/salaries are determined by the market- not the government. Better products translate to higher prices on the market, retaining the incentive to do better work. The difference is that business owners can't profit as much- which doesn't impact the incentives for working at all.

Some of the literature I've read on market socialism has a central planner setting initial prices and then the same planners adjusting them based on supply & demand. This is quite different than a real market economy. Even your wikipedia article talks about various forms of market socialism. So the devils in the details and I can't really comment too much without seeing a specific proposal.

The main issues I see, in general, with market socialism have to do with profit incentives and the inability of lower level managers to make decisions because they don't control resources - central planners do.

I see. I suppose this is more complex than I initially anticipated. Let me outline a specific proposal then:

Tax 95% of all economic profits (i.e. opportunity costs are taken into account). Use some of the money for necessary government spending and distribute the rest equally among all citizens.

Note that this is different from the traditional "welfare state" since economic profits rather than incomes are taxed. Also, let me address an obvious potential criticism of this plan: too much money flows through the government allowing room for corruption. Yes, this is true, but not unique to this proposal at all. Indeed, money flows through the hands of the government whenever there are taxes. I have a hard time believing this is the primary reason socialism fails.
kowalskil
Posts: 68
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8/30/2015 11:58:12 PM
Posted: 1 year ago
At 8/28/2015 9:57:10 PM, Lee308 wrote:
I am forced at gun point to give money to those that don't deserve it, just like WELFARE in the USSA today ... "

Socialist economy is good "in theory" but it was not good in practice. I am thinking about the USSR and other "socialist" countries.

http://pages.csam.montclair.edu...
Ludwik Kowalski (see Wikipedia)
Ludwik Kowalski, author of "Diary of a Former Communist: Thoughts, Feelings, Reality." <http://csam.montclair.edu...

http://csam.montclair.edu...

It is a testimony based on a diary kept between 1946 and 2004 (in the USSR, Poland, France and the USA).

The more people know about proletarian dictatorship the less likely will we experience is. Please share the link with those who might be interested, especially with youn
ax123man
Posts: 317
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8/31/2015 1:55:47 AM
Posted: 1 year ago
At 8/30/2015 5:41:43 AM, DisKamper wrote:
At 8/30/2015 1:19:36 AM, ax123man wrote:
At 8/29/2015 11:03:52 PM, DisKamper wrote:
At 8/29/2015 9:51:16 PM, bballcrook21 wrote:
Because distribution does not work. When you collect all income and then redistribute it evenly that is grounds for corruption. There is no incentive to work harder or create a better product if someone else will decide your income and refuse to increase it. Better work should equal higher earnings.

The point with corruption applies to taxation in general- there is always a scope for corruption. There is corruption even in capitalism. Plus, not all income is collected at all- only profits. Salaries are for the most part untouched.

To your second point, this is about market socialism. Prices/salaries are determined by the market- not the government. Better products translate to higher prices on the market, retaining the incentive to do better work. The difference is that business owners can't profit as much- which doesn't impact the incentives for working at all.

Some of the literature I've read on market socialism has a central planner setting initial prices and then the same planners adjusting them based on supply & demand. This is quite different than a real market economy. Even your wikipedia article talks about various forms of market socialism. So the devils in the details and I can't really comment too much without seeing a specific proposal.

The main issues I see, in general, with market socialism have to do with profit incentives and the inability of lower level managers to make decisions because they don't control resources - central planners do.

I see. I suppose this is more complex than I initially anticipated. Let me outline a specific proposal then:

Tax 95% of all economic profits (i.e. opportunity costs are taken into account). Use some of the money for necessary government spending and distribute the rest equally among all citizens.

Note that this is different from the traditional "welfare state" since economic profits rather than incomes are taxed. Also, let me address an obvious potential criticism of this plan: too much money flows through the government allowing room for corruption. Yes, this is true, but not unique to this proposal at all. Indeed, money flows through the hands of the government whenever there are taxes. I have a hard time believing this is the primary reason socialism fails.

You are correct, corruption is not the primary reason socialism fails. However, your given plan hasn't really addressed the necessary details.

First, let me say "Market Socialism" was created in response to the economic calculation problem raised by Ludwig Von Mises in 1920. Mises showed that market prices could not be determined under socialism. Market prices are critical to an economy because they help to balance supply and demand and coordinate production.

And, on the surface, it would appear that Market Socialism addresses this. But it raises many other questions. To unravel this, you have to look at the rolls played by various participants under capitalism:

entrepreneur: provides market insight, attempts to determine consumers wants, selects among candidates for startup funding
capitalist: provides funding
management: manages the details of various functions
marketing: provides information to potential consumers in order to increase sales
sales: engages clients directly in order to facilitate sales
stock market: alternative method of capital funding, allows for anyone to be an owner
commodities & futures markets: provides a way to reduce risk in markets
banking: provides another source of funding

So how would all of these functions be provided under Market Socialism? The entrepreneur is especially important since they specialize in innovation and satisfying consumers. The entrepreneur and capitalist are highly motivated because of the large payoff potential. It would appear that motivation would be lost under Market Socialism. This is why socialist countries tend to simply copy products from Western capitalist countries. Also, under capitalism, the best rise to the top while those who fail must find other lines of work. Would this occur under Market Socialism? It would appear the incentives are not in place for this to occur.

As far as setting prices, how would this occur exactly? Socialism, even Market Socialism, implies centralized control of resources. Under capitalism, individual experts constantly review supply and demand and make decisions on prices, sales, etc. If you are saying this occurs under Market Socialism, then the central planning board does not really control resources. I'm not sure this qualifies as socialism at that point. The one proposal I saw indicated that central planning would try to monitor supply and demand and come up with "formulas" to set prices. This is a recognition of the scope of the problem: there are approx. 30 million businesses in the U.S.. Even if they had only 100 products per, that is 3 billion prices and they are constantly changing. This seems doomed to failure. How many members are on this planning board? I mean you have to be an expert on the products and their supply and demand to set prices.

Do sales & marketing exist?

What about stock markets, commodities & futures, banking? Do they exist? If not, how are these functions handled?

The more I learn about economics and how the free market works, the more astounded I am. It's almost magical. Socialism clearly is the opposite of magical. It has failed miserably and I doubt that new forms of socialism have worked out all the issues. And I'm FAR from an expert - there are many other details which I'm sure I'm not even thinking of.

There is a paper written by Leonard Read called "I, Pencil" you might want to check out. The idea is that no one person on the face of earth has the knowledge to make pencils such as is done today. Think about all the processes that go into it: tree farm management, tree cutting machines, lumber processing, all the material, science and engineering that goes into those machines, then the paint, lead and rubber. How does this all come together without central planning? Anyone can get a pencil in a million different stores for a few cents. The answer is the autonomy of millions of individuals coordinated by supply, demand and market prices.
joe1776
Posts: 7
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8/31/2015 11:26:08 PM
Posted: 1 year ago
When we cooperate, everyone wins. When we compete, someone must lose. So, at the foundation level, cooperation is clearly the better choice. However, a cooperative economy needs a competent, clean policy-making process to manage it. The world has never had a government that wasn't incompetent, corrupt, or both. Therefore, the policy-making problem has to be solved before the economic problem can be solved.

I think a money-less economy is possible one day when we get it right. Money facilitates trade but it also facilitates crime and corruption.

The competitive marketplace works fairly well when consumers can shop and compare and they are spending their own money. Products can usually be seen and compared before they are bought. But not so with services. Since most people are math illiterate, the financial services industry is rife with fraud both the legal and illegal varieties.

Insured healthcare means that the consumers don't care about the cost of the services they receive. They often know if the services are even necessary much less what a fair price should be. The insurance carriers are happy to see prices rise because it's more profitable to have a 10% share of a 2.5 trillion dollar industry than a 10% share of a 1.5 trillion dollar industry.

Because of the profit motive, Big Pharma is motivate to produce drugs that will maintain illness for a lifetime rather than to find drugs that will prevent them.
ax123man
Posts: 317
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8/31/2015 11:56:56 PM
Posted: 1 year ago
At 8/31/2015 11:26:08 PM, joe1776 wrote:
When we cooperate, everyone wins. When we compete, someone must lose.

But business that are competitors cooperate all the time. And an economy that has no losers can't be successful in the long run. Those who are poor performing the role of capitalist, entrepreneur, etc need to be weeded out. That's how we grow successful businesses.

I think a money-less economy is possible one day when we get it right. Money facilitates trade but it also facilitates crime and corruption.

Great, how would that work? I mean money is one of the primary facilitators (along with free trade & the division of labor) of wealth creation.

Insured healthcare means that the consumers don't care about the cost of the services they receive. They often know if the services are even necessary much less what a fair price should be. The insurance carriers are happy to see prices rise because it's more profitable to have a 10% share of a 2.5 trillion dollar industry than a 10% share of a 1.5 trillion dollar industry.

I agree with this. It's failing because there are no market prices. So how would that moneyless economic system work again?

Because of the profit motive, Big Pharma is motivate to produce drugs that will maintain illness for a lifetime rather than to find drugs that will prevent them.

So if it were possible to develop a drug that cured cancer and therefore made the owners millionaires, your saying instead those owners would say "No, we don't want that. Let's collude with all the other pharmacies and make sure nobody develops this"? This doesn't make any sense.
DisKamper
Posts: 63
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9/1/2015 12:58:44 AM
Posted: 1 year ago
At 8/31/2015 1:55:47 AM, ax123man wrote:
At 8/30/2015 5:41:43 AM, DisKamper wrote:
At 8/30/2015 1:19:36 AM, ax123man wrote:
At 8/29/2015 11:03:52 PM, DisKamper wrote:
At 8/29/2015 9:51:16 PM, bballcrook21 wrote:
Because distribution does not work. When you collect all income and then redistribute it evenly that is grounds for corruption. There is no incentive to work harder or create a better product if someone else will decide your income and refuse to increase it. Better work should equal higher earnings.

The point with corruption applies to taxation in general- there is always a scope for corruption. There is corruption even in capitalism. Plus, not all income is collected at all- only profits. Salaries are for the most part untouched.

To your second point, this is about market socialism. Prices/salaries are determined by the market- not the government. Better products translate to higher prices on the market, retaining the incentive to do better work. The difference is that business owners can't profit as much- which doesn't impact the incentives for working at all.

Some of the literature I've read on market socialism has a central planner setting initial prices and then the same planners adjusting them based on supply & demand. This is quite different than a real market economy. Even your wikipedia article talks about various forms of market socialism. So the devils in the details and I can't really comment too much without seeing a specific proposal.

The main issues I see, in general, with market socialism have to do with profit incentives and the inability of lower level managers to make decisions because they don't control resources - central planners do.

I see. I suppose this is more complex than I initially anticipated. Let me outline a specific proposal then:

Tax 95% of all economic profits (i.e. opportunity costs are taken into account). Use some of the money for necessary government spending and distribute the rest equally among all citizens.

Note that this is different from the traditional "welfare state" since economic profits rather than incomes are taxed. Also, let me address an obvious potential criticism of this plan: too much money flows through the government allowing room for corruption. Yes, this is true, but not unique to this proposal at all. Indeed, money flows through the hands of the government whenever there are taxes. I have a hard time believing this is the primary reason socialism fails.

You are correct, corruption is not the primary reason socialism fails. However, your given plan hasn't really addressed the necessary details.

First, let me say "Market Socialism" was created in response to the economic calculation problem raised by Ludwig Von Mises in 1920. Mises showed that market prices could not be determined under socialism. Market prices are critical to an economy because they help to balance supply and demand and coordinate production.

And, on the surface, it would appear that Market Socialism addresses this. But it raises many other questions. To unravel this, you have to look at the rolls played by various participants under capitalism:

entrepreneur: provides market insight, attempts to determine consumers wants, selects among candidates for startup funding
capitalist: provides funding
management: manages the details of various functions
marketing: provides information to potential consumers in order to increase sales
sales: engages clients directly in order to facilitate sales
stock market: alternative method of capital funding, allows for anyone to be an owner
commodities & futures markets: provides a way to reduce risk in markets
banking: provides another source of funding

So how would all of these functions be provided under Market Socialism? The entrepreneur is especially important since they specialize in innovation and satisfying consumers. The entrepreneur and capitalist are highly motivated because of the large payoff potential. It would appear that motivation would be lost under Market Socialism.

Could you explain why?

This is why socialist countries tend to simply copy products from Western capitalist countries. Also, under capitalism, the best rise to the top while those who fail must find other lines of work. Would this occur under Market Socialism? It would appear the incentives are not in place for this to occur.

Well, because the system is a market economy wouldn't the best be paid more because they make better products and offer better services? Maybe I'm not seeing something here.

As far as setting prices, how would this occur exactly? Socialism, even Market Socialism, implies centralized control of resources. Under capitalism, individual experts constantly review supply and demand and make decisions on prices, sales, etc. If you are saying this occurs under Market Socialism, then the central planning board does not really control resources. I'm not sure this qualifies as socialism at that point. The one proposal I saw indicated that central planning would try to monitor supply and demand and come up with "formulas" to set prices. This is a recognition of the scope of the problem: there are approx. 30 million businesses in the U.S.. Even if they had only 100 products per, that is 3 billion prices and they are constantly changing. This seems doomed to failure. How many members are on this planning board? I mean you have to be an expert on the products and their supply and demand to set prices.

I can understand why centralization doesn't work. At this point, the semantics don't really matter to me: I'd like to know why a decentralized economy in which profits are distributed to some combination of government/people/employees doesn't work, whether we call it socialism or not. Getting back to my proposal:

Do sales & marketing exist?

Yes.

What about stock markets, commodities & futures, banking? Do they exist? If not, how are these functions handled?

Yes, these are all handled mostly the same way. Basically the scenario is that one day Congress decides to reform the tax code. It abolishes most major taxes (income tax, sales tax) and creates this 95% economic profit tax. The reason I way 95% instead of 100% is that this ensures that the market regulates itself- if it were 100% arbitrage would not equalize prices in different areas.

The more I learn about economics and how the free market works, the more astounded I am. It's almost magical. Socialism clearly is the opposite of magical. It has failed miserably and I doubt that new forms of socialism have worked out all the issues. And I'm FAR from an expert - there are many other details which I'm sure I'm not even thinking of.

Yes, it is magical in theory. If only it were like that in practice. In my view the ideal economic system is allocatively efficient- capitalism theoretically satisfies this but in practice this is obviously not the case. I am wondering if socialism is allocatively efficient- and if not which economic system is.

There is a paper written by Leonard Read called "I, Pencil" you might want to check out. The idea is that no one person on the face of earth has the knowledge to make pencils such as is done today. Think about all the processes that go into it: tree farm management, tree cutting machines, lumber processing, all the material, science and engineering that goes into those machines, then the paint, lead and rubber. How does this all come together without central planning? Anyone can get a pencil in a million different stores for a few cents. The answer is the autonomy of millions of individuals coordinated by supply, demand and market prices.

Yeah, it kind of is miraculous how capitalism works. It's like natural selection or the cell- despite obvi
DisKamper
Posts: 63
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9/1/2015 1:00:13 AM
Posted: 1 year ago
Yeah, it kind of is miraculous how capitalism works. It's like natural selection or the cell- despite obvious flaws, it is brilliantly efficient.
joe1776
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9/1/2015 5:15:30 AM
Posted: 1 year ago
ax123man

But business that are competitors cooperate all the time. And an economy that has no losers can't be successful in the long run...

You are describing how a competitive economy has to work. You are not thinking about how a well-managed cooperative economy might work.

Great, how would that [money-less economy] work? I mean money is one of the primary facilitators (along with free trade & the division of labor) of wealth creation.

You don't need to facilitate trade in a cooperative economy. That's why money isn't needed. A well-organized management system would create jobs for everyone (Bear in mind that the profit motive is no longer in play) -- jobs that provide the goods and services needed to maintain the same high standard of living for all.

So if it were possible to develop a drug that cured cancer and therefore made the owners millionaires, your saying instead those owners would say "No, we don't want that. Let's collude with all the other pharmacies and make sure nobody develops this"? This doesn't make any sense.

You created a hypothetical that would not make sense, but here's reality:

Collusion isn't necessary. You are the CEO of a big drug company with X dollars to spend on research. With the profit motive in mind, should you invest X in a) trying to find a low-cost way to prevent disease or b) a high-cost was to manage the symptoms for a lifetime?
joe1776
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9/1/2015 5:30:04 AM
Posted: 1 year ago
At 9/1/2015 1:00:13 AM, DisKamper wrote:
Yeah, it kind of is miraculous how capitalism works. It's like natural selection or the cell- despite obvious flaws, it is brilliantly efficient.

Brilliantly efficient? We must not be looking at the same evidence.

As for evolution, it seems to me that natural selection is favoring the survival of those willing to cooperate in a worthy cause rather than those who compete because they are driven by greed and economic materialism.
ax123man
Posts: 317
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9/1/2015 11:12:09 AM
Posted: 1 year ago
At 9/1/2015 12:58:44 AM, DisKamper wrote:
At 8/31/2015 1:55:47 AM, ax123man wrote:
At 8/30/2015 5:41:43 AM, DisKamper wrote:

So how would all of these functions be provided under Market Socialism? The entrepreneur is especially important since they specialize in innovation and satisfying consumers. The entrepreneur and capitalist are highly motivated because of the large payoff potential. It would appear that motivation would be lost under Market Socialism.

Could you explain why?

For the same reason that farmers in China under full communal food distribution vastly underperformed their potential. That changed when the govt. started allowing farmers to keep some of what they grow. Isn't it on you to explain why one would be just as motivated when they don't get to keep what they create?


This is why socialist countries tend to simply copy products from Western capitalist countries. Also, under capitalism, the best rise to the top while those who fail must find other lines of work. Would this occur under Market Socialism? It would appear the incentives are not in place for this to occur.

Well, because the system is a market economy wouldn't the best be paid more because they make better products and offer better services? Maybe I'm not seeing something here.

See below.

I can understand why centralization doesn't work. At this point, the semantics don't really matter to me: I'd like to know why a decentralized economy in which profits are distributed to some combination of government/people/employees doesn't work, whether we call it socialism or not. Getting back to my proposal:

Do sales & marketing exist?

Yes.

What about stock markets, commodities & futures, banking? Do they exist? If not, how are these functions handled?

Yes, these are all handled mostly the same way. Basically the scenario is that one day Congress decides to reform the tax code. It abolishes most major taxes (income tax, sales tax) and creates this 95% economic profit tax. The reason I way 95% instead of 100% is that this ensures that the market regulates itself- if it were 100% arbitrage would not equalize prices in different areas.

And you also said:

Tax 95% of all economic profits (i.e. opportunity costs are taken into account). Use some of the money for necessary government spending and distribute the rest equally among all citizens.

What you are describing is not Market Socialism. There is no private ownership under any form of socialism, so there can't be any stock market or market of any kind because that implies private ownership. If you look at the Lange model for example: en.wikipedia.org/wiki/Lange_model, prices are set by a planning board via a trial-and-error method. What you are describing is capitalism with a 95% tax rate. As far as the impact that would have, it would be a disaster. There is already evidence of this in the U.S. and that wasn't even a HARD 95% tax. It was 94% for earnings over $200K. The affect this has on those who control the economic engine is well known. It kills motivation - no different than the Chinese farmers. Also, you have to consider the inefficiency of government. Just look at private charity vs welfare, where it takes something like 3$ of welfare to equal 1$ of charity.
ax123man
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9/1/2015 11:18:47 AM
Posted: 1 year ago
At 9/1/2015 5:15:30 AM, joe1776 wrote:
ax123man

But business that are competitors cooperate all the time. And an economy that has no losers can't be successful in the long run...

You are describing how a competitive economy has to work. You are not thinking about how a well-managed cooperative economy might work.

It's easy to complain about a system and much harder to design it's replacement. So what is your proposal?

Great, how would that [money-less economy] work? I mean money is one of the primary facilitators (along with free trade & the division of labor) of wealth creation.

You don't need to facilitate trade in a cooperative economy. That's why money isn't needed. A well-organized management system would create jobs for everyone (Bear in mind that the profit motive is no longer in play) -- jobs that provide the goods and services needed to maintain the same high standard of living for all.

Read my replies to DisKamper. You are dreaming.


So if it were possible to develop a drug that cured cancer and therefore made the owners millionaires, your saying instead those owners would say "No, we don't want that. Let's collude with all the other pharmacies and make sure nobody develops this"? This doesn't make any sense.

You created a hypothetical that would not make sense,

Why doesn't it make sense? I mean I could just reply to everyone all day saying "Your wrong", but I'm not sure what the point of that is.

but here's reality:

Collusion isn't necessary. You are the CEO of a big drug company with X dollars to spend on research. With the profit motive in mind, should you invest X in a) trying to find a low-cost way to prevent disease or b) a high-cost was to manage the symptoms for a lifetime?

Business men are FORCED to come up with the lowest cost solution that will get the job done because, without question, if you don't someone else WILL! If you think otherwise, then you've never been involved in business decisions at this level.
joe1776
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9/1/2015 12:27:15 PM
Posted: 1 year ago
ax123man:

It's easy to complain about a system and much harder to design it's replacement. So what is your proposal?


It's not hard to design something better than we have in the USA, one which is benefiting fewer and fewer citizens as time moves on. Right now, our middle class income has fallen below that of Canada's. Reason? Our healthcare system is ripping us off. Chucking it for national healthcare is the place to start.

How to manage it is key. If it's managed like the federal government, it will fail. I think the majority vote of a panel of experts is probably best. With the right software package, such a group could communicate online and make their debate and discussions public.

Read my replies to DisKamper. You are dreaming.

If you quote me, please reply to my remarks.

Why doesn't it make sense? I mean I could just reply to everyone all day saying "Your wrong", but I'm not sure what the point of that is.

You said it didn't make sense. I agreed with you. Then I explained why collusion isn't necessary.

Business men are FORCED to come up with the lowest cost solution that will get the job done because, without question, if you don't someone else WILL! If you think otherwise, then you've never been involved in business decisions at this level.

That's true only with products which informed consumers, spending their own money, can shop and compare. It has no application to insured healthcare and Big Pharma which is what we are discussing.
ax123man
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9/1/2015 12:58:05 PM
Posted: 1 year ago
At 9/1/2015 12:27:15 PM, joe1776 wrote:
ax123man:

It's easy to complain about a system and much harder to design it's replacement. So what is your proposal?


It's not hard to design something better than we have in the USA, one which is benefiting fewer and fewer citizens as time moves on. Right now, our middle class income has fallen below that of Canada's. Reason? Our healthcare system is ripping us off. Chucking it for national healthcare is the place to start.

Again, lets see your design. All I see is a vague proposal on health care - this says almost nothing. The problem with healthcare is the lack of market prices and national health care isn't going to fix that.


How to manage it is key. If it's managed like the federal government, it will fail. I think the majority vote of a panel of experts is probably best. With the right software package, such a group could communicate online and make their debate and discussions public.

And where do these experts come from? Does someone oversee them? Some entity, like, oh, I don't know, the federal govt?


Read my replies to DisKamper. You are dreaming.

If you quote me, please reply to my remarks.

I would, but I would have simply have cut-paste the same text. Are you too lazy to scroll back in your browser window and read?


Why doesn't it make sense? I mean I could just reply to everyone all day saying "Your wrong", but I'm not sure what the point of that is.

You said it didn't make sense. I agreed with you. Then I explained why collusion isn't necessary.

Your exact words were:

"You created a hypothetical that would not make sense"

Is that how you agree with someone?


Business men are FORCED to come up with the lowest cost solution that will get the job done because, without question, if you don't someone else WILL! If you think otherwise, then you've never been involved in business decisions at this level.

That's true only with products which informed consumers, spending their own money, can shop and compare. It has no application to insured healthcare and Big Pharma which is what we are discussing.

I agree on health care, but this is because there aren't market prices, which require a connection between payment and service. It seems like we agree on that. But do you really think national health care is going to re-establish this?

Same is true for pharma. The lack of prices was the CREATION of a federal bureaucracy and you want to fix this by creating even more bureaucracy.
lannan13
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9/1/2015 1:05:14 PM
Posted: 1 year ago
Lack of innovation and the government only permitting certain industries to operate and they run a complete monopoly on the market.
-~-~-~-~-~-~-~-Lannan13'S SIGNATURE-~-~-~-~-~-~-~-

If the sky's the limit then why do we have footprints on the Moon? I'm shooting my aspirations for the stars.

"If you are going through hell, keep going." "Sir Winston Churchill

"No one can make you feel inferior without your consent." "Eleanor Roosevelt

Topics I want to debate. (http://tinyurl.com...)
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ax123man
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9/1/2015 1:26:34 PM
Posted: 1 year ago
At 9/1/2015 1:05:14 PM, lannan13 wrote:
Lack of innovation and the government only permitting certain industries to operate and they run a complete monopoly on the market.

The closer you get to freedom re: health care, the better off we will all be:

http://econlog.econlib.org...

For any proposal on health care, I'd like to hear policy positions on all the following:

1) how much will customers have to pay out of pocket for services?
2) will providers publish prices?
3) will medical licensing continue as is?
4) will medicare, medicaid and the VA continue as is?
5) will insurance companies continue to be forced to cover services and generally be coerced into limiting selection?
6) will regulatory barriers to entry for providers continue?
7) will pre-existing condition coverage continue?
8) will employer sponsored health care continue?
9) will lower coverage, catastrophic insurance become available?

Those are the primary reasons health costs are high. Any proposal that doesn't address those items won't fix that problem.
lannan13
Posts: 23,022
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9/1/2015 1:42:49 PM
Posted: 1 year ago
At 9/1/2015 1:26:34 PM, ax123man wrote:
At 9/1/2015 1:05:14 PM, lannan13 wrote:
Lack of innovation and the government only permitting certain industries to operate and they run a complete monopoly on the market.

The closer you get to freedom re: health care, the better off we will all be:

http://econlog.econlib.org...

For any proposal on health care, I'd like to hear policy positions on all the following:

1) how much will customers have to pay out of pocket for services?
2) will providers publish prices?
3) will medical licensing continue as is?
4) will medicare, medicaid and the VA continue as is?
5) will insurance companies continue to be forced to cover services and generally be coerced into limiting selection?
6) will regulatory barriers to entry for providers continue?
7) will pre-existing condition coverage continue?
8) will employer sponsored health care continue?
9) will lower coverage, catastrophic insurance become available?

Those are the primary reasons health costs are high. Any proposal that doesn't address those items won't fix that problem.

I agree. A free market would better the health care system compared to a single payer system.
-~-~-~-~-~-~-~-Lannan13'S SIGNATURE-~-~-~-~-~-~-~-

If the sky's the limit then why do we have footprints on the Moon? I'm shooting my aspirations for the stars.

"If you are going through hell, keep going." "Sir Winston Churchill

"No one can make you feel inferior without your consent." "Eleanor Roosevelt

Topics I want to debate. (http://tinyurl.com...)
-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~
joe1776
Posts: 7
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9/1/2015 1:52:42 PM
Posted: 1 year ago
ax123man:

Again, lets see your design. All I see is a vague proposal on health care - this says almost nothing. The problem with healthcare is the lack of market prices and national health care isn't going to fix that.


You are making an unreasonable request. I would need far more time and space than I have to give you the details of the model I have in mind.

You say that the "lack of market prices" is the problem with healthcare. That's like saying that the reason Henry isn't a genius is that he has an 85 IQ. The reason for the lack of market prices is that the free market doesn't work with healthcare.

And, no, national healthcare isn't going to fix the market price problem. It's going to replace the free market system.

Your exact words were: "You created a hypothetical that would not make sense"
Is that how you agree with someone?


It's agreement when your exact words after posting your hypothetical were: "This doesn't make any sense."

Same is true for pharma. The lack of prices was the CREATION of a federal bureaucracy and you want to fix this by creating even more bureaucracy.

1. The federal expert panel in a national healthcare system I suggested would considerably reduce bureaucracy if by 'bureaucracy' you include all federal, state, local, and insurance carrier employees involved in the system.

2. The federal government has no blame in the the lack of market prices. They are called 'market prices' precisely because they are supposed to be set by the function of the market. But, that doesn't happen with healthcare for the reasons I gave you earlier.