Why Socialism doesn't work ?

[Shad]

A cooperative economic system is the future but it won't happen until we invent a governmental decision-making model that is both effective and free of corruption. We've never had one of those.

I am doubtful about this future. I lean towards a far more corporate future.

It fails in services like financial services and insured healthcare where fraud rules. Even incompetent regulation is better than none at all in healthcare.

Both are highly regulated by the government and that causes a lot of issues.

 

[Willamena]

Maybe this is why no one who has actually lived under socialism is ever a proponent of it.
AFP news agency

@AFP
“Our pensions are not even enough for half a box of eggs," a desperate Venezuelan senior citizen tells AFP during a protest in Caracas (link:
https://mobile.twitter.com/AFP/status/1019784782362816512/video/1

That's not because of socialism, but because of Manduro.

 

[joe1776]

Still the fault of the system for enabling bad plans and bad planners to come to power.

The system IS the plan. People create the system and people run the system.

Soviet Socialism failed but logically we can't jump to the conclusion that socialism is inherently flawed because we know that the economy was mismanaged by a corrupt government. No economic system survives mismanagement.

 

[Revoltingest]

My standard for success is quality of life. Capitalists usually choose GNP.

Of course, there are different judgments about what "quality of life is".
A fundamental feature of capitalism is economic liberty, which by itself
I find to be a worthwhile quality.
But other aspects are independent of the economic system, eg, social
liberty, social safety net. These can be ensured by governance, & so
are rather independent of the economic system.

A society is essentially a cooperative endeavor. So, to design a competitive economy to fuel more effective cooperation would be a classically dumb move except for one thing: a cooperative economy requires effective, corruption-free government; and we humans have yet to invent such a thing.

People not running businesses often don't know that capitalism is very
much about cooperation. Sure, sure, companies compete with one
another, but they also cooperate with others, employees, & stockholders.
A healthy balance of competition & cooperation function best in the real world.

So, for now, capitalism's free-market, which needs less regulation, serves a purpose. It work fairly well on products which can be seen and compared by well-informed consumers spending their own money. But none of those factors are possible in services. That's why fraud, of both the legal and illegal varieties, rules the financial services industry.

First, I'll say that I favor useful regulation, ie, that which promotes honesty, transparency,
& competition. Financial services are are pretty good market. Yes, I've seen some fraud,
but the biggest problem I've found is ham fisted incompetent government regulation.
In lending, I've seen.....
- The fed gov push banks to foreclose on loans rather than renegotiate them.
This isn't just with Fannie Mae & Freddie Mac (which the fed created & controls),
but also private sector lenders, eg, RBS (British gov owned), Citizens NA.
- The fed requires that when a loan is renegotiated, the borrower must
immediately pay income tax on forgiven principal & even on any interest waived.
The latter is particularly onerous because the borrower has no gain, just a future
expense not incurred. This makes refinancing impossible for many borrowers.
- The fed has not just encouraged risky loans (eg, via PMI), but even required
such lending (eg, Community Reinvestment Act).

Health care services are different for a couple reasons....
- Consumers are poor buyers, eg, ignorant of the service, stressed.
- The system has been corrupted by a myriad of laws which require free service
to some, with others subsidizing it, preferential treatment for insurers over
consumers in bargaining price, dysfunctional tort system to handle malpractice,
& imposition of a massive bureaucracy.
- Rapidly escalating technology & associated costs, with commensurate expectations.
- Obamacare's throwing a monkey wrench into the works.

I expect that single payer will be the political solution to this.
Let's just hope that it allows for a private sector option, rather
than what Hillary proposed when Bill was Prez (making private
care illegal).

For healthcare, the competitive free-market is simply the wrong tool for the job. Some of the problems:
-- consumers don't know what services they need
-- insured consumers don't care about the cost of the services they receive
-- care providers easily justify over-charging deep-pocket insurance companies
-- lawyers easily justify representing clients in malpractice fraud against deep-pocket insurance companies
-- as long as they aren't paying more of it than their competitors, fraud benefits the insurance companies by adding to the industry's bottom line
-- drug companies find it more profitable to create drugs that manage symptoms for a lifetime rather than those which cure the disease

- Some consumers understand the service. But it's a problem that so many don't,
particularly their own insurance policies.
- Drug companies must compete with others, so a drug cures rather than manages
symptoms would have the patients beat a path to their door. But we do need
regulatory reform in this area. Laws have driven companies like Pfizer out of my
state, meaning that more & more research will happen overseas.

 

[Shad]

The system IS the plan. People create the system and people run the system.

I am talking about the plans as in implementation of the system. If the system fails to get off the ground in the planning phase again it is the systems plans that failed. This problem will exist for a long time as Marx was clueless regarding detailed implementation. Most of his ideas were clueless rambling anyways.

Soviet Socialism failed but logically we can't jump to the conclusion that socialism is inherently flawed because we know that the economy was mismanaged by a corrupt government. No economic system survives mismanagement.

Failures and flaws of the system have been pointed out that does not involve specific examples of X nation. Beside it is easy poking holes in what is nothing more than an utopian fantasy.

 

[metis]

As China switched to State Capitalism decades ago. Cali is capitalist and it's social programs are crippling the state. Sweden is a social democracy, high taxes does not mean Socialism but just high taxes.

As I mentioned previously, it's a matter of degrees since all countries have what we call "mixed economies". Also, taxes are really intrinsic to "socialism" if you stop and think about it. IOW, tax monies collected go to the government(s) and the money is spent or is dispersed from there = "socialism". Now, mind you, I'm using a different definition than what most probably think of, but there are many different definitions and forms of "socialism": https://en.wikipedia.org/wiki/Socialism

 

[metis]

As China switched to State Capitalism

"State Capitalism"? Really?

Cali is capitalist

No, it is not as it has a "mixed economy".

it's social programs are crippling the state.

Is that why it's become #6 internationally? I wish we had that kind of "crippling" here in Michigan.

Sweden is a social democracy,

"Social democracy" is a political system, not an economic one. Like all other countries, it has a "mixed economy" but is significantly more socialistic than the U.S.'s economy.

 

[Revoltingest]

BTW, if socialism doesn't work, why is it that economists project China will pass up the U.S. economically in several years, and why is it that California has the 6th largest economy in the world? And why is it that the former head of Sweden's department of the treasury, when asked how his country managed to stop its decline and recover so nicely in the late 1990's, his two-word response was "Higher taxes"? [hint: money collected through taxes does not disappear into thin air]

I notice that you didn't mention the real socialist countries, eg, Cuba, N Korea, Venezuela.
How are things going there?

 

[joe1776]

People not running businesses often don't know that capitalism is very much about cooperation. Sure, sure, companies compete with one another, but they also cooperate with others, employees, & stockholders. A healthy balance of competition & cooperation function best in the real world.

You are describing the manufacturing business in the USA since the 1970s, after the Japanese, following Ed Demings' lead, cooperated with their employees to deliver better bargains to consumers in cars and electronic products. For generations before that, capitalists treated their employees like the enemy and consumers like fools. Still, I have no problem granting that the free market works okay with products that can be comparison-shopped by informed consumers. But what of the other half of the economy?

First, I'll say that I favor useful regulation, ie, that which promotes honesty, transparency, & competition. Financial services are are pretty good market. Yes, I've seen some fraud, but the biggest problem I've found is ham fisted incompetent government regulation. In lending, I've seen.....
- The fed gov push banks to foreclose on loans rather than renegotiate them. This isn't just with Fannie Mae & Freddie Mac (which the fed created & controls), but also private sector lenders, eg, RBS (British gov owned), Citizens NA. - The fed requires that when a loan is renegotiated, the borrower must
immediately pay income tax on forgiven principal & even on any interest waived. The latter is particularly onerous because the borrower has no gain, just a future expense not incurred. This makes refinancing impossible for many borrowers.
- The fed has not just encouraged risky loans (eg, via PMI), but even required such lending (eg, Community Reinvestment Act).

From what you wrote, I think we can agree that competent government regulations are necessary and ineffective regulation has been a major problem in the financial services sector. However, I'm of the opinion that the smartest cheaters in business will always gravitate toward the financial services industry because 1) there are so many ways to skin their cats (2) math illiteracy is a common consumer weakness and (3) that's where the money is.

On healthcare, I think you're right that the single payer option is the likely next step.

 

[Epic Beard Man]

Maybe this is why no one who has actually lived under socialism is ever a proponent of it.
AFP news agency

@AFP
“Our pensions are not even enough for half a box of eggs," a desperate Venezuelan senior citizen tells AFP during a protest in Caracas (link:
https://mobile.twitter.com/AFP/status/1019784782362816512/video/1

You do realize Jesus was a socialist and the ultimate utilitarian

 

[joe1776]

Failures and flaws of the system have been pointed out that does not involve specific examples of X nation. Beside it is easy poking holes in what is nothing more than an utopian fantasy.

What specific flaws do you find with socialism that don't involve examples of X nation?

What is utopian about a cooperative economy? Do you think it impossible that we humans could invent a good decision-making model that could manage such a thing? Governments can still be criticized, but as a world phenomenon, they are improving. They're far better today than they were centuries ago.

 

[YmirGF]

That's not because of socialism, but because of Manduro.

Yeah, things were going so swimmingly under Chavez, eh?

What is it about committed Socialists in that they always seem to get things so very wrong?

They're far better today than they were centuries ago.

Especially after the rather spectacular failures of Socialist regimes in the past. For example, while several Nordic countries are purring along nicely with a Socialist/Capitalist mix, they are not doing spectacularly. Socialist policies, in general, tend to inhibit growth,

 

[Revoltingest]

Yeah, things were going so swimmingly under Chavez, eh?

What is it about committed Socialists in that they always seem to get things so very wrong?

Some say that the fundamental problem with socialism is that the wrong people are always in charge.
The real problem is that the system cannot succeed unless virtuous competent people run it.
Until we evolve into such, let's stick with what works, ie, capitalism.
It has a good record of providing an economy strong enuf to provide whatever social safety net we want.

 

[joe1776]

Especially after the rather spectacular failures of Socialist regimes in the past. For example, while several Nordic countries are purring along nicely with a Socialist/Capitalist mix, they are not doing spectacularly. Socialist policies, in general, tend to inhibit growth,

You're making a list of claims you can't support with evidence.

Offer your evidence that the Socialist concept and not inept and corrupt government has been responsible for ANY past failure.

On what standard do you measure a society? The Nordic countries aren't doing spectacularly in WHAT?

Socialist policies inhibit the growth of WHAT?

 

[dfnj]

Socialism, communism, laissez-faire capitalism, fascism, corporatism, I don't care what tactic is used. As long as something can be done about this:

https://www.quandl.com/data/FRED/CU...umers-Purchasing-Power-of-the-Consumer-Dollar

And this:

To be honest with you, I don't really care what tactic is used.

 

[dfnj]

You're making a list of claims you can't support with evidence.

Offer your evidence that the Socialist concept and not inept and corrupt government has been responsible for ANY past failure.

On what standard do you measure a society? The Nordic countries aren't doing spectacularly in WHAT?

Socialist policies inhibit the growth of WHAT?

Great post! I love your way of thinking. But I guarantee you YmirGF and his group of friends have carved in stone thinking no one is going to change.

 

[Revoltingest]

It appears that every fan of socialism really doesn't like socialism,
eg, N Korea, Cuba, Venezuela, USSR, the old PRC.
What they really like, & call "socialism", is capitalism with a social
safety net paid for by taxes. They're pro-capitalism.

 

[dfnj]

It appears that every fan of socialism really doesn't like socialism,
eg, N Korea, Cuba, Venezuela, USSR, the old PRC.
What they really like, & call "socialism", is capitalism with a social
safety net paid for by taxes. They're pro-capitalism.

How do you explain China? I've been to China on business many times. There is no doubt we are talking communist country. Some of the companies and factories we buy from share intellectual property. Everything in China is about maximum employment.

 

[Estro Felino]

What they really like, & call "socialism", is capitalism with a social
safety net paid for by taxes. They're pro-capitalism.

To be precise...there is a third way: the state owns banks and enterprises in strategic sectors...so the state's profits are not "taxes" only.

 

[joe1776]

It appears that every fan of socialism really doesn't like socialism,
eg, N Korea, Cuba, Venezuela, USSR, the old PRC.
What they really like, & call "socialism", is capitalism with a social
safety net paid for by taxes. They're pro-capitalism.

You need your own narrow definition of "socialism" to make your arguments sound like they make sense.

If socialist countries must be entirely socialist to qualify as socialist in your thinking, then let's apply the same rule to capitalism. You can't say that capitalism has worked anywhere in the world because nations don't use the system entirely.