Observations on Socialism

[Steve81]

Socialism is a thorny topic for many people. What comes to your mind when I mention the word? Some might think of horrendously mismanaged nations like Venezuela or Cuba. Others might leap to the idea of wealth redistribution. But what is socialism? Fundamentally, it is a system in which the means of production (factories, farms, etc.) are controlled by society at large (i.e., government), as opposed to being privately owned. Ultimately, this means what to produce, and how much of a given thing to produce is managed centrally.

The first obvious question is, how do central planners make these decisions? For a socialism on a national scale, the question of how much to produce requires an immense amount of essentially real time data and analysis to be able to make appropriate decisions. In terms of what to produce, things are even trickier. Sometimes it’s difficult to see the potential applications of a new idea / product. Lasers are an example of this; when lasers were first invented, nobody really knew what to do with them. It took years for somebody to figure out that we could use lasers to scan a printed code, giving us the barcodes we use every time we scan an item at the grocery store. Other applications like optical discs and fiber optic communications would soon follow. But what if a central planners saw no merit to the laser, and decided to shelve the project? There’s always the possibility that a private individual could continue thinking on the problem, but without government or corporate funds for research and development, this becomes quite difficult.

My next observation regards the propensity of socialist nations to devolve into horrifying dictatorships. The issue can be boiled down to a single word: power. In socialism, political and economic power are merged. Anyone familiar with the phrase “power corrupts, absolute power corrupts absolutely” might be able to work out how this would lead to problems when concentrated into the hands of a few people. Democratic Socialism has its own problems; polling people on every little issue takes time and effort. For useful decisions to be produced, it requires that the populace be well informed on a broad array of topics. In both cases, it requires that the decision makers (the few, or the majority) be “benign” in the sense that they don’t abuse their power to harm a particular subgroup, an ethnic minority as an example.

Ultimately, when taking these issues into account, it becomes clearer as to why socialism is often looked down upon in the West. It also becomes easier to see how the inefficiencies of central planning combined with the potential for abuse of power directly leads to the issues we see in nations like Venezuela and Cuba. Food for thought.

[exchemist]

12 minutes ago, Steve81 said:

Socialism is a thorny topic for many people. What comes to your mind when I mention the word? Some might think of horrendously mismanaged nations like Venezuela or Cuba. Others might leap to the idea of wealth redistribution. But what is socialism? Fundamentally, it is a system in which the means of production (factories, farms, etc.) are controlled by society at large (i.e., government), as opposed to being privately owned. Ultimately, this means what to produce, and how much of a given thing to produce is managed centrally.

The first obvious question is, how do central planners make these decisions? For a socialism on a national scale, the question of how much to produce requires an immense amount of essentially real time data and analysis to be able to make appropriate decisions. In terms of what to produce, things are even trickier. Sometimes it’s difficult to see the potential applications of a new idea / product. Lasers are an example of this; when lasers were first invented, nobody really knew what to do with them. It took years for somebody to figure out that we could use lasers to scan a printed code, giving us the barcodes we use every time we scan an item at the grocery store. Other applications like optical discs and fiber optic communications would soon follow. But what if a central planners saw no merit to the laser, and decided to shelve the project? There’s always the possibility that a private individual could continue thinking on the problem, but without government or corporate funds for research and development, this becomes quite difficult.

My next observation regards the propensity of socialist nations to devolve into horrifying dictatorships. The issue can be boiled down to a single word: power. In socialism, political and economic power are merged. Anyone familiar with the phrase “power corrupts, absolute power corrupts absolutely” might be able to work out how this would lead to problems when concentrated into the hands of a few people. Democratic Socialism has its own problems; polling people on every little issue takes time and effort. For useful decisions to be produced, it requires that the populace be well informed on a broad array of topics. In both cases, it requires that the decision makers (the few, or the majority) be “benign” in the sense that they don’t abuse their power to harm a particular subgroup, an ethnic minority as an example.

Ultimately, when taking these issues into account, it becomes clearer as to why socialism is often looked down upon in the West. It also becomes easier to see how the inefficiencies of central planning combined with the potential for abuse of power directly leads to the issues we see in nations like Venezuela and Cuba. Food for thought.

Hardly. These observations have been standard stuff for most of my lifetime (I'm 68). That's why you find the better run economies in Europe tend to practice a form of mixed economy, sometimes referred to as social democracy. In short, people have learnt what to take from the ideals of socialism and blend those with regulated market economic mechanisms to get the necessary feedback from consumer to producer.

What has become equally clear over the last couple of decades is that inadequately regulated market mechanisms can also fail to deliver for citizens. The water and railway companies in Britain are examples, as is the health system in the USA. What we are also now seeing, with the new transnational IT entities such as Amazon, or Zuckerberg's empire, is that it is becoming a struggle to prevent the development of international monopolies which hand an unacceptable degree of control to producers, while disempowering consumers, just  as much as any state-planned enterprise in the old USSR.  

It seems to me issues like these are the real food for thought nowadays. 

  

Edited August 10, 2023 by exchemist

[Steve81]

8 minutes ago, exchemist said:

Hardly. These observations have been standard stuff for most of my lifetime (I'm 68). That's why you find the better run economies in Europe tend to practice a form of mixed economy, sometimes referred to as social democracy. In short, people have learnt what to take from the ideals of socialism and blend those with regulated market economic mechanisms to get the necessary feedback from consumer to producer.  What has become equally clear over the last couple of decades is that inadequately regulated market economies can also fail to deliver for citizens. The water and railway companies in Britain are examples, as is the health system in the USA.  

I'm somewhat confused by your confrontational tone. I didn't imply that my observations were groundbreaking in any way. Further, my post was quite obviously limited to a discussion on socialism itself, not mixed economies or the many flaws of unregulated capitalism. Basically, you agree with the point of my post, but you decided you needed to confront me all the same. Good for you. 

Edited August 10, 2023 by Steve81

[exchemist]

2 minutes ago, Steve81 said:

I'm somewhat confused by your confrontational tone. I didn't imply that my observations were groundbreaking in any way. Further, my post was quite obviously limited to a discussion on socialism itself, not mixed economies or the many flaws of unregulated capitalism. Basically, you agree with the point of my post, but you decided you needed to confront me all the same. Good for you. 

If I were to post Newton's laws of motion and then sign off with "Food for thought", I'd expect a bit of criticism.  

Yes I agree with your points, but it is all conventional stuff. I am suggesting it would be more interesting to think about the economic challenges of today than go over old debates, long since decided.  

[Steve81]

13 minutes ago, exchemist said:

If I were to post Newton's laws of motion and then sign off with "Food for thought", I'd expect a bit of criticism.  

Yes I agree with your points, but it is all conventional stuff. I am suggesting it would be more interesting to think about the economic challenges of today than go over old debates, long since decided.  

Well, I suppose that depends on your target audience. To someone with a doctoral degree in physics, Newton's laws might not be food for thought. For a man with only passing knowledge of physics, they might well be interesting. I don't expect all the denizens of this forum to be all knowing on all things, so I figured I'd post my thoughts and spur a little discussion. Then again, I'm new here, so maybe my assumption was wrong.

I'm happy to discuss the challenges we face with capitalism today (not accounting for externalities like pollution, discrimination preventing market access, and so on). However, I'd just assume do so with someone who approaches things in a constructive manner.

Edited August 10, 2023 by Steve81

[exchemist]

4 minutes ago, Steve81 said:

Well I suppose that depends on your target audience. To someone with a doctoral degree in physics, Newton's laws might not be food for thought. For a man with only passing knowledge of physics, they might well be interesting.

I'm happy to discuss the challenges we face with capitalism today (not accounting for externalities like pollution, discrimination preventing market access, and so on). However, I'd just assume do so with someone who approaches things in a constructive manner.

I don't think I would treat pollution, and other environmental negative impacts, as an externality. It's sort of interesting in that both state-run and market-run systems produce pollution disasters. In both cases the problem really comes down to lack of public knowledge and public accountability. I suppose, at the end of the day, what we all want from an economic system is one that innovates and thus creates wealth, for us all to share in some measure, but is accountable to us as consumers and as citizens. The political debates are all about how best to do that.  

[Steve81]

15 minutes ago, exchemist said:

I don't think I would treat pollution, and other environmental negative impacts, as an externality. It's sort of interesting in that both state-run and market-run systems produce pollution disasters. In both cases the problem really comes down to lack of public knowledge and public accountability. I suppose, at the end of the day, what we all want from an economic system is one that innovates and thus creates wealth, for us all to share in some measure, but is accountable to us as consumers and as citizens. The political debates are all about how best to do that.  

With respect to pollution disasters, I'd think of it like this: when humans invented coal fired steam power, they simply didn't know enough about the pollution byproduct to consider that. Humans got hooked on the benefits the new technology provided, and by the time the pollution costs were realized, it was too late to do much about it except try and innovate again. 

This applies to many things. A medication can undergo years of testing, get FDA approval, and then years later be discovered to have some horrific side effect and have to be pulled from the market. The problem is, we don't (and likely can't) know everything at inception.

Edited August 10, 2023 by Steve81

[exchemist]

2 minutes ago, Steve81 said:

With respect to pollution disasters, I'd think of it like this: when humans invented coal fired steam power, they simply didn't know enough about the pollution byproduct to consider that. Humans got hooked on the benefits the new technology provided, and by the time the pollution costs were realized, it was too late to do much about it except try and innovate again. 

This applies to many things. A medication can undergo years of testing, get FDA approval, and then years later be discovered to have some horrific side effect and have to be pulled from the market. The problem is, we don't (and can't) know everything at inception.

True. (Our use of fossil fuel and consequent dependence on it today is the perfect example of that.) But that's why we need mechanisms that learn from experience and apply corrective action. Markets generally won't do that, or not until so much damage has been done that sales are lost from angry consumers. One needs regulation, by an expert non-profit body, supported by the political system so that citizens can see why it is needed -  and that it is not just dedicated to depriving people of "freedom". 

[Steve81]

5 minutes ago, exchemist said:

True. (Our use of fossil fuel and consequent dependence on it today is the perfect example of that.) But that's why we need mechanisms that learn from experience and apply corrective action. Markets generally won't do that, or not until so much damage has been done that sales are lost from angry consumers. One needs regulation, by an expert non-profit body, supported by the political system so that citizens can see why it is needed -  and that it is not just dedicated to depriving people of "freedom". 

One potential way to mitigate this going forward that I can think of is to essentially have some sort of insurance system to help clean up the mess. On a large industrial scale, given the potential costs involved, we would likely have to rely on government for this. If the government deems something uninsurable, it doesn't get done. Of course, who makes that decision, and the potential for abuse there is also a possible issue. Funny how the weak link always seems to be humanity.

Edited August 10, 2023 by Steve81

[studiot]

1 hour ago, Steve81 said:

Socialism is a thorny topic for many people. What comes to your mind when I mention the word? Some might think of horrendously mismanaged nations like Venezuela or Cuba. Others might leap to the idea of wealth redistribution. But what is socialism? Fundamentally, it is a system in which the means of production (factories, farms, etc.) are controlled by society at large (i.e., government), as opposed to being privately owned. Ultimately, this means what to produce, and how much of a given thing to produce is managed centrally.

 

46 minutes ago, Steve81 said:

Well, I suppose that depends on your target audience. To someone with a doctoral degree in physics, Newton's laws might not be food for thought. For a man with only passing knowledge of physics, they might well be interesting. I don't expect all the denizens of this forum to be all knowing on all things, so I figured I'd post my thoughts and spur a little discussion. Then again, I'm new here, so maybe my assumption was wrong.

 

Physics ?

Maybe you are looking at the wrong Science ?

 

I am not a social scientist but I understand that (early) Christianity is scientifically classed as "Primitive Socialism".

 

How dows that play out with your definition  of Socialism?

 

+1 by the way for actually offering a definition of a term you are intending using.

This necessary  courtesy is all too often omitted.

[Steve81]

6 minutes ago, studiot said:

I am not a social scientist but I understand that (early) Christianity is scientifically classed as "Primitive Socialism".

 

How dows that play out with your definition  of Socialism?

As just an off the top of my head reply…

“Primitive Socialism” wouldn’t have some of these criticisms applied. Communities were small, which made consideration and discussion of issues much simpler. Innovation happened at a snails pace back in those times as well compared to what we’re used to; they certainly weren’t stuck trying to figure out how to use a laser. Perhaps a new type of plow…

Edited August 10, 2023 by Steve81

[Genady]

1 hour ago, Steve81 said:

what is socialism? Fundamentally, it is a system in which the means of production (factories, farms, etc.) are controlled by society at large (i.e., government), as opposed to being privately owned.

This is not the definition in Marxism and thus, not the definition in USSR or Cuba.

[exchemist]

1 hour ago, Steve81 said:

One potential way to mitigate this going forward that I can think of is to essentially have some sort of insurance system to help clean up the mess. On a large industrial scale, given the potential costs involved, we would likely have to rely on government for this. If the government deems something uninsurable, it doesn't get done. Of course, who makes that decision, and the potential for abuse there is also a possible issue. Funny how the weak link always seems to be humanity.

It seems fair though that the polluter should pay to clean up his own mess, does it not? I'd be averse to a system whereby private enterprise can pollute with impunity and the taxpayer has to pay for the clean-up.  One wants the incentive not to pollute to be with the enterprises that may be contemplating polluting activities.  If they know they may be held liable, they will do their due diligence on pollution hazards before they start their operations. That is more or less how it works today, imperfect thought it is. 

Edited August 10, 2023 by exchemist

[Steve81]

44 minutes ago, exchemist said:

It seems fair though that the polluter should pay to clean up his own mess, does it not? I'd be averse to a system whereby private enterprise can pollute with impunity and the taxpayer has to pay for the clean-up.  One wants the incentive not to pollute to be with the enterprises that may be contemplating polluting activities.  If they know they may be held liable, they will do their due diligence on pollution hazards before they start their operations. That is more or less how it works today, imperfect thought it is. 

My thought is that such insurance would apply to ventures where risk is unforeseeable, such as new medication. Pollution is already well understood (unless we discover something new), so insurance wouldn’t apply there.

In the case of drugs especially, the FDA certifies the drug as safe for use, so I would consider them equally liable if it isn’t. And of course the drug companies would be paying into the insurance system, so no free rides. Might have to propose this to my congressman 😂

Edited August 10, 2023 by Steve81

[studiot]

What does a discussion about insurance have to do with socialism ?

 

Also I don't know how young you are, but have you heard of the 'National Socialists'  ?

 

 

[iNow]

4 minutes ago, studiot said:

What does a discussion about insurance have to do with socialism ?

Insurance markets in shared risk pools. The larger the population of subscribers, the more dilute the risks and costs become to each member. Insurance is an often a private market based system (with exceptions for government sponsored coverages), but even private coverages work by more broadly spreading and sharing risks across larger populations. It’s this shared and spread out risk which might rightly be framed as socialistic in principle. 

I’m happy to be corrected by the person who raised it. 

[Genady]

What @studiot said above, plus, in connection with a "primitive socialism" mentioned earlier, there exist a modern variety in the form of socialist kibutzes in Palestine / Israel.

[exchemist]

1 hour ago, Steve81 said:

My thought is that such insurance would apply to ventures where risk is unforeseeable, such as new medication. Pollution is already well understood (unless we discover something new), so insurance wouldn’t apply there.

In the case of drugs especially, the FDA certifies the drug as safe for use, so I would consider them equally liable if it isn’t. And of course the drug companies would be paying into the insurance system, so no free rides. Might have to propose this to my congressman 😂

Yes that's fair. And in fact I think that sometimes happens, in cases where a risk was not reasonably foreseeable by the company that made the product. 

[Steve81]

46 minutes ago, studiot said:

What does a discussion about insurance have to do with socialism ?

 

Also I don't know how young you are, but have you heard of the 'National Socialists'  ?

 

 

You'd have to follow the breadcrumbs to figure out how we got onto insurance 😁

And yes, I'm familiar with the Nazis, and some of the how's and why's things came about they way they did 😛

Edited August 10, 2023 by Steve81

[studiot]

2 hours ago, iNow said:

Insurance markets in shared risk pools. The larger the population of subscribers, the more dilute the risks and costs become to each member. Insurance is an often a private market based system (with exceptions for government sponsored coverages), but even private coverages work by more broadly spreading and sharing risks across larger populations. It’s this shared and spread out risk which might rightly be framed as socialistic in principle. 

I’m happy to be corrected by the person who raised it. 

 

I'm sure we are all well aware of at least the basics of how insurance works and that it can work for both many socialist (in the broadest sense) and non socialist societies.

 

1 hour ago, Steve81 said:

You'd have to follow the breadcrumbs to figure out how we got onto insurance 😁

And yes, I'm familiar with the Nazis, and some of the how's and why's things came about they way they did 😛

 

Actually I'm trying to find some solid foundation to this thread which has the makings of a good topic, but seems to me to be floundering around all over the place.

It's your thread.

 

Perhaps we could examine societies for which 'socialism' presents special difficulties ?

For instance take the Modern day Outback or the pioneering North America.

Self reliance was /is possibly the greatest virtue where folks live hundreds of miles from the nearest neighbour.

Or societies that relied on slavery. Is there any point insuring your 'asset' if there is a ready supply of replacements ?

 

 

 

[Steve81]

2 hours ago, studiot said:

It's your thread.

Perhaps we could examine societies for which 'socialism' presents special difficulties ?

For instance take the Modern day Outback or the pioneering North America.

Self reliance was /is possibly the greatest virtue where folks live hundreds of miles from the nearest neighbour.

Or societies that relied on slavery. Is there any point insuring your 'asset' if there is a ready supply of replacements ?

It's my thread, but I'm under no pretenses that I have power to moderate it 😀

If we accept my original post as a reasonably accurate representation of things, the larger and more advanced the society, the more difficult socialism will likely be to maintain. As noted with your example of primitive socialism, a small community can successfully pull it off (and there is clearly historical precedent for that). 

In a large, industrialized society, things become more difficult as the central planners have far more to manage. In the modern world, I suspect that a reasonably sophisticated AI could assist with this issue to some extent (i.e. how much to produce). The decision of what to produce is more complex though, and you'd ultimately want a fairly diverse team of experts to manage those kinds of decisions. In a reasonably free socialist society, this would involve market research to make sure people might actually want the product, and of course a system in which citizens still have the incentive and access to resources to actually innovate to achieve best results.

As far as insurance goes, this was brought up with respect to capitalism, and the issues of not necessarily being able to foresee the harm your product might cause, as is the case with FDA approved medication. That they approve it doesn't guarantee it's safe, in spite of the research, clinical trials, and so forth that goes into producing a new drug. I opined that it might be advantageous to create a government run insurance for the drug companies; this would increase the FDA's incentive to vet new medications, and reduce manufacturer risk (essentially taking a potential lawsuit payout and moving it to a predictable monthly cost of doing business). 

Edited August 10, 2023 by Steve81

[exchemist]

2 hours ago, studiot said:

 

I'm sure we are all well aware of at least the basics of how insurance works and that it can work for both many socialist (in the broadest sense) and non socialist societies.

 

 

Actually I'm trying to find some solid foundation to this thread which has the makings of a good topic, but seems to me to be floundering around all over the place.

It's your thread.

 

Perhaps we could examine societies for which 'socialism' presents special difficulties ?

For instance take the Modern day Outback or the pioneering North America.

Self reliance was /is possibly the greatest virtue where folks live hundreds of miles from the nearest neighbour.

Or societies that relied on slavery. Is there any point insuring your 'asset' if there is a ready supply of replacements ?

 

 

 

I don't think it is floundering particularly. As @iNow observes, risk pooling is the basis of a number of collective systems in societies.

National Insurance was the original basis of the UK's welfare state, cast in its present form by Attlee's government, which was of a distinctly socialist persuasion. (It's hard to think now that even road transport was nationalised by that government.). 

I think there's a productive discussion to be had about the way socialist ideas can be, or have been, adapted over the years, bearing in mind some of the excesses of corporate capitalism that we have seen in the last decade or two. 

 

 

[sethoflagos]

9 hours ago, Steve81 said:

But what is socialism? Fundamentally, it is a system in which the means of production (factories, farms, etc.) are controlled by society at large (i.e., government), as opposed to being privately owned. Ultimately, this means what to produce, and how much of a given thing to produce is managed centrally.

This statement seems to confuse a desired end (some idyllic utopia) with a specific means to that end (a societal transition via the Marxist-Leninist model). It is a confusion that serves the purposes of not only the political right but also many on the political left.

A better 'fundamental' starting point may be the principle 'From each according to his ability, to each according to his needs', which is Marx's version of an idea that can be traced back in western tradition to at least classical Greece.

How you achieve that end is really a quite different proposition to what constitutes the desired end. 

[Steve81]

3 minutes ago, sethoflagos said:

This statement seems to confuse a desired end (some idyllic utopia) with a specific means to that end (a societal transition via the Marxist-Leninist model). It is a confusion that serves the purposes of not only the political right but also many on the political left.

A better 'fundamental' starting point may be the principle 'From each according to his ability, to each according to his needs', which is Marx's version of an idea that can be traced back in western tradition to at least classical Greece.

How you achieve that end is really a quite different proposition to what constitutes the desired end. 

It's the basic definition of socialism reworded a tad from Merriam Webster...

Socialism Definition & Meaning - Merriam-Webster

any of various egalitarian economic and political theories or movements advocating collective or governmental ownership and administration of the means of production and distribution of goods

[Genady]

7 minutes ago, Steve81 said:

It's the basic definition of socialism reworded a tad from Merriam Webster...

Socialism Definition & Meaning - Merriam-Webster

 

 

Yes, it can be collective OR governmental. Not necessarily governmental.

 

13 minutes ago, sethoflagos said:

'From each according to his ability, to each according to his needs'

That used to be slogan for communism. The slogan for the socialism was, 'From each according to his ability, to each according to his contribution'.