You’d think the real world examples would be enough to convince any rational person that socialism is a bad idea. Despite the atrocities, though, many people still believe it’s the best way to create a just and fair society.
My question is why is socialism such a failure?
I always liked Margaret Thatcher’s answer – short and pithy. “The problem with socialism is that eventually you run out of other people’s money.”
A more philosophical answer is that socialism requires force, and force is inconsistent with fairness – the goal of socialism. Fairness requires agreement. If you resort to force to obtain agreement, then the result isn’t fair.
I want to offer a more practical answer, though to explain the failure of socialism. I call it the Grocery Store Analysis.
I marvel sometimes at the abundance in the average grocery store. Think about the thousands of grocery stores across America where it’s repeated. Millions of people visit them every day to get things they need or want. Think of the effort necessary to stock those shelves so neatly, and keep them stocked constantly.
Now most of the stuff in the average grocery store is junk, in my opinion. I don't buy it. Someone does, though, and the folks who run grocery stores are experts at stocking stuff that sells, in just the right amounts, to satisfy millions of people and make a profit. The government doesn’t order the owners of the stores to do this. They do it freely in order to make money, to make a living. They also serve a useful social function while making a profit – helping people feed themselves and their families.
(But what do grocery stores have to do with socialism? Socialism is politics or economics. It’s about organizing economic activity for everyone’s benefit, not just the good of a few greedy capitalists. It’s about fairness.)
The next time you're in the grocery store, make a list of everything in the store - thousands, maybe hundreds of thousands of items. (With computers and databases, the manager can probably print a list for you.) After you make the list, you have to decide for each item whether it’s good, efficient, and worthwhile or bad, inefficient, and worthless – the essence of socialism. The things you decide are worthwhile can still be produced, but the stuff that’s worthless will be banned.
Of course, after you make these decisions, you’ll have to deal with some consequences.
You will first have to determine what you’re going to do with the people that had some small role in producing the goods you’ve banned. What will they do now that their economic role is no longer needed or is reduced? What are those people going to do?
One option might be to reassign them to help produce the goods you determined were good and efficient. If you do, though, you have a problem. Those goods were already produced efficiently. Adding extra workers to the process will decrease efficiency and increase the prices of those goods because you now have to pay extra workers.
An alternative, if you want to employ these extra workers but still keep prices the same, is to cut everyone’s wages. I doubt, though, that the workers who were already employed making the approved stuff will like this idea. Why should they take a cut in pay because you decided that potato chips are bad?
You could provide the laid off workers with a stipend to tide them over until they can find work making good and worthy stuff. If the remaining workers have to put up the funds for this stipend, through taxes, it too will reduce their wages. In this case, though, they will probably be even more upset because they still have to work just as hard, but for less pay.
As if these problems aren’t enough, you’re also going to have another problem on your hands. You’re going to have a bunch of unhappy customers who can no longer buy the stuff you decided was bad. Before you passed judgment on everything in the grocery store, these people freely chose to buy the worthless stuff. Now they can’t buy it anymore; they can only buy the approved stuff. You’ll have to convince them, or more likely force them, to buy the good stuff.
(Perhaps the people laid off from making the bad stuff can take complaints from the people who can no longer buy the bad stuff you banned. That should keep them busy.)
On top of that, since there are fewer things to buy, the cost of the remaining things will now increase due to the law of supply and demand. So not only will some people have to buy stuff they don't like, and previously chose not to buy, but it’s going to cost them more.
(If they weren’t upset before, they’re sure to be upset once they see the higher prices. That should keep the complaint department extra busy, though.)
Socialism is just a fancy name for the grocery store analysis. It creates the same problems because there aren’t any wise men who know what’s best for everyone and who know exactly how society should be organized. The only fair way, the way that provides the most social benefits, is to let people choose for themselves what they need and what will make them happy.
Now I have no doubt that most socialist are well intentioned. Fairness is a good and noble goal. To make socialism work, though, the socialist has to make too many choices. The socialist also has to be trustworthy enough to resist the temptations associated with having this power.
Even though socialism can’t work, socialist have a valid point. Life can be unfair, and recently the unfairness has been especially blatant. Many good, ordinary folks are being cheated. Where I part company with socialists, though, is blaming capitalism for these problems. The real causes of the problems highlighted by socialists these days are corrupt political and monetary policies. Today’s poor economy is the result of political favoritism, not capitalism. Capitalism doesn’t include bailouts, government loan guarantees, or unlimited monetization of government debt.
In the end, though, it doesn’t matter whether it’s called socialism, communism, some other “-ism,” or just plain, old cronyism, the scheme is still the same – using power to manipulate people’s choices to achieve political ends. Politicians are interested in power, and all politicians are birds of the same feather. The only difference between thugs like Lenin, Stalin, Mao, and Castro, and the bunch of political scoundrels we have in the “free” world is that ours have been restrained a bit more. They have had to use roundabout methods to maintain the illusion of a free society. Beware of politicians promising fairness, though. Most politicians are just opportunists who have no qualms promising things they can never deliver. And even if they did know what’s fair, do you want to live in a world in which politicians have the power necessary to impose complete fairness?