Why Socialism Fails – Editorial

I suppose it really isn’t that shocking why socialism fails.

…or that a publication named Capitalists.com would choose to explore what our staff thinks about why Socialism fails.

The truth is, I admittedly have very little ear for socialist rhetoric, at least not in what would be considered current or historically applied garb.

Socialism, as a practice, turned out to be the Emporer’s new clothes kind of deal. Like the buildings in those old westerns, the front of socialism looks impressive and full of promise, but a cautious view from any side reveals the true nature, the facade.

But let’s be fair…

Although this is an editorial, and thus allows me some latitude of attitude, I would like to approach this fairly.

So, I turned to Quora, the gold standard in open question asking and answering, though knowing the principals, I was a little reticent to post a counter-left-wing aimed question.

The question we asked the Quora world was:

So, we asked Quora why socialism fails

What is most surprising is the varied tone and nature of the resulting answers from the Quora user base, which I present below in order received:

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Edgar McDonald, former Parole Probation at Nevada (2001-2014)

Oh, you are going to be ridiculed for this question. They are going to argue that Scandinavia has, in fact, successful Socialist governments because they are Democratic Socialist Governments.

They will insist that conservatives skew the meaning of Socialism so that only the corrupt dictatorial Socialist governments are true Socialist.

The next argument will be that the reason those governments descended into corruption was they didn’t have the Right People running things.

The Webster Dictionary defines socialism as:

Definition of socialism

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

2a : a system of society or group living in which there is no private property b : a system or condition of society in which the means of production are owned and controlled by the state

Definition of SOCIALISM

Now they skew this a bit and define it this way:

Socialism is a range of economic and social systems characterized by social ownership and workers’ self-management of the means of production as well as the political theories and movements associated with them.

Socialism – Wikipedia

It sounds like the people “Be runnin” the factory. They own it and manage it.

OK, that sounds very democratic and socialist.

No such thing exists-

At the Socialist shinning city on the hill?

All of the three Scandinavian nations allow for the private control of the means of production and distribution. In fact, about 10% of Scandinavians own about 65% of the economy.

See once “Everyone” owns something it’s a Collective. You end up in one place with Collectivists. The political elite manages it for the people’s benefit. In other words instead of the economic elites running things its the political elites.

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John Purcell, Director at Cave of Programming

There’s no single definition of socialism that everyone agrees on. Clearly, it’s possible for a government to run nationalized industries within an overall framework of capitalism. While many people question the efficiency of such a thing, no-one questions whether it’s possible.

One definition of socialism involves the workers owning the means of production. When someone says the workers should own the means of production, they might actually mean that the state should own it on behalf of the workers. In that extreme case, where the state owns all businesses, the question arises of how resources should be allocated.

One possibility is that every company should retain the sort of structure that companies typically have anyway. But in that case, what does state ownership actually amount to? If it amounts to directors simply getting a lesser share of the profits or non-state shareholders not existing, there’s less incentive for them to really put their back into making the right decisions. If you own a company and your success depends on it (if you’re a shareholder in other words), you’re going to bend over backward and work like crazy to make sure your company succeeds.

If the state is the owner of a company, whether the company succeeds and is efficient or not, is hardly more of a concern to you than any other bureaucratic matter. It’s more a question of forms than of your personal success.

Perhaps this is why actual out-and-out socialists so frequently resort to threatening people with dire consequences if they don’t succeed at various tasks. Then people are working to avoid death or prison, not for any really positive reasons. They’re not likely to really be enthusiastic about what they’re doing, a key reason why socialism fails.

Another arrangement involves vast bureaucracies deciding how much of what item each business produces. The state sets prices and quotas appropriately. Since this eliminates local knowledge, as well as the sort of striving for efficiency that results from the success of individuals being linked to the success of companies, it ends up involving vast wastage and astonishing inefficiency.

Companies could simply have a flat hierarchy where everyone votes on all decisions. This also doesn’t work; most people who work in a company are not interested in knowing in detail how the company works, and have no great talent for making those sorts of decisions. It’s also true, to put it flippantly, that if you share a single responsibility between three people, each one gets a tenth of the responsibility.

A lesser form of socialism might involve just every business being owned by the people who work in it, retaining a managerial structure. Then there’s the question of why anyone would ever bother setting up a business, or searching for business opportunities and identifying gaps in the market.

Almost anyone who has set up a business knows the emotional turmoil involved and the risks they had to take. Often they’ve worked countless unpaid hours to make their business work. Often they have a string of failures behind them. For them to then simply hand over a major share of their business to their first employee, who has taken none of these risks and puts in none of this effort, and who likely does not bear the continuing ongoing risk of taking full responsibility for the business, would be quite unthinkable. You ask why socialism fails…

People will practically run themselves into the ground, very enthusiastically, in the pursuit of profit, especially in situations where they really feel that their proposed business will be of benefit to society. It’s just effectively impossible to get anyone to work that hard and take the kinds of risks entailed, in a socialist system, where the profit motive is removed. It’s like asking people to care just as much about random people who live near them as they do about their family; it’s unlikely to happen.

Most countries now are capitalist, including China. Socialism may take the form of taxes redistributing wealth to the least wealthy, or of lots of nationalized industries — which aren’t really socialism at all.

Both of these have their associated problems, even if probably most countries have accepted that doing this to some extent is a good idea.

Nationalised industries do tend to be inefficient and tend to be perceived as boring by people working in them. Armies work pretty well, but only because there’s more than enough pressure and excitement in an army without needing profit motives. It’s questionable whether an effective army could even exist without a great deal of patriotism being involved. Soldiers in national armies are motivated by defending their homeland and by patriotism and excitement, to the extent that they are willing to even be told when they should get up and go to bed. They get leave so they can get back to their normal lives for a while. They are staffed by unusually tough people, except when conscription is introduced in times of dire national crisis. That system wouldn’t work at all well in any normal industry.

Taxes can be used to help the least well off, but taken too far, that ends up amounting to paying for poverty. Whatever you pay for, you get more of. In any case, high taxes are not the same as socialism.

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Dan Dragan, 15 years as a citizen of the Socialist Republic of Romania

Want to know why socialism fails? Socialism always fails because it starts from the false premise that all humans are equal in abilities, needs and wants, and that there is an end-state to a human being called “happy” or “content”. The whole philosophy is build around how to organize these ideal identical humans so they all reach that ideal end-state.

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George Jones, former Bell Labs DMTS

Socialism does not always fail. Socialist economies are always implemented as a blending of Socialism and Capitalism. The success depends on balancing the two for the specific society in question. The question of why socialism fails hints at a conflation of socialism and communism.

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Anonymous Poster – works at Self-Employment

Socialism ignores everything good about humans and turns them into dependent fools. That’s why socialism fails.

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And last but not least, this awkward and embarrassing product of Jean Monnet University (Which they institute will likely disavow) is a response to the question about why socialism fails:

Greg King, studied at Jean Monnet University Answered 5h ago

china is kicking the usa’s ax, so you are wrong

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Well, folks, there you have it. Responses by the people of Quora to the question

Why does socialism fail?

As you can see, there is, for the most part, a common theme, save for the token and somewhat illiterate University grad, Greg.

In the end, there are few absolutes, but when a system is designed that all but completely ignores human nature and behavior, and omits entirely any form of incentive system, we need not ponder at length as to the reason for its failure. There is little mystery as to why socialism fails.

Socialism seems to have dropped the proverbial ball simply because it works initially, but because of the reasons above, is not sustainable – unless we can get the masses to simply stop being human.

One might argue that the purest form of capitalism is likewise doomed, but this author would argue that capitalism at very least embraces human behavior, encourages action and abundance while discouraging and even penalizes sloth.

In the end, do we, as a society, choose our own quality of life, or leave it up to the State? Do we wish to be accountable to ourselves, our community, and our loved ones for our chosen lot in life, or simply do the minimum possible to just “exist” in gray harmony with other robotic non-doers?

I don’t know about you, reader, but I choose the former.

The Editor
Capitalists.com