Capitalisim vs. Socialisim

[Patriqvinia]

Because government can't compete against itself. Prices are going to be higher; thus making it more difficult to fulfill demands because goods become less mobile.

Except the government can compete against itself. You've got various state owned factories for example. All trying to prove more efficient than the other.

Why? What do they get for being more efficient? Isn't it bad for the economy if one group of state-workers creates more supply than is necessary? The government would hurt itself if it dropped prices because one factory put out more product than expected.

Because government can't compete against itself. Prices are going to be higher; thus making it more difficult to fulfill demands because goods become less mobile.

Isn't the point of government control that they don't set the profit maximising price, they set the most allocatively efficient price?

The most "allocatively efficient" price can't be universal, individual company owners are going to be much better at deciding prices than bureaucrats, so long as they don't have a monopoly.

Edit: too slow

[Pryssilvalia]

What you guys seem to be not understanding is that the State can not know its labour cost - it's trying to determine that in the first place, and therefore it is not the same as a monopolist in a capitalist country. A monopolist knows how much its labour cost by basing it on other competitive industry.

[Izarius]

Wait I thought you're a capitalist...

Why do you care if I insult Trotsky?

Trotsky may be a dirty stinkin commie.

But dammit, he's our dirty stinkin commie.

Also, he commands respect even from us capitalists, we would appreciate if you accorded him that.

Ideology is a terrible reason to hate. Indeed, there isn't a good excuse ever to hate.

Yeah next you'll be asking me to respect Bin Laden won't you?

Wait I thought you're a capitalist...

Why do you care if I insult Trotsky?

1) Because I'm that good of a person.
2) Because I am/was uncertain whether you were directing "Twat" at Trotskylvania or Trotsky himself. Trotsky I have much less problem with you addressing it to
Edit: Also, see above

Oh I see. Fair enough.

[Meryuma]

I'm talking about a de-industrialized (but not pre-modern) society.

And I oppose de-industrialized societies because they don't produce anything useful beyond the subsistence level.

What makes you say that exactly?

I'm talking about a de-industrialized (but not pre-modern) society.

Meryuma, you do realize we can't all survive on this Earth with pre-modern societal economies.

Do you see the problem here? Also, there are a few aspects to the population thing. For one thing, this wouldn't be a sudden shift, and so people can just have fewer kids. For another, there are social aspects to overpopulation that can be changed politically. For another, the system we're currently in will probably collapse due to peak oil (obviously we should try to save as many people as possible).

Self-sufficient communes with permaculture and confederations at the bioregional level could help with famine, as could the lack of social stratification and the fact that the physical structures of cities would still exist.

We can't go back to subsistence without killing off at least 90% of today's humans.

Please show me where I said we should "go back to subsistence".

You're obviously not acquainted with the economies of Canada, Europe and the U.S.

If you were, you might not that they are all Market Capitalist Economies, even your so called Social Democratic states like Sweden and Norway have massive private sectors, they are run by capitalism, all of the West is.

I hate how everyone mixes up socialism and social democracy.

Same.

Socialist is all communally owned, the community may take the form of democratic councils or a state-like apparatus, so long as it is nominally working for the benefit of it's community without competition, it is a socialist economy.

What about market socialism?

[Distruzio]

You're obviously not acquainted with the economies of Canada, Europe and the U.S.

If you were, you might not that they are all Market Capitalist Economies, even your so called Social Democratic states like Sweden and Norway have massive private sectors, they are run by capitalism, all of the West is.

I hate how everyone mixes up socialism and social democracy.

Democracy is a soft socialism, my friend. The mix up is understandable.

[Distruzio]

Wait I thought you're a capitalist...

Why do you care if I insult Trotsky?

Trotsky may be a dirty stinkin commie.

But dammit, he's our dirty stinkin commie.

Also, he commands respect even from us capitalists, we would appreciate if you accorded him that.

Ideology is a terrible reason to hate. Indeed, there isn't a good excuse ever to hate.

You and OD, got this chit handled.

[Distruzio]

There are problem with both capitalism and socialism, especially when taken to extremes (Anarcho-Capitalism and Communism, respectively), why not take a middle ground and take the best of both worlds? Get greater income equality from the socialist aspects, and the better insensitive to work from capitalism. Of course those wouldn't be the only things from the two, but I don't have the time to write out how everything would interact.

Take the time. I'm one of those extremists who sees very little value in a system that elevates to the pinnacle of morality the expropriation of the population to benefit the population.

[Meryuma]

There are problem with both capitalism and socialism, especially when taken to extremes (Anarcho-Capitalism and Communism, respectively), why not take a middle ground and take the best of both worlds? Get greater income equality from the socialist aspects, and the better insensitive to work from capitalism. Of course those wouldn't be the only things from the two, but I don't have the time to write out how everything would interact.

Take the time. I'm one of those extremists who sees very little value in a system that elevates to the pinnacle of morality the expropriation of the population to benefit the population.

I feel you're treating "the population" is monolithic when it isn't.

[Mr Bananagrabber]

Isn't the point of government control that they don't set the profit maximising price, they set the most allocatively efficient price?

Which isn't quite true in practice would you not admit Bananagrabber?

Oh absolutely. I'm just playing devil's advocate here.

When mail services are only kept profitable through legal monopoly and barely at that.

Competition can maximize efficiency and price much better than government control, because the firms in seeking the highest profit, will have to necessarily streamline efficiency to waste the least money, and when they do so and other firms copy them, they must lower prices.

A government monopoly can and does intentionally allow their efficiency to falter, if it will allow them to retain a high price. A government run business will never be as efficient as a private one, at best they might provide better service, but we know when those cases occur it comes at a massive price to profitability.

Keep in mind I'm talking about allocative efficiency (getting resources to those who value them most), not productive efficiency. While yes, the profit motive does incentivise productivity, it also incentivises pricing above marginal cost when the firm has some market power. That allocative inefficiency can be reduced by government, since the government (we're assuming they actually have our best interests at heart) isn't driven by the profit motive, and would be willing to set a price which does not maximise their profit.

[Mr Bananagrabber]

Isn't the point of government control that they don't set the profit maximising price, they set the most allocatively efficient price?

The most "allocatively efficient" price can't be universal, individual company owners are going to be much better at deciding prices than bureaucrats, so long as they don't have a monopoly.

Actually it is universal. The allocatively efficient price is "price = marginal cost" (we get some problems when there's a natural monopoly, but we're just assuming competitive firms with market power for now).

[Patriqvinia]

The most "allocatively efficient" price can't be universal, individual company owners are going to be much better at deciding prices than bureaucrats, so long as they don't have a monopoly.

Actually it is universal. The allocatively efficient price is "price = marginal cost" (we get some problems when there's a natural monopoly, but we're just assuming competitive firms with market power for now).

Wouldn't that assume that every manufacturer would be able to produce goods at the same cost?

[Risna]

People are lazy so Socialism will not work, we all think that our neighboors are always two steps away from killing us. Capitalism allows monopolies to form and then 90% of people are starving and dependent on coporations as the rich get all the money. Both suck

[Mr Bananagrabber]

Actually it is universal. The allocatively efficient price is "price = marginal cost" (we get some problems when there's a natural monopoly, but we're just assuming competitive firms with market power for now).

Wouldn't that assume that every manufacturer would be able to produce goods at the same cost?

No. How do you figure?

[Patriqvinia]

People are lazy so Socialism will not work, we all think that our neighboors are always two steps away from killing us. Capitalism allows monopolies to form and then 90% of people are starving and dependent on coporations as the rich get all the money. Both suck

Do you really think your neighbors are two steps away from killing you? Maybe you should move?
Capitalism doesn't inherently allow monopolies to form (government favoring one company with resource allowance or copyrights) nor is it inherently corporatism. And... 90% of people aren't starving...

[Sibs bottle of vodka]

Production is the driving force in capitalism as well.

How, exactly, do you think that demand and supply works?

It doesn't. Companies seeking profits create demand for useless products that people don't need, through advertisement. They then sell services as products. For example, a lot of the American economy today consists of buying stuff from China for $1 and selling it here for $10. That adds $1 to China's GDP, while adding $9 to America's GDP. That's not actually useful for anyone.

Under a socialist system, we'd focus on actually producing stuff in America, so that the total world production is higher, and people overall are better off.

Yeah! What use is making a living to anyone? We should all be dirt poor socialists!

[Patriqvinia]

Wouldn't that assume that every manufacturer would be able to produce goods at the same cost?

No. How do you figure?

There may be a limited number of a certain machine, so some factories may have to make do with something else that's maybe less cost effective... also, some places may find it more difficult to ship materials in, or perhaps the climate they are in is unfavorable to the material, which would create a necessity to treat it or specially store it (extra facility cost, maybe extra labor to move it).

[Sibs bottle of vodka]

Socialism 100% of the pop owns 100% of the wealth.

Capitalism 1% of the pop owns 99% of the wealth

Bull.

In socialism, the nomenklatura own 99% of the wealth. The other 99% of the people are almost starving.

[Mr Bananagrabber]

No. How do you figure?

There may be a limited number of a certain machine, so some factories may have to make do with something else that's maybe less cost effective... also, some places may find it more difficult to ship materials in, or perhaps the climate they are in is unfavorable to the material, which would create a necessity to treat it or specially store it (extra facility cost, maybe extra labor to move it).

Yeah. So different firms face different marginal costs depending on their method of production. The rule for allocative efficiency is that a firm sets its price at whatever marginal cost it faces.

[Sibs bottle of vodka]

Unless your Chinese, in which case no trade with America = Starvation.

How many useless products can you think of off the top of your head? Genuinely worthless? Because I'll tell you that anytime you think that, you show your bias against economics, without the realization that value is subjective, you cannot work as such.

What is it you believe that a socialist economy will do? Operate by pure magic to produce only things that people need? Right now, tell me what car you want, if you could have any? Easy? Tell me what car your neighbour would want? Tell me what car his brother would want? Tell me what car every person in your town needs and would like to have in their garage? How do you propose that a socialist economy could ever learn all these things?

Edit: Actually, I misread, there something entirely else I have to address.

The world economy would not be "better off" if every nation produced it's own goods. I'll make this an easy scenario, would the world be better off if everyone grew their own food? Everyone? Would the world be better off if everyone built their own homes? Furnished them by themselves? Cut down all the wood and mined and smelted the iron needed to make the nails?

Why not? Simple answer, Division of Labour, the division of labour means it's better that China produce our cheap goods, so that America can produce the expensive goods. And do not mistake yourself, America produces goods.

There's nothing wrong with trade and division of labor. The USSR and its allies did plenty of that. Of course, the collapse of the USSR caused severe hardships for many of its trade partners, who then began working towards self-reliance.

But labor should be working towards something useful. We can't have an entire country largely working towards retail and advertising.

None of them were working towards self reliance. Self-reliance is an idiotic dream. A lot of them, left their socialist past before the USSR did. And were working closer with the west, and opening their economies to markets. Because they could see that free market capitalism is the path to prosperity.

[Sibs bottle of vodka]

And we don't. 21% of the entire world's production is created in America, that is with a population that consists of less than 5%.

Retail/advertising are necessary parts of any economy. Even socialist economies had advertising and retail. What you consider overbloated is nothing but conjecture.

A much higher percentage of our economy is dedicated to retail and advertising than in socialist economies, and we produce about 16.6% of the world's industrial production. However, we consume far more than that. Quite simply, China, which is capitalist, is having the Chinese produce goods and send them to us. Goods that we could have produced ourselves, allowing the Chinese to consume more.

Oh no! Capitalist economies make and sell things that people want!

The madness! We should stop production of all consumer good and focus on... military hardware!

Are you listening to yourself?

We do not consumer industrial production. Capital goods are not consumed. We sell them, to China.

[Sibs bottle of vodka]

And why don't we want the Chinese to live as well as Americans?

Nationalism is a relic, you'd think a socialist would be the first to say so. What's good for America is good for China is good for America and the same is true of every other nation, besides, Izarius, what's your beef with China? The US trades almost 10% of it's economy with Canada? Is Canada evil? What about the nations of the European Union? Or Japan?

This is what you didn't follow in my other post, for the same reason that it doesn't make sense for every individual to make his own nails and grow his own food, nations benefit from trade, China makes our cheap goods, we sell them our technological goods, Europe sends cars, America sends planes. When your neighbour makes nails for you, you have more time to grow wheat and he make more nails, the end result is more wheat, more nails.

Also why don't you like retail? Retail workers (that would include service sector employees) make our lives better, would you prefer a world without restaurants? Masseuses? Coffee baristas? Why do you want everyone to work in a factory?

You misread me. I said that if we produced those goods ourselves, the Chinese wouldn't have to export them, and would have been able to use those goods themselves. Of course, that would be if China were socialist.

I support the Chinese people here...

The Chinese would be poorer, and we'd be poorer, if we produced those goods ourselves. In case of the Chinese, you're talking starvation level poor, for tens of millions of people.

[Industrial Republics]

There's nothing wrong with trade and division of labor. The USSR and its allies did plenty of that. Of course, the collapse of the USSR caused severe hardships for many of its trade partners, who then began working towards self-reliance.

But labor should be working towards something useful. We can't have an entire country largely working towards retail and advertising.

None of them were working towards self reliance. Self-reliance is an idiotic dream. A lot of them, left their socialist past before the USSR did. And were working closer with the west, and opening their economies to markets. Because they could see that free market capitalism is the path to prosperity.

I agree that self-reliance is an idiotic dream when trying to push for truly Communist ideals, it'd have to be on a world scale. Trying to focus inside one country and completely cutting oneself off from the world does nothing but lead right back to an agrarian pre-industrial revolution country at this point.

And I would re-word the last party different: Free Markets lead to competition and innovation to bring about new inventions that lead to prosperity in the long run.

[Trotskylvania]

I'm playing the long game, so socialism. Participatory planning is the only feasible way to an ecological economy.

Oh no not a Twatskyist.

I'm not a Trotskyist at any rate, so your insults are not very effective.

[Sibs bottle of vodka]

What would be the point of that? These states have guaranteed customers in the populations of their states why innovate or economize when your customer base is guaranteed?
Unless you're suggesting that each of these "publicly" owned industries be able to compete in other states? In which case you are essentially just creating fifty mega-corporations that are sponsored by the state and MAY (emphasis: MAY, MAY, MAY have some check on their power via communal participation/community involvement in that area. Almost sounds like government sponsored Capitalism!

Except these publicly owned industries aren't out to make profits. It's a crucial difference.

Exactly.

That is why they are not efficient, don't innovate and produce crap that nobody wants.

[Trotskylvania]

Socialism 100% of the pop owns 100% of the wealth.

Capitalism 1% of the pop owns 99% of the wealth

Bull.

In socialism, the nomenklatura own 99% of the wealth. The other 99% of the people are almost starving.

Stop for a second there.

Saying that 100% of the population owns 100% of the wealth is tautologically true of any society.