Socialism is Bad
Tags: socialism socialism is bad capitalism
Socialism is Bad published by The 1st Amender
Writer Rating: 3.0000
Posted on 2023-08-02
Writer Description: Loves to blog and debate
This writer has written 209 articles.
Why socialism is bad:
Socialism has numerous issues. I have had many people throw arguments in my direction and portray something that isn't the reality of any of my positions regarding socialism, and so I figured I would take the time to quantify it in as concrete a way as I can.
Predicate of internal values:
I possess a predicate on what I consider to be a perfect society: Internal values. Internal values are basically activities and items that, if you could do that thing, it would make you more satisfied. It can be as simple as eating sushi, which you enjoy, or being able to do art, music, or exercise. Even if there are no items required, there are often situations that cannot be satisfied without basic needs being met. Things such as the ability to obtain the things that allow you to do the things to begin with We can think of basic healthcare as an example where if this were not readily available, it would result in a loss of internal values as people cannot do the things they care about if their basic needs are not met.
There is also the fact that doing things requires objects to do them. For example, to be an oil painter, you require ease of access to an easel, paints, gamsol and glycol for thinning, brushes, and the paint itself. Given that thought, it is up to a society to establish the highest level of internal values, given that each individual possesses their own internal values independent of other people but can share them with others. My predicate is that people wish to live the highest quality of life possible, which, in my mind, is the ability to satisfy internal values to the highest degree. Not necessarily to achieve it, but simply to have the option to do so.
Addl. predicate: Why internal values?
I have thought this through for quite a bit of time, considering not just material but spiritual concerns. I could not think of a better method to establish a better quality of life than those who live at higher levels of "internal value satisfaction." While rich vs. poor might be somewhat close, it really doesn't map out perfectly, as money that exists in a society where the value overinflates would leave money worthless. There is also how a person's spiritual desires ultimately lead to a level of "satisfaction", not necessarily happiness, but it can be included to allow this. I see no better method to introduce that would not place internal value satisfaction as the predicate of what we ought to care about.
Problems with socialism:
1. Problems with supply chain dynamics and empirical issues:
This is an age-old problem that keeps rearing its ugly head. Under concepts of internal value satisfaction, the only way that can be generated to a greater degree is by allowing for free-market fundamentals combined with social safety nets to maximize internal values. Why? We see that in empirical reality. When you look at the quality of living, the countries with the highest quality of living are capitalist countries (as in, private ownership of the means of production) mixed with social safety nets. If we were to use GDP per capita (but wait, GDP per capita is not a good metric because of inequality of wealth. Inequality of wealth also does not favor countries that argue for socialism either; even if you include wealth inequality, it has more to do with corrupt governments than it has to do with socialism vs. capitalism. https://worldpopulationreview.com/country-rankings/wealth-inequality-by-country), the countries with the largest GDP per capita are countries like Luxembourg at $128,820, Ireland at $106,998, Switzerland at $94,835, Qatar at $89,417, Norway at $88,749, Singapore at $84,501, the United States at $78,422, Iceland at $77,961, Australia at $68,024, and Denmark at $66,394. Source: https://www.visualcapitalist.com/worlds-richest-countries-2023-gdp-per-capita/#:~:text=This%20article%20sorts%20countries%20according,figures%2C%20not%20accounting%20for%20inflation.
(Addl note: I am aware countries like Qatar, Luxembourg, and Singapore are outliers to the situation for different reasons, such as Luxembourg being very tiny and only wealthy people living there, Qatar being an oil magnate where they establish great wealth due to their abundant natural resources of oil, and Singapore having an extremely good strategic location for international trade and commerce.)
Socialism was attempted in many countries, and the ones where "socialist spirit" still lives include:
• Republic of Cuba
• People's Republic of China
• Lao People's Democratic Republic
• Socialist Republic of Vietnam
Countries with "constitutional references to socialism" include:
• People's Democratic Republic of Algeria
• Portuguese Republic
• People's Republic of Bangladesh
• State of Eritrea
• Republic of Guinea-Bissau
• Cooperative Republic of Guyana
• Democratic People's Republic of Korea
• Republic of India
• Republic of Nicaragua
• Democratic Socialist Republic of Sri Lanka
• United Republic of Tanzania
Some of these countries have been largely left alone by the United States, such as China, yet still bolster an extremely low standard of living in comparison to most capitalist countries. Given that there is so little available in these countries, the realization I came to is that internal values cannot possibly be satisfied to the greatest degree under a socialist system. Certainly, it could be possible that with tweaking socialism, it somehow magically does better than capitalist economies, but empirically, that is false.
Of course, with the supply chain, it only gets worse when you look at it, as capitalist nations are often deterred from investing in places that expropriate the means of production, i.e., their property, effectively causing investors to steer away from countries that advocate socialism. This causes a lack of commerce and production, effectively retarding the entire level of production at a base level, given that it does not respect property rights. Given my initial predicate of internal value satisfaction, I find this to be extremely distasteful and antithetical to a better society.
2. Kills entrepreneurial opportunity.
There is a general disdain for those who create and try to make something of themselves for selfish gain, and the more successful they are, the worse it is. In the United States, this entrepreneurial spirit is often championed as a benefit for everyone. In a collective sense, it is seen as a huge negative. This will often stifle entrepreneurial incentive and veer away anyone who might consider this for their own gain. This in turn causes the system to stifle business and often leaves people considering creating their own work to no longer do so, and simply offer the bare minimum, which results in lower internal value satisfaction.
3. The socialist economy cannot handle the "invisible hand".
The invisible hand is a metaphor for the unseen forces that move the free market economy. Through individual self-interest and freedom of production and consumption, the best interests of society as a whole are fulfilled. The constant interplay of individual pressures on market supply and demand causes the natural movement of prices and the flow of trade. It is an initial idea presented by Adam Smith in his famous book, "The Wealth of Nations".
Under command economies, this erodes away the concept of the invisible hand. In certain situations, commanding supply chains (such as food) might be necessary due to their volatility. Yet this is a far more pragmatic approach in comparison to socialism, which finds itself incapable of creating a command economy. Even if you remove the idea of a command economy from socialism, you still have additional problems with worker co-ops.
4. Issues with worker co-ops.
Worker co-ops themselves are not negative in any way. The problem that I have with worker co-ops is that they are a catch-all system for socialists. If we had a system that was exclusively worker co-ops, then the entire system would effectively be socialist! This, however, doesn't remove an investing class, effectively making a society roughly equivalent to a capitalistic system. The worker at no point ends up owning the means of production, yet they have more say in how the company works through democratic principles.
Issue with worker co-ops and leverage: Companies are able to attract large amounts of money through leverage. Leverage is the result of using borrowed capital as a funding source when investing to expand the firm's asset base and generate returns on risk capital. Leverage is an investment strategy that involves borrowing money—specifically, the use of various financial instruments to borrow capital—to increase the potential return of an investment. So, let's say we have two perfectly scalable companies, Widget Private Firm and Widget Co-op, both of which sell the same type of widget.
Widget Private Firm has $10 million in capital to spend a year on five factories. Each factory costs $10 million to create and have the machinery, which generates roughly $2 million in capital per factory. Should the company decide to invest all its capital into one new factory, the next year it would receive an additional $2 million in capital—a good deal! But what makes it better is that Widget Private Firm could invest through leverage and take out a $100 million loan. With this loan, they have the ability to purchase 10 factories, where the benefit would be an additional $20 million a year, making the total $30 million in profit for the year. They can easily pay off portions of the loan and, after a few years, have the entire loan paid off to try again.
Widget Co-op has $10 million in capital to spend a year on five factories. Each factory costs $10 million to create and have the machinery, which generates roughly $2 million in capital per factory. Should the workers decide to invest all of their capital into one new factory, the next year they would receive an additional $2 million in capital—a good deal! But what makes things far more difficult is the ability to leverage with a loan. However, even if this were possible, the worker co-op is no different from any capitalist firm in handling leverage, effectively creating a ruling class. Should they take the loan, however, regardless of the firms and investors also being worker co-ops, it still results in the haves and have-nots of society, making no difference between traditional models and a worker co-op.
Considering my original predicate of internal value satisfaction, having more is much better than having less, and having fewer factories, less trade, and less benefit ultimately makes for a worse society, so I would not be in favor of worker co-ops (though I would easily argue in favor of co-ops in certain industries as they are perfectly compatible).
This is not to say worker co-ops cannot be beneficial in any way and ought to be abandoned; instead, applying pragmatic views on co-ops and their limitations is needed. There are industries where worker co-ops are quite compatible and, I would venture to say, even superior to more traditional firms. This is a far cry from the idea of socialism, however.
5. Socialism leads to countries collapsing.
I'm sure those who are looking for answers would point to the mass killings under communist regimes such as Kim Il Sung, Mao Tse Tung, and Joseph Stalin, but I don't even need to do that. When you look at instances of socialism without acknowledging the deaths, the results often look bleak. Even if you account for living conditions being at the absolute bottom and then a sudden rise in benefit, you still end up with a fundamental issue where industrialization tends to cause countries to raise their quality of living to a comparable measure.
Though if you were to take China into account, the country that industrialized at a much quicker pace than the United States by roughly 18 years (US second industrial revolution, 1870–1914, 44 years; Chinese industrialization, 1964–1990, 26 years) ultimately represents an unsustainable tradeoff. For those extra 18 years, you end up with the deaths of anywhere between 15 million and 55 million people: https://en.wikipedia.org/wiki/Great_Leap_Forward#Methods_of_estimating_the_death_toll_and_sources_of_error
Even if you give the benefit of the doubt to 15 million dead, you still end up with a fundamental issue: for every year saved, you effectively killed 833,333 people a year to make that happen. It is reasonable to say that while industrialization is comparable between nations, the methods to get there are radically different from one another.
Reasons why economies collapse under socialism:
• Centralization of trade results in an inability to handle changes in market dynamics.
• Kills investment. Leaves little to no incentive for investors to invest and ultimately consumes this class of people.
• It kills the desire to run a business. Entrepreneurship goes down the tubes, leaving those who want to take risks no longer able to do so.
• Incompatible with foreign nations Most nations are capitalist, especially if they have money. They are often diametrically opposed, and as a result, foreign assistance goes down the tubes as well as access to trade with the rest of the world.
• Bad leaders. Due to unchecked balance in leadership, a single decision that could have been avoided completely destroyed the country.
I might add more to this list of items I have issues with. Though I feel that the explanation is quite extensive at this point, if there are points that you find missing the mark, please feel free to message the thread and I can make edits as necessary.
Sources: self-written, sources in article
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