Three years after the Russian Revolution, an Austrian economist, Ludwig von Mises, argued that Communism would fail and explained why. Communism, or socialism, couldn’t succeed, Mises wrote in 1920, because it had abolished free markets so that officials had no market prices to guide them in planning production. Mises was relatively unknown when he made his controversial forecast, but he acquired some international renown later as the leading spokesman of the Austrian (free market) school of economics. Since his death in 1973, his theories have gained new adherents, some now even in Eastern Europe. The Soviet Union was launched with high hopes. Planning was to be done by a central committee, insuring plenty for everyone. The state was to wither away. But things didn’t work out that way. The Soviet state soon became one of the most oppressive in the world. Millions of Russians starved in the 1920s and 1930s.
As Mises pointed out, the raw materials, labor, tools, and machines used in socialist production are outside the market. They are owned by government and controlled by government planners. No one can buy or sell them. No market prices can develop for them because they aren’t exchangeable.
Modern production is time-consuming and complicated. Producers must consider alternatives when deciding what to produce. And they must consider various means of production when deciding how to produce. Raw materials, tools, and machines must be devoted to the most urgent projects and not wasted on less urgent ones.
Consider, for instance, the planning of a new railroad. Should it be built at all? If so, where? And how? Is building the railroad more urgent than constructing a bridge, building a dam to produce electricity, developing oil fields, or cultivating more land? No central planner, even with a staff of statisticians, could master the countless possibilities. Machines might be substituted to some extent for labor; wood, aluminum, or new synthetic materials might be substituted for iron. But how will the planners decide?
To make these decisions, planners must know the relative values—the exchange ratios or market prices—of the countless factors of production involved. But when these factors are government-owned, there are no trades, and thus, no market prices. Without market prices, the planners have no clues as to the relative values of iron, aluminum, lumber, the new synthetics, or of railroads, oil fields, farm land, power plants, bridges, or housing. Without market prices for the factors of production, the planners are at a loss as to how to coordinate and channel production to satisfy the most urgent needs of consumers.
More than 70 years have passed since the Russian Revolution and 45 years since the end of World War n. Why then do the Russian people still lack adequate housing and many everyday items? Why does agricultural produce rot in the fields for lack of equipment to harvest and transport it? Why are factories and oil fields so poorly maintained that production declines? Because the raw materials, tools, machines, factories, and farms are not privately owned. Without the bids and offers of private owners, prices reflecting their relative market values cannot develop. And without market prices, it is impossible to coordinate production activities so that the goods and services consumers need will be available. That is why Communism fails.
In a competitive economy, where factors of production are privately owned, these problems are solved daily as owners calculate the monetary values of the various factors and then buy, sell, and trade them as seems desirable, As Mises wrote in 1920, “Every step that takes us away from private ownership of the means of production and from the use of money also takes us away from rational economics.”
Today, even Communists are coming to recognize that Mises was right. The U.S.S.R., a socialist society without private property and monetary calculation, is still “floundering in the ocean of possible and conceivable economic combinations,” as Mises foresaw in 1920, “without the compass of economic calculation.” Will she now take the important step Mises recommended of introducing private ownership of the means of production?
It only appears to not work because most state involvement is invisible; the genius of letting people keep nominal ownership in a fascist system is that, when there is no bread, people get mad at the store-owners. In a communistic dictatorship, people get mad at the government when there is no bread. The genius is that in the former, the government involvement is not well understood, so it appears that the market is doing it.
It's a unavoidable bi-product of a valuesystem. Please let us discuss and consider if it is that great instead of throwing useless informations in. In some ways even monarchy(Also a bi-product) helped us formate as big nations, but it's not that good anymore. It is only important if it's good for the the future, not if it were in the past.
That's it, huh? That's all you've got? Primitive capitalism kept the Mesopatamians working. It kept the Egyptians, Greeks, Romans, Byzantines, Holy Roman Empire, Medici, Hapsburgs, British Empire, Napoleonic Empire, Ottoman Empire, and of course, the United States of America in order. Capitalism naturally lends itself to efficiency by allowing the strong to thrive and the weak to wallow. In socialism or similar systems, the weak keep the strong from fulfilling their destiny.
No, socialism have been proved great for Europe. Socialism is about helping the work-class to equality. Don't look at those old civilizations(The most DID'NT made it to the day today). Americans are for some reason thinking the same about nazism as communism, just like the think good guys with guns always are stronger than bad guys with guns.
Capitalism does encourage efficiency, assuming every child is able to start out with a roughly equivalent levels of resources at their disposal. However, when there is an imbalance of resources, some are cast in a permanent cycle of poverty simply because they will never be able to reach a level of wealth in their entire lives where they can attempt to succeed. As a result, there are people among us who may have the chemical makeup in their brain to see the solutions for the future of mankind; however, their potential is never realized, simply because they were born to a poverty stricken family, and never had the opportunity to thrive.
If you knew anything about history, you would comprehend:
1.: There's nothing naturaly at capitalism at all. Capitalism is the most unhuman form of society and economy ever; 'unhuman' meant in terms of 'human' as describing the man as a being which differs from animals.
2.: Capitalism, in whatsoever form, just exists since ~200 years.
3.: What keeps you working in capitalism is the lash of the rich, mainly in the form of money and bureaucracy.
4.: There hasn't been socialism yet. What was blown away in the czardom wasn't capitalism, and what was 'revolutionized' in the USSR wasn't socialism at all.
For a simple understanding of what capitalism means nower days, just watch this film.
I'm not going to try and disdain any of those points because they're all emotionally based. You silly little commies fall back on bitching about capitalism rather than proving the merits of communism. Not once did you guys ever say what was good about communism, but rather you ramble on and on and on and on about "the lash of the rich" and other ephemeral terms.
"PPS: I'm sorry for any misspellings."
"PS: It's 'Habsburg'."
You just admitted you couldn't spell, and then you told me I was spelling wrong. If you were any dumber I'd have to water you twice a week. And explain to me how the strong devouring the weak is "unnatural", or, in your native tongue, "duuuuuuuuuuuuuuuhhh". And nowhere in nature have I ever seen the weak rising above the strong. And keep in mind strength is not necessarily physical. You could learn a lot from good ol' Adam Smith.
"My rifle is the only one who understands me." Yeah, I really believe you.
And oh, thank you, I emediatley changed my weltanschauung back to a one which declares the old Egyptians to capitalists.
I bet your skills in foreign languages are not anywhere near mine, which is why I just laugh about how narrow most of those people from the country are which tortures it's enemies in a brutal campaign, bringing war, pain and suffer to the whole world, not even being able to realize that it's one grave has already been digged. In 100 years, nobody will give a damn F*** on the USA which then are on the same list as the Nazis for being a shame for humanity. Over and out.
I was yanking your chain when I said the egyptians were capitalist. I was really just trying to get you to invoke Godwin's law, which you just did by comparing the USA to the third reich. You did everything I wanted you to.
I must agree though; capitalism is not the problem. It is, in fact, inevitable no matter the social structure. The problem here is the same problem evident in any other system; a lack of restraint. If a solution is to be found, it must work with a capitalist economy, not against it. Even if you smash the machine, it will only be replaced, and you'll be out of a job.
I'm probably late on the discussion, but how is it inevitable? For awhile slavery was "inevitable" because otherwise labour would be too expensive, then theocracy and monarchy were "inevitable" because there was no other way to keep people from rebelling, now Capitalism is supposedly inevitable because there's no better way of controlling people's greed than letting it run wild. Crapitalism will eventually be replaced by something completely much more humane.
I agree that a capitalist market must be balanced by regulation; I was speaking of capitalism in the most elemental sense, the idea that men WILL behave according to supply and demand, and that markets denied legal forum will only go underground. (Point and case: prohibition.) I also agree that we will probably (hopefully) evolve past our current short-sighted habits and better regulate ourselves, but that system will still retain the foundation of property and trade. While one can argue that money (e.g. property) is the root of all evil, it is not. Greed is. In all practicality, taking away one's "right" to property will only allow for the greater injustice of servitude to the state in exchange for that same property, and the exploitation of one's personal freedoms by right of might.
There was a time when some aircraft were thought impossible to fly, thanks to the chaotic and complex adjustments needed to keep the craft level. That changed with the advent of computers able to make those calculations for us. Maybe our economy is not so different a problem.
There's a huge difference between economics and Capitalism. The validity of economic theories isn't tied to any single economic philosophy. You can have a socially fair system that takes care of economic growth, respects all private property and enterprise, but also regulates big business when necessary. Capitalism doesn't recognize social justice as a necessity, it can't regulate big business and hinders small businesses by serving only big corporations. The State itself doesn't help monopolies, a Capital-owned state does. Also politically, Capitalism is based on lobbyism, which means big businesses can influence politics, but regular people and small businesses can't. That's why Congress is more likely to vote to "save" big business by borrowing money from China to be later repaid by the taxpayer, than vote a bill to force Pfizer to lose some of its huge profits and lower the price of medicine. Big business caused the crisis, but it can still order the government to bail them out by threatening to bankrupt the economy or paying politicians to vote their way. That's a typical Boss-employee relationship and we all know who's the boss.
Another fault of Capitalism is that it gives full freedom to speculators and financial manipulators. People like Bernard Madoff and Jerome Kerviel are just the tip of the iceberg. Only 10% of the money in banks is real, and money constantly loses value. Does that sound like a working and "inevitable" system?
Again, I'm sorry for barging into the conversation, I'm probably being harsher than I should be, but I feel that people consciously refuse to look at Capitalism's major malfunction even when it's right in front of them. It's like someone's spitting in your face and you're wondering if it's starting to rain.
I think we're both trying to make the same point here; I was speaking of capitalism the principle, not Capitalism the institution. My mistake if I misused the word. I quite agree that big business needs to be better controlled, and that lobbying is a corrupt practice. I am also unimpressed by this debtor's approach to our current situation, which is to bail and borrow even more than we already were to get ourselves into the mess. And I am aware that our currency system is a farce built upon the invention of funds where none exist. I've been predicting such a crash since I was a child, and old enough to understand the way money and economy are treated by our society.
My intention was merely to caution against the complete abandonment of economic theory, which certain Parties have done in the past. They weren't exactly Marxists in the purist sense of the word, but they did attempt to integrate social ideals at the expense of trade. What resulted was corrupt military states and overburdened bureaucracies.
What we need is a system in which big-business trade is regulated at the highest levels, and taxed more heavily than any individual or small business. Lobbying should be marginalized, if not eliminated altogether, and our "federal reserve" must be taken from the hands of private entities so that the dollar means something for a change. The way debt and credit are handled must also be revamped from the ground up. And while we're at it, how about we eliminate the Electoral College, which does nothing but remove power from the voter and hand it to the highest bidder. But that's getting into a different discussion.
All this is a roundabout way of saying that we're on the same page here. Capitalism without any regulation devolves into an Oligarchy, and pure Socialism devolves into Communism. Both become fascist without compromise. It'll require careful balancing from both to achieve the desired results.
(And thank you. Glad you like my work. Your 3d stuff is impressive.)
Please explain how "Socialism caused the crisis", if I remember well, the crisis was caused by the credit crunch, which was a direct result of an unregulated Capitalist market. Alan Greenspan acknowledged that, why can't you? [link]
Here are the main points that debunk anyone's claim of laissez faire:
1. Government spending in the United States currently equals more than forty percent of national income, i.e., the sum of all wages and salaries and profits and interest earned in the country. This is without counting any of the massive off-budget spending such as that on account of the government enterprises Fannie Mae and Freddie Mac. Nor does it count any of the recent spending on assorted "bailouts." What this means is that substantially more than forty dollars of every one hundred dollars of output are appropriated by the government against the will of the individual citizens who produce that output. The money and the goods involved are turned over to the government only because the individual citizens wish to stay out of jail. Their freedom to dispose of their own incomes and output is thus violated on a colossal scale. In contrast, under laissez-faire capitalism, government spending would be on such a modest scale that a mere revenue tariff might be sufficient to support it. The corporate and individual income taxes, inheritance and capital gains taxes, and social security and Medicare taxes would not exist.
2. There are presently fifteen federal cabinet departments, nine of which exist for the very purpose of respectively interfering with housing, transportation, healthcare, education, energy, mining, agriculture, labor, and commerce, and virtually all of which nowadays routinely ride roughshod over one or more important aspects of the economic freedom of the individual. Under laissez-faire capitalism, eleven of the fifteen cabinet departments would cease to exist and only the departments of justice, defense, state, and treasury would remain. Within those departments, moreover, further reductions would be made, such as the abolition of the IRS in the Treasury Department and the Antitrust Division in the Department of Justice.
3. The economic interference of today's cabinet departments is reinforced and amplified by more than one hundred federal agencies and commissions, the most well known of which include, besides the IRS, the FRB and FDIC, the FBI and CIA, the EPA, FDA, SEC, CFTC, NLRB, FTC, FCC, FERC, FEMA, FAA, CAA, INS, OHSA, CPSC, NHTSA, EEOC, BATF, DEA, NIH, and NASA. Under laissez-faire capitalism, all such agencies and commissions would be done away with, with the exception of the FBI, which would be reduced to the legitimate functions of counterespionage and combating crimes against person or property that take place across state lines.
4. To complete this catalog of government interference and its trampling of any vestige of laissez faire, as of the end of 2007, the last full year for which data are available, the Federal Register contained fully seventy-three thousand pages of detailed government regulations. This is an increase of more than ten thousand pages since 1978, the very years during which our system, according to one of The New York Times articles quoted above, has been "tilted in favor of business deregulation and against new rules." Under laissez-faire capitalism, there would be no Federal Register. The activities of the remaining government departments and their subdivisions would be controlled exclusively by duly enacted legislation, not the rule-making of unelected government officials.
5. And, of course, to all of this must be added the further massive apparatus of laws, departments, agencies, and regulations at the state and local level. Under laissez-faire capitalism, these too for the most part would be completely abolished and what remained would reflect the same kind of radical reductions in the size and scope of government activity as those carried out on the federal level.
This bit sums it up well:
What this brief account has shown is that the politico-economic system of the United States today is so far removed from laissez-faire capitalism that it is closer to the system of a police state. The ability of the media to ignore all of the massive government interference that exists today and to characterize our present economic system as one of laissez faire and economic freedom marks it as, if not profoundly dishonest, then as nothing less than delusional.
The rest of the article I sourced this from goes on to explain how government intervention in the market caused the crisis. Read more at [link]
I'm not letting you get away from this, dude. Your claim that socialism caused the current crisis is the biggest lie - even your link doesn't support it. It's a claim that no one is making publicly for fear of merciless rebuttal and public humiliation, which is what you deserve with that absurd statement. Don't blame Capitalism's inherent malfunctions on your "ideological enemies". Whenever Capitalism makes a mess, apologists like you are there to blame it all on socialism. This isn't only insolent, it's downright ignorant.
I have a feeling you'll try to avoid the question again, so I'll help you. The crisis was caused by several things:
- most importantly - the Credit crunch. That's when banks gave away sub-prime credits to poor people who couldn't service them. This happened because there was NO regulation to tell the banks not to do this. Because given credits are a capital that allows banks to give even more credit, and because the virtual trust-capital is only 10% of what banks really own, the banks' only goal was to expand their operation no matter what - so they decided there was noone else to sell credit to but subprimes. Get it? There was not enough regulation - even mister Laissez-faire Alan Greenspan admitted it. Get over it and stop fooling yourself.
- Secondly - the shrinkage of the credit market evaporated a lot of that virtual trust-money that never existed in the first place. Endless unregulated speculation eventually leads people to the realization that you can't invent something out of nothing.
- Next, the housing bubble. This was caused again by unregulated speculation with the prices of homes. Because unregulated business saw prices rise, they built more and more houses, thus the economy expanded. When there were more built houses than anyone was willing to buy, prices fell and the industry shrunk, dragging down the economy.
- Fannie Mae and Freddie Mac - while more of a casualty of, rather than cause for the crisis, this is the biggest embarrassment for Capitalists and Libertarians - the ultimate proof that social services are not supposed to be privatized businesses.
Not only did socialism have nothing to do with all these things, but more regulation would have actually forced the free market NOT to make these mistakes. One of your own gods of wisdom - Alan Greenspan figured it out for himself when he reluctantly admitted that unregulated businesses don't know what's best for the market or even for themselves.
Furthermore, it was not the state, but unregulated businesses who asked for the taxpayer to bail them out. The result is not socialism, it's socialism for the rich, which is the exact opposite of socialism.
It's OK to be libertarian or anarcho-capitalist and I realize it must be hard for you to rationalize this failure of free-market Capitalism, but don't try to pin the blame on whomever you don't like. Sooner or later there will be someone to slap some sense into you.
You didn't bother to explain anything in the first place - you made a dumb statement and you let a website speak for you. I wrote a large enough paragraph on several points touched by your "articles", you didn't reply, so I'd say it's you who's being a brick wall.
Oh, and further proof that you don't read the articles that you keep posting (from that one site you seem to take your whole knowledge from), is that the Greenspan article you posted has nothing to do with the comments he made, that I was referring to.
i love the image. it's simple, and beautiful.
for all yopu funny guys who are not decided about capitalism... you see, capitalism is kind of son of a bitch that can't be ignored. if you're not working against, you're working for. he doesn't really need worship, or support. he needs work. passive participation.
same thing with mass culture- you can't be neutral. even if you're against, you must be very careful- you can support it, even not knowing about it! only a councious, true resistance is able to create oposition. otherwise you're helping them exploit you and you're fellows
so go on, my sweet littlle conformists. tell me, that the problem of capitalis, and maybe even all the politics isn't interesting for you. but the thing is, that you're interesting for the capitalism, and widely understood politics. Which simply means you're in a deep shit