What, exactly, is socialism? Again this discussion seems necessary.

Discussion in 'Economics & Trade' started by Kode, Aug 19, 2018.

  1. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    39,883
    Likes Received:
    2,144
    Trophy Points:
    113
    That's the point. I didn't say "ask me loads of questions". Indeed, I've indicated that you're asking questions rather than providing economic content. Its not a difficult request: provide an economic critique and justifies your 'socialism can't work' stance.
     
  2. LangleyMan

    LangleyMan Well-Known Member

    Joined:
    Nov 14, 2017
    Messages:
    44,677
    Likes Received:
    12,448
    Trophy Points:
    113
    Gender:
    Male
    IOW, you can't even address the questions about the pipeline.

    If the pipeline worker-owned, where does the capital come from to finance construction and ongoing maintenance? We could easily be looking at $10b for building a major pipeline. Does your socialist society have banks and this is where the pipeline is financed? Does the government raise the money through taxation? Of whom? Individuals?

    If society has banks, does the bank pay interest on deposits? If not, why would anyone deposit their money and risk not getting it back if the bank's loans aren't repaid!

    We can apply the laws of supply and demand to the bsnking institutions you might set up to supply losns for enterpises like pipelines.

    I'm not even going to get into who is responsible for paying back loans if we don't have banks. No bsnks? Where do people get their housing? Is it a grant? Who gets a grant, when? Is the grant more for parents? Who is responsible for maintaining the house? Do we have cooperative apartments? Do people pay rent? Who gets the loan or grant to build the apartments?

    Anyway, I'm going to stop. There's no socialist model that works with markets--the laws of supply and demand. Those laws describe human behavior in the real world. In fact, markets exist in socislist societies, with or without the consent of government.
     
  3. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    39,883
    Likes Received:
    2,144
    Trophy Points:
    113
    Actually I've already responded to that red herring.i wanted you to flesh out this 'socialism can't work' argument. You deserved an opportunity to try and refer to something worthwhile, such as the socialist calculation debate. You missed out on the opportunity.

    This is a nonsense effort. First, it shows an innocence of orthodox economics. That refers to how investment may be insufficient due to market failure (e.g. where are the opportunities for investment when firms are small and only cover opportunity costs? What is the impact of risk aversity?). You shift the analysis to economies of scale argument and the need for market power. We'd need a nonsense assumption that such large firms only have capital if there is traditional ownership. Second, you have to make the ridiculous assumption that the economy has failed for socialism to fail (circular 'logic'). Otherwise then there is no reason to deny that an investment bank can fund large investments. The difference is that such an investment bank would be committed to social return criteria (eliminating another market failure).

    There's no argument here. Of course interest is paid on loans. The switch to long term outcomes, mind you, ensure that interest payments are much lower.

    First, the laws aren't actually laws. Second, good luck applying standard microeconomics to the banking sector. You'd only have a point if there was perfect competition, which then becomes nonsensical when you're referring to the importance of economies of scale (where public sector interventionism has been the norm).

    Who said there weren't any banks? You are making ridiculous claims to try and hide from your lack of economic insights.

    You'll be claiming that you've never heard of cooperative banks and building societies next...

    And you finish with drivel that only shows that you don't understand socialism. Who said there isn't a market? It wasn't me; the clue is in the title: market socialist.

    In summary, you haven't actually got economic support for 'socialism cannot work'. At least try something credible, like Hayek's contribution to knowledge theory and how it impairs socialist planning. Blindly stating 'Its the laws of supply and demand ain't it' just won't wash!
     
  4. Kode

    Kode Well-Known Member

    Joined:
    Feb 5, 2016
    Messages:
    26,310
    Likes Received:
    7,461
    Trophy Points:
    113
    Gender:
    Male
    How do you know?
     
  5. Kode

    Kode Well-Known Member

    Joined:
    Feb 5, 2016
    Messages:
    26,310
    Likes Received:
    7,461
    Trophy Points:
    113
    Gender:
    Male
    Nice-sounding theory, but that's all it is. Want reality? Get a look at this:


    "Common definition"? The "common definition" is a capitalist's definition. Look beyond empirical and superficial assertions and see the purpose, meaning, and intention laid out by Marx and all Marxists. Marx is the authority, not Houghton, Mifflin and Company. It's about workers ending capitalist exploitation by seizing the means of production.
     
  6. LangleyMan

    LangleyMan Well-Known Member

    Joined:
    Nov 14, 2017
    Messages:
    44,677
    Likes Received:
    12,448
    Trophy Points:
    113
    Gender:
    Male
    Oh, please--you didn't respond to even the most basic question of where the money comes from, and under what conditions it is made available.
    You're wandering all over the place. I asked how a major pipeline would be financed if we have worker-owned businesses. It isn't about small investments or "opportunity costs." There is no assumption the economy has failed. We can talk about "risk aversity," "opportunity costs," "opportunities for investment," "orthodox economics," and so on in the context of how business acquires capital.
    When we have banks charging interest, presumably they have different rates for different risks. We're looking at markets for loans. Do the pipeline workers assume some of the risk? It could easily be five years before oul flows to market theough the pipeline. I could see older workers not caring in the pipeline is ever finished.
    No, they are indeed laws and their operation creates markets. People exchanging things of value is what we humans do. Markets exist between children.
    "Perfect competition" isn't a relevant concept. We're looking at markets without perfect competition. And now you're talking about a "public sector," as though a private sector exists, in a socialist economy?
    Why are you getting nasty?

    Anyway, where do worker-banks get their capital in a socialist economy? Worker and worker-business deposits? Do banks pay interest on deposits?
    One of us is an economist, and one of us isn't. You're the "isn't."
    Hayek? Egads. Anyway, I said I'd keep going unless and/or until you got nasty...
     
  7. LangleyMan

    LangleyMan Well-Known Member

    Joined:
    Nov 14, 2017
    Messages:
    44,677
    Likes Received:
    12,448
    Trophy Points:
    113
    Gender:
    Male
    Thanks for playing.
     
  8. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    39,883
    Likes Received:
    2,144
    Trophy Points:
    113
    I've responded repeatedly now. Why do you think, when the socialist calculation debate was in full flow, they didn't just say "its economies of scale" and shup up shop? Because the argument is illogical, twinning zero understanding of socialism and Econ 101.

    Actually I'm not. I'm referring to your ignorant application of economies of scale and the reference to market failure. I've maintained focus on market failure to derive two key points. First, economies of scale cannot be used to critique socialism. Second, socialism eliminates other market failures that naturally occur in capitalism. Your ignorant use of economies of scale has actually just attacked your own argument (you just haven't been able to grasp it).

    Pointless comment! We know that banks continue in socialism. We know that interest does. We just know that interest rates will be lower, due to a long term perspective and the positive impact of an investment bank. The only debate is the extent that co-operatives provide funds for SMEs.

    Sorry, but this is clueless. First, they aren't real laws. It is a social science construct, not a scientific one. The law of demand is regularly broken. For example, behavioural economics will inform us how a price rise can generate an increase in quantity demanded (e.g. endogeneous preferences). Second, markets are not specific to any economic paradigm. You made the silly mistake of assuming market=capitalism.

    This just advertises that you haven't understood Econ 101. You need perfect competition to derive efficient financial markets that deliver appropriate level of investment funds. If they don't exist then we know that capitalism and investment failure go hand in hand. Of course we know that is the reality. Its why capitalism has been so heavily reliant on public sector interventionism.

    There is a clearer divide between the private and public sectors in market socialism. The public sector is focused on public good provision, rather than being corrupted by rent seekers.

    If you think that's nasty you're having a laugh. I've merely achieved the appropriate: tutting at your ridiculous assumptions.

    Does your bubble lack any transparency? Where do you think co-operative banks and business cycles derived their capital?

    You haven't even grasped introductory concepts, but I look forward to reading your PhD.

    Hayek actually made relevant attacks on socialism. That also led to transformation in our understanding of knowledge (and why state capitalists such as the Soviet Union were doomed to fail). In contrast? You merely made irrelevant reference to economies of scale...
     
    Last edited: Dec 26, 2018
  9. LangleyMan

    LangleyMan Well-Known Member

    Joined:
    Nov 14, 2017
    Messages:
    44,677
    Likes Received:
    12,448
    Trophy Points:
    113
    Gender:
    Male
    I asked you. So far, nothing. I have a university education is economics.
    Okay. No more games. You won't even say how the pipeline is financed.
    Banks will continue to exist? Capitalist banks? Banks will provide the money for the pipeline?
    You would get an argument about backward bending demand curves from economists, but you wouldn't know that.
    Now, you're making stuff up. I specifically said markets exist in every economy.
    The rest of your post? :yawn: :yawn: :yawn:
     
  10. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    39,883
    Likes Received:
    2,144
    Trophy Points:
    113
    Wow! That you think economies of scale informs political economy is striking. Was your minor economics?

    Please don't lie. I've done two things. First, referred to how these large investments are funded by investment bank. Second, used your bogus argument to show how you're completely clueless over how market failure impairs investments (and how socialism actually eliminates that market failure)

    The existence of banks is not a sufficient condition for capitalism. You are merely continuing your obvious ignorance of socialism and capitalism.

    Don't talk toss. Backward bending curves typically refer to supply, reflecting the nature of income and substitution effects. Suggesting that the demand curve is backward bending is an open assualt on the 'law of demand'. You again show your Econ 101 lack of understanding.

    Once you admit that socialism and the market coincide, where is your argument? What irrirates me about you is that you haven't even had the good grace of composing a valid economic argument. You thought you could blag it with economic vocab.

    Given you lack understanding of Econ 101, I see that as a positive!
     
    Last edited: Dec 26, 2018
  11. LangleyMan

    LangleyMan Well-Known Member

    Joined:
    Nov 14, 2017
    Messages:
    44,677
    Likes Received:
    12,448
    Trophy Points:
    113
    Gender:
    Male
    [​IMG]
    Play games with someone interested in playing.
     
    Last edited: Dec 26, 2018
  12. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    39,883
    Likes Received:
    2,144
    Trophy Points:
    113
    No problem! There's nowhere to go after making the economies of scale error.
     
  13. Kode

    Kode Well-Known Member

    Joined:
    Feb 5, 2016
    Messages:
    26,310
    Likes Received:
    7,461
    Trophy Points:
    113
    Gender:
    Male
    You're asking questions about a later stage of socialism that we must grow into. Initially we must start with businesses that create and provide a product or service to be purchased. Pipelines are either built by very large corporations which are far, far ahead of where socialism will be for quite a while, or they are funded and contracted by the government, which, again, is far ahead of where we will be for some time.

    In this case you're asking about what should be a government function, and a socialist government will also run schools, so the example is one that doesn't illustrate anything important for any question of socialism.

    Huh?

    I'm glad you have more because among them there may be some better cases to discuss.
     
  14. LangleyMan

    LangleyMan Well-Known Member

    Joined:
    Nov 14, 2017
    Messages:
    44,677
    Likes Received:
    12,448
    Trophy Points:
    113
    Gender:
    Male
    Do we have large private corporations or not? If we don't, how do we organize large-scale enterprises like pipelines, power generation, building cars, making computers, and on and on? If we do, then we have a capitalist economic system.
    Why are schools necessarily run by the government? What rights do teachers have?
    Why should teachers have fewer rights than other workers?
     
  15. Kode

    Kode Well-Known Member

    Joined:
    Feb 5, 2016
    Messages:
    26,310
    Likes Received:
    7,461
    Trophy Points:
    113
    Gender:
    Male
    Yes, of course we do.

    And of course we have a capitalist economic system. But that offers nothing to the conversation as presented in the title and OP of this thread. You were asking Reiver about alternatives to capitalists building pipelines, weren't you? That's what I responded to.

    It's an issue of homogeneity. It's an issue of equal opportunity and avoidance of pockets of poor education to the extent that we can reasonably achieve. Significant differences in affordability will guarantee eventually, if carried to its natural conclusion, that the best education is available to the richest while poorer education is what the rest of society must endure. Instead, we should work to ensure that all students have the opportunity for an excellent education.

    How am I proposing that they should have fewer rights?
     
  16. LangleyMan

    LangleyMan Well-Known Member

    Joined:
    Nov 14, 2017
    Messages:
    44,677
    Likes Received:
    12,448
    Trophy Points:
    113
    Gender:
    Male
    What are the alternatives to large corporations undertaking economic projects thst require large amounts of capital?
    Why not give people enough money and let them choose schools fir their children?
    Teachers don't control thrir workplace, but other workers do? Why is that?
     
  17. Kode

    Kode Well-Known Member

    Joined:
    Feb 5, 2016
    Messages:
    26,310
    Likes Received:
    7,461
    Trophy Points:
    113
    Gender:
    Male
    You mean today, now, or do you mean 40 years after socialism begins to develop? Today there is only one alternative possible that I can imagine, and that would be a worker-owned co-op construction firm signing contracts to do such construction. Their costs would include heavy equipment rental so as to keep capital costs low for now and probably loan repayment.

    And 40 years after socialism begins to develop, industry would have time to grow into such roles as capitalist companies did. Then ownership of expensive equipment would develop, just like Mondragon started as a home appliance manufacturer and now, 60 years later, has evolved into a business manufacturing solar panels and doing research with Microsoft and Apple working with them to learn Mondragon's methods.

    The problem we're up against is the common expectations among people that if we switch to socialism, we would do it completely within a month, because, after all, we socialists "MUST have a complete and sufficiently detailed plan to do that", right?

    I think I answered that.... it leaves too many doors open to unwanted, unfair variation and inequality.

    Others do? Where?
     
  18. LangleyMan

    LangleyMan Well-Known Member

    Joined:
    Nov 14, 2017
    Messages:
    44,677
    Likes Received:
    12,448
    Trophy Points:
    113
    Gender:
    Male
    Sign contracts with whom? Today, corporations own a lot of the infrastructure and decide to finance and build infrastructure in response to market conditions. If government is the buyer, how does a worker-owned construction firm achieve sufficient size to undertake large-scale projects?
    Who owns the heavy equipment?
    Why would socialism develop (evolve?) from a largely capitalist system?
    I don't know what people might expect. Frankly, I don't think enough people understand how to run an economy for very many to have an expectation.
     
  19. Kode

    Kode Well-Known Member

    Joined:
    Feb 5, 2016
    Messages:
    26,310
    Likes Received:
    7,461
    Trophy Points:
    113
    Gender:
    Male
    The government, local, state, and federal. Most roads, bridges, water and sewer systems to name just a few are owned by government and they contract with private firms to get such work done (if you're in the USA).

    Where are you located? You have no bio/demographics to indicate this. In the USA what you say isn't the whole picture. Governments even float bond measure to pay for projects and then hire contractors selected from bids. I'm not even sure what infrastructure is owned, if any, in the USA.

    The same way Mondragon did.


    http://www.mondragon-corporation.com/wp-content/themes/mondragon/docs/History-MONDRAGON.pdf

    Equipment rental companies.
    https://www.rent1usa.com/

    Because people who are fed up with the corruption, cheating, layoffs, loss of benefits, income disparity, and increasing pollution want to work to create an alternative.

    I don't know what people might expect. Frankly, I don't think enough people understand how to run an economy for very many to have an expectation.[/QUOTE]
    Well, I base my comment on the frequency with which I see anti-socialist demanding to know exactly how a socialist economy would handle everything from licensing to distribution of goods, and I see "socialists" actually trying to give answers!!
     
  20. LangleyMan

    LangleyMan Well-Known Member

    Joined:
    Nov 14, 2017
    Messages:
    44,677
    Likes Received:
    12,448
    Trophy Points:
    113
    Gender:
    Male
    Oregon, but does it matter where I'm located? A lot of infrastructure is owned privately.

    Anyway, I used infrastructure as an example, but you could look at any large project owned by a private entity--a shopping center, a computer manufacturing business, and that doesn't even get into services.
    Your PDF isn't in English and I'm not interested in watching a video. Besides, what about all the other assets the business must have? Are you thinking they're going to rent everything?
    Being fed up doesn't mean the system will evolve. Anyway, how the evolution might take place is relevant.
    I'm an economist and someone who has seriously looked at comparisons between socialist and capitalist systems. The questions I asked have to be addressed by any system, capitalist and socialist. It's a very complicated business and people who don't look at such things really don't have answers.

    Socialist systems don't work very well, at least so far.

    Capitalist system have their own difficulties around income and wealth distribution.

    P.S. Marx wasn't an economist and didn't have a clue.
     
    Last edited: Jan 28, 2019
  21. Kode

    Kode Well-Known Member

    Joined:
    Feb 5, 2016
    Messages:
    26,310
    Likes Received:
    7,461
    Trophy Points:
    113
    Gender:
    Male
    Yes it matters. If you were logging in from Russia or maybe even Denmark it might explain your comments. But I'm in Oregon too, so our experience with this is probably similar.

    You said "Today, corporations own a lot of the infrastructure and decide to finance and build infrastructure in response to market conditions."

    Shopping centers, manufacturing businesses, and many services are indeed businesses and business-owned, but I certainly don't think of them as "infrastructure". So it looks like we're talking past each other so far on this.

    The PDF is in three languages on each page. It sounds like you were hasty and were only too happy to exit the page hastily.

    And now it sounds like rather than trying to understand reasonable answers, you are trying everything you can to invent an impasse. If you were going to join up with 8 buddies to start a construction business together, where would you get what you need? ... -the same place any other businessman does when starting a construction firm, right? Same thing.

    It would evolve in the same way capitalism evolved over a hundred years beginning in the 1500s and 1600s in different places. -Start small and build.

    Mondragon did. Arizmendi Bakery did. About 600 other such businesses in the US did and are working quite well. Rutgers University did a study of the and found that they are 4% more productive and 14% more profitable than equivalent top-down capitalist businesses. And they have fewer layoffs in downturns of the economy. So you might want to check your sources that are feeding you your information because it sounds like it is mostly wrong.
     
  22. LangleyMan

    LangleyMan Well-Known Member

    Joined:
    Nov 14, 2017
    Messages:
    44,677
    Likes Received:
    12,448
    Trophy Points:
    113
    Gender:
    Male
    i used infrastructure as an example, but the concern applies to every large-scale enterprise.
    I have to admit I gave up too quickly when I saw it was 172 pages and you hadn't addressed many of my questions.

    I think their failed attempt to rescue Fagor Electrodomésticos shows the weakness in the model.
    These businesses are not very large and are a type amenable to a particular type of enterprise. The Mondragon cooperatve wisely chose the businesses it backed.

    Businesses with a large capital base wouldn't work well in the Mondragon model.
    You think, or hope, they're "reasonable answers." But are they? How will you capitalize a chip manufacturer? A factory can cost more than a billion dollars.
     
  23. Kode

    Kode Well-Known Member

    Joined:
    Feb 5, 2016
    Messages:
    26,310
    Likes Received:
    7,461
    Trophy Points:
    113
    Gender:
    Male
    The reading goes fast when you realize how it's presented, huh?

    I didn't address your questions? Like what?

    I think that is reaching. After all, not only do capitalist companies occasionally experience failures in a division while the rest of the business thrives, but Mondragon went on to become a 60-year-old business with about 80,000 workers in 4 countries and working in very expensive, cutting edge, high-tech solar and other industries. They have their own bank and their own university. Hardly weakness.

    And it is quite large. Such growth takes time. Mondragon is 60 years old. Garizmendi Bakery and the other co-ops in the US are more like 10 years old.

    How do you explain that Mondragon worked?

    Being an economist you should be able to tell ME how capitalism went from little shops making horseshoes and hats in the 1500s to being able to capitalize a chip manufacturer today. Wasn't it a matter of gradual growth along with an accumulation of laws that facilitated their success and growth? Or what? Whatever it was, co-ops would be no different.
     
    Last edited: Jan 29, 2019
  24. LangleyMan

    LangleyMan Well-Known Member

    Joined:
    Nov 14, 2017
    Messages:
    44,677
    Likes Received:
    12,448
    Trophy Points:
    113
    Gender:
    Male
    No, not if you know what to look for.
    Oh, c'mon--I asked a lot of questions about how capital hungry businesses would get capital, how profits might be distributed, and so on.
    They weren't able to save a potentislly profitable small business. Why?
    Amazon didn't exist 25 years ago. Apple and Microsoft are about 40-years-old. The Mondragon model is okay for smaller businesses requiring less capital.
    We need large enterprises to do important things like saving the planet. We don't have time for a slow evolution in how we produce goods and services.
     
  25. crank

    crank Well-Known Member

    Joined:
    Jan 20, 2013
    Messages:
    54,812
    Likes Received:
    18,482
    Trophy Points:
    113
    the very best education on earth will not create an academically successful student, if the home life of that student is not geared to the same end.

    and all students already have the opportunity for an excellent education. public schools provide it freely, to anyone willing to do the work involved.
     

Share This Page