Why does socialism fail?

In the same radio discussion that I mentioned in my previous post, I heard the radio talk show host say that socialism — and variants of it — has been responsible for millions of deaths and has proven over and over to be a failure. He encouraged the self-described socialist to read some history.

I hear this point made on occasion. I find it frustrating because rarely is it mentioned why socialism fails.

Why does it?

I believe it’s for a couple main reasons.

There’s the knowledge problem. A free market of prices communicates vastly more and better information to allocate resources better than any small group of people can.

I also believe it stifles risky experimentation, which is the source of most innovations, large and small. Without risky experimentation, society rots. I’m not sure, but I think this may actually be a subset of the knowledge problem.


Why socialism doesn’t work

From the comments of another blog:

Perhaps this is one of Socialism’s great appeals: the hope of unifying an entire nation behind a single vision.

I think that is socialism’s main appeal.  People are familiar with how we interact with one another in small groups — with our families, with our close friends — and we think that’s how we ought to behave with the extended order of people around us.

What we put into and get out of relationships with family and friends is not based on dollar prices.  It’s based on commitment, emotion, bonding, reciprocation and many other things.

The commenter continued:

Sadly, people insist on living their own lives with their own aims and ambitions – some petty or tawdry, some trite – unworthy of philosopher kings.

Sadly…for the philosopher kings and socialists.

Those more observant might realize that what binds us as family and friends doesn’t translate well to the extended order of people, no matter how much we want it to.

It doesn’t translate well because of two constraints — time and brain capacity.  We don’t have enough of either to get to know and develop feelings for everyone in the extended order like we do with our families and friends.

At some point, the opportunity cost of getting to know everyone is less than the what it’s worth to eat and put a roof over our heads.

My Mom may bake a loaf of bread for me to be nice.  As much as she may want to, she won’t bake a free loaf for everyone. She doesn’t have the time or the resources to do that.

The baker will bake a loaf for everyone, not because he’s nice (which he may be), but because people are willing to trade him something of value for it.

We don’t often use dollar prices to get our family and friends to do things for us.  But, it’s the limits of time and brain capacity and opportunity cost that cause us to use prices to get billions of other folks to do things for us.

The desire to have everyone behave like a big, happy family — acting toward a common goal without a set or prices — is why some folks have a hard time accepting and realizing what the price system does for them and why.

The commenter closes with:

Only existential threats, it seems, are capable of rousing an entire country to strive for the common good. And so, the socialist must, in the end, resort to force.

Actually, in a free market most of the country is already working for the common good.  That’s a fundamental oversight made by free market critics.

Prices, among other cues, help us coordinate our activities to the common interest.

But, to the philosopher king, the chaotic, seemingly disjointed and inevitable failures that occur within a free market do not appear to serve the common good — at least not his or her vision of that common good.

Also, many may disagree with their vision of what the common good is.  That is when the philosopher king becomes a socialist and resorts to force to impose his or her vision, for the greater good.

Devil’s Midnight

Redeye is what goes on at Devil’s Midnight on the Fox News channel.

Hosted by Greg Gutfeld, the show seems to be a conservative Daily Show/Chelsea Lately.    I heard about this short Greg-A-Logue on a Dennis Miller show podcast.  The Greg-a-logue discusses on a recent poll that showed 36% of Americans view socialism favorably.

I liked one of the examples given in this video about Socialism.  It went something like:

We need to teach our kids about socialism.  When your kids mow your lawn for $10, don’t give him the $10.  Tell him instead that he needs to share it with the deserving kids down the street.

I would add: Then ask him when he plans to the mow the lawn next time?

I’ve always thought a major disadvantage of conservatism is that it doesn’t win sound byte arguments.   I appreciate creative attempts like this to pack our side of the argument into effective sound bytes.

I’ve had some luck in the past with this.  For example, try this on someone who is against school vouchers: Why do you want to limit choice of the poor?