Some questions about socialism - Politics Forum.org | PoFo

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As either the transitional stage to communism or legitimate socio-economic ends in its own right.
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#14277908
I read this definition of socialism on the following link: http://www.slp.org/res_state_htm/socialism_m_p.html

It says that a political government represented by senators etc. should be replaced by a socialist government represented by representatives of different labor unions. That sounds like a great idea, but what about the other aspects of life that do not include the production or distribution of good, such as education, healthcare, etc.? Isn't there a need for policy-makers???

In addition to that, if I were in a socialist country, and I wanted to own a factory, is that possible? What are the restrictions on owning property? Furthermore, It says that there is no wage system in socialism, then how do we determine what to pay people? What does "the social value" of labor mean?? Will a doctor and a garbage collector be paid the same? knowing that both occupations are needed for a functioning society??? How to you measure the output of a doctor/architect/engineer, etc??

Don't you think that if everyone was given a chance to be educated and do what they love, no one would actually "choose" to work in a "less-prestigious" but much needed job, such as a garbageman??? What solution does socialism - even in theory - offer to these problems??

PS: answers from socialists only please
#14279243
It says that a political government represented by senators etc. should be replaced by a socialist government represented by representatives of different labor unions. That sounds like a great idea, but what about the other aspects of life that do not include the production or distribution of good, such as education, healthcare, etc.?


Direct government by workingmen sound attractive to some. After all we can all be equal at work and what better way to organise. However I would tend agree with you that unions while important are a narrow basis for any sort of government. We might ask what about people who choose to raise families, pensioners, the unemployed, disabled people. Do they not get a say ?

I think that the Socialist Labor Party is a little unconventional in that respect. Very many socialist support representative democracy along with greater workplace democracy

In addition to that, if I were in a socialist country, and I wanted to own a factory, is that possible


I don't think owning factories fits well socialism. I would wonder 'what do you want to own a factory for ?'

Some socialists feel that a total ban on market production is counterproductive. So we would keep enterprises. However it is probably true that factory owners profit from other peoples efforts and that tends to produce greater inequality in society.

It says that there is no wage system in socialism, then how do we determine what to pay people? What does "the social value" of labor mean??


Many socialists think people should be paid a common hourly rate with gauranteed welfare for those who cannot work.

The social value of labour suggests to me a common rate for time worked. The amount society can afford to pay everyone who works for the hours they work

If people are going to be paid similar rates then it usually follows that Doctors are paid to study because it takes a long time to study.

My own view is that people should be encouraged to have job portfolios. Perhaps Doctors would perform some form of community work on alternative days.

Don't you think that if everyone was given a chance to be educated and do what they love, no one would actually "choose" to work in a "less-prestigious" but much needed job, such as a garbageman??? What solution does socialism - even in theory - offer to these problems??


I think that highly rewarded professionals and creatives are reluctant to do manual or menial work. However I think that is producing a very divided society. If we want a society which is fairer and more equal people ought to be required to share service and manual work. If that happened it would probably be better rewarded and attempts would be made to make it more pleasant or less labour intensive.
#14281326
but what about the other aspects of life that do not include the production or distribution of good, such as education, healthcare, etc.? Isn't there a need for policy-makers???


There wouldn't be anything precluding the development of bureaucracies in a socialist state, just as there is nothing stopping them in capitalist states. The government does not only comprise of elected officials, but also appointed bureaucrats of all sorts. Typically, a socialist government would deploy a system of universal, free education and healthcare.
#14281679
Ozz94 wrote:That sounds like a great idea, but what about the other aspects of life that do not include the production or distribution of good, such as education, healthcare, etc.?

That is far from the main problem with the model. The main problem is that such model privileges existing actors within their respective industries, thereby acting to inhibit innovation.

Innovation always has enemies. Every change disadvantages (at least temporarily) existing actors. By giving those actors concentrated political power, the system inhibits the emergence of new actors, technologies or practices.

Julian wrote:My own view is that people should be encouraged to have job portfolios. Perhaps Doctors would perform some form of community work on alternative days.

One problem with this model is that it is very wasteful.

Regardless of how much you pay them, a Doctor's time (working as a Doctor) is more valuable than that of a garbage collector (working as such). Society will lose by forcing (or even "encouraging") Doctors to waste some of their time doing jobs of far lower value to society.

Picture long lines at the neighbourhood clinic created because one of the Doctors is busy cleaning the streets, even while droves of street-cleaners are standing idle...
#14281694
At one point, as a doctor working as a doctor, is not beneficial to the community? That's a swell idea. Lets have the guy who spent a million dollars on education and countless man hours learning how to replace a human heart and have the person still live, let's have that guy do community work! Maybe the garden needs more tomatoes!
#14281783
Both previous responses assume that there is a shortage of Doctors and an massive burden involved in creating surplus capacity. Infact both supositions seem doubtful. We already have doctors and scientists working part time to provide domestic care. There is a cost but it is not perhaps as substantial as suggested.
#14281984
Here is how economics works.

People always want more. More physical goods, and more services. Other things being equal, it is safer to have your little mole or the cough of your little child checked by a Doctor. Preferably by an experienced expert.

But it just takes too long to educate and give experience to a lung doctor to have a senior specialist listen to every child's cough. To we have to prioritize. There is, and never will be such thing as "post-scarcity". Sure - certain products may become easily affordable (as has already happened). But humans being humans, they will always want more or better.

Ok, so we have to prioritise. Unsurprisingly, people tend to prefer (or value more) the services of an experienced physician to those of an unskilled street-cleaner. Put differently, society is wealthier when its experienced physicians get to spend as much time as possible (as they want, actually) working in their capacity as physicians, rather than as street-sweepers.
#14282228
Eran wrote:Here is how economics works.

People always want more.


I don't know about you, but I eventually get full when I eat dinner. I would propose that most people actually have limits to their demands; that the demand we see expressed is merely a symptom of pervasive discontent with present material conditions.

In other words, demand is not infinite. If nothing else there are constraints imposed by space-time (there are, after all, only so many seconds in the day where you could be using all of your effort to consume things).

More physical goods, and more services. Other things being equal, it is safer to have your little mole or the cough of your little child checked by a Doctor. Preferably by an experienced expert.

But it just takes too long to educate and give experience to a lung doctor to have a senior specialist listen to every child's cough. To we have to prioritize. There is, and never will be such thing as "post-scarcity".


Wrong. All that is required is for the effort required to create specialists to drop to nothing or nearly nothing. For example, if computing power becomes so cheap that medical expert systems can turn anyone into a reasonable diagnostician at effectively trivial prices. Computers are actually pretty good at that sort of thing, so that potentially provides a solution.

Alternately, if there is a sufficient distribution of specialists to cover the complete demand for specialist examinations--which is not, as you proposed before, infinite. I don't know about you, but I sure don't want to go to the doctor for a checkup if I don't think something is wrong. I've got things I'd rather be doing, all things being equal. Since there is not infinite sickness, there is not actually infinite demand for medical examinations.

About the only thing there is actually an infinite demand for is entertainment. Coincidentally, people can usually provide that for themselves if they're not having to work all the time.

Sure - certain products may become easily affordable (as has already happened). But humans being humans, they will always want more or better.

Ok, so we have to prioritise. Unsurprisingly, people tend to prefer (or value more) the services of an experienced physician to those of an unskilled street-cleaner. Put differently, society is wealthier when its experienced physicians get to spend as much time as possible (as they want, actually) working in their capacity as physicians, rather than as street-sweepers.


It's wealthier by some measures, not by others. That enters into the fundamental multimodal optimization problem in economics--or, in other words, the lack of a functional system of valuation.
#14282239
Ozz94 wrote:It says that a political government represented by senators etc. should be replaced by a socialist government represented by representatives of different labor unions. That sounds like a great idea, but what about the other aspects of life that do not include the production or distribution of good, such as education, healthcare, etc.? Isn't there a need for policy-makers???


Presumably the labor unions would be reaching policy decisions themselves. Is there a need for central decision makers? Probably not. What is required is a means by which different interests can communicate their preferences and negotiate solutions to mutual problems. Political systems do, in fact, provide that function--through the mechanism of lobbyists.

In addition to that, if I were in a socialist country, and I wanted to own a factory, is that possible?


Why would you want to? It's kind of an odd impulse. Do you just want to say "I own a factory?"

What are the restrictions on owning property?


Depends on the socialist model. Under anarcho-syndicalism, for example, there would be absolutely no restriction whatsoever on the ownership of property because society would stop recognizing property rights. Remember; you need not restrict ownership to abolish property. All that is required is for the government to stop granting property privileges. Property is not some naturally preexisting thing that requires active resistance to abolish. Property exists only because governments say that it does--if governments stopped protecting the property privilege, it would literally cease to be.

To put this another way; I do not need to ban you from owning property, I simply need to stop recognizing your property claim. It's no infringement on your freedom whatsoever to stop giving your claims special treatment.

Furthermore, It says that there is no wage system in socialism, then how do we determine what to pay people?


You don't. Without property, what's the point in payments?

What does "the social value" of labor mean??


"What your labor contributes to the well-being of society." Or roughly something like that, anyway.

Will a doctor and a garbage collector be paid the same?


Neither would be paid. The doctor would practice medicine because they wanted to or felt that it was necessary; the garbage collector would collect garbage because they wanted to or felt that it was necessary. I rather suspect that there would be more of the former in the former, and more of the latter in the latter. Indeed, I would propose that many currently existing service positions--jobs that are fundamentally degrading, which could be taken care of individually if we weren't all dividing our labor all the time--may well disappear under socialism. I can't personally see a whole lot of people finding personal satisfaction in flipping burgers for hours on end, but who knows?

If a job is important enough that it becomes self-evidently necessary, then obviously some people will consider it worthwhile enough to spend some of their time doing it. For example, repairing sewers because one does not want to live in their own filth.

Alternatively, communities and cooperatives might well arrive at their own agreements as to the division of unpleasant but necessary work--agreements to provide certain services in exchange for others. This does not actually require a wage system to arrange.

knowing that both occupations are needed for a functioning society???


Let me ask this; why would garbage collection be necessary for the functioning of society if people had nothing in particular they were expected to do? Couldn't they just take their own garbage out? Garbage collection only seems necessary because everyone is spending all their time doing some specific job for other people--no one has the time to actually do that themselves. Even if we assume that it is necessary and assume that there aren't enough people willing to do such an apparently(?) necessary job... why couldn't they just arrange to handle that on a rotating basis on a neighborhood level?

How to you measure the output of a doctor/architect/engineer, etc??


You can't. That's kind of the whole point of socialism. Just like you can't actually measure the benefits of central garbage collection for society. The assumption has to be that people will take it upon themselves to do the things they consider worthwhile. The alternative basically condemns most of humanity to perpetual slavery.

Don't you think that if everyone was given a chance to be educated and do what they love, no one would actually "choose" to work in a "less-prestigious" but much needed job, such as a garbageman???


I do work as a computer technician despite having far more valuable training. Why? Because I prefer the work. People have some strange motives sometimes. I do actually think that if people had far more free time, they would be far more willing to spend small amounts of that doing unpleasant work for others. Especially if they developed relationships that lead to reciprocity.

Let's look at this another way--we've currently had to structure our entire society in such a way that it forces some people to do work that (apparently) is so intuitively distasteful that the only way they can be compelled to do it is to offer them a choice between working and starving.

Don't you think there could be a better way? Especially as it relates to tasks that are fundamentally nothing more than one person sacrificing their own future to serve the trivial whims of other people? If garbage collection is an obviously necessary function for society, don't you think that people will find that obvious enough to perform the work required to make it happen?

What solution does socialism - even in theory - offer to these problems??


Noting that it's only a problem if you view the problem with the assumption that the only way you can get people to work is to force them to do it.
#14282554
I don't know about you, but I eventually get full when I eat dinner. I would propose that most people actually have limits to their demands; that the demand we see expressed is merely a symptom of pervasive discontent with present material conditions.

Sure - there is a limit to how much food we can eat. But not to the quality of that food. Other things being equal, wouldn't you prefer your meals cooked by an excellent rather than a rubbish cook? Wouldn't you prefer access to more varied, fresher, higher quality ingredients?

Imagine having this conversation in late 19th century England (or the US). Your society has already experienced a sustained economic growth for decades. You live better than your parents or grand-parents. If you were to argue for an ultimate limit for consumer demand, where would you place it? And how would you feel today, in the 21st century, being stuck at a level considered ample in the late 19th century?

In other words, demand is not infinite. If nothing else there are constraints imposed by space-time (there are, after all, only so many seconds in the day where you could be using all of your effort to consume things).

Demand isn't finite or, at least, there is no way of ascertaining where the limits of demand might lie. Sure, at some point you don't demand more food - only better food. Not more cars, but faster, safer and more comfortable cars. You may demand more leisure, longer vacations. You may demand more services which depend on human labour (nursing, medical attention, massage, chef-quality cooking, one-on-one tutoring, etc, etc.).

No, there is no visible or ascertainable limit to demand, this side of paradise.

All that is required is for the effort required to create specialists to drop to nothing or nearly nothing. For example, if computing power becomes so cheap that medical expert systems can turn anyone into a reasonable diagnostician at effectively trivial prices. Computers are actually pretty good at that sort of thing, so that potentially provides a solution.

Ah, post-scarcity nirvana. In which computers will do all the work, and humans can have grapes dropped into their mouths by robot servants...

Seriously though, in such a society, the notion of a physician will cease to apply. But whatever professions are relevant (somebody has to program those computers, for example) will still be associated with differing marginal values. An hour of, say, an expert medical system designer would still be worth more than an hour of, say, a nursing aid. And getting a personal qualified as the former to have to work in the capacity of the latter is wasteful.

It's wealthier by some measures, not by others. That enters into the fundamental multimodal optimization problem in economics--or, in other words, the lack of a functional system of valuation.

But we do have a functional system of valuation, namely how much people are willing to pay for stuff. It works. If members of society, for example, derive pleasure from seeing qualified professionals part-time as unskilled workers, that is perfectly consistent with capitalism, even anarcho-capitalism. All that has to happen is for people to voluntarily pay enough to induce those professionals to sweep floors for the public's entertainment...

Why would you want to? It's kind of an odd impulse. Do you just want to say "I own a factory?"

A factory doesn't need to be a multi-billion-dollar facility employing thousands of people. It can refer to any size of production facility. And so no, wishing to own a factory isn't an odd impulse. You may want to produce goods that other people don't believe in. Or in ways others aren't interested in. You are an individual, and you have your own ideas which you might want to implement without seeking the approval of thousands of others.

Depends on the socialist model. Under anarcho-syndicalism, for example, there would be absolutely no restriction whatsoever on the ownership of property because society would stop recognizing property rights. Remember; you need not restrict ownership to abolish property. All that is required is for the government to stop granting property privileges. Property is not some naturally preexisting thing that requires active resistance to abolish. Property exists only because governments say that it does--if governments stopped protecting the property privilege, it would literally cease to be.

Not quite. "Property" refers to physical objects (or locations) which society (not government) recognises as somebody's exclusive domain of control. All societies have property, though what constitutes property depends on technological development and production modes. For example, in a hunter-gatherer (or a nomad) society, land doesn't tend to be property in the exclusive sense, although use-rights in land are still very important. But personal property (your bow and arrow, for example) are still property.

Conversely, in the 20th century, radio frequencies started to be treated as property (albeit, unfortunately, government-owned).

But make no mistake about it - every society requires property.

You don't. Without property, what's the point in payments?

So without property, every person can just help themselves to whatever they fancy. No locks, no fences. Just go in and help yourself to whatever food, electronics, art, furniture, clothing, cars or other goods you feel like. Hey, why don't we go and sleep in the bed of Comrade Johns tonight?

"What your labor contributes to the well-being of society." Or roughly something like that, anyway.

That's not nearly good enough. How is that contribution going to be quantified? By whom? Using what standards?

If a job is important enough that it becomes self-evidently necessary, then obviously some people will consider it worthwhile enough to spend some of their time doing it. For example, repairing sewers because one does not want to live in their own filth.

What if not enough people volunteer to repair the city's sewers? After all, the benefit to me from repairing the sewers is much smaller than the cost in terms of time spent doing something unpleasant?

Alternatively, communities and cooperatives might well arrive at their own agreements as to the division of unpleasant but necessary work--agreements to provide certain services in exchange for others. This does not actually require a wage system to arrange.

It would require wages in all but name (and efficiency). Ultimately, people would need to be offered something of value (to them) in exchange for doing something unpleasant but necessary. What some people value is different from what others do. It is thus far more efficient to provide value to people in a form that they can readily exchange for whatever they actually value most. In other words - money. Give people money (or what is in effect, even if not in name, money), in exchange for doing work, and you have wages, whether that's what you call them or not.

The more hung up you are about labels and appearances, the less efficient the system will become. Thus expect to see "vouchers" instead of "money", "reward" instead of "salary". But look under the labels, and you'll see the same thing again.

Let me ask this; why would garbage collection be necessary for the functioning of society if people had nothing in particular they were expected to do? Couldn't they just take their own garbage out? Garbage collection only seems necessary because everyone is spending all their time doing some specific job for other people--no one has the time to actually do that themselves. Even if we assume that it is necessary and assume that there aren't enough people willing to do such an apparently(?) necessary job... why couldn't they just arrange to handle that on a rotating basis on a neighborhood level?

Are you seriously suggesting we do away with the huge benefits of the division of labour, and go back to each doing everything for themselves?

Division of labour didn't arise out of some theoretician's dream. It emerges naturally whenever you allow people to freely interact with each other. Time and time again, in every society that progressed beyond hunter-gatherer existence.

The alternative basically condemns most of humanity to perpetual slavery.

Actually, the alternative is working remarkably well to lift most of humanity to unprecedented levels of prosperity...

Let's look at this another way--we've currently had to structure our entire society in such a way that it forces some people to do work that (apparently) is so intuitively distasteful that the only way they can be compelled to do it is to offer them a choice between working and starving.

Don't you think there could be a better way? Especially as it relates to tasks that are fundamentally nothing more than one person sacrificing their own future to serve the trivial whims of other people? If garbage collection is an obviously necessary function for society, don't you think that people will find that obvious enough to perform the work required to make it happen?

A system in which some people specialise in being garbage collectors is better for everybody, including, first and foremost, for garbage collectors.

It is a system in which every person finds (or is as close as humanly possible to finding) the occupation in which they most productively help satisfy the wants of other members of society. A garbage society doesn't have his job because otherwise he would starve. Rather, he has this job because nothing else he can do is of more value to other members of society. He is rewarded for doing that job by gaining access to the fruits of the labour of all other members of society.
#14284299
Eran wrote:A factory doesn't need to be a multi-billion-dollar facility employing thousands of people. It can refer to any size of production facility. And so no, wishing to own a factory isn't an odd impulse. You may want to produce goods that other people don't believe in. Or in ways others aren't interested in. You are an individual, and you have your own ideas which you might want to implement without seeking the approval of thousands of others.


You know, there's nothing in socialism to stop a group of like-minded individuals determined on manufacturing certain goods from just forming a cooperative and doing it. Under a workers' government, all the would-be entrepeneurs would need to do is to found a collective, secure funds from their own savings, mutual credit, public credit and/or crowdsourcing, and get to work.

If you're, say, a craftsman or a 'liberal professional' and work individually without exploiting the labor of others, socialism wouldn't begrudge you the right to have your own workshop. In some cases, the self-employed are even allowed to hire a small number of assistants and/or apprentices (subject to compliance with labor laws etc).
#14284335
Thank you both. Not being as familiar with left-leaning ideas, it is easy to accept as universal the views of whomever I happen to exchange views with at the time.

KlassWar wrote:In some cases, the self-employed are even allowed to hire a small number of assistants and/or apprentices (subject to compliance with labor laws etc).

That sounds very good, subject, of course, to the nature of those labour laws.
#14284345
It stands to reason that a freelance professional might well need an assistant to keep track of appointments, contracts and commissions, that kind of stuff. Unless we propose to get rid of freelancers entirely (it's possible for a socialist state to decide to liquidate small-scale individualist production, but it wouldn't make much economic sense, as sporadic work is by definition best handled by a contractor) it would be a bad decision to ban the hiring of assistants. They're needed to handle admin grudgework while specialists actually perform specialized work.

It'd make sense to tolerate a certain amount of private employment, as long as the self-employed professionals that hire them comply with wage and working conditions standards, usually with enforced collective bargaining. An enterprise of a certain size should probably be required by law to become a cooperative if it wasn't one to begin with, but I'm not entirely ready to affirm a cooperative is needed for every single professional-and-secretary shop in the world.

While Big Business and the haute-bourgeoisie will require forceful expropriation in order to establish socialism, with the working petty-bourgeois it makes most sense to coexist. Economies of scale will probably make freelance professionals obsolete in the face of contractors' cooperatives sooner or later anyway.
#14284715
Fair enough. Today's regulatory regime is full of size-based distinctions as well as a plethora of labour regulations. The leap from today's to that of the kind of socialist society you are describing isn't hard to imagine.

Since we established that a diversity of views exists within the socialist/communist/Marxist/left-libertarian camp, perhaps you could give me your views on the following question.

I understand that the preferred production unit is syndicate/cooperative (is there a difference between them?) run, broadly by its own workers. How complete is the workers' control over the production unit? Are they entirely autonomous, or subject to oversight by a central authority? Do they "own" the enterprise in a substantive sense, or operate more as diffuse management?

For example, do workers decide what the manufacture? Where to buy their raw materials and machinery? Whom to sell their product to, and under what terms? Whom to hire or fire?
#14285298
Eran

I do have some sympathy with your predicament.

If socialism was just a matter of workers owning capital and using that capital to produce and sell products then on the face of it, it is not much different to capitalism. It would however be somewhat of a challenge to the legitimacy of this socialism when larger units failed and high local employment prevailed or the old and the ill were increasingly forced to beg as they have no stake in these collectives.

The way I see it unless the economy is controlled by the whole people its not socialism or at least its not a socialism that will suffice. That is not to say that socialism must in all cases be based on command and control because whatever objectives socialists m have it seems unlikely that top down central planning is the best or only solution.
#14285305
The way I see it unless the economy is controlled by the whole people its not socialism or at least its not a socialism that will suffice

That does tend to reflect the mainstream of socialist thought (and certainly implementation).

That is not to say that socialism must in all cases be based on command and control because whatever objectives socialists m have it seems unlikely that top down central planning is the best or only solution.

How do you square this circle? How do you have an economy controlled by the whole people without having top down central planning?
#14285307
My guess is that socialism requires at a minimum the ability of the democratically elected government to intervene in any way which it has a mandate for.

Arguably social democratic states have a theoretical right to intervene in markets but they do not have the means to do so because they lack reliable information about how interventions work and their cost. To that extent society suffers from information asymetry and socialists need to find better ways to collect and analyse data. I would therefore agree that socialism in practice faces a challenge in calculating the differing utility of different policies but I would disagree with the suggestion that it is not possible. It is possible to provide free health free education and welfare. This wouldn't be possible if there were insurmountable reasons why only markets were able to provide efficient allocations of resources. Markets have no magic. We can organise society differently if there is a will.
#14285311
In case you think I am being deliberately obtuse, I think that there are lessons to be learnt from Sweden and Yugoslavia. Neither provides blueprints but both societies attempted to provide alternatives to free market capitalism and central planning with some successes.
#14285324
It is possible to provide free health free education and welfare. This wouldn't be possible if there were insurmountable reasons why only markets were able to provide efficient allocations of resources.

Interesting. The original Economic Calculation Problem argument was an all-or-nothing proposition. It showed that a completely-socialised economy, i.e. one in which a single effective owner controls all means of production, is completely unable to engage in economic calculation, and is thus doomed to fail.

I have recently given some thought to what I would consider partial application of that proposition, namely that government control over particular sectors of the economy would similarly lead to difficulties in economic calculations, and thus inefficiencies in resource allocation.

I believe we do see those in the health, education and welfare sectors. Just as the Soviet Block economies were able to "calibrate" their economic calculations based on price signals observed from capitalist nations, so the socialised sectors of the economy (health, education, transportation infrastructure, policing) manage to avoid total collapse thanks to prices signals available from other sectors of the economy. Still, they suffer significant (if not always observable) inefficiencies.

Price signals are available because higher-order means of production are typically shared between those sectors and freer ones. Labour is an obvious example - government employers compete with the private sector for labour, and can thus calibrate their wage structure to that of the free economy. Generic raw materials and equipment, from steel and glass to computers are also shared and thus price signals are available.

Having said that, there is no way for wholly-publicly-owned sectors to avoid inefficiencies. Public education is notoriously expensive relative to comparable private alternatives, public health costs rise much faster than those in which people pay privately (e.g. plastic surgery and eyesight-correction), and shortages plague most government services (evidenced in traffic congestion and long patient waiting lists).

Let me give you just two examples, from sectors not just dominated by, but completely monopolised by government, namely transportation infrastructure and, in particular, roads.

A simple question. How can government decision-makers make a rational decision with regard to how much and where to invest money in the road system? To clarify, a "rational" decision would be one likely to result in benefit to society that exceeds costs. The "cost" part, in this case (though not, for example, in the case of regulations) is relatively easy to assess (though not if eminent domain is used to confiscate land). But the equation is incomplete without the "benefit" part. How do you quantify the benefits associated, for example, with slightly faster travel, involving less congestion-related frustration?

A private operator has no problem - if drivers are willing to pay a toll charge, it follows automatically that the benefit they perceive to using the road exceeds that toll. If those tolls, in aggregate, exceed in value the cost of building and running the road, we know value has been created.

But note - even if the private road builder was wrong, and tolls fail to exceed his cost, the deficiency is borne exclusively by himself. The drivers still benefit, as those who feel the value is less than the toll simply avoid the road. Thus the value to society excluding the road operator is always positive.

When the road is funded by tax money, on the other hand, no such assurance is possible.

Markets have no magic. We can organise society differently if there is a will.

I think markets do have a "magic", and I am eager to hear what you have in mind for a different organisation of society.

The "magic" of market, btw, relates to a combination of factors:
1. Dispersed, localised decision-making
2. Efficient and effective signalling of supply and demand through the price mechanism
3. Effective incentives for genuinely meeting consumer demands
4. Internalisation of value-creation/loss associated with economic decision through the profit-and-loss system
5. Diversity allowing experimentation
6. Competition driving ever-greater efficiency, cost-reduction and quality-enhancement

I don't know of any other mechanism that comes even close to the efficiency (and, of course, morality) of markets thanks to these points, none of which can easily be replicated without markets.

In case you think I am being deliberately obtuse, I think that there are lessons to be learnt from Sweden and Yugoslavia. Neither provides blueprints but both societies attempted to provide alternatives to free market capitalism and central planning with some successes.

I don't know much about Yugoslavia. I will be happy to learn.

As for Sweden, it is an interesting case. While government provides a deep safety net, it is, in many ways, a relatively free economy. It also offers freedom in surprising ways, such as its relatively-extensive private school system.

The difficulty, as always when trying to use empirical data to settle economic questions, is lack of counter-factuals. Swedes enjoy a homogeneous, educated, peaceful and stable society. Yet their per-capita GDP is 20% lower than the US, with its notorious health-care, crime, military expenditures, racial tensions, unskilled immigration and other problems.

For a fair comparison, we shouldn't contrast Sweden with the entire US, but with selected US states. All but 12 of the 50 US states enjoy higher per-capita GDP than Sweden. In many cases (Wyoming, Massachusetts, Washington, Colorado), GDP per person is at least 30% higher. I have purposefully excluded states benefiting from the New York financial centre (New York, New Jersey, Connecticut) and the DC government centre (DC, Virginia, Delaware).

So, how much better could the Swedes have done if they had a freer economy?
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