I've seen a lot of posts holding that some kind of universal "change of heart" will be required for Socialism's success. Even if we all become angels overnight, socialism would still fail.
One of the major advantages of capitalism is that the price system efficiently handles information concerning what goods should be produced and what services should be provided. A planned economy would buckle under the sheer weight of decisions faced by it's leaders.
When the price of butter goes up, farmers step up their production to meet demand. If the farmhands object, they will strike and force the farmer to pay better wages (note that the right to strike is essential to capitalism).
Without a price system, we would wind up like the old Soviet system...huge wheatfields, vast oil reserves -- yet long lines for bread and petrol.
Even a worldwide community of angels (the only beings who would willingly accept communism) would be unable to effectivly track demand and match supply to it.
Consider modern-day examples of planned economies...America's giant corporations:
Every week we hear that some company has decided to break up or spin-off part of itself. Why? Because management difficulty increases as size increases. We need a certain size to become productive, but beyond this we become inefficient.
Sears, Roebuck is a giant American retailer. This firm once controlled an insurance, real-estate, credit card, and stock brokerage subsidiary. The conglomerate was too difficult to administer under a command system and had to be broken up -- so the more efficient price system could take over.
How productive would a single worldwide conglomerate be? Make no mistake, this is what Socialism will produce! Even though we would all be shareholders, our shares wouldn't be worth much. So much effort would be wasted on layer after layer of unproductive management.
Of course, sometimes the price system fails. The price of gasoline in America is very low, so we use far too much of it. This low price reflects the costs of production, but not the heavy environmental and political costs of each gallon of gas.
A market-based solution might be to impose heavier taxes on gasoline. The new, higher price will discourage unecessary use and will provide funds to repair some of the environmental damage. The higher price will also encourage innovation -- perhaps resulting in a cleaner method of transportation.
Capitalism is superior not only because it better reflects human nature, but because it better reflects the inherent difficulties in managing a global economic system.
- nat
