Thursday, 8 April 2010

Socialist Economy vs Normal Economy

There is one key difference between the two - their final goal and objective.

In a normal (free, voluntary, capitalist) economy, the goal is to reduce the overall amount of labour. In other words, capitalists want to completely eliminate useless labour and also decrease necessary labour as much as possible. This is done through elimination of inefficiency and reduction in costs of production or increasing output (through mechanization or other means). Thus time people spend working decreases and they have more time for leisure and other activities (because they are so productive!). For the best detailed discussion of this phenomenon I recommend parts of Ludwig von Mises's Human Action.

Meanwhile the goal of the socialist (coercive, centrally-planned, governmental) economy is to create jobs and keep people employed. This is probably the second most absurd notion in socialism (second only to the phenomenon of "Robin Hoodery" - see here). Socialism achieves its goal by "creating" useless jobs. This is why socialist take-over is always combined with a huge increase in bureaucratic positions and functions which are completely unnecessary in a normal world. In the USSR and other socialist nations of the Eastern Block bureaucratic governmental committees oversaw everything from the manufacture of spoons to the recipes in cook books - literally everything. Socialist governments also tend to fund economically unviable ventures as long as they provide jobs, thus the creation of so-called "public works programs". Thus socialists make everyone perpetually perform repetitive and dull activities which serve no real purpose, and then claim to be saviours of the economy. For an example of such socialist action I highly recommend reading Bastiat's Candlestick makers' petition here.

With all this well known and documented, can somebody tell me why so many people still trust socialism to be good for anyone?

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