Why do you think that Socialism is so bad?

At the macro-economic level this is true but socialism has worked quite well in many micro-economic situations. The hippie communes of the late 1960's and early 2970's were based upon socialism and many functioned very well for those involved. We also have many enterprises in the United States today that are "employee owned" which is the fundamental tenet of socialism and they often do quite well.

Once again I'll point out two important facts.

First is that socialism can and does exist in capitalistic economies but capitalism cannot exist in a socialistic economy.

Second is that taxing and spending to mitigate the effects of poverty (e.g. welfare programs in the United States) is not socialism as socialism mandates the workers own the means of production.

 

Conservatives talking of utopias ... whatever, you think only communists voted for the "unknown quantity Grillo" in Italian elections?
People are sick of the established politics and they will seek for alternatives ,what they are asking on a global scale is for people to be more important than money , full employment , taking care of the needy and in general not being idiots ( with the ancient Greek meaning ) , those are all concepts of socialism.

 

That is possible with conservatism also. I don't quite see the problem.

 

This actually explains why "socialism" has failed at the national level because the government, not the workers, owned the means of production and normally the government acquired the means of production by theft. In the USSR it was the leaders of the government that were profiting from the enterprise and not the workers.

We can also note that the same problem can occur in capitalism if the "owners" of enterprise become a small elite group of individuals that fundamentally reap the wealth created by the enterprise. This is a problem for "Republican" economic policies which advocate the consentration of wealth in a very small percentage of the population. Favoritism for the wealthy in US tax policies, which the Republicans have supported without apology, is moving more and more of America's wealth to a small wealthy elite group of individuals. As more and more wealth is transferred to an elite few the workers that create the wealth lose the motivation to create the wealth and this can be true in capitalism just as it was demonstrated to be true in the USSR and other communist countries. It's just a slower process in capitalism than it is when a few government leaders do it in dramatic fashion by "socializing" the ecomomy in stealing the means of production from the people.

 

Exactomundo!

We can also note that the same problem can occur in capitalism if the "owners" of enterprise become a small elite group of individuals that fundamentally reap the wealth created by the enterprise.[/QUOTE]

Please point to any enterprise or any entity where this has or is happening now. While there will always be enterprises or owners of businesses that should I say are doing business on the wrong side of the law, the majority of these capitalistic enterprises that reap the wealth do so with the intent to reinvest in their business and in their workers for the betterment of all concerned so that that particular business can compete in the market place of ideas and of production.

This is where I have a problem with the liberal talking points. Republican economic policies do not advocate for the concentration of wealth to a very small percentage of the population. We advocate for everyone to adopt Capitalistic ideals so that everyone gets a piece of the pie. Show me how a liberal or a socialist economic policy could possibly give an individual a viable and productive goal to reach, or a chance to succeed in life or a chance to feel that they've accomplished something worthwhile in their life. All I've seen from liberalism is a dumbing down of America, a catering to victimhood, a catering to illegals, the poor, the unions and the criminal element and or a need to search for equality by applying any and all social justice policies. How in the world can any of these liberal priorities give us a strong and productive economy?

Here is another liberal talk point that makes no sense. How are the wealthy considered favorites with our tax policies? The wealthy pay a huge majority of the taxes while the poor pay zero taxes. So what would be your solution to and or reason for breaking up these small elite group of individuals that you're so envious of? Perhaps you would rather we usher in full blown socialism so that everyone would or could be 'EQUAL.' But again, I have yet to get a clear vision as to how a socialist (government run) economy would work and or prosper.

You just couldn't be more wrong. I said it before and I'll say it again, the CEO's reinvest in their business and in the workers with pay raises and promotions etc to keep the capitalistic venture moving forward. USSR demonstrated pure socialism, period.

 

Several talking points so I will address one at a time.

I can't address this from a "liberal" perspective because I'm highly "conservative" in my economic philosophy but I do see a huge disparity between "Republican" economics and "conservative" economic philosophy. I oppose all forms of favoritism and I oppose the bastardized Keynesian economic policies of our government. I also don't fall for the "Republican" talking point that "liberals" support socialism because taxing and spending to mitigate the effects of poverty is not socialism.

But the question is about unfair tax policies endorsed by Republicans which is what I mentioned and which is questioned so here goes.

Every person has a mininum amount of income required for the necessities of life including food, clothing and shelter. While we have government established "poverty levels" they are arbitrarily low as people really can't live on those low levels of income. A person shouldn't have any tax obligation if they are earning less than the necessary income just to survive and yet FICA/Payroll taxes are imposed starting at the very first dollar of income. Payroll taxes are actually a cost of compensation for employment that are merely excluded from the gross income of the individual but which the individual is responsible for generating. This is accurately reflected by the "self-employment" tax imposed on small business owners that pay the combined rate of FICA/Payroll taxes on their income. Bascially a person earning federal minimum wage is paying a 15.3% "income" tax on their gross income even if they pay no other income taxes due to allowable deductions although only 1/2 of this shows up on their pay stub. The tax is still being collected.

The funding of government should not be taking food off of the table of the workers but instead is a burden that should be carried by those that have more than enough to live on. The standard of living for someone with over a million dollars per year is not adversely effected if they pay 20% or 25% on their income. The standard of living for a person with a $20 million annual income isn't adversely effected even if they pay 50% of their gross income in taxation. Mitt Romney (and I only use him because he publically disclosed his income and taxes) paid less than 14% on his income in 2010 which is less taxation than is collected based upon the labor of a minimum wage worker in American in combined FICA/Payroll taxes.

Investors pay no FICA/Payroll or Self-Employment taxes and if their only income was from investments and equal to the minimum wage they would pay no taxes at all. Same income where the workers or self employed is paying a mininum tax rate of 15.3% based upon their labor but the investor pay zero in taxes on the identical income.

There is a "Republican" myth that investors are creating jobs but this is really a myth as overwhelmingly investors in the "stock market" are merely purchasing existing stocks that are already owned by other investors and not a single dime of this money goes to capitalize enterprise. By way of example Mitt Romney was a primary owner in Bain Capital which was a capital investment company. Bain Capital never contributed one dime of Bain's money in any enterprise it purchased. It merely purchased controlling interest from the previous owners of the enterprise and not a single dime of Bain's money was ever invested in the actual enterprise. It merely purchased controlling interest from the existing owners. It did ofter "leverage" the assets of the corporation to borrow money but that was borrowing and not investing and there is a huge difference between the two. Changes in ownership do not capitalize an enterprise and don't create any jobs.

When we address job creation jobs are overwhelmingly created by small business owners that are responsible for 70%-80% of all jobs in America. The vast majority of the remaining jobs (20%-30%) are created from corporate growth and not from capital investments in the corporation (capital investments relate to IPO's, whether the actual initial stock offering by the corporation or subsequent stock offerings). While an IPO can create a few jobs it probably represents less than 1% of job creation in America. IPO's themself represent fewer than 1% of all stock trades and it really is a myth that investors create jobs in American today.

And yet investors receive the most favorable tax rates in America that are even lower than corporate income tax rates. Republicans are huge advocates of the Capital Gains tax loophole that overwhelmingly benefits the wealthy by allowing them to acquire wealth under the lowest tax rates in America.

I've provided the following as an example because I actually took the time to research the tax tables for it.

A self-employed person with a net income of $100,000 pay slightly more than $37,000 in income and self-employment taxes.
A worker with a net income of $100,000 pays $22,000 in income taxes plus over $7,500 in FICA taxes and is also responsible for over $7,500 in Payroll taxes.
A corporation with a net income of $100,000 pays $22,000 in corporate income taxes and is not subjected to the "self-employment" tax.
An investor with a net income of $100,000 pays a maximum of $20,000 in Capital Gains taxes, no other income taxes, and no FICA/Payroll or self-employment tax. They might have no tax obligation at all if they funnel their income through an off-shore paper corporation.

Overwhelmingly Republicans support this tax rate structure but the obvious fact is that it highly favors corporations and wealthy investors over workers and the self-employed.

As noted I'm not a "liberal" but the obvious discrepancies between the tax rates for corporations (which create a minority of jobs) and the self-employed (that create most jobs) and the working American (which produces the wealth of America) and the investor (that creates no wealth and virtually no jobs) is apparent to anyone but a Republican.

As a "conservative" I oppose unfair taxation and yet the Republicans are advocates of treating income differently where favoritism is very evident in favoring large corporations and investors over small business owners and the workers of America.

As a "conservative" I also advocate paying for the authorized expendatures of government which Republicans oppose. Yes, I believe that Congress has authorized too many expendatures but fiscal conservatism dictates that first the "bills must be paid" and then we must work at "reducing the bills" that we have to pay. By analogy I could be paying too high of an interest rate on my mortgages but I will pay that mortgage and then work to reduce the interest rates on the mortgage by refinancing the loan. I don't simply refuse to pay the mortgage which is what Republicans currently advocate related to funding of the authorized government expendatures.

Republicans are not "fiscal conservatives" and they advocate unfair taxation that favors the wealthy as documented above. Those that can't see this are living in a "Republican bubble" because it's evident to anyone doing an actual review of the facts.

 

I didn't address this specific point and it deserves a response. First let me note that I'm not envious of anyone but I do have a simple proposal.

Assuming our income tax system, as opposed to other forms of taxation, treat every dollar if income, regardless of source and regardless of who receives it, identically under our tax codes.

Income taxes, both general taxes and FICA/Payroll taxes (which fund two different categories of government expendatures), should be progressively applied across the board with no caps.

Finally we need to collect enough in taxation to fund all authorized government expendatures. Once we're "paying for the authorized cost of government" then if it results in too much taxation then let's work to reduced the amount of authorized expendatures. We have to pay the bills first and then work to reduce the amount of bills responsibly if we can't afford to pay the bills. Borrowing just results in more unnecessary spending and taxation in the future.

 

Socialism is a dirty word largely because the majority of people haven't got the faintest clue about what the system entails.

Exhibit A: Ignorant people fed laughable propaganda usually with the former Soviet Union as the locus classicus - which had about as much socialism as Bergen-Belsen. The US was and is more of a socialist country than anything to be found in Russia under Stalin.

Exhibit B: References to Nazi Germany's National Socialists. In case you haven't noticed, guys, you can't just say Hitler + National Socialism = socialism bad. The truth of the matter is that Germany under Hitler was economically successful to an impressive degree. His policies rescued their economy to a large extent. Large-scale state expenditures and so on. The genocide had about as much to do with socialism as his mustache did.

Exhibit C: Constant fulminations based on ridiculous assumptions like socialism resulting in the poor living off the rich, when socialism is simply giving working people real democratic control in their workplaces and communities. Yeah that leads to less profits for the rich; less as compared to what they do now in a society that gives them rights beyond that of normal human beings.

There are genuine and legitimate criticisms to be made of socialism, and I've often expressed them myself, but the three above, or any similar, are not to be taken seriously. They're to be swept out the door before the discussion can even begin.

 

Which is exactly why all forms of collectivism must be voluntary in practice lest they degenerate into tyranny.

 

Wow 11 pages and not one person mentioned Mises? As far as ctrl-f goes at least.

LINK

Why does socialism not work? Because resources cannot be rationally allocated in an industrial economy in the absence of market price. Without prices entrepreneurs cannot perform economic calculation of profit and loss. Without economic calculation, there is no way to make rational decisions about production. Socialism abolishes private property in capital goods, which means market prices cannot arise. Genuine socialism has very rarely been tried (such as a post-revolutionary years of Russia), and when it has it has been a disaster. Most examples of "socialism" have actually relied on the market prices of western countries for economic calculation, which is why the USSR was able to survive for so long.

And that's just the economic argument. One could elaborate for miles about how centralization of power leads to amazing tragic abuse, and we have millions of dead bodies from the Soviet Union, China, and the Soviet Bloc as proof of that.

 

Did you really had to mention a clown from the Austrian school of idiots? Labour hour is the only market price of a product , the focus is not in profit but to achieve self sufficiency and better the lives of the citizens through free education & open source projects that maximise output and minimise input .

I have not seen any communist/socialist here advocating centralisation or a return to Sovietia yet users from the other side fail to see it .
The vision today's people share is closer to municipalism administration wise rather than Maoism , a skinned central government that upholds a very short constitution with the basic rights / duties , the supreme court and the army while all the decision making is left to communities (that was the idea behind the "united soviets" thing too) . It is power to the people under the concept that everyone will have to spend 1-2 hours per day on the internet participating in debates , reading proposals and voting what the community should do .

 

That's not where Socialism or Communism began.

Educate yourself.

 

Nice argument.

Prices reflect the subjective valuations of actors in the market. Labor hours have nothing to do with that. And what kind of labor? - labor is inhomogeneous. The labor a construction worker does cannot be said to be the same labor a computer programmer does.

Did I say the focus was profit? I said production cannot be rational without market prices. We produce so that we can consume, consumption is the ultimate goal, the satisfaction of human needs.

You can get a free education on the internet in the market.

Irrelevant to my point that centralized power is not a good idea.

 

Actually it is the ultimate argument , see the effects of the Austrian school in EU economy , need more proof that they are a joke?

The value of a commodity is the sum of the labour invested in it and what unit did you use to count the difference between construction and coding, calories ?

Production can be rational with a functioning bookkeeping in a society where consumerism is not the ultimate goal.

Thanks a lot!

Very relevant because today nobody speaks about centralised anything , i guess you do not have many communist friends ( you support Austrian school so no surprise there) .

 

LOL you think the Austrian school of economics has influence on the EU economy? Wow.

Value is subjective, not objective. It only makes sense to say something is valuable (or not) to a given person. Value as an objective property of objects is absurd.

You're full of great arguments.

Formally speaking, consumption is the goal of all action. We act to satisfy our ends, i.e. consume. That has nothing to do with consumerism.

I have my fair share of discussion with communists online. How can you have collective ownership of the means of production and de-centralization? If individuals are not free to use their capital as they see fit, but instead there is one-will production, I call that centralization.

 

Maybe in your universe Europe is different ! in our universe government is seen as the ultimate evil and sells public enterprises , we have deflation because nobody has money ( exclude UK they are not in the "zone") , interest is not am issue it just destroys our economies , and hey the money supply now comes from "the markets" it is not controlled by the government. Yeah definitely NOT Austrian.

Wait , the objectiveness of value is not textbook capitalism ? why do we need rating institutes like Fitch then?

You said that markets are rational , that's amusing .

It has plenty to do with consumerism , when almost half the food in Europe ends up in trash bins we are producing to satisfy needs we don't have.

And yet you understood nothing? i guess you didn't paid much attention .

The collective ownership passes to the communities and from there to those who work this means , for example a shoelace factory in Buenos Aires belongs to the workers of the factory and it is licensed by the municipality that will support it for as long as it is beneficial for the city.
Individuals are not banned from opening personal business for as long as they don't use waged labour but instead make partnerships , if those activities are beneficial for the community then they can ask for public support .

 

We've lived much longer under primitive socialism than capitalism, so it can hardly be against human nature.

 

Government is definitely not seen as a bad by most people in Europe, at least as compared with the US. Europe is far more sympathetic to social democracy.

Since when does "having deflation" mean people are following Austrian policy?

How is that Austrian?

The Euro is a market money? Where are you living? The Euro is a fiat government creation just like the USD. You clearly have no grasp on Austrian economics.

No. Subjective value theory is an essential characteristic in post-classical economics (in particular with Menger). Capitalism simply refers to private ownership of the means of production, it has nothing to do with a theory of value. Adam Smith was a "capitalist" who believed in the labor theory of value.

Since when is someone's opinion (which is what a rating is) an objective standard?

I find your lack of arguments amusing.

No, it doesn't. Although I agree our culture is to a significant degree consumerist.

All action, and thus production, is speculative. Entrepreneurs cannot predict with absolutely certainly what consumers will want the next day or the next year. Nobody can. There will ultimately be entrepreneurs who predict correctly (and earn profits) and those who predict incorrectly (and get losses). That's why it's so important to have market prices, so that profit and loss can reward those entrepreneurs who do satisfy human wants, and punish those who don't. We don't have market prices today by a country mile, especially in money.

So because I don't agree with communism, that means I don't understand communism? Come on, stop being pathetic.

Okay, fair enough.

 

Not seen as bad by who? since the 80's there is a big privatisation wave that deprived governments from revenue outside taxation . The only different in Europe is that conservatives have to make concessions in order to survive , the policy of the social-democrats is to inflate the finance sector and build a social state with the leftovers of the plutocrat feast .

The Austrians particularly hate inflation no ? this is why EUzone states are deprived for their right to print money and deal with debts by devaluating.

It is not per ce Austrian but it an issue the Austrian school ignores

What part of "governments now can not print money so they can only loan from the markets" you do not understand ? HINT: this sticks with the manipulation of money volume supply.

Wait , i am paying taxes according to the objective value of my real estate and every product on the market has an "indicative price" which of course is also an objective value and yes Greece is a free market economy .

Since someone's opinion determines the interests all countries around the world are borrowing .

Good so we can both have fun.

we will never agree in that and i will not cheat by referring to poofering

I will agree that money prices are manipulated by consortiums of banks but Sir i laughed uncontrollably with the "satisfy human wants" part given that the hot air exotic market for derivatives is 10 times bigger than world's GDP . Good that those pension funds were punished for entrepreneurs failing at speculation. In a more serious tone i find your support for casino economics worrying .

No it means that either all the communists you have met are Stalinists / Maoists (unlikely) or you just discredit them without paying attention

 

It is untrue to assert that the government of the USSR was directly profiting while the workers were not. Everyone was benefiting from Soviet Planning, and while officials were certainly (and unjustly) benefiting more that the workers they certainly weren't taking the role of capitalists. The role of the Soviet officials was more like that of the old aristocracy.
I'm about to get a bit historical here but whatever..

Russia's problems today and during Soviet times can be traced more of less directly to the problems of Tsarist Russia.
late Tsarist Russia was comparatively backwards compared to other countries at the time. While Germany was highly industrialized and the envy of the world, Russia could certainly be said to have still been semi-feudal. And Russia was not on a slow road to progress either, their backward system was literally becoming more and more entrenched every day. Russia's problem was that while in other countries capitalism was growing rapidly building on its own advances, in Russia the aristocracy was using the advances of capitalism to further entrench feudalism. And yet at the same time Russia had a small, highly advanced working class to serve the needs of the aristocracy, in case you haven't realized yet many of these guys would go on to become active revolutionaries (though most of the revolutionary theorists came from the displaced intellectual "class").
Because Russia had remained essentially feudalist, it would've been impossible for the workers to own the means of production. This is because the working class for the most part didn't exist! They were minuscule compared to the masses of peasants. And indeed the means of production weren't for the most part advanced to capitalist standards of automated production, during Soviet times equipment for Russia's first ice cream factory had to be imported from America. By all reports Soviet ice cream was very tasty, but I guess that's beside the point
The point is that no matter what, actual worker-ownership and control of the means of production was impossible at that time. Lenin recognized this and supported a program of state-capitalism to develop Russia, later Stalinists decided to claim this was socialism. To be fair Lenin didn't help much with his often vague comments about state-capitalism evolving into socialism.

Anyway, centralized planning did help develop Russia and everyone was benefiting from it. People in Russia were living better than they ever had before. But they also wanted consumer goods, and many people believed that it would be easy to convert to American-style capitalism to get these things. It wasn't easy. Russia's economy crashed and burned, a huge amount of wealth was destroyed. Many Russians were jobless and impoverished. To this day the average Russian's life expectancy has not recovered from Soviet times.The problem was that the USSR was wasting 30% of their production on military crap, they could have forgoed much of that in favor of consumer goods.

 

Europeans tend to be more supportive of programs like social welfare, universal healthcare, and in general the government as caretaker of the people. The liberal ideas I support are not even on the radar of most European politics.

Austrians are not against "inflation" per se. Inflation can happen in a free market. They are against money printing. The fact that EU countries are not printing like crazy has nothing to do with Austrian influence, which is essentially 0. It has all to do with the fact that even central bankers are not idiots. Printing that much cash to pay off debts is completely idiotic because it leads to a currency crisis. Germany, in particular, having been through hyperinflation itself, is kind of the most stubborn of the bunch. It's the same in the US, Bernanke isn't going to print the dollar into dust.

Your ignorance of this issue is so amazing, I really don't have time to educate you. You should read Rothbard's What Has Government Done To Our Money? if you want a quick and easy introduction to the Austrian view on money. Any person reading that will realize that what you're saying is completely off the mark.

Money prices are not measures of value. Prices are ratios.

Okay you're a troll. Have fun.

 

On a fundamental level, "stateless" socioeconomic collectivism is largely...if not wholly dependent on the fallacious notion that everyone being of "equal value" to the success of the "enterprise"....be it a worker owned cooperative, or an entire "society".....will, via "direct democracy", result in a willingly productive and content work force.

not taking into account that out of every 100 workers, up to 49 may not be at all happy with what the other 51 have decided.

Such disparate opinions to "the common good" will ultimately...and ALWAYS....end in the same corruption, coercion, and discontentment that utopian dreamers believed their "system" would eliminate.

 

Socialists don't believe that everyone is equal or of equal ability.
And the aim of socialism is more to produce a multiocracy than a democracy, this would be easy with a society comprised of small, essentially autonomous groups - if you disagreed with the rest of th group you could work with a different one.

 

Where you'll find the same problem.

And I'm not familiar with "multiocracy"....is that another invented word to "make" socioeconomic collectivism "work"?