Why socialism needs capitalism
I know more than a few people who would turn purple - and probably explode - if they heard me say something like the title of this post and, I must confess, it would be a very funny thing to see at that.
The core idea of socialism, as I’ve heard it, is that the means of production should rest in the hands of the people. Fair, I suppose, yet every socialist country I’ve seen invariably tries to nationalise everything. They put the means of production in the hands of the state, which is about as divorced from the people as you can get these days. Capitalism, meanwhile, always boils down to the lowest viable unit and then expands. As a system it’s not perfect, and when socialist ideas are introduce to the mix it quickly degenerates - nobody can say that a companyusing the government to further its monopoly is really capitalistic, as it is increasingly relying on the state for support and is consequently divorced from the profit motive. A good example of this is, perhaps, Boeing vs Airbus. Both produce high-quality aircraft (though that might be debtable on Airbus’s case), and both have quite extensive government contracts. The difference between the two is that Boeing is a private company, born out of necessity, whilst airbus was formed by governments out of pride and hubris. I’ll admit that, in the face of that, Airbus has been quite successful, but it faces one very big problem. It lacks the priofit motive. Recent news about the A380 is that it’s going to fall behind schedule, yet Airbus seems to be shrugging this off despite the threat of contract cancellations. After all, it gets subsidy from the governments so it doesn’t need to cater to the market.
Some might argue that they shouldn’t be forced to sell an inferior product in order to meet deadlines. I agree, they shouldn’t, but at the same time they shouldn’t be sheltered from the risk of bringing that product to market. Boeing is taking an equal risk with its dreamliner 7E7, the long-haul low capacity airliner that’s about as opposite the A380 as you can get. It’s made a choice about the market, and if it’s wrong, it will have to absorb that cost and move on. I doubt Boeing will be wrong, but I see they’re covering their bases with a new version of the 747 to compete in the same market as the A380. Airbus doesn’t have anything to compete with the 7E7 and decided, through hubris again, that it didn’t need to.
The fact that Airbus isn’t considering the market, and is acting purly out of a “bigger is better” attitude, is perhaps the reason why the A380 is being so beset with problems. Presumably market studies were done, materials and contruction costed and all that jazz but, being a subsidised company, Airbus doesn’t feel the need to really work that hard. If it were working for the market it might have made a more realistic assessment about when the A380 would be ready and might have laid in more contingency plans to mitigate the risk of producing such a massive project. In other words it would have created a competitor to the Dreamliner and wouldn’t have set such an unrealistic completion date for the A380. It wouldn’t then be facing the potential loss of contracts, and it probably wouldn’t be facing the financial lossess it currently facces on the project itself. In all likelhood, if Airbus were a market-driven company, it might well have followed the decentralising idea that Boeing is pursuing. But, being essentially state-owned and with the mindset that brings on, it has followed a centralising agenda and assumed that hub-to-hub will be the way things go.
Hm, that example went on longer than I thought. Oh well, here’s the argument itself. A socialist ideal is that nobody should have to work to live, or they should be free to do what they want. Or something. Socialist reality always comes down to persecution and state control. You see, socialists want the world of Star Trek, where nothing has a cost and everything can be produced on demand. It’s a nice world, and I imagine a lot of people would like to live in it, but it isn’t a world that can be brought about by a socialist economy, simply because a socialist economy has to face up to the reality of supply and demand. A free-market economy is only kind of economy that could truly martial the resources necessary to produce the Cornucopia that would make socialism viable.
And yet… and yet… a free market economy is also, probably, the only kind of economy that could actually survive the shock of such an advance as a star-trek style replicator. A socialist economy would still attempt to centralise and nationalise, and remove the incentives that drive people to achieve which would, at some point, mean limiting access to the replicator technology in order to prevent people becoming independent of the state. A replicator would probably be a driver of the ultimate free market as, with the costs of producing raw materials equalised, price would truly be dictated by demand and the market would consist entirely of the value added to a product. Copper would be more expensive than gold, in such a society, and the fashionable would wear iron necklaces…
Sounds like fun.
