Why Excessive Socialism Doesn't Work

What can any system do if the well, or flow runs dry.

I forgot to add. Like in todays UK capitalism a certain Mr Green running his company into debt, creaming his workers pension fund and escaping with so many millions . Then there's the conservative flagship company Carillion going under, the executives paying themselves millions in payoff leaving millions of unpaid debts to the ordinary workers. YES, capitalism is a shining example isn't it. That's sarcasm by the way.

"It's the balance between the two ideologies that matters, if either gets out of control it can be a bad thing"

From an ideological perspective I agree with this to a degree, It seems quite necessary to balance the needs of the self and the needs of others. Perhaps ones family, pets and friends should come before the society at large.

This appears to be a biological trait present in all social animals with varying degrees of self serving vs collectivist behavior.
Making a monkey think like a bee, may not be the best idea.

The socialist reformers who believe they can override naturally regulating systems, are typically dangerously narcissistic.
I'm not sure that the Pareto principle represent un fair inequity.

It feels coercive to be required to participate in enept bureaucracies that average out your priorities against your own volition.

Socialism as a system of government robs people of the means of reaching productive conclusions, and corals large numbers into the same mistakes.
Socialism transmits distorted signals and is ultimately a house of cards.

I would love to believe that some centralized system could administer the virtues of charity, but I don't.

From a systems point of view, centrally controlled socialism, or any ideology for that matter, seems to creates a single point of catastrophic failure.

originally posted by: johnb
Top 5 happiest conutries to live in
1. Finland (7.632) 25-68% sliding tax scale
2. Norway (7.594) 25% and didnt really understand the other bits
3. Denmark (7.555) 23-51.5% tax
4. Iceland (7.495) 37-46% tax
5. Switzerland (7.487) avg 40% is different in each canton

So looks like high taxes to provide social welfare lead to the happiest places to live.

Yet the U.S. is higher on the Human Development Index, has a higher economic output, the average income per person is higher, the average standard of living is higher, and the cost of living is lower, than any of those nations, demonstrated in this thread showing the correlation between economic freedom and economic output. Hong Kong is ranked highest on the Economic Freedom Index, has very low taxes for individuals and businesses, has one of the highest economic outputs in the world, and almost no public debt. The gap between the rich and poor is very large but the average standards of living are extremely high even for poor people.

Wikipedia states Hong Kong "has a very high Human Development Index ranking and the seventh-highest life expectancy in the world". So inequality does not always translate directly into poverty if even the poor have a reasonable standard of living. Also, the happiness of a nation does not directly translate into a measure of how successful the nation is or how well off the people are, smaller communities which have a culture of respect may naturally be more happy, because having wealth clearly doesn't automatically make people happier, if anything having less money and living on the bare necessities makes people happier for some reason.

a reply to: ChaoticOrder

Care to site those claims? Because the internet says you're wrong:

Human Development Index rankings (4 of the 5 countries in question rank higher than the US): en.wikipedia.org... ndex

Quality of Life (all 5 rank higher than the US):
www.weforum.org... ve-the-highest-quality-of-life

over the long term it will result in even greater problems and even wider spread poverty

That's what capitalism is doing.

a reply to: XAnarchistX

If Capitalism is the superior economic system.. why is it not only failing but look at the poverty and inequality it has created, look at the corruption, Greed, Corporatism etc

I am not advocating Socialism or Communism, I have been outspokenly against ALL economic systems

but, this utopic statement by people that "Capitalism" is liberating, and Free is false

That's false. Extreme poverty and income inequality has been declining rapidly around the world, especially in countries that have adopted free-market reforms such as China, India, South Korea, etc.

For example, China:

Since initiating market reforms in 1978, China has shifted from a centrally-planned to a market-based economy and has experienced rapid economic and social development. GDP growth has averaged nearly 10 percent a year—the fastest sustained expansion by a major economy in history—and has lifted more than 800 million people out of poverty.

www.worldbank.org...

Here's a neat infographic about the decline in extreme poverty and wealth inequality throughout the world, thanks to industrialization and trade.

slides.ourworldindata.org...

If you want a good comparison of capitalism vs socialism, compare life in West Germany to East Germany, and North Korea to South Korea. Where would you rather live?

a reply to: ScepticScot

Modern computing and the Internet originally developed by governments. Hypocrisy apparently works both ways...

And governments would still be hoarding them if it wasn't for the private sector bringing them to the public.

a reply to: ChaoticOrder

Chinese are kicking our butts. If you've been there, then you know how socialist it is.

Always interesting to see people discuss this, every time I hear people extol the virtues of communism or socialism I think to the people I met form Eastern Europe that grew up under the iron boot heel behind the curtain.

They almost all said the same thing, all three systems have the same problem... as long as you have the right people in charge its pretty good living, but once the wrong people are in charge only the areas that practiced capitalism had the means to change things for the better.

That is what stuck with me, I can find a better path forward, I can elevate my earning potential, or change jobs with minimal impact on my retirement. I met a lot of people in Europe that were stuck in the same job their entire life because they didn't want to lose the pension.

Sorry ill stick with our broken capitalism and freedoms over being locked in and getting cradle to the grave care from the govt.

a reply to: narrator

Interesting, I did kind of assume the HDI would automatically be much higher for the U.S. than most places in the world simply due to the level of technological development. Finland is still ranked quite a bit below the U.S. and it seems to have the most excessive taxes out of them all. And the U.S. does have a higher average income per capita than any of those nations except maybe Norway, according to a List of countries by GDP (PPP) per capita. Wikipedia states the HDI is a "composite statistic of life expectancy, education, and income per capita indicators", it seems where the U.S. isn't so great is life expectancy, and as I've said before I think much of that comes down to what they eat. On the List of countries by life expectancy the U.S. is ranked around #30, with places such as Norway having an advantage of around 2 years on their life expectancy. According to the 2015 Education Index the U.S. is ranked #8 in education and a few of those nations are ranked higher and a few ranked lower. So overall the U.S. is ranked very close to all those other nations in the HDI index at 10th place, and it achieves that without taxing its citizens into oblivion.

Also, I wouldn't exactly use the HDI as a true indication of how developed a nation is and how well off it's population is. There's one simple reason I say that, and that's because Australia is ranked #2 on the list but I know for a fact the U.S. is more developed than Australia, Wikipedia says the avg income per capita is 10K lower in Australia and I know for a fact the cost of living is substantially higher here. The U.S. has a much more robust energy infrastructure, and has a much stronger economy fueled by innovation at places such as silicon valley, whereas in Australia we have one of the slowest internet connections of all developed nations and an energy grid constantly on the verge of failure. I've honestly considered moving to the U.S. because I'm getting so sick of the governments inability to fix these issues and it's clear to me the U.S. has more opportunities than any of these other nations. Given a choice to move to the U.S. or any of these other nations with a higher HDI, I'd know which I'd pick. Having said that the HDI is not entirely useless, if we look at the HDI map it has some interesting properties:



I looks to me as if the greenest areas are all centered around the capitalistic and westernized nations of the world, the US, UK, Australia, Canada, etc. Japan has embraced western culture and capitalism more than most other Asian nations, with a strong electronics and automobile industry, and it stands out as a small patch of green in the Asia-Pacific. According to Wikipedia Japan has the world's second largest developed economy and the third-largest in the world by nominal GDP.

originally posted by: NiNjABackflip
a reply to: ScepticScot

Modern computing and the Internet originally developed by governments. Hypocrisy apparently works both ways...

And governments would still be hoarding them if it wasn't for the private sector bringing them to the public.

So you agree it takes government and private enterprise to make a successful economy?

Holy moly... just looking at the tax rates in some of these nations gives me nausea. It seems Switzerland actually has impressively low tax rates, Norway and Iceland seem to have tax rates similar to Australia. Denmark and Finland are out of control. I'm honestly shocked that Denmark can still function with that obscene individual tax rate.

At 60.2%, Denmark last year had the highest top personal income tax rate among the 34 countries in the OECD, an organization of developed and emerging countries. And that 60.2% applied to income over roughly $55,000.

money.cnn.com...

The Personal Income Tax Rate in Finland stands at 51.60 percent. Personal Income Tax Rate in Finland averaged 52.96 percent from 1995 until 2016, reaching an all time high of 62.20 percent in 1995 and a record low of 49.00 percent in 2010.

tradingeconomics.com...

originally posted by: NiNjABackflip
a reply to: XAnarchistX

If Capitalism is the superior economic system.. why is it not only failing but look at the poverty and inequality it has created, look at the corruption, Greed, Corporatism etc

I am not advocating Socialism or Communism, I have been outspokenly against ALL economic systems

but, this utopic statement by people that "Capitalism" is liberating, and Free is false

That's false. Extreme poverty and income inequality has been declining rapidly around the world, especially in countries that have adopted free-market reforms such as China, India, South Korea, etc.

For example, China:

Since initiating market reforms in 1978, China has shifted from a centrally-planned to a market-based economy and has experienced rapid economic and social development. GDP growth has averaged nearly 10 percent a year—the fastest sustained expansion by a major economy in history—and has lifted more than 800 million people out of poverty.

www.worldbank.org...

Here's a neat infographic about the decline in extreme poverty and wealth inequality throughout the world, thanks to industrialization and trade.

slides.ourworldindata.org...

If you want a good comparison of capitalism vs socialism, compare life in West Germany to East Germany, and North Korea to South Korea. Where would you rather live?

China, Germany and South korea are all examples of mixed economies with both the state and private enterprise playing an important role in economic development.

There is no boolean choice between free market and managed economy. Its an extremely wide spectrum with the most successful countries sitting near the middle.

originally posted by: ChaoticOrder
Holy moly... just looking at the tax rates in some of these nations gives me nausea. It seems Switzerland actually has impressively low tax rates, Norway and Iceland seem to have tax rates similar to Australia. Denmark and Finland are out of control. I'm honestly shocked that Denmark can still function with that obscene individual tax rate.

At 60.2%, Denmark last year had the highest top personal income tax rate among the 34 countries in the OECD, an organization of developed and emerging countries. And that 60.2% applied to income over roughly $55,000.

money.cnn.com...

The Personal Income Tax Rate in Finland stands at 51.60 percent. Personal Income Tax Rate in Finland averaged 52.96 percent from 1995 until 2016, reaching an all time high of 62.20 percent in 1995 and a record low of 49.00 percent in 2010.

tradingeconomics.com...

Not only do they function they score higher on most measures of economic development and happiness.

Looking at taxation is only looking at one side of the story.

a reply to: ScepticScot

There is no boolean choice between free market and managed economy. Its an extremely wide spectrum with the most successful countries sitting near the middle.

There is a boolean choice when dictatorial communist leaders try to enforce communism.

The Great Leap Forward (Chinese: 大跃进; pinyin: Dà Yuèjìn) of the People's Republic of China (PRC) was an economic and social campaign by the Communist Party of China (CPC) from 1958 to 1962. The campaign was led by Chairman Mao Zedong and aimed to rapidly transform the country from an agrarian economy into a socialist society through rapid industrialization and collectivization. However, it is commonly considered to have caused the Great Chinese Famine.

Chief changes in the lives of rural Chinese included the incremental introduction of mandatory agricultural collectivization. Private farming was prohibited, and those engaged in it were persecuted and labeled counter-revolutionaries. Restrictions on rural people were enforced through public struggle sessions and social pressure, although people also experienced forced labor.[1] Rural industrialization, officially a priority of the campaign, saw "its development... aborted by the mistakes of the Great Leap Forward."[2]

It is widely regarded by historians that The Great Leap resulted in tens of millions of deaths.[3] A lower-end estimate is 18 million, while extensive research by Chinese historian Yu Xiguang suggests the death toll from the movement is closer to 55.6 million.[4] Fellow historian Frank Dikötter asserts that "coercion, terror, and systematic violence were the foundation of the Great Leap Forward" and it "motivated one of the most deadly mass killings of human history".[5]

Great Leap Forward

Seems to me more like they took a great leap backwards... but who would let such a small set back stop them from pursuing Utopia, certainly not these geniuses...

The Cultural Revolution, formally the Great Proletarian Cultural Revolution, was a sociopolitical movement in China from 1966 until 1976. Launched by Mao Zedong, then Chairman of the Communist Party of China, its stated goal was to preserve 'true' Communist ideology in the country by purging remnants of capitalist and traditional elements from Chinese society, and to re-impose Mao Zedong Thought as the dominant ideology within the Party. The Revolution marked Mao's return to a position of power after the failures of his Great Leap Forward. The movement paralyzed China politically and negatively affected both the economy and society of the country to a significant degree.

The movement was launched in May 1966, after Mao alleged that bourgeois elements had infiltrated the government and society at large, aiming to restore capitalism. To eliminate his rivals within the Communist Party of China, Mao insisted that these "revisionists" be removed through violent class struggle. China's youth responded to Mao's appeal by forming Red Guard groups around the country. The movement spread into the military, urban workers, and the Communist Party leadership itself. It resulted in widespread factional struggles in all walks of life. In the top leadership, it led to a mass purge of senior officials, most notably Liu Shaoqi and Deng Xiaoping. During the same period, Mao's personality cult grew to immense proportions.

In the violent struggles that ensued across the country, millions of people were persecuted and suffered a wide range of abuses including public humiliation, arbitrary imprisonment, torture, hard labor, sustained harassment, seizure of property and sometimes execution. A large segment of the population was forcibly displaced, most notably the transfer of urban youth to rural regions during the Down to the Countryside Movement. Historical relics and artifacts were destroyed and cultural and religious sites were ransacked.

Cultural Revolution

a reply to: ChaoticOrder

Happy to agree dictatorships (right & left wing) are a bad thing.

a reply to: ScepticScot

Not only do they function they score higher on most measures of economic development and happiness.

In what economic measure do they rank higher than the US? Their income per capita is about the same as Australia, 10K lower than the U.S. And as I said a high HDI ranking doesn't necessary indicate how advanced or developed a nation is, Australia is ranked #2 yet the cost of living is substantially higher here and the U.S. has a much more robust energy and telecommunications infrastructure. However the life style here is much more laid back and crime rates are fairly low, and a lot of people live in rural areas so they don't particularly care about technology, hence the high levels of happiness. Although I can assure you the level of happiness is rapidly declining as the cost of living increases and more people get into debt.

a reply to: ChaoticOrder

Per capita measurements are an extremely flawed way of looking at economic development. If Bill Gates and I share a lift the per capita wealth in that lift would be in billions. Doesn't make me any wealthier.

Denmark, Finland etc have extremely well developed infrastructure. They also have well developed welfare and health systems that improve the quality & standard of peoples life's.

The US has many issues of its own with infrastructure, at least in part due to years of insufficient funding.

originally posted by: ScepticScot
a reply to: ChaoticOrder

Per capita measurements are an extremely flawed way of looking at economic development. If Bill Gates and I share a lift the per capita wealth in that lift would be in billions. Doesn't make me any wealthier.

It may not be the best measure of overall prosperity, but it's still certain a measure of how productive a given economy is. Also, it's quite clear that inequality does not always translate into increased poverty. Hong Kong has high levels of inequality, higher than the U.S., yet the life expectancy is one of the highest in the world and their ratio of homeless people is one of the lowest in the world. In 2016 there was found to be around 1K homeless people in a population of over 7M, that's a ratio 6x lower than Denmark. Australia also ranks better than the U.S. in terms of equality yet we rank worse than the U.S. in terms of homelessness, more than 2.5x worse. Clearly using taxes to redistribute wealth doesn't do much to help the poor in the long run. Australia may be ranked #2 on the Human Development Index but our economy clearly has issues.

Denmark, Finland etc have extremely well developed infrastructure. They also have well developed welfare and health systems that improve the quality & standard of peoples life's.

They may have great social welfare programs in place but it comes at the cost of the majority of their paycheck. Denmark doesn't have a substantially lower ratio of homeless people compared to the U.S. yet it has a substantially higher tax rate. We also have to remember the population of Denmark is fairly small, they only have around 10K homeless people so it's much easier for them to manage the problem, yet homelessness is still considered a fairly significant social problem in Denmark. Other capitalist nations with low taxes such as Japan and Hong Kong achieve a lower ratio of homeless people while at the same time having some of the strongest economies in the world. Their poorest fraction of the population have higher standards of living and they are more technically advanced than any other nation just like the U.S.

Until you actually go live in one of these nations and experience it first hand I don't think it's really legitimate to make an argue about how great these places are just because they have a high happiness ranking or high HDI ranking. If you just went off the HDI statistics you might believe Australia is one of the most advanced nations in the world because it's ranked #2, but we have quite a serious homelessness problem and we are behind most other developed nations in terms of technological development. We tend to eat fairly healthy foods which is probably the main reason for our high life expectancy, and the fact a lot of people live outside of cities away from smog and other pollution. Also we do have quite a substantial welfare system, but it's almost half the federal budget.

I'm not sure exactly where the optimal balance between taxes and welfare is, but I would say we spend a bit too much on social welfare and it hurts the economy because we spend almost nothing on other critical things. Our tax rates are still some what reasonable but that doesn't help with our growing national debt. I actually think we have a fairly good welfare system in Australia and it works pretty well considering that most nations have a large national debt regardless of their welfare system. However I can see how it's harming innovation and giving people an excuse not to work, I would like to see them spend a bit less on social welfare and a bit more on other critical things which help improve the economy and increase the standards of living for everyone, such as fixing our outdated energy grid.