Can Socialism Work? A Pizza Party Suggests No

I have listened carefully to the many arguments about that question. So far I found nothing conclusive in support and nothing but failed attempts as evidence the idea cannot work.

In some ways that none of the tries have worked is a white swan – black swan problem. Until the mid 1700s it was fact taken on faith that all swans were white. The existence of a single black one would reduce that argument to zero and did when some were found in Australia. The idea of taking a survey to prove socialism just as futile as proof. You cannot prove any idea conclusively in that way

A scholarly look

I enjoy many articles on AIER. The American Institute for Economic Research.  One of these is The Pilgrims Tried Socialism and It Failed

The pilgrims came to America grounded in their faith and believing that civilization in Europe was aimed at the wrong goals. That would seem to be a cohesive group with the right antecedents to make socialism work. Working to together to make a better world, under God’s guidance, seems sufficient for a beginning.

The subheadings in the article are these:

  1. Plymouth Colony Planned as Collectivist Utopia
  2. Collective Work Created Individual Resentment
  3. Rejecting Collectivism for Individualism
  4. Giving Thanks for the Triumph of Freedom

The article relies on the written word of the governor of the colony. I think the points cited could apply to every other attempt at socialism.

When you don’t need scholarly

I recall being at an event where there was pizza for the crowd. It appeared there might not be enough. Two people came to the table. One took three pieces and another took one. Both for the same reason.

Whether it is pizza or the vast economy, the people are the predictable variables. Not everyone is motivated the same way. To assume people will allow equality of outcome without equality of input cannot be overcome with words. Thus the need for a powerful government. Even then, people will game the system.

Each of us knows that people are all differently motivated. Many are not the same from day to day. To assume Socialism will work, denies what you can see among your family, friends, and neighbours. We are not the same. Homogenized doesn’t seem relaistic.

If socialistic ideas reduce the ambition of the strong and talented and increases the greed of some of the others, it has its own baked-in flaw. Perhaps looking for a black swan socialist experiment that did not point out greed and reduced ambition would be a beginning of a way to have the promised paradise.

Until then I will be a skeptic

The bits to take away

You need to answer a simple question before deciding if socialism can work, “We know the skilled and ambitious are unlikely to work extra hard for nothing. Will the others pick up the difference?”

The rule of distribution is this. If someone gets something for nothing. Someone else must get nothing for something. There must be something to distribute and where did it come from? Economics works on incentives. Do you think the equal distribution method will work for long?. Absent a tyrannical government it can’t happen. And do you know what else comes into play? Even the takers don’t want that government.

The proponents are the ones who think they will be the government. Look for who might benefit? Follow the power. Follow the money. To whom the good? Pay attention to them. Every politician has told the story of saving the people as their way to rule the people.

“The urge to save humanity is almost always only a false-face for the urge to rule it. Power is what all messiahs really seek: not the chance to serve.” H.L. Mencken

Have your own pizza party and see if altruistic behaviour is universal?

 


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I build strategy and fact-based estate and income plans. The plans identify alternate ways and alternate timing to achieve both spending and estate distribution goals. In the past I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning, have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, Banks – from CIBC to the Business Development Bank.

Be in touch at 705-927-4770 or by email to don@moneyfyi.com

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