Friday, March 20, 2009

Marxism, Socialism, and Captialism

Continuing, Starting with Communism...

Marxism is generally an idealized political model for the economic model of Socialism. Communism, then, is an actual political implementation of the economics of socialism.

"From each according to his ability, to each according to his deeds" is often cited as the economic slogan of Socialism, where central planners allocate resources to you based on what you are worth to society. "Worth to whom," is never really addressed, so far as I can tell. There is an underlying premise that centrally planning an economy is more efficient than letting it evolve without guidance, so there is ultimately more to go around.

Socialism then, is an economic model where wealth is constantly distributed to produce a centrally planned outcome, which presumably gravitates towards individual economic fairness or equality.

The ideal of Marxism is economic socialism guided by a political democracy, where the majority determines how to redistribute (I can't believe that's really a word) wealth. Marx wrote his Manifesto in 1848 during what he considered a terribly unfair time period, the industrialization of England under the reign of the central Bank of England, the original central bank.

Up to this point I have tried to remain somewhat neutral, so enough of that. Being a trader by nature, it is clear to me that everything discussed so far (Communism, Marxism, Socialism) is nothing more than a way to convince poor people to toil forever on behalf of a few rich people. A possible exception is Marxism, which in it's idealized form, is just the musings of a man who doesn't "get" that he is describing capitalism without a central bank. A central bank subverts the system to tear fools from their money, using an entirely different method of allocation than the one overtly advertised.

Capitalism, DOES use majority rule to allocate resources, but you don't vote in political booths draped in red cloth, you vote in stores. I hope it's obvious that people don't vote politically the same way they vote economically. A simple example is a person who votes "green" while driving something heavier than a bicycle (never mind that bicycles provide no life-sustaining carbon to green plants).

The problem with England's mid-19th century "capitalism" was that it was not capitalism at all, the BoE was (and still is) insidiously stealing most production. The BoE used their financial resources to keep the people undereducated, so they wouldn't know what was happening. This central bank model was so criminally successful that was quickly exported to all corners of the Earth. Central banks continue to rape entire nations, using corrupt institutions like our wholly unconstitutional, corrupt and evil Federal Reserve system. The basic model is to buy politicians using freshly printed currency which costs the bank nothing; hardly ingenious, and hardly capitalism.

The central flaw of all "socialized" systems, at least to people who don't want to hand over everything to a self-ordained aristocracy, is the undefined concept of "fairness." Fairness is a nice way of saying, "give your stuff to me." There is no "we" in fairness, because the only measure by which it can be meaningfully applied is per individual.

To illustrate this, try to remember that you own 80% of AIG. Do you care? No, because there is absolutely no benefit derived from "group ownership." I have yet to receive my AIG stock certificates in the mail. I wonder what is the hold up?

But lack of individual application isn't the real problem with "fariness" as an economic goal. The problem with fairness is that the only equalized outcome is dirt-poverty. A simplistic goal of "fairness" sounds good and sells well, but it fails to recognize that the most humane and broadly prosperous outcome, for all people, is producing the widest possible range between rich and poor.

The widest gap between rich and poor should be the goal. Why? Because everyone participating in an economy has an optimum incentive to improve their lot in life and receive maximum reward when they attempt to do so; they can work harder for an actual reason. The only one not thoroughly "incentivized" is the single person who happens to be at the tippy top on any given day.

By encouraging the widest range of outcomes, capitalism gives everyone a tangible return on hard work. "Fariness" IS embracing the maximum attainable difference between hard work vs. contributing little.

True INequality is characterized by "poor" people with video games and cell phones. Equality is a crowded labor camp with wooden cots.


  1. Hi FDR,

    Interesting post. I see your point and agree that with regards to 'the market' government shouldn't intervene, I was just wondering where you draw the line. Given we live in a globalised world in which pure competition creates huge multilateral entities, without some form of regulation, how do we prevent past mistakes being made again? I am coming from a position of ignorance here so would appreciate your perspective on this form of intervention.

  2. Not to be offensive FDR, but you are distorting the 'level playing field' argument. From your angle, economic equality (deemed tax paid) takes precedence over the social interest full-stop. Now, I cherish my personal freedoms (and couldn't stand living under communist or socialist rule), but the 'level playing field' argument is more a recognition that some lack the capabilities of others (for example how can anyone in here argue that they are on a level-playing field with a person with Down's Syndrome?) and that society has a duty to protect our weakest and most vulnerable. I'm not trying to piss you off here, just trying to understand how you would deal with the issue of intrinsic inequality if you were 'President for a day'.

    I fundamentally agree with the importance of individual liberties. That's not the issue I'm interested in, rather where you stand on the issue.

  3. I posted above - just want to add I'm trying to fill in gaps in my knowledge.

  4. There is no level-playing field between you and central bankers.

  5. You mean, to each according to his NEEDS.


The USA's political-economc system is best described as:

On Nov 2, 2010, I plan to vote (FOR or AGAINST) my incumbent congressman

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