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  • Explaining Why Socialism Doesn’t Scale

    Posted by Shannon Love on February 17th, 2011 (All posts by )

    The fundamental problem with socialism is that it won’t scale organizationally. Too many people look at very small scale communal organizations of a few dozen or even a few hundred people and assume that form of organization can scale up to the hundreds of millions.

    The best way I’ve found to explain it is to use the example that everyone has experience with: a group of people deciding on where to have lunch.

    One person can decide easily, two require a quick conversation, but the length of the conversation increases exponentially as more people are added. By the time you reach more than a dozen or so people, you start having to delegate individuals to go around and get everyone’s opinion. By the time you have two to three dozen, you start having votes and committees. Planning for a hundred people requires votes, committees and a week’s lead time. Deciding for thousands requires specialists and months of collecting opinions and planning. Deciding for 10,000 or more is simply impossible.

    Everybody understands intuitively that the more people you add to the lunch group, the longer the decisions take to make, the more time and resources go into making the decision and the more mediocre the final choice — e.g., it takes hours with numerous phone calls and emails and everyone ends up eating bland, overcooked chicken because everyone finds it the least offensive dish.

    What socialists don’t understand is that all forms of collective decision making suffer from this scaling problem. They naively assume that because they can imagine how they would make the right decision in any particular circumstance (where to have lunch with a couple of friends) that therefore we can create a real-world political system to do the same thing (decide where 300 million people will have lunch).

    Socialism and collective decision-making in general always lead to slow and costly decisions that result in mediocre outcomes. In the end, we feel lucky if we eat before 3pm and that we find enough ketchup to hide the taste of the entree.

     

    4 Responses to “Explaining Why Socialism Doesn’t Scale”

    1. Michael Kennedy Says:

      Socialism always leads to tyranny after other measures fail.

    2. Robert Schwartz Says:

      They don’t intend you to take part in the decision making. Problem solved.

    3. sol vason Says:

      In a socialist state everyone has a government job. Obviously, the state needs to collect 100% income taxes from its employees in order to pay them. This will not work because if everyone pays 100% taxes, then no one has any money to spend. On the other hand, if the state provides food, lodging, clothing, work and a good substitute for entertainment, then no one needs spare cash. Everyone needs a network.

      Socialism works in monasteries and communes. In a single purpose community everyone is equal (except the leaders who are more equal because they have special needs) and gets the same lodging, etc as everyone else. Everyone works hard for the cause. However income comes from outside the community in the form of donations or income from sale of services or goods.

      The socialist state has the same sources of income. Donations are usually called ‘foreign aid’ or ‘reparations’. Many socialist states support themselves by selling oil, coal, rare earths and other natural resources. Some socialist states sell weapons. A socialist state cannot survive unless it can make reliable weapons. Weapons are needed to make sure the citizens love socialism. Socialist states never have surplus food to sell.

      Socialism and Feudalism (as it existed in the year 1000 anno domini) have a great deal in common. Both are based on personal loyalty rather than loyalty to the state. The ruling party has replaced the nobility. The church still exists, although sometimes it’s a mosque or temple. The peasants and the land are tied to each other, just like the serfs. In the cities the workers and factories are tied to each other. The worker cannot leave his job and he cannot be fired. He can be killed.

      Factories exist under socialism to create jobs. If a person works harder than his co-workers he does not earn more because income equality is the major goal of Socialism. A person who works overtime takes away a job opening from someone else. Similarly, rises in personal productivity destroy new jobs. Because it is very difficult to enforce quotas or quality levels, there are always shortages. The factory can never go bankrupt because it is an organ of the state.

      Both the apparatchiks of the socialist state and the nobility of the feudal state hope that the farms and factories will produce enough food and goods to satisfy the needs of the workers and peasants AND then produce a surplus that can support the state. Food and goods go first to the party members/nobles and their men-at-arms. What ever is left over goes to the peasants and workers. Shortages are blamed on hoarders and capitalists.

      And of course apparatchiks and nobles justify their actions using the code of Noblesse Oblige. Economic decisions are too complex to be entrusted to peasants.

      From time to time a Socialist state will adopt the New Economic Policy devised by Lenin and used 1920-1930 in order to build new factories. Amazingly, there are always foreign investors who believe “this time will be different”.

      So when you read about “corruption” in states governed by socialism, remember socialism is feudalism and corruption is merely honoring the bonds created by a network of personal loyalties.

    4. Michael (Constant Conservative) Says:

      The issue is that pretty soon we don’t have enough ketchup to cover the taste, then we barely have enough time to eat before the 11pm curfew, and then we are told that chicken is too bourgeois and so has been removed from our diets entirely.

      As matters progress, we are told that our leader (who is, as has been noted, slightly more equal than we are) has listened to our heart’s desires and will, in keeping our best principles, be the only one who eats chicken. He will do this out of pure selflessness and a willingness to sacrifice on behalf of us, his most beloved people and fellow citizens.

      Finally, we will have an annual holiday to celebrate the fact that we no longer eat ketchup, that most capitalistic condiment.