J. B. S. Haldane,
Haldane was a biologist, and the problem with socialism is really one of information, but nonetheless he nailed it. Socialism suffers dreadfully from scaling problems. It works fine for small, close-knit groups (families), and inevitably collapses into ruin for large heterogenous groups (the Soviet Union).
Haldane - a socialist himself - pointed this out in 1928. It took several more decades for others to realise just how right he was. Some still haven't grasped this fact.
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Eh. There's more than a scaling difference between the Ford Motor Company and Luxembourg. A small country is in some senses a closed system - a holistic, total entity with all of its constituent parts intact, but scaled to size. A company, no matter how huge and oversize, on the other hand, is no more than a component of some greater whole. An organ, rather than an animal.
Even Ford's behemoth, which had such cradle-to-grave pretensions of company socialism, wasn't a beast in and of itself, but rather a massively swollen organ in an unbalanced beast called Detroit, which would eventually die of its imbalances. Cities and towns in which one big company owns too much, does too much, almost always come to grief sooner or later. Ask anyone who lives in, or has lived in, a company town.
Posted by: Mitch H. at Friday, July 22 2005 09:58 AM (iTVQj)
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Well, yes, Haldane glosses over the problems associated with efficiently socialising a country rather too quickly. But the point remains that an efficiently-run socialist Andorra (pop. 70,549) is at least plausible, and probably feasible - if you can find capable and honest administrators. Admittedly, 80% of Andorra's GDP is related to tourism, so it's hardly a closed system. And of course, capable and honest administrators aren't easy to come by.
Scale the population up by a factor of 1000 or so (Britan or the Soviet Union) and you're on the fast track to disaster. It doesn't work
at all, not even on the surface, not even temporarily.
I'm not sure exactly what the scaling factors are for maintaining various forms of social structures are, but it seems clear that capitalism is sub-linear (a large capitalist society is
more efficient than a small one), representative democracy isn't much worse than linear (small representative democracies suffer significant waste and corruption too), and socialism is dramatically worse than liner, possibly geometric.
It's simply impossible to run a country the size of the Soviet Union on a purely socialist system with an efficiency that approaches that of capitalism. The costs involved in the information processing required to achieve that efficiency would be greater than the entire nation's GDP.
Capitalism works by breaking the problem down and seeking local rather than global optimums - and by allowing sub-units of the society to fail without propagating that failure. Corporations often run on socialist principles; they've been called "the last refuge of the command economy". But if a company fails, even one the size of Ford, it doesn't bring down society.
Posted by: Pixy Misa at Saturday, July 23 2005 12:09 AM (AIaDY)
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I didn't mention Andorra because it's a dubious example of a country - for most of its existence it was essentially a smugglers' route with a flag. Luxembourg at least has most of the salient characteristics of an authentic country. But my point about Ford Motor Company and Detroit was that the city died before the company did. Corporations are not governments, because corporations are not altruistic entities. They're profit-making enterprises. Ford saw his interest in a vast sort of convenant with his workers, and so a lot of people confused this economic-social arrangement with government. But his covenant wasn't with the people, but with a significant sub-set of the people, a literal proletariat. The city ended up with the balance of "the people". It was a social distortion that resulted in social violence in the late Sixties.
Eh, I'm mostly talking out of my ass, here. But I still think that there's more than a scaling issue here. To paraphrase Ayn Rand, A is A, but it certainly isn't B. A family is a family, a company is a company, a government is a government, and an army is an army. This is what freaks me out about true anarchist libertarians. Just as governments shouldn't be run as if they're corporations, corporations oughtn't be subcontracted true government functions. Which would follow that corporations oughtn't be subcontracted true military functions, either, I suppose...
Sigh.
Posted by: Mitch H. at Saturday, July 23 2005 09:06 AM (iTVQj)
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Eh, I'm mostly talking out of my ass, here.
No, you're right. There is more than a scaling issue here. Socialism is fundamentally based on woolly thinking (basically, expecting arbitrary groups of people to act as if they have a common interest). The fact that it
can work for small enough groups doesn't mean it's a good idea.
What's important about Haldane's observation is that even if socialism can be made to work on a small scale, it
inevitably fails on a larger scale. Even with honest and competent leaders (which they weren't) the economic collapse of the Soviet Union was guaranteed.
And yeah, the extreme libertarians are as crazy as the hard-line communists.
Posted by: Pixy Misa at Saturday, July 23 2005 12:21 PM (uEuNd)
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