Well the USSR did also have a huge industrial machinery. But one thing that seems to emerge as a lesson from its downfall is that it is really hard to steer an economy with quotas and plans from the top.
A good market usually gives better incentives for people at every level.
The problem is getting a good market which is definitely not the same as the libertarian dream of a super free market. Without good regulations it’s really easy for markets to get captured or become exploitative.
Some thinks should never be privatised(like infrastructure). And I think lots of industries would benefit from a state run (mostly nonprofit) competitor.
Take a look at why communism failed: When resources are distributed by a central authority, it doesn’t matter how well intentioned they are, at best they can only approximate which goods will be valued most by which individual at any given time. People would end up with an abundance of stuff they didn’t want, and a deficit in things they needed.
In a free market, supply and demand are constantly adjusting on an individual level with every transaction. Can’t get flour at the price I want? Fine, I’ll get potatoes. Can’t get flour or potatoes? Maybe a communist government thinks rice would be a good substitute.
But if it’s money in my hand, maybe I know I’ve got some other carbs and starch, and if I can’t get flour or potatoes, my money would best go to medicine or shoelaces… the point is, I’m setting my own priorities, and they aren’t always related or predictable.
Maybe I really want shoe laces, but they aren’t worth $6 to me. Maybe I’d pay 50 cents for them, otherwise, I’d rather use butchers twine, for a fraction of the cost, and just resign myself to retying my shoe.
Capitalism allows people to be nimble and adaptive. Communism was a: you take what you get, and that’s IT.
So people were getting things they didn’t value, and highly valuing things they couldn’t get, and it was just … inefficient.
Does capitalism really generate wealth better, or is it the industrial machinery? Major confounding factor there
Well the USSR did also have a huge industrial machinery. But one thing that seems to emerge as a lesson from its downfall is that it is really hard to steer an economy with quotas and plans from the top.
A good market usually gives better incentives for people at every level. The problem is getting a good market which is definitely not the same as the libertarian dream of a super free market. Without good regulations it’s really easy for markets to get captured or become exploitative.
Some thinks should never be privatised(like infrastructure). And I think lots of industries would benefit from a state run (mostly nonprofit) competitor.
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Capitalism. Full stop.
The issue is about economic efficiency.
Take a look at why communism failed: When resources are distributed by a central authority, it doesn’t matter how well intentioned they are, at best they can only approximate which goods will be valued most by which individual at any given time. People would end up with an abundance of stuff they didn’t want, and a deficit in things they needed.
In a free market, supply and demand are constantly adjusting on an individual level with every transaction. Can’t get flour at the price I want? Fine, I’ll get potatoes. Can’t get flour or potatoes? Maybe a communist government thinks rice would be a good substitute.
But if it’s money in my hand, maybe I know I’ve got some other carbs and starch, and if I can’t get flour or potatoes, my money would best go to medicine or shoelaces… the point is, I’m setting my own priorities, and they aren’t always related or predictable.
Maybe I really want shoe laces, but they aren’t worth $6 to me. Maybe I’d pay 50 cents for them, otherwise, I’d rather use butchers twine, for a fraction of the cost, and just resign myself to retying my shoe.
Capitalism allows people to be nimble and adaptive. Communism was a: you take what you get, and that’s IT.
So people were getting things they didn’t value, and highly valuing things they couldn’t get, and it was just … inefficient.