A socialist alternative to a vcommand economy

[Kidlicious]

Imran has a very good critizism about capital formation in such a system. So does Oerdin. Banks make the whole thing very messy, in a system that is suppose to be egalitarian.

1) Borrowing money and making investment involves risk. Investors need to be rewarded for taking risk or the system doesn't work for crap.

2) Where do the funds come from? Depositors? That means exploitation. Print? That means inflation, and that make allocation very inefficient.

3) And as Oerdin touched on. Capital allocation and formation has to be efficient or banks don't work. How do you deside who will get loans in such a system? The people who get loans in an efficient capital market in this system are the ones most able to pay them back. Give those people loans in a egalitarian economy and you no longer have an egalitarian system and you approach an exploitive system.

Banks.

[Kidlicious]

Originally posted by Spiffor
There are so many different products a consumer might want, which in turn need gazillions of subproducts to be made, that a planned economy can't do the job properly.

The SU didn't even make enough tiolet paper. That's a choice that they made. The SU wasn't democratic and it didn't give a crap if people had these goods. That doesn't mean they weren't capable of producing them.

[Az]

Well, this post reminds me of Sikander's. The State owns missile factories because it demands missiles, just like Sikander's community owns a hospoital because it demands health service. Since the State uses what it produces, it makes a good job at producing it. I don't expect Statesmen pouring money in a high tech 3D graphic card or in a uber-shampoo, simply because the State doesn't use it (or doesn't need any technological progress in this area).

Unrelated. We've had state Chemical plants, state plastics plants etc. It can be done/

The main problem of the USSR was its inability to create a consumer economy. There are so many different products a consumer might want, which in turn need gazillions of subproducts to be made, that a planned economy can't do the job properly.
Especially since the many useless things a consumer might want (such as, blech, computer games) cannot be conciliated with the imperatives of efficiency the planification lives for.

The problem was not the inability. The problem was that the leaders didn't want to. That atmosphere was festered by an enviroment of cover-ups, and backscraching of the middle echelon.

[Imran Siddiqui]

I still don't know whether private loans (do you call them "obligations" in English too?) should be wishable, given that the loaner is only in for the money, and doesn't get any 'political' say in the company.

Well we can use the term obligations in English, but not that often to describe loans . I'd imagine under your system private loans would be hard to justify, because of that which you state. They would not be the worker, but gets some of the profits (in interest - otherwise why loan).

the system keeps them down

How?

[Imran Siddiqui]

There are so many different products a consumer might want, which in turn need gazillions of subproducts to be made, that a planned economy can't do the job properly.

Indeed. The problem with totally planned economies, even with a democratic government is that it really isn't as good in deciding what people ACTUALLY want compared to the market. After all in democracy the majority win in deciding what to make. In the market, a good which only 5% of the people enjoy may make a company profitable and continue to produce it.

[Spiffor]

Originally posted by Kidicious
3) And as Oerdin touched on. Capital allocation and formation has to be efficient or banks don't work. How do you deside who will get loans in such a system? The people who get loans in an efficient capital market in this system are the ones most able to pay them back.

I'm not talking about consumption loans, but investment loans. It doesn't involve how rich the guy (or group) asking the loan is, but the expected viability of the business model. For high-risk investments, loans made by individuals may be an idea, although they're bound to be exploitative, in that the people won't lend their money unless there are promises of high returns (high interests).

The problem with capital is that it either has to be subsidized, or to be exploitative. I see no problem with a subsidized public bank, that offers very cheap loans to viable business models. I have much more problems with exploitative systems.

[Spiffor]

Originally posted by Imran Siddiqui
Well we can use the term obligations in English, but not that often to describe loans . I'd imagine under your system private loans would be hard to justify, because of that which you state.

My system is mostly about worker's empowerment, in a way that is still functional. The closest to my idea would be a Scandinavian Paradise, with the twist that companies are responsible toward their workers rather than shareholders.
You get the picture: an equilibrium between state-owned and market forces (although I'd prefer the balance to be more tilted toward the State than in today's Scandinavia), a welfare system to help the victims of the market socialism, and an income disaprity that is low yet allowed, simply because the workers won't accept huge gaps within their company.

Edit: oops, forgot to answer the question
What I meant is: "it's not too bad if part of the profit rewards capital (although I'd prefer to avoid it when possible), as long as the owners of the capital wield no political power within the company.

[Kidlicious]

Originally posted by Spiffor
I'm not talking about consumption loans, but investment loans. It doesn't involve how rich the guy (or group) asking the loan is, but the expected viability of the business model.

Subsidized banks don't depend on profit though. How are you going to make sure that they only make good loans and there is no corruption? And why would people take risk like that anyway. They can't become rich for it. Answer: they won't.

[Spiffor]

And what do you suggest?

[Imran Siddiqui]

ANARCHY!

[Az]

Indeed. The problem with totally planned economies, even with a democratic government is that it really isn't as good in deciding what people ACTUALLY want compared to the market. After all in democracy the majority win in deciding what to make. In the market, a good which only 5% of the people enjoy may make a company profitable and continue to produce it.

That's not completely true. A modern market actually creates demand for things that were not demanded, fueled by the ad-brand-PR industry. In any case "totally planned" is very vague. You could have a company that manufactures "consumer goods of type X". The fact that it's production is part of a government plan, doesn't mean that it cannot produce specifical products.

And here we come to, perhaps, the most crucial aspect, The ad-brand force. While it's quite obvious that it's wasteful to the overall system ( people buying lifestyle instead of product, higher prices paid for nothing, countless manhours of models, photographers, copywriters, wasted print ink, god knows what else ) It's also a powerful tool, that assists it's holder to beat the competition, so that the one with the bigger PR machine ( more waste) wins. This is an inherent inutility in evolutionary systems, in general, and in a market economy, in particular however the fact that it's doesn't maximize general utility doesn't mean that it's not viable in a system of internal competition.

So, in order to compete on the global market, a necessity to create a high living standard, or a decent prospect of one (*) that would make the population support the ( in our case, socialist ) economic model, one has to approve, at least de facto, of branding as a tool to compete, in the global market. However, a dillema arises:
a) By following a generic branding strategy. However, this makes our operation "sin" in the same sin.
b) By pointing out that this product is socialist, and pointing out to the superiority of that product as proof of the superiority of socialism. This, of course, threatens to make socialism itself a brand. (As those dreaded che guevara T-shirts. )
c) By sticking to pointing out the advantages in our product, and attacking the bull**** of competitors.

I believe that C is the way to go.



(*)- Many capitalist systems, esp. the less welfare oriented, as well as the golden day of command economy dictatorships, have proven that this can often be enough to make the public content with an existing economic model.

[Kidlicious]

Originally posted by Spiffor
And what do you suggest?

Planned economy. You can really screw a planned economy up, but I have ideas about it. Too bad I'm just about to go on a trip to the California coast.

I'll tell you about it later.

[Kuciwalker]

Originally posted by Azazel
That's not completely true. A modern market actually creates demand for things that were not demanded, fueled by the ad-brand-PR industry.

Like personal computers, console gaming platforms, cars, electric lights... so what? Increased efficiency in one sector results in freeing up labor to create new products. Just because they aren't "needed" or even desired originally doesn't make this bad. These things are called luxuries. How is it bad that our society has progressed to the point where the only improvement results in increased luxury?

[Az]

Like personal computers, console gaming platforms, cars, electric lights... so what? Increased efficiency in one sector results in freeing up labor to create new products. Just because they aren't "needed" or even desired originally doesn't make this bad. These things are called luxuries. How is it bad that our society has progressed to the point where the only improvement results in increased luxury?

Actually, each and every one of the items you've mentioned has not been created by the ad industry, people were just made aware of them, and their utility. some of them are luxuries ( consoles), while the rest of your examples are quite useful in non-entertaining ways. . I am talking about the vast array of products that have little purpose but form only. the things people buy just to buy. The millions of manhours spent on making clothes that you'll never wear again. The corporate movie merchandize, the Tamaguchi toys, and what else not.

Luxuries can be useful. Products disguised as lifestyle are not.

[Kuciwalker]

Actually, each and every one of the items you've mentioned has not been created by the ad industry, people were just made aware of them, and their utility. some of them are luxuries ( consoles), while the rest of your examples are quite useful in non-entertaining ways. . I am talking about the vast array of products that have little purpose but form only. the things people buy just to buy. The millions of manhours spent on making clothes that you'll never wear again. The corporate movie merchandize, the Tamaguchi toys, and what else not.

Do you know what purpose they have? Utility. You're a utilitarian, right? Obviously they make people happy, so how is a tamaguchi different from a computer game?