"Long live socialism from below."

What would it actually look like, in your opinion, John?

How would it avoid the problem that, with the abolition of private ownership of the means of production, whatever political apparatus was set up would fall a natural prey to the ambitions of statists like the Stalins of this world?

LOL,

Does this guy have a day job?

From where I'm sitting it looks as if the governmental form of the future is more likely to be theocracy than "socialism".

John Passant can dream on if he likes. The article has some entertainment value as an example of how divorced left-wind intellectuals can be from reality. But in this case Passant and reality are not so much divorced, as living in different galaxies. Sure Marx imagined something different to the reality practised by those claiming to be marxist. But even the Israeli Kibbutzes, which were much closer to his dream, have switched to free enterprise.
The socialist ideal has been abandonded. Passant should write its euology, not plead for its revivial.

There are still people who want us to believe that Marxism is cool? Fascinating.

As far as I can tell, Mr Passant is suggesting that Socialism didn't fail, it was simply mis-applied. If Marxism hadn't been bastardized by the people who operated under its banner, all would have been well.

What he might also choose to acknowledge, perhaps in his quieter moments and in the seclusion of his own room, is that precisely the same may be said of capitalism.

And of the two "failed" systems, only one has actually delivered a level of prosperity, worldwide and across the board.

As even "Communist" China has figured out.

"Does this guy have a day job?"

Yes. He's an academic at the Australian National University. You and I, and everyone who reads this, have been forced for decades to pay for him to propagate this drivel.

*genuine democratic socialism where workers themselves decide what is to be produced to satisfy human need*

Sheesh, never mind the customer, you will buy what we decide to
make!

I gather that the author used to work for the tax office. That
would explain alot.

Stalinism was not a new ideology. It was Lenin who established the dictatorship. Lenin's Cheka murdered people because of their class identification which is not very different from murdering someone because they are a Jew or a Gypsy. Lenin founded the first gulags a few months after he took power. Lenin brought back censorship which Kerensky had eliminated. Stalin was merely a more extreme Leninist.

A command economy simply does not work. It was a great opportunity. The Marxists had an immense country with great natural resources. They were able to build an impressive military establishment, but they had to import food and other goods from the capitalist world. Aside from their military they remained a third world country.

They had their chance. Like the Christians who hope for a seond coming of Jesus to make everything fine and dandy the Marxists want another go.

It was not Stalinism that was the problem. It is Marxism. Lenin was a dictator who did his best to follow Marx's prescription.

A good mix of both capitalism and socialism is the way, some things need to be in Govt hands.

So let’s get this straight. No-one is to have any claim on the fruits of his labour but through the polis. The directors of the polis will thus rule the masses. But this elitist and statist arrangement is necessary for true human liberation – by abolishing freedom except to ask one’s political overlords for permission to do anything productive?

And the socialists *still* don’t get it.

Those who say the ideal is a mix between private and public ownership are merely calling for communism as to telephones, or hospitals, or railways, or whatever they arbitrarily decide should be under political direction.

The basic economic problem is the need to use scarce resources for their most important uses. No-one ever explains how common ownership or political direction is supposed to achieve this protean task.

When you point this out, they say public ownership going to be ‘democratic’. But this only means that the same people who were supposed to be incompetent to use scarce resources for their most important uses in the first place, and to need governmental direction, are supposed to direct the government.

If it were true that government had this superior competence or virtue as to any given part of the economy, it would be true that it has it as to the whole. Obviously, according to the part-socialists themselves, the only thing making part-socialism viable, is the existence of the private sector.

But the part-socialists *still* don’t get it.

The fact is, liberty and property are two sides of the same coin. No-one can reduce one without reducing the other.

The only system that shows any hope is one where there is more direct democracy and one that makes corruption difficult (if not impossible) and where there is accountability both in the private and public domain.

The only way you get that is a mix of public and private ownership and via some regulation. I don't know why people are so scared of that possibility especially when it comes to universal needs (health etc) as opposed to 'wants'. The wants can easily be delivered by the private sector, it is for the essential services that tax is paid, that ideally should not be placed in the hands of profiteers.

I don't share John's faith that a grass roots socialist state won't turn into 'more of the same' historical experience. Socialism works well in small groups of interested and focussed parties but is more unwieldy in larger populations and historically has involved force. However, that said, local grass roots collectives can achieve all sorts of good things for communities and we should not dismiss the idea of greater participation from citizens.

Why do we still persist in the old labels like 'capitalist' and 'socialist' - they distract and distort any movement or ideas about systems that will better serve communities.

People start fleeing under their beds at the mention of anything publicly owned with a blind faith in private ownership delivering the goods which is at odds with what we are actually seeing in our modern global economies. There is a tendency to turn a blind eye to the socialisation of debt while still deriding the sharing of profits.

A system that better delivers to the greater majority and less to a small elite is what we should be striving for, where wars are not waged purely to advance the interests of the minority who are advantaged only through the demise and diadvantage of others.

Unlike Peter Hume suggests it does not have to be all one or the other.

You only have to have a look at USA to see you can go too far the other way.

Only the state can provide for universal needs like broadband and handouts to corporations, as opposed to mere wants the private sector supplies like food, clothing and shelter?

According to John, China isn’t communist. Cuba, North Korea and Vietnam are not communist. The USSR was not communist, nor was the eastern block. Nor were Albania or Yugoslavia or Cambodia. Nor the African experiments in Angola, Congo, Ethiopia, Mozambique, Somalia, and South Yemen. In fact, none of the multitude of different countries with different histories who have experimented with different varieties of what they themselves described as “communism” ever actually delivered the real deal. So communism remains a really good idea, it’s just that no-one has yet managed to put in into practice for long enough for history to judge its effects.

What I find particularly endearing about John’s form of socialism is its peculiarly Australian flavour. It celebrates near-misses and glorious defeats (Paris commune, Allende, the Sparticist revolution ... Gallipoli, Ned Kelly), but prefers embarrassed silences about its victories (Russia, China, Cuba). It holds fast to its utopian vision in fierce defiance of the overwhelming weight of argument and evidence stacked against it. “she’ll be right, mate.”

Endearing, but totally nutty.

Peter Hume wrote:

>>You and I, and everyone who reads this, have been forced for decades to pay for him [John Passant]to propagate this drivel.>>

Chill Peter Hume. At low cost he adds greatly to what Samuel Johnson called "the public stock of harmless pleasure".

Look how much entertainment we've all had deriding him. He's almost as much fun as John Pilger.

No serious thinker takes these aging lefties any more seriously than we take people still fighting the cold war.

Just enjoy the spectacle.

You tried to sell me your vision , but you failed , I prefer Little Johnny Howard ideals pity he was so boring , otherwise he may have still been there . Now we have Bunnies running our Country , isn't it exciting and Goose's attempting to ignite Communism , funny that our pm used to be one of them !

What I find amusing is that the nasty old communist country, China, is at present assisting that bastion of capitalism, America to manage inflation by producing cheap goods...apparently the U.S.'s low interest rates and faltering recovery are closely reliant on the American public having access to the benefits of cheap Chinese manufacturing.
Even so, the U.S. House of Reps last week voted to slap tariffs on Chinese imports in response at what the Americans see as China keeping their currency artificially low to favour their manufacturers. In fact, it looks as if international "currency wars" might be with us for a while.

This article tries (and fails) to articulate the principle that a revolution has to involve the vast mass of people in changing themselves and the way they think.
If capitalism and statism were abolished tomorrow they would be back within a week. (just like happened with Russia and Stalin and the rest)
People think voting and representatives etc are the only way to organise society so they would quickly reintroduce the authoritarian system that exists today. It is what they have been brainwashed to believe. That is all they know and all they are used to. People are shaped by the society they live in and it is hardly surprising that people under authoritarian control are by nature obedient, submissive, passive aggressive and fearful. Happier when being told what to do and think rather than deciding for themselves.

For any revolution to succeed it must come from below and start with the direct action of the people involved changing themselves and the way they think. The ongoing social struggle that results will transform those involved and in turn transform the society they live in.
Freedom cannot be given only taken and the only way to be truly free is through your own actions and your own efforts.
Direct action by oppressed people is the only way to attain liberty and freedom from exploitation.

Revolution is a process, not an event.

Peter Hume
<<The fact is, liberty and property are two sides of the same coin.>>

I know you really believe this but can I just point out that if someone with no property was to use a piece of land that, while "owned" by someone else was currently unused, they would be prevented by the law and the thugs that enforce it. Where is the "liberty" Peter?
Property is the state writ small. A billion petty dictators lording over their "property" the same as a king lords over his subjects.

Liberty? Only for the property owner never for the property-less.

John Passant,

When you give your vote to somebody, you agree to be ruled by that somebody.

Voting has two meanings; shunning civic duties towards the weak in your community which you believe hinder your plans for a free life and surrender your rights to interfere with the running of your community.

After you vote the next thing you see besides you is a baton in the hand of a burly policeman, not there to defend you, but there to tell the law made by those to whom you gave your vote.

Until a man passionate in the belief of socialism or democracy understand the simple undeniable fact that to vote is to surrender, the bullies of the world will thrive.

And bullies have many names: Stalin, Hitler…You, Me… or anyone in a position of privilege.

It doesn't pay to suggest getting rid of capitalism or free markets, does it? Some people go hysterical.

Of course, these people are not the victims of capitalism and free markets. No, they are not caught up in the endless wars or the poverty that capitalism spawns. No, they are living a comfortable lifestyle and don't care about anyone else!

In the iconic home of capitalism, America, one in seven people now live below the poverty line. Even in Australia, the numbers of the homeless are increasing by the day.

But then, who cares? It's not worth talking about, is it?

David G

Wars and poverty have been features of all forms of human political and economic organisation. Socialism promised to end both, but spectacularly failed to deliver. We should judge political systems by their fruits, not the claims of their adherents.

Capitalism has its faults, but I think the evidence suggests it has raised the living standards of ordinary people to levels never seen under any other economic or political system.

The extremes of anarcho-capitalism and Marxism are populated by a tiny and dwindling band of people. Most Australians support some form of mixed economy, with the market doing what it does best (allocating resources efficiently, spurring innovation, facilitating growth) and the government correcting the market’s failures and attending to our collective needs and wants. The arguments in social democracies like ours are mostly about where to set the balance between collective and individual, private and state activity. Few of us want complete state control or complete laissez faire in all areas of our lives.

Rhian, do you really think that the bulk of society working until 70 in largely mindless jobs, achieving little more than being slavish producers and consumers so that a few people can become incredibly rich is how humans were meant to live?

The Ancient Greeks despised money-grubbers and business people. They valued other human pursuits like science, art, drama, philosophy, physical achievement, etc.

It's all been downhill since then!

Of course those that argue for a classless society have NO class, as in classy.

This is equally true of so called libertarians especially as manifested in the former One Nation party/movement here in Oz, the Tea Party in the USA, and indeed all right-wing populist movements.

Note for instance that the Tea Party are against the "elites" (though they are quite fond of elite generals)

Never mind that all of the outstanding and enduring features of any and every culture were created by the elites. Or via the patronage of the elites, as per the patronage of artists and musicians in Europe.

David G

Capitalist societies of the past few decades are the only ones in history where most people have had the opportunity to work (or not) to the age of 70. Life expectancy in most places and times has been well below that. In fact, rising like expectancy is one of the reasons some countries are edging their retirement ages upwards.

Is your job mindless? If so, I feel sorry for you, but I also think you’re the unusual. Repetitive, unskilled, physically demanding labour is now the exception not the rule in countries like Australia.

My job isn't mindless. I don't work to make any other individual "incredibly rich" (or myself), but nor do I mind if someone else is enriched by my efforts.

I also value science, the arts and philosophy, and am pleased to live in a time and place where such pursuits are accessible to ordinary folk like me. The fruitful marriage of capitalism and modern science means I can access tens of thousands of the greatest books in the English language for free. I need to work less than an hour to earn the money to buy a CD of the world’s finest music played by its best musicians. I can debate political philosophy with strangers over the internet.

The ancient Greeks who despised business people were not socialist egalitarians but deeply elitist, with contempt for ordinary people. I think I’m closer to John Passant than to you on this issue. Marx did not sneer at materialism.

"Only the state can provide for universal needs like broadband and handouts to corporations, as opposed to mere wants the private sector supplies like food, clothing and shelter?"

You only read what you want Peter - the private sector does supply some of the 'needs' but within a regulated framework which in some respects is lacking. I just don't share your blind faith in the private sector, nor do I hold a blind faith in governments - which is the point of the article to some extent - seeking more involvement from the grass roots.

As for broadband - some may see it as an essential service if we are to assist regional areas to compete in business and to encourage growth away from already congested cities.

Handouts to the private sector is not the business of governments nor is bailing out banks. The governmetn would have been better bailing out the bank customers rather than fostering the current rotting system.

Clearly governments and corporations are flawed in many ways which is why more input is needed from the grass roots to ensure governments (of the people) are accountable and are acting on behalf of its citizens not in opposition.

We need an economic system that works for us not against us - economic systems are man-made they do not occur naturally and as such can be tweaked to support communities as people see fit.

Pelican
“We need an economic system that works for us not against us - economic systems are man-made they do not occur naturally and as such can be tweaked to support communities as people see fit.”

If that doctrine were true, we could create bread out of stones; and communism would be possible. There is such a thing as truth; not everything is “ideology” and opinion.

mikk
According to your reasoning, there could be no liberty unless all property was held in common. Not even Marx went that far, since he restricted his communism to capital property.

More communist than Karl Marx – that’s quite an achievement. But it doesn’t make communism viable or ethical.

Rhian
“Most Australians support some form of mixed economy, with the market doing what it does best (allocating resources efficiently, spurring innovation, facilitating growth) and the government correcting the market’s failures and attending to our collective needs and wants. “

There is no evidence for this, since
1. the government takes the money whether you agree or not
2. they spend it on anything they want. Is politicians’ superannuation a collective need or want?
3. if everyone in the population was compulsorily indoctrinated for 10 years from a young age by the church, would you expect them to be able to see that the church’s claims are completely groundless? It is no different with the state.

All the same defects that underlie the belief in Marxist socialism, also underlie the belief in part-socialism or ‘mixed economy’, for exactly the same reasons. The fact that the one thing uniting the part-socialists is an understanding that a private sector is necessary to stop the descent into poverty and despotism says it all.

Just because people, if left free to choose, don’t buy or sell things that you think they should buy or sell, that doesn’t mean there’s a “market failure”. There’s such a thing as scarcity.

There is no universally accepted definition of a public good or a collective need because it’s arbitrary. Mikk thinks all property is a collective need; Passant esq. thinks all capital property...

… is a collective need; until recently many thought airlines were a collective need; now Labor says high-speed internet is a collective need.

There is no general agreement on the definition of market failure or public goods, because it’s arbitrary: https://mises.org/journals/jls/9_1/9_1_2.pdf . But even if there were, still there is no reason or evidence to think that government has any competence at correcting, or superiority at providing them, any more than there is to believe that the Church communes with God.

If government could presumptively “correct market failures” then John Passant would be right and full communism would work. It can’t.

Once government is granted political direction of the fruits of other people’s labour, there is no way to constrain them to spend it on what is important or collective needs. They will aggrandise their own income, power and prestige. They will bribe anyone for votes, no matter how divisive or wasteful. They will multiply a hundredfold the problem of free-riding, externalities, corruption, and the direction of scarce resources to less important uses. Common ownership or control turns everything it touches into a tragedy of the commons, starting with the consolidated revenue: http://economics.org.au/2010/07/the-tragedy-of-the-tax-pool-commons/

All the socialists call for political direction of resources, and then complain bitterly when the government spends billions on things like aggressive war, favouring big corporations and banks, creating inflation and bubbles, rigging the system against the workers, driving small businesses to the wall, and failing to efficiently manage hospitals, schools, and railways.

The belief that you can have a bit of judicious re-distribution of wealth without these massive negative consequences is false. You can’t. That’s the whole point! It is not “blind faith” to point this out: it’s blind faith to believe in it.

But the socialists never get it! They see the *only possible* economic and social results of their policies and say “It’s that bloody capitalism again!”

Just like John Passant.

But if you’re looking at the result of public ownership or direction of the means of production, the problem by definition is not capitalism – it’s socialism however you re-name it.

Peter Hume claims to know the truth. We are in the presence of greatness.

I sometimes wonder if you are just being recalcitrant but maybe you just really don't get it.

"If that doctrine were true, we could create bread out of stones; and communism would be possible. There is such a thing as truth; not everything is “ideology” and opinion."

This is a ridiculous analogy and you know it - economic systems don't just occur naturally just as stones don't naturally turn into bread. Man (usually an elite) decide on the form and dynamic of those systems even if he/she does not always know or understand the resultant effects.

Truth! It is only your truth.

<<According to your reasoning, there could be no liberty unless all property was held in common.>>

Depends what you mean by "property".
Is it just land and capital goods? Consumer items? Ideas? Inventions? Art?
All these things are conflated into this mythical "property" as if they are the same. As if there is no difference between owning a toothbrush or owning a huge estate. No difference between owning an Ipod or owning the "rights" to a lifesaving drug. No difference between owning your home and owning BHP. As anyone can see these things are very different and used in very different ways.
The "property" I have a problem with is that which is used to exploit and use people. That "property" which restricts and denies peoples "liberty".

Dear Peter Hume,

Socialism implies neither government ownership nor a command economy. It means ownership in common. That ownership may be in the form of a consumer cooperative where customers own the enterprize and decide on its policies or a producer cooperative where the producers (eg dairy farmers) own the cooperative and decide on its policies. The USSR and other Marxist economies have been called socialist. In reality they were state capitalist without the disciplne of the market. Command economies simply don't work. However, ownership in common with the various enterprizes owned in common competing with each other works very well. That is the case in a large segment of the Scandinavian economies.

Ownership means control of what you own. In the case of most corporations 'owned' by the stockholders that is not the case. There is a managerial class making decisions. If they make bad decisions they leave with a golden handshake. It is control without responsibility or ownership.

Cooperatives combine capitalism and socialism. They are capitalist in that they succeed or fail according to how well they deal with the market and are managed by the owners. They are socialist since they are owned in common.

They are the key to the high standard of living of the Scandinavian people. The democratic procedures used in the control of the cooperatives directly translate to a democrat spirit in politics.

*No difference between owning your home and owning BHP*

Ah Mikk, but BHP is not owned by any one. Its owned by half a
million Australians directly, another 8 million or so Australians,
through their super funds.

You are free to increase your share of BHP if you wish. Save
your pennies and buy a few more shares. Its your choice.
That is how free you are!

But of course you might actually have to work a bit, to
save those pennies. Most who I know, who dream of a socialist
takeover, are those less keen to actually have to work for
their share. They want it without effort.

Life just ain't that simple.

Peter Hume

I agree with a lot of your points.

I agree that market failure doesn’t mean that people don’t choose to buy and sell things.

I agree that market failure doesn’t necessitate government intervention. Sometimes, the problem is too small, or intractable, or the cost of government failure exceed the risk of market failure.

Like you, I’m no fan of subsidies and business welfare or politically driven market interventions.

I disagree that the definitions of “market failure” and “public good” are subjective, probably because I approach these issues as an economist. Economics has quite clear ideas about what causes market failures – natural monopoly, externalities, information imbalances etc. It also has a fairly clear definition of a “public good” – non-excludable and non-rivalrous (e.g. free to air TV) – though in practice excludability in particular tends to be a matter of degree not absolute.

I agree, though, that there is no clear or common definition of “collective need”. That’s negotiated through the political process, and we have to argue it out.

The evidence for support of the mixed economy is that this is what the overwhelming majority of Australians vote for at elections, while the Marxists, libertarians etc tend to attract a small proportion of votes. Plus, almost all mainstream political discourse seems to me to sit between the extremes.

Your argument from indoctrination seems to contradict your position elsewhere that supports individuals’ right to choose their own paths.

A few footnotes on the article, which I enjoyed:

Because something is a public good does not mean that it must be supplied by government, or that it will not be supplied by the private sector. Free-to-air TV makes a profit not by selling programs to viewers, but by selling audiences to advertisers. However, a public good may not be supplied at an efficient level by the market alone. We might get private roads, lighthouses, police forces and charities, but the misalignment of costs and benefits means that there is a much greater likelihood of the market under-supplying such services compared to conventional goods like bread and televisions.

Peter the Profit tells us many things. He enjoys word-games too! And he seems to be rather hot for capitalism.

Of course, most people are. After all, they've been indoctrinated from birth to think that more is better, that one's life can be measured in dollars. I suppose that makes Rupert Murdoch an outstanding human being, Kerry Packer too!

It's funny how we value human beings. But it's not funny how corporations value human beings (their value is based upon how much money each human can make for the corporations and the shareholders).

Are humans simply economic units on two legs? Or do we actually have other potentials, other creative talents?

http://www.dangerouscreation.com

*But it's not funny how corporations value human beings (their value is based upon how much money each human can make for the corporations and the shareholders).*

David G, I think you misunderstand the role of corporations, so
let me ask you a question. If your bank took some money out
of your account and gave it away for what they thought was a good
cause, what would be your reaction?

Most people would protest loudly and demand their money back
from the bank.

Yet for some reason you seem to think that this is what corporations
should do, if a shareholder entrusts their hard earned savings
with a company.

David f
> Socialism implies neither government ownership nor a command economy.

Agreed.

> It means ownership in common.

Agreed.

The crucial distinction is between coercive or voluntary socialism. Examples of voluntary socialism would be monasteries, communes, kibbutzim and voluntary co-operatives. I have no problems with voluntary socialism if people want to do it and don’t impose it on others.

There is nothing stopping producers from forming co-operatives voluntarily. If the public prefer their products, a co-operative will thrive.

But historically, producers’ co-operatives have only rarely been able to withstand market competition. This is the same as saying that the masses prefer the products, prices and ultimately the internal policies of the competition. If it were true that co-operatives work very well, then there would be no need for government to prop them up against their competition. The fact that coercion is necessary to override the choices that the people would make in the absence of the coercion, demonstrates that the people do not in fact prefer such co-operatives.

Consumers don’t need to own a business to determine its policies. As a group, the consumers as a class – almost all of whom are the workers - exercise sovereign direction over production through their behaviour in buying or abstaining from buying. Businesses which do not satisfy their consumers’ demands suffer losses and go out backwards. Their assets are transferred by the market into the hands of entrepreneurs who are able and willing to provide satisfaction of their demands. Businesses which makes profits demonstrate thereby that the consumers place a higher value on the finished product than they place on the alternative uses to which the factors of production could have been put.

All government economic interventions amount to diverting the factors of production to uses which the masses, in their capacity as consumers, consider to be of lower value. Wealth comes not only from increasing income; it’s also from reducing expenses. This means that the masses, in their capacity as producers, gain less from co-operatives than they lose in their capacity as consumers.

Pelican
Economics does occur naturally, because nature imposes certain limitations on human action - for example our time is limited and resources are scarce. And these limitations have logical consequences which
a) can be known, and
b) cannot be evaded.

We can’t just make up whatever economic reality we like, no matter how many people vote for it.

That’s why not even the communists claim that communism has ever really existed; and it’s why private property has arisen in every human society. Sarcasm, telling me what I want or think, accusing me of bad faith, or calling me ‘recalcitrant’ – these are all personal and irrelevant.

The basic economic problem is that human life and society take place in conditions of scarcity. There is a need to make choices so as to devote resources to the uses that will satisfy the most urgent or important wants. This problem underlies all economic activity by anyone. It is not a matter of “ideology”, and the problem can’t be made to go away by vesting ownership of resources in the public.

Marx actually claimed that socialism would make society more physically productive as well as fairer but nowadays not even the socialists claim that socialism will make society more physically productive, since both theory and practice have proved the claim to be laughable.

The idea that private property is “exploitative” comes from Marx’s theory, according to which, the value of everything is just an embodiment of all the labour that has gone into it. According to this theory, if you take two hours to produce something, and I take one hour to produce the same thing, your product is worth twice as much as mine. And if the theory was true, the value of a Van Gogh painting would remain as it was when the artist completed his work on it.
No business would ever suffer a loss. If you kicked up a one-kilogram gold nugget while going for a walk, the value of the gold would be the value of the labour that went into finding it: - nothing.

(cont.)

The labour theory of value is simply wrong. And that theory is the basis of the socialist belief that capitalism is exploitative.

In fact, the worker gets paid now for a product that may not actually bring in any income for years. And the worker doesn’t undertake the risk: - if the product fails to sell, he doesn’t pay his wages back. The entrepreneur, by contrast, undertakes the risk of failure, and has to wait for payment during the period of production. If I offer you $1000 now or $1000 in 5 years, which do you choose? Present goods are universally worth more than same future goods. That is why the worker gets less earlier in time than the total value of the final product later in time. The capitalist gets something a) for risk, b) for delayed grat, and c) for correctly predicting the future state of the market - *if indeed he gets anything at all!*.

Marx was wrong. Employment, being mutually beneficial, is not exploitative.

Mikk
There are three major problems with that:
1. You have not ventured to define which private property is to be permitted, and which not; and no wonder
2. Public property would entail the same exclusivity and therefore would be no improvement on the original problem
3. If we apply the same standard consistently to both public and private property, then no-one would have the right of exclusive usage of resources and the result would the immediate death by starvation of literally thousands of millions of people.

David G
Passionate indignation and personal argumentatin does not make communism ethical or practical.

Rhian
Since perfection is not an option in any case, it is unfair to hold against private ownership that it is not “efficient” by reference to an abstract standard involving perfection. Public ownership is no better position to satisfy the same standard, or rationalise the same scarcity when all costs are considered.

All
No-one has shown how common ownership or control is going to be any improvement on any of the problems discussed.

PeterH, I don't disagree with everything you put forward albeit looking at things from a differnt perspective. Economics is man-made, it is based on models which are designed by men. In that sense there is some 'natural' element but the indisputable natural factors such as finite resources or potential environmental damage are not always considered over other forces (pressure of profit, shareholders etc) which may have greater emphasis.

A common ownership may reverse those risks of doing 'more of the same' damage when the interests and decisions are not limited to a small powerful elite. Ignorance of lack of care regarding some of those natural consequences may result in irreversible consequences. You would think our survival instinct would counteract some of those risks but sometimes human beings get lost in short term gain over long term consequences.

The idea that the existence of profit self-evidently proves the misallocation of scarce resources comes from Marx’s theory and is based on the labour theory of value (LTV), which we have seen is wrong.

It is a universally valid proposition of economics that human action always involves preferring A to B. Even to deny it one must prefer one state to another, and thus prove it by one’s action.

And we know from being human that the human actor, in taking action, is trying to use means to achieve an end, is trying to cause an effect, that he subjectively judges will be more satisfactory, or less unsatisfactory.

By preferring A to B he demonstrates that he places a higher value on A than on all the other ends he could have attained with the same scarce resources.

Not only is it untrue that the fact of profit shows that scarce resources are being misallocated, as Marx wrongly claimed, but it is demonstrably true that the fact of profit shows a better alternative both from the human and the environmental point of view, other things being equal.

By other things being equal I mean, there are people today who say that humanity is a cancer and plague. They openly wish that billions of people were dead. (They never seem to include their own miserable lives in their severe proscriptions). This view is obviously anti-human and I denounce it.

Marx claimed, and the ‘centre-left’ and 'centre-right', the part-socialists, claim that the purpose is, as best we know how, to make things better rather than worse for human beings in general including the poorest, and at the same time to conserve the environment. Assuming the question is as to the means to achieve that end, still a system based on private ownership of the means of production is better at allocating scarce resources to their most urgent or important uses than one based on compulsory public ownership, i.e. political socialism in full *or part*.

Channeling Marx, the socialists’ mistake is that the value of a good is *in* the thing itself. It isn’t. A good is only a good so far as man values it as a good, to satisfy an end that he is aiming at. That’s why the value of all the gold in other galaxies is zero. That’s why the value you place on water is higher when you’re thirsty. The value isn’t *in* the water itself. It’s in the human valuation.

The reason we value the environment is because it is important and beautiful, and not to deprive future generations of the pleasures we enjoy. But that doesn’t mean the value is objective. It’s still in the human valuation of what is good. You can’t figure out how to allocate scarce resources to their most important values, without consulting human values.

Profit and loss have important social functions.

Profit results from combining the factors of production so that the value of the final product later in time is greater than the value of the factors of production earlier in time. This means that the entrepreneur has removed the difference between where and how the factors are, and where and how the masses want them to be. Profit is the means by which the masses direct production, so that scarce resources are allocated to what the masses judge to be the most important and urgent ends. The greater the maladjustment removed, the greater the profit.

Loss results from combining the factors of production so that the value of the end product is less than the value of the factors of production. In other words the masses of people, as consumers, are saying to the entrepreneur “We much preferred the other things that could have been done with the factors of production. You wasted them.

Being able to use scarce factors profitably is actually quite rare. Most people can’t do it. 80% of business go broke in the first year, and of the remainder, 80% go broke in the next five years.

Now the scarcity of roads is not caused by the road-makers. The scarcity of bread is not caused by the bakers. And capitalists are not the cause of the scarcity for which they are often blamed. More than anyone else, they alleviate it. But when they employ people or provide goods they are vilified as ruthless exploiters.

As for the environment:
“The Swedish retail giant IKEA announced Thursday it will invest $4.6-million to install 3,790 solar panels on three Toronto area stores, giving IKEA the electric-power-producing capacity of 960,000 kilowatt hours (kWh) per year. According to IKEA, that's enough electricity to power 100 homes. Amazing development. Even more amazing is the economics of this project. Under the Ontario government's feed-intariff solar power scheme, IKEA will receive 71.3¢ for each kilowatt of power produced, which works out to about $6,800 a year for each of the 100 hypothetical homes. Since the average Toronto home currently pays about $1,200 for the same quantity of electricity, that implies that IKEA is being overpaid by $5,400 per home equivalent.”

Governmental direction of production is not less wasteful, better for the environment, less short-sighted, more caring, or better for the poor people, than production based on profit and loss.

Under full or part socialism, *all* the same problems of scarcity of economic and environmental goods will still exist, but there will be *no* way to calculate or allocate the scarce factors of production to their most urgent or important uses on the basis of a lowest common denominator of value. There will be no greater sightedness. There will be *much greater* waste of *both* human and environmental values than a system based on profit and loss.

See “Profit and Loss” by Ludwig von Mises: http://mises.org/daily/2321

PH, interesting figures about the Ikea investment. It seems like
we have similar rorts happening here. Lots of small time
entrepreneurs are moving into the solar panel installation business.

The Govt pays for a large proportion of the cost, various electrcity
companies are then forced to buy the electricity produced from
people, at 3-5 times the going rate. IIRC its around 60cKwH in
NSW.

Smart consumers will soon figure out that its far better to do
the washing at night, using power they can buy off the grid for
20c, then let the grid buy back their solar power for 60c, during
the day.

Who is going to pay for this? Other electricity users of course,
in the form of increased electricity charges. No doubt it will
be blamed on "greedy corporations", when it's in fact a political
decision made by the polticians that they elected.

What asinine comments in the main. No I don't work for the ANU. Yes I used to work for the ATO. So what? I ran international tax reform in the Office. How does that 'explain it all really?'. As to those who doubt my grasp on reality - oh well, all good stalinists question the sanity of those they disagree with or cannot understand. It's the logic of the gulag.

Just because a ruling elite calls itself communist doesn't make it so. You need to look at the class forces involveed. Why the ALP calls itself a Labor Party, the main part of the Opposition calls itself a Liberal Party, the North Korean dictatorship calls itself a Workers Party. That doesn't make it so.

Why are these issues improtant? Because when workers rise again - Bolivia in 2005 is the most recent example before Morales sidetracked them - there will be some of us who understand the logic of this and its operation in Australia and across the world. Hungary in 1956, France 1968, Portugal in 74, Iran 78/79 with the shoras, Poland until 1989, all show the potentality of the working class to challenge the dictators who run our day to day lives, and the potential to create a new society of plenty, where want is a foreign word and democracy rules in all aspects of life.

And of course the ongoing GFC around the globe will play its way out as decaying capitalism looks for solutions to restore stagnating or falling profit levels - exploit workers more through a longer working day and reduced wages for example, if we let them, and devalorise significant elements of capital if it can.

Really, Passy, you don't provide particularly convincing examples, do you.

>>Bolivia in 2005... Hungary in 1956, France 1968, Portugal in 74, Iran 78/79 with the shoras, Poland until 1989... show the potentality of the working class to challenge the dictators who run our day to day lives, and the potential to create a new society of plenty, where want is a foreign word and democracy rules in all aspects of life.<<

The word you use is "potential". But it works better as "forlorn hope", or "daydream".

If even Morales can't make it happen, given the support he has and the power he wields, doesn't that give you the tiniest clue that you might be chasing rainbows?

Your remaining examples are even more ephemeral. The student anarchy that drove Paris 68 bears no resemblance to your utopian uplands, nor indeed did Solidarnosc, at any stage, think in terms of a "society of plenty". They were too busy being practical and pragmatic.

Still, there's no harm in dreaming, Passy, which comes free of charge, and without any responsibility.

Enjoy.