ECONOMIC SYSTEMS
The range of economic systems also forms a "spectrum", and I find that exactly the same principle applies. We can say that some such systems work better than others, but that is due to the nature of the people involved and not because of the economic systems themselves. Such systems are neutral, just as electromagnetic waves are neutral. We can say that the best system is the one which produces the most good for the maximum number of people, but which system is the best depends on the nature of those people.
I have no doubt that communism would be the best system in an ideal world. People would do their best at working, as well as looking for ways to improve the system, and everyone would take what they needed and would share the rest equally.
Communism has actually worked very well, at least on a small scale and with highly motivated people. The early Christian apostles lived under a system of pure communism, as described in the Acts of the Apostles. Many monasteries, other religious orders and, communes have been very productive. Families operate under a communistic order, with one or two earners and everyone being supplied with what they need.
By the way, communism has been artificially packaged together with atheism and here I am referring to pure and theoretical communism not any established Communist Party. By communism with a lower case "c", I mean pure and theoretical communism and not an established Communist party with an uppercase "C".
However, as you may have noticed, on a large scale and with people motivated mainly by self-interest, communism runs into trouble. Most people require some motivation to be the best that they can be or to put in maximum effort. If you tell workers that they can call in sick as many times as they feel is necessary, and that they will still be paid for those missed sick days and will not be penalized in any way, how much work do you think will actually get done?
Suppose we have two workers, Worker A and Worker B. Worker A is a naturally diligent worker and will happily do his job to the best of his ability without supervision. Worker B is also a capable worker, but without being watched and periodically warned, he will usually put forth as little effort as he can get away with.
The reason that idealistic communism tends not to work, at least not on a large scale, is that most workers are more like Worker B than Worker A. People will work very hard, but they require motivation to do so, like the threat of economic hardship or unemployment. This is why a system like capitalism tends to eclipse communism, it is not due to the superiority of the system in any way, just the nature of the people. I am sure that communism would thrive in a world of Worker As.
What it all comes down to is the self-interest that motivates people. "Why should I work an extra hour because a boy in another city needs a new pair of shoes? It's his own father's place to work the extra hour."
But yet, capitalism has proven to have serious issues as well. Capitalism gets people to work and innovate, but it does so in a negative kind of way. With the competition of capitalism, we risk bringing out the nastiness in people and by making people the object of continuous seeking for their business, we risk making them self-centered. Communism tried to be such a positive system, their mistakes were in thinking that a new economic system could change human nature and that religion was the "opiate of the masses".
In Communism, workers are paid regardless and prices are set. In Capitalism workers, as well as entrepreneurs and investors, can earn as much as they are able, based on hard work and shrewd business. But it is also possible to lose one's money or to not have enough for the necessities of life. It is this "carrot and stick" that Capitalism uses to motivate people. The founders of Communism did not believe that such motivation was necessary.
In Communism we tend to get inferior goods, except on the black market where people can buy what they like but at "real" prices. In Capitalism, we tend to get vast wealth disparities, crime and, periodic recessions because the wealthy, setting the system up to suit themselves, take too much money out of circulation and there is not enough remaining to buy the goods and services that have been produced.
Capitalism would work better if people could make as much money as they wanted, but where money did not equal power. The reality is that plutocracy inevitably seeps into a democracy that practices (practises) capitalism. But then how much right, in a civilized society, do people have to set the system up to suit themselves just because they have better business sense than others?
If people were more equal in ability and intelligence, capitalism would work better and wouldn't bring us back toward the Law of the Jungle, where the strong are free to dominate the weak. If people were altruistic and thought of all humans as one big family, communism would certainly work. Communism is actually a far superior system, with regard to human nature, than Capitalism. The reason that Communism has not worked well, at least on a large scale, is due to human nature.
THE INDUSTRIAL REVOLUTION
The spirit of the Industrial Revolution was to let machines, instead of people, do as much of the work as possible. Meanwhile, let the people read and become more educated so that they can develop still more new ideas (I consider the invention of the printing press to have been effectively a part of the Industrial Revolution). The Industrial Revolution would thus feed on itself in an upward spiral, giving the people better lives for less work.
This concept of pure communism fits perfectly with the spirit of the Industrial Revolution. Workers go out and do their best, both at working and at looking for ways to improve the system. Everyone gets what they need and shares the rest equally.
Now, back to reality. The trouble with progress is that it creates unemployment. Increasing the efficiency of production, whether with machines or superior organization, basically means that the same work can be done by fewer people.
The rest are then unemployed. Unemployment, which is the goal of the Industrial Revolution, has instead become a very negative thing because now, under the capitalistic system which human nature forces us to rely on to get people to really work, those people are not doing the purchasing which is necessary to drive the economy.
The end result is that unemployment, due to increasing efficiency of production, should be taken as a sign of progress but instead is a big negative. We have created a system that works, but also works against itself. This would not be the case if we could manage a system of pure communism, unemployment would not even be an issue.
Our production has become so efficient, like agriculture before it, that only a relative few are needed to make things. But that leaves tens of millions out of work. So, it is necessary to fill up the workforce with service and other non-productive jobs. (See the posting "The Extreme Inefficiency Of Wealth Production" on this blog).
But this drives up both wages and prices (See "The Wage And Price Disparity", also on this blog) because the wages of these non-production jobs must "hitch a ride" on the production that does take place. This, in turn, drives production work away to other countries where the production can be done cheaper, because many more people work in production there so that both wages and prices are lower.
The incredible end result is that when we make our productive capacity more efficient, meaning that it requires fewer workers, we actually drive production work away rather than attracting it.
The only way around this, as I explained in the posting "The Idea Curve" on my progress blog, http://www.markmeekprogress.blogspot.com/ , is a continuous stream of new ideas so that the number of people engaged in production work remains constant. Progress is also essential in the real world because a country that gets too satisfied with things the way they are risks falling behind more progressive countries.
So, we have got an economic system that works for us. But it is clearly an inferior kind of system that uses the old "carrot and stick" principle to get us to work hard. This system actually works against itself with regard to progress in two different ways.
First, technical progress produces unemployment. This should mean that we are making progress but, due to the nature of the system that we must use, this unemployment is a very negative thing.
Second, when we make our productive capacity more efficient, we actually drive production work away instead of attracting it. This is because having fewer workers actually producing something drives up both wages and prices.
Part of the vulnerability of this system is that money is an economic entity in itself, when it should be just a vehicle of economic activity. In an ideal situation, one should earn money by actually producing something or by doing some useful work. Instead, so many people get wealthy by moving paper around and the real way to make money is to have money in the first place.
Once again, the reason that economics has to be so complex and convoluted is that this is what it takes to overcome human nature and get people to work hard. This is a reversed reflection of our natures.
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