Socialism 101

[Dave Long]

> I can imagine a universe where socialism would work on a large scale.
> It just doesn't seem to be this universe.

Yes, it seems the universe where that
socialism works on a scale beyond the
extended family is the same one where
it is possible to have "property" but
no "state" that protects it.

However, I am not interested in that
sort of socialism, as defined by the
state replacing markets, but in what
Mr. Turpin was discussing: one where
capitalists and the laborers are the
same set of people. [0]

> >What prevents an entrepreneur from 
> >innovating with his own means of production?
> 
> The question is: With whose labor?

With his own, and his partners'[1].
Let us work this out in more detail:

1. C a p i t a l i s t   S c e n a r i o
 Capitalists (C) contribute financial backing
Entrepreneur (E) manages venture
    Laborers (L) contribute sweat

and at the end of the day, if the
laborer's sweat was worth more (V)
than their alternatives (W), then
> In a capitalist system, the entrepeneur and his
> financial backers rake off the lion's share of profit ...

Key words being "and his ... backers",
so E gets what is left of the (V-W)
term after C have taken their cut.
(anyone have average dilution %ages?)

2. S o c i a l i s t   S c e n a r i o
Entrepreneur (E) manages venture
    Partners (P) contribute both sweat
             and financial backing

and at the end of the day:
>                                   ... that increment
> in profit should be equitably divided among those who
> labor, and the entrepeneur is just one more of these.

... but since the laborers are also
financial backers, this is the same
scenario as above, and E gets what
is left of (V-W) after P have taken
their cut.

How well E does under the first
scenario is determined by what
valuation for the venture the C's
can agree with when they buy in.

How well E does under the second
scenario is determined by what
valuation for the venture the P's
can agree with when they buy in.

Now, because C<<L, E may have an
easier time pitching the plan if
it is dubious[2] that V>>W, but
are there other differences?

-Dave

[0] and I am open to the hypothesis
that insofar as this is as true in
current America as it was in the
time of de Tocqueville, we are the
true working man's paradise[3].

[1] "material participation" may
be a better term than "labor".

[2] remember that it is possible
to fool all of the people some of
the time, so (V<W) pitches may be
wrought under either scenario.

[3] such as the one where Adam
delved, and Eve span?

:::::::::::::::

> > If the relevent knowledge in a society is to a good extent fundamentally
> > unarticulated, calculation speed is not relevent.  You can't calculate
> > what you can not reliably accumulate and express.
>
> ... empowers decision making -wrt- interaction to occur pair-wise at the
> "edges," rather than being dictated in the middle by a narrow majority ---
> certainly not a consensus.

Perhaps I am not cynical enough.  I'd
thought the purpose of parliaments is
to articulate such knowledge.  Debate
is a method of expression, and coming
to consensus is one of accumulation.

Market prices are also middling, set
as they are by the marginal consumers
and producers.  How many of us do our
marketing by interacting pair-wise at
the edges: with the butcher, with the
dairy maid, with the M&Ms plant, etc.
rather than accepting consensus set
grocery store prices?

(Calculation speed may unfortunately be
still relevant for politics.  There was
a book a while ago which went into the
benefits of IBM technology for Fascism,
and it seems likely that the reporting
requirements are much lower on business
in Vietnam than they are here at home)