To all those who are distressed by Yazad’s post yesterday defending price gouging, let me propose the following thought experiment.
Suppose that there is an island which has absolutely no contact at all with the rest of the world. It is usually self-sufficient, but something horrible has happened this year. It has suffered such a bad drought that food production is only 20% of what it was last year.
Now, take my word for it that there is absolutely no additional food to be had from anywhere in the short term (i.e. within a year, until the next harvest) As food production is only 20% of last year’s if people tried to eat as much as they did last year, only 20% will have a full meal, while the other 4/5ths will die. Perhaps you can stretch the food reserves to feed 25 or 30 percent of the people, but there is no way to feed everyone. Any attempt to do so will mean that everyone will be malnourished and die by the end of the year.
Now tell me, what is the
Capitalist way
Socialist way and
Your way
to make the best of a bad situation?
Tell me how your way scores over the other two ways, using whatever criteria you choose to define success.
I am giving you fair warning. I am being unfair to Socialism. Yes I know that this is an extremely unrealistic situation, and it is unfair to evaluate any system on the basis of how well it fixes this problem. I will refine this problem to make it more realistic later based on your responses. But I am telling you that I am being specially unfair to Socialism. Can you tell me why?
But I am telling you that I am being specially unfair to Socialism. Can you tell me why?
As a capitalist, may be you just cant help it 😉
If we go by history repeating itself, the “socialist” way will win in such a situation. Call it religion or what-ever you want.
For an example I will take the religion of Islam. The rules were the most “humanitarian” though they may seem rigid in today’s world. “Killing the thief who steals food”, “eating as a community”, usually shared from the same utensils etc., all originated from the harsh conditions of the land.
In order to maximize during harsh conditions, the society must focus on the “greater common good”…and once again, call it socialism, communism, religion or whatever you please.
As to argue against the Capitalist way — if you allow “free market” during such a plight, per the rules of demand/supply food may be hard to get with very few profit-makers who want to maximize…and you may see the Great Depression repeating itself: people starving while food-stock burning because you can’t sell it (since no one has the capacity to buy it).
Sorry the arguements don’t go deeper or more elaborare — but this is the gist. Its the best one can do on a blog comment!
Zaphod,
You still haven’t given me the practical solution to the problem. You haven’t defined what the “greater common good” will be in this situation and how your plan will achieve it. You assume that the capitalist way is going to be bad without giving an explanation of why or what would be a better solution. So what are you saying?
Because the socialists will have to DECIDE who gets the food, and therefore also decide who dies?
Everyone will have to do it Sonia, not just socialists. In this bad situation, all three systems will result in some people living and others dying. All systems will have to decide how to recover from the bad situation. Question is, which one will do it best.
I think the unfairness to socialism comes in because this is clearly a situation where the market and the demand/supply paradigm wins out. But I think the frustration for us socialists is that the current situation in the world and possibly the affected areas is that there is 20% surplus but captialist model still yields 80% of the population going without.
But why is this “clearly” a situation where the market wins out? In what way is it better? The “market” solution is to auction off the food to the highest bidder. Why is this better than drawing lots, voting, the head honcho deciding, a committee deciding, or whatever alternative way you can think of?
And why is it that everyone wants to discuss theory and no one wants to think of what will happen in practice except me, the impractical libertarian?
Why don’t you tell us and spare us this torture, oh wise capitalist?
The clarity arises from the allocative efficiency of the market in getting resources to those who have the needs. Price like justice is blind and thus there is no concept of ‘judging’ who ‘needs’ the resources but reduces it to a concept of who ‘has’ the ability to pay for those resources. You might argue that drawing lots is equally blind but there is a judgement by the person on how much should be allocated to a person who has a token.
I think people are responding theoretically because you posed as a hypothetical. What will happen in reality is that people will splinter into groups and divide themselves along religious, ethnic, cultural, hair colour(or lack thereof) lines and will seek to appropriate other groups resources and so on and so on.
I completely agree with Ram.
The divided groups based on race/creed/religion or family are socialist within themselves and will try to ensure maximized use of food to all. Rationed food, low quantities to all and eventually survival of the fittest.
Ofcourse per ANY solution, some will die and perhaps over time they island may evolve into a cannibalistic zone.
Bue we are talking about the short-term best solution. The capitalistic way, like Ram put it focuses on who ‘has’ the ability to pay for those resources may fail to provide for anyone.
On a completely different note — there is this huge class of Indians who call themselves Libertarians and also staunch Capitalists. I hope it is clear the two are not synonymous.
Sorry for the late arrival.
First off, there does exist a theoretically optimal (albeit practically unachievable) solution – central planners decide correctly the maximally correct mix of people to survive, and give them all the food.
Socialism would entail that food is distributed equally and hence that everybody DIES. Thus, this example is much skewed against socialism – not that I’m complainin 🙂
I’d recommend a pseudo-capitalist approach – that is pretty close to the “optimal” approach I mentioned above – and which some readers above alluded to:
Small and cohesive groups (e.g. family) pooling resources together, and participating in a laissez-faire market. The allocation within the group can be done optimally due to its cohesiveness.
Ahh, NOW I see the connotation associated with the word “Socialism” here! Don’t you think that’s quite a superficial definition, Pradeep? You call it “pseudo-Capitalist”, I call it Socialist.
I think a demarkation between Socialist and Communist philosophies needs to be established here. And again, for lack of space, I’d like to just quote the below from Wikipedia: “The earliest modern socialist groups were the so-called utopian socialists, who shared characteristics such as focusing on general welfare rather than individualism, on co-operation rather than competition, and on **producers of wealth** rather than on political leaders and structures.”
Zaphod – the time-tested “that would be communism, I’m talkin about socialism” argument eh? 🙂
I think I read a post/article on this somewhere (on this blog itself?), about how people take “nice” and “ethical” things like co-operation and justice et al and equate that to socialism. Defined in this fuzzy and implicit manner, only an evil person can protest against it eh?
ah here is the post by RR I was referring to – clicky.
Socialism has a lot of variations in historical and contemporary literature. So I am assuming a simple definition of socialism and that would include economic egalitarianism which would require that all persons are equally entitled to basic material possessions. In this example, food is a basic material possession. So by this definition, you will have to divide the food equally to all and consequently all die. Any other system, including anarchy, has a chance of at lease one person living. If the criteria of which is a better system were not number of people left living but something else like “collective spiritual satisfaction” just before death we may have different outcome.
But there could be flavours of socialism which include a different brand of egalitarianism which might not have an inherent disadvantage in this problem.
Ravi break your silence and silence us all.
cheers
Ganti