economic question

[jinx92]

So I was having a discussion with a captialist about economics. They claimed that suply and demand ws the only way the economy can work. I rold them that an organized economy would be more effective and effiecent. They rebtted by saying that a socialist economy wouldn't meet the demand of the people because it would be controlled, not capitalist. How would ya'll respond to this?

[Sensible Socialist]

It would be controlled...by the people who are involved. What better way to efficiently manage the economy than have the people involved in it (i.e. everyone) be able to voice their needs and desires? One of the problems of a capitalist economy is that no one is asked what they want, not really. A capitalist has to guess how much to produce. Often times they produce too much, which then causes them to lose profits, and the result is a loss of jobs.

I find that the animosity towards any form of planning is absurd. In what other endeavor would you, or should go, participate blindly in? It's dangerous to explore a cave without the proper precautions. It's dangerous to sail into uncharted waters. It's dangerous to ride a bull without training. Likewise, an economy that is blindly planned by thousands of capitalists each guessing what and how much to produce is also dangerous: to the workers.

In a socialist economy, the people are able to voice their opinions on what they need and want, allowing for little waste and more productivity (this time benefiting everyone) in the system.

[Fawkes]

That's some wiggity wack bullshit. A capitalist economy does not meet the demand of the people as that "supply" and much of the demand that is created by the bourgeois themselves is utilized for the maximization of profit for the bourgeois, not to meet the demands of the general population. In a socialist economy, goods and resources are created and allocated based on the need/want of the population, not on the potential ability for capitalists to get some extra digits on their bank balance.

[jinx92]

thanks comrade! That cleared it up.

[Drumming Monkey]

Your friend is probably thinking of the Soviet Union, thinking it was a socialist economy. It was a planned economy, but it was controlled by an elite of people, not democratically, so it was not a socialist economy.

Especially from the 70's onwards the economy in the USSR wasn't capable of meeting peoples needs in terms of quality consumer and luxury goods. This was because ordinary people didn't have a say in how things were made; targets and production were set by bureaucrats.

Socialism cannot survive without democracy, because democracy replaces capitalisms supply and demand in determining what is needed. However, the capitalist economy doesn't 'work' because as others have said, it is blind and unplanned and so there are recessions etc, such as is happening now. It was the drive for quick profits without any thought of the consequences (which Marxists predicted) that has caused the greatest crisis in capitalism since the great depression.

Also, if supply and demand were such a good theory then why are there 5 million people in the UK who need a council house, but nowhere near enough are being built?

Oh yeah, cause there isn't a profit incentive for the private developers who build council housing.

Even in rich countries like the US, 36 million people were fed last year by the Feeding America charity. These are not homeless people, but the sick, elderly, disabled, unemployed and most shockingly low paid workers and of course millions of children of these families.

There's a whole lot of 'demand' for food but not much 'supply'

Seems your friends Supply and Demand model dont work neither :rolleyes:

Another good example of a kind of socialistic model is the National Health Service in the UK. The model is based on need and planning not profit, so every single man woman and child can receive the same high standard of treatment.

The US health system however is based on profit and 'supply and demand' yet there are millions and millions of people without health insurance, 'cos they can't afford it.

Hope that helps a little. :)

[Kotze]

Capitalism vs Socialism presented as supply and demand and free competition vs something else is a red herring.

Capitalism != markets. Ancient slave-owner societies had markets too, yet are not called capitalist. Capitalism is means of production being owned by a small minority who hires workers. Planning also exists under Capitalism. A contract is a plan.

Socialism is means of production under public control, it is about democracy in the workplace. There is a debate among socialists about how much to rely on market-like mechanisms, how much to rely on voting, how much to centralize.

For consumer goods, demand signals can also be used under Socialism to adjust production. Socialism is very much compatible with people having individual consumption points and buying consumer stuff with them, but they won't be able to hire workers with their consumption points. These demand signals will actually work better than under Capitalism, because with the extreme differences in income under Capitalism it is harder to infer who needs specific stuff of limited quantity the most from what they are willing to pay. That's not to say that under socialism there won't be any income differences whatsoever regardless of how arduous your tasks are and how long you work, that's another strawman.

I made a thread in Opposing Ideologies — The case for central planning (http://www.revleft.com/vb/case-central-planning-t142473/index.html) — which contains a simple example of central planning and deals with common questions. There is also this book by Paul Cockshott and Allin Cottrell, freely available online: Towards a New Socialism (http://reality.gn.apc.org/).

[jinx92]

I see. One of their arguments would be that planning is too rigid to be stable, but I see what you all are saying, because although it is planned, it is planned by workers and the people, so it would also be flexible, and it would also be more effective, not to mention the ups and downs of capitalism wouldn't be present. I think I understand it much better now. thank you all!!

[S.Artesian]

So I was having a discussion with a captialist about economics. They claimed that suply and demand ws the only way the economy can work. I rold them that an organized economy would be more effective and effiecent. They rebtted by saying that a socialist economy wouldn't meet the demand of the people because it would be controlled, not capitalist. How would ya'll respond to this?

First off, supply and demand doesn't meet the "demand of the people," not in the United States, not in Thailand, not in Brazil, unless we happen to think 18% of children born in the United States are demanding to be born into poverty.

Secondly, you might point out that "supply and demand" does not govern the capitalist economy-- production for the accumulation of value governs the capitalist economy. The aggrandizement of profit governs the economy.

No matter what the "demand" may be for rice in Indonesia, milk in the United States, no matter how much "supply" may exist, how much oversupply of milk or underproduction of rice there may be, rice and milk disappear from the markets when profitability cannot be maintained.

Thirdly, you might point out that "demand" itself is the product of a level of social development-- so that all the demand in the world for a cure for smallpox or polio didn't matter until a certain technological level had been achieved-- and in many case such technological development is limited, stymied, by the requirements for profitability, the "need" to preserve property rights, etc.

Fourthly, you might just tell them how supply and demand are the perfect descriptors for the bourgeois economy. They signify everything and mean nothing.

[el_chavista]

.. They claimed that suply and demand ws the only way the economy can work..
The reverse would be more practical: demand and supply. That's why planning is the only solution to the biggest contradiction of capitalism: overproduction throws out of balance all the system!

[The Idler]

Look at how markets work so well at supplying demands in famines, unemployment or homelessness.

[ckaihatsu]

So I was having a discussion with a captialist about economics. They claimed that suply and demand ws the only way the economy can work. I rold them that an organized economy would be more effective and effiecent. They rebtted by saying that a socialist economy wouldn't meet the demand of the people because it would be controlled, not capitalist. How would ya'll respond to this?


In addition to all of the good responses here I'll say that a system of collectivized, *conscious* mass centralized planning over the economy means that *scarcity* could be done away with, especially for the goods and services most critical to satisfying human need. (The market is a *non-conscious* mechanism, and we see the chaos that results at the greatest scales as a result of this lack of overall, conscious planning.)

It's really the issue of *scarcity*, relative to actual human need, that's at stake here -- it's the crux of materialism itself and any resulting politics. Note that if something is in *ready supply* there's *no politics* around it (anymore) -- people won't be bothering to argue about something that is readily available and freely available to all. (My favorite example from the natural world is air, and from the societal world my favorite example is the time of day.)





For consumer goods, demand signals can also be used under Socialism to adjust production. Socialism is very much compatible with people having individual consumption points and buying consumer stuff with them, but they won't be able to hire workers with their consumption points.


This is *very* interesting, because I'm of the position that a post-capitalist system of abstracted material valuations -- if any -- should *not* represent / be transferable for actual material items. Instead, with all goods and services, assets and resources being *collectivized*, the material domain would be basically freely available, like nature itself, though mediated through a collective-political process.

What's always at issue is human *labor* -- *that's* what I think should be the 'independent variable' to be qualified and quantified as well as possible, to serve as the determining source of all other political and economic activity in a post-capitalist social environment. In my conception (accessible as a model at my blog entry) self-selected actions of freely given liberated labor would entitle the laborer to, in turn, authorize the same from others, going forward, in a like proportionate quantity.

Since all of the material proceeds (goods and services) from such liberated labor effort would already have been pre-planned by the larger collective-political process, the output of all liberated labor would always be *collectivized* and *not* under the control of any individual liberated laborer, or grouping of liberated laborers. Therefore there would be no need for the abstract valuation of material items (goods and services) whatsoever -- only the co-administration of them as collective assets and resources according to their basic physical properties.


communist supply & demand -- Model of Material Factors

http://postimage.org/image/35sw8csv8/