Socialism Is Pure Inefficiency

Rather than being a radical antidote to the perceived errors of market capitalism, socialism is actually very similar to capitalism, but with some extra steps of inefficiency. Capitalism often consolidates the means of production through increasing returns to scale, and sorts people through the pice system into the roles where they would add the most value to the economic welfare of society. The capitalistic system then lets the people own the means of production through stocks and bonds while giving most people a relatively risk-free life, and has entrepreneurs bear most of the risk. Rather than an agricultural ownership economy where risk was borne uniformly, capitalism concentrates high risk-bearing to a few people. Socialism shifts the risks and responsibilities of the individuals to the state, but does so with mediated consent and adds in some extra steps of inefficiency that are not present in capitalism. Modern capitalism provides most people with a simple path to a decent livelihood without the risks of the more distributed entrepreneurship that was common in the past. Socialism seeks to do the same thing, but the extra layers of government mediation create less efficient outcomes and allocative problems that are far too difficult to solve with central planning. Socialism does not solve the fundamental anxiety-producing problem of capitalism, rather, it merely worsens it.

People in a mass capitalistic society often feel disenfranchised because they live lives that are primarily directed by others. They own little property and gain their livelihood by working for the purposes of their employer. Even highly paid employees experience this disconnect between meaning and daily sustenance. Their own goals are reduced to little more than paycheck collection and consumption. Many do not even feel that entrepreneurship is an option, as they are taught that safe employment is the only choice for respectable people. Although they have the ability to own shares in the companies they work for, they often feel that they do not have as much control as they would like. Employees would like to have a more meaningful impact on the direction of their company. The inability to meaningfully influence the world surrounding them causes these employees to consider socialism as an option. They think that through government power they would be able to regain control over their lives that they feel inaccessible to them in a capitalistic system. …