By Kelly O'Connell ——Bio and Archives--February 3, 2014
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It is often thought that the idea of socialism derives from the work of Karl Marx. In fact, Marx wrote only a few pages about socialism, as either a moral or a practical blueprint for society.To understand this, let's consider the first Marxist state, the USSR. The first true attempt at a Marxist economic system was created by Vladimir Lenin after the Russian Revolution:
The true architect of a socialist order was Lenin, who first faced the practical difficulties of organizing an economic system without the driving incentives of profit seeking or the self-generating constraints of competition. Lenin began from the long-standing delusion that economic organization would become less complex once the profit drive and the market mechanism had been dispensed with--"as self-evident," he wrote, as "the extraordinarily simple operations of watching, recording, and issuing receipts, within the reach of anybody who can read and write and knows the first four rules of arithmetic."Lenin believed his First 4 Rules were a panacea of economics. Contra, their application presaged a catastrophe:
In fact, economic life pursued under these first four rules rapidly became so disorganized that within four years of the 1917 revolution, Soviet production had fallen to 14 percent of its pre-revolutionary level. By 1921, Lenin was forced to institute the New Economic Policy (NEP), a partial return to the market incentives of capitalism. This brief mixture of socialism and capitalism came to an end in 1927 after Stalin instituted the process of forced collectivization that was to mobilize Russian resources for its leap into industrial power.The Soviet leaders grappled with the problem of a government being responsible for creating an entire economy, which Lenin and Joseph Stalin struggled to master. Neither Lenin nor Stalin knew anything about economics. The answer the Russians created was a command economy, based upon a top down pyramid controlled by the Gosplan, defined by Russiapedia:
The Soviet Union was a country with a state-controlled economy. Every five years, government developed plans for all plants and collective farms in USSR, ordering them to produce exact amounts of goods in the following five year period. The committee responsible for the creation of those plans was called State Planning Committee (Gosudarstvenny Komitet po Planirovaniyu), or, in short, "Gosplan".Neither Lenin nor Stalin knew anything about economics. Marx himself never received any training in economics, but was self-taught. It was the blind leading the blind. To put the problem in a nutshell, Marx's socialism is not even theoretically possible. In a socialist economy, there is no manner to efficiently price the various items and services, nor guess which products and services to offer the public, or in what amounts. These flaws, outside of any other problems, makes certain such a system cannot work in practice, according to Mises and Hayek:
Ludwig von Mises in particular contended that a socialist system was impossible because there was no way for the planners to acquire the information --"produce this, not that"--needed for a coherent economy. This information, Friederich Hayek emphasized, emerged spontaneously in a market system from the rise and fall of prices. A planning system was bound to fail precisely because it lacked such a signaling mechanism.
The demands of socialism are not moral conclusions derived from the tradition that formed the extended order that made civilization possible. Rather, they endeavor to overthrow these traditions by a rationally designed moral system whose appeal depends on the instinctual appeal of its promised consequences...To follow socialist morality would destroy much of present humankind and impoverish much of the rest.In other words, the very appeal of socialism is not a more prosperous world, but rather one where the rich are punished for daring to become wealthy, regardless the result.
Informational cascades are the most basic sort of cascades. In them, people form their beliefs using information obtained by observing the behavior or opinions of others. UCLA economists Sushil Bikhchandani, David Hirshleifer, and Ivo Welch define an informational cascade as a situation in which "it is optimal for an individual, having observed the actions of others ahead of him, to follow the behavior of the preceding individual without regard to his own information." Although "actions speak louder than words" and economists rely more on actions to reveal individual preferences, cascade theory also applies to opinion conformity.All groups are susceptible to herd thinking. But amongst neo-liberal, or socialist believers, the group itself is a semi-sacred notion. Therefore, groupthink takes on an even larger role for finding truth. In Marxist soteriology--salvation theory--one cannot find the good or true outside the group. Further, this group opinion is delivered from the top down. The support for and belief in the efficacy of ObamaCare is another unsavory and undeniably hilarious example of false Information Cascades. When Barack made his pitch for healthcare reform, the left was smitten and instantly persuaded by the project. Today, despite the fact the all ObamaCare was sold as a shiny fairytale upon an enormous raft of lies, the left refuses to let go of their dream. The simple conjuring up of the phrase universal healthcare, Obamacare or the Affordable Care Act caused even elderly politicians with a lifetime of experience to guarantee its delivery, sight unseen. In fact, not only were the details of the program unknown to these leftist polticos, but the bill itself remained famously unread before passage. This is certainly an example of toxic informational cascade. It appears the president himself fell victim to his own socialist rhetoric. This is reminiscent of Chairman Mao's belief that ideas, in and of themselves, would transform the world simply by being uttered, according to Judith Shapiro's Mao's War Against Nature. Barack could probably identify with how Mao's personal secretary described his mind, "He found systematic scientific knowledge annoying and constricting." Mao influenced his society to set aside known laws and believe they could achieve anything they could conceive, despite the details -- a sentiment certainly reminiscent of ObamaCare.
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Kelly O’Connell is an author and attorney. He was born on the West Coast, raised in Las Vegas, and matriculated from the University of Oregon. After laboring for the Reformed Church in Galway, Ireland, he returned to America and attended law school in Virginia, where he earned a JD and a Master’s degree in Government. He spent a stint working as a researcher and writer of academic articles at a Miami law school, focusing on ancient law and society. He has also been employed as a university Speech & Debate professor. He then returned West and worked as an assistant district attorney. Kelly is now is a private practitioner with a small law practice in New Mexico.