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To: Moominoid who wrote (30536)	5/2/2005 10:21:48 AM
From: GraceZ	Read Replies (2) \| Respond to of 306849

Socialism properly defined is the idea that the government should own the means of production. That's communism, which is a form of socialism. Almost no government left pushes for state owned enterprise anymore because communism was such an outright failure next to market economies. To see that graphically demonstrated all one had to do is pass from East Germany to West Germany fifteen years ago. Same people, same history, different government form and radically different outcomes. Almost all countries that still have state owned enterprises are in the process of "privatizing" them. What they do now instead to resolve their socialist goals is try to direct the money that these private enterprises and individuals create and put increasing limits on voluntary exchange. We know how bad collective economies are at producing stuff, but maybe they are better at directing social justice! All in the vain hope that somehow the inherent risk that lay in all enterprise can be socialized and failure eliminated or at least mitigated. I see socialism as trying collectively to take away the worst aspects of failure. This seems like a great idea, until you realize that pain and failure are two very important indicators telling you what not to do. The rationale for forced saving is that people are irrational... This is the rational used to take personal freedoms from individuals all over the world, that some group of experts or a voted representative will somehow know better what is best for you, that you are too immature to make the "right" decisions. Since what is right is highly subjective how is it possible they will know what is "right"? The problems arise because government then has the power to direct large sums of money here or there, so instead of dueling it out in the market place transaction by transaction, where the real knowledge exists of what people need and want, companies find it more lucrative to lobby the government or government representatives. This has a highly corruptive effect on government officials as seen in our own Congress and it has the effect of misallocating resources on a grand scale. Not so bad in a small economy like Australia, but disastrous in an economy the size of the US or that of the EU. When I say "free" I mean that the price charged to users is zero. Not that it is cost-free of course! When you spend your money you have weighed the cost as well as the price. The cost is what you don't do with your money, the alternative uses. Here's one of my favorite economists on the difference between individuals spending and governments spending: In a market economy, the costs created by our decisions are explicit. In a government-controlled economy, those costs are not explicit. This is a great advantage for government officials and a great disadvantage for the general public, which ends up paying the costs, whether or not they are aware of what those costs are. I know what the cost is of my private health insurance, I can still duke it out with various health providers on price (they haven't made it illegal here yet to negotiate price as they have in other countries with public health). I can still sit down and decide whether the dental procedure I am contemplating is worth the cost of driving my old car for another three years because at least I know what it will cost. I can sit down and figure out the opportunity costs associated with one investment over another and if it's in a taxable account I can account for the tax and know what how much of a hit my investments will take. I can make a reasonable guess as to how long I will live and how much I need to save under various assumptions. What I don't know and what cannot be determined, is how much the government will tax me in the future on tax deferred investments (that unknown cost back to bite me) and how much their promises of medical care for the elderly will cost me and everyone else. They've effectively destroyed any hope of having a reasonable planning horizon all with the intention of guaranteeing some sort of social safety net for all.