How Do Socialist Know When To Change Anything?

Under capitalism business owners know when to do something different with their businesses based on signals that they get from the market or consumer spending patterns.

Since a socialist economy doesn't rely on market feedback then how do socialist know when to change anything with businesses or industries? What signals are they relying on for when to make changes?

 

Probably when the income drops?

 

Lol socialist economies have no market huh? Haha that's a new one.

 

It's a planned economy based on principles of cooperation rather than competition. It's about developing and delivering goods and services according to need. Capitalism creates false scarcity of goods and services so as to keep people locked into a cycle of debt and want. In socialism signals are audited and material product is then distributed in a planned way. Capitalism no longer follows the market. It is largely fixed and rigged to benefit those at the top.

 

True Socialism has never been practiced. It's an unknown as to whether or not it could actually work. Marx envisaged the fully industrialised England as the most fertile ground for the inception of Socialism. Feudal Russia was way too big and backwards for it to have a chance of being successful there.

This is just my opinion.

 

This clarifies what I mean by socialism not having markets or market prices specifically.


"In a capitalist economy, incentives are of the utmost importance. Market prices, the profit-and-loss system of accounting, and private property rights provide an efficient, interrelated system of incentives to guide and direct economic behavior. Capitalism is based on the theory that incentives matter!

Under socialism, incentives either play a minimal role or are ignored totally. A centrally planned economy without market prices or profits, where property is owned by the state, is a system without an effective incentive mechanism to direct economic activity..."

Why socialism always fails - AEI

 

Capitalism emphasizes efficiency at the expense of equity. Capitalism is great for making sure that the greatest number of consumers have the goods and services they want at the lowest price using the least amount of society's resources. However, efficiency may be gained at the cost of equity, defined in terms of distributive justice. For example, it might be highly efficient to reduce production costs by automation and outsourcing of jobs overseas to Third World countries. The result may be income inequality at home, with the top 10% of earners taking home 50% of all income and the top 1% taking home 20%. That is in fact the way it is in the USA.

How do socialist countries determine prices? Goods and services are produced based on usage value, and production is "planned" or "coordinated". Cuba has recently introduced reforms along the lines of "market socialism", incorporating market mechanisms and an expanded private sector. China has done something similar. Most socialist systems have ended up making such concessions. Then there's Scandanavia, which really operates on the "social democracy" model, in which the means of production are not nationalized, but are highly regulated, and private entrepreneurs are heavily taxed to fund an extensive welfare state. This is a mixed economy, not socialism, since the means of production and distribution are in private hands.

 

I don't think it's particularly 'efficient' to mine/produce materials using slaves in Africa or wherever, ship the materials to whatever country's wage slaves happen to be cheapest at the time, then ship the finished product back home. Profit margins don't depend on total efficiency... you're still wasting fuel, and wasting time and money shipping it. You have to pay to arm the dictators that suppress the people and keep them enslaved while also ensuring that they remain friendly to your own interests.

The most efficient way would be to use your local materials to assemble what you can, then trade it for other things you want.

 

From "Social Problems: Continuity and Change"

 

Is that sustainable though? Seems like the playing field will level itself in time because while there are fewer manufacturing jobs in the US than in years past, there has been in increase in tech-related jobs. Whole industries--digital marketing, for example--have sprung up while more and more manufacturing jobs are being sent overseas. It seems to me that our economy is transitioning from blue to white collar, and that for every job lost, a new one is created. Wouldn't that, naturally, over time, shrink the inequality gap?

 

I don't think the tech-related fields are likely to generate the jobs. They too are highly prone to outsourcing and automation. The demand in the tech industries is for skilled and educated workers and those with customer service skills. There are limits on the ability to transform displaced coal miners, factory workers and fast food/Wal Mart employees into those. The tech industry currently employs 6.7 million people, and there is still room to grow--but I don't think by that much. It might be all we can do to find "born in America" workers to replace the loss of immigrant labor. And the wages won't be high. A WalMart in northwest Oklahoma has to import workers from Oklahoma City, over 100 miles away, because it can't find locals who can pass a drug test.

 

Kind of self defeating.... I would have to be on massive amounts of drugs just to work at a WalMart...

 

America has never really had pure capitalism. In a true capitalist country, the law of supply and demand commands the economy. In America, we've always had a corporate command economy which endeavors to keep prices high so the rich stay rich and the poor are required to work harder, only to make the rich richer. Like a famous singer once said, "Capitalism wants us to pursue happiness and prosperity, but never attain it!"

 

Michigan ..

 

Zug Island

 

Um... Buenos Aires.

Am I playing this game right?

 

Socialist countries have markets...the black market for example. There the same old laws of supply and demand work about the same as they do in capitalist countries.

 

Dictators are awesome..

 

Dictators suck. Can't think of a good one. Social democracies are much better.

 

A pure socialist system has no market economy.

Here's the definition of a market economy. This definition doesn't fit a socialist economy.

"A market economy is a system where the laws of supply and demand direct the production of goods and services."

How the U.S. Constitution Protects America's Market Economy