Wednesday, July 16, 2014

The Problem with Communism

From each according to his ability, 

to each according to his need

I've a standing challenge with Ducky, asking him to point to one successful implementation of communism, one successful state that illustrates that the system is better than "Kapital", as he puts it.


Set aside disbelief for a moment and imagine if America were that country, a workers paradise in which the government owns the means of production and distributes the benefits (profits) of that system to each of us, citizens in this grand experiment.


The problem with communism is incentive, incentive to work and even more, incentive to work harder.  In 2013 the US Gross Domestic Product was 16.8 trillion dollars, in 2013 the Chinese Gross Domestic product was 9.4 trillion dollars.  That in itself appears to be an indictment of the communist (or hybrid communist system), but it's worse than that.


In December of 2013 the total US workforce stood at roughly 155 million. In 2013 the Chinese workforce stood at 937 million.  The US is 56% more productive with 17% of the workforce.


The median US household income in 2012 was $51,371, in China it was $2100.  In China, like the US there is a wide disparity in income regionally, in Shanghai it was $4700 whereas in rural areas it was as low as $1600.


So, lets get back to that idyllic communist dream.  As I said the GDP in 2013 was 16.8 trillion subtract from that what the government spent and that leaves 13.35 trillion. Dividing that number by our workforce gives each worker $86,129... seems pretty good.


Now we get back to that productivity issues and worker incentive. Discounting workforce numbers if you eliminate America's 56% advantage that 13.35 trillion drops to 7.47 and that payout drops to 48,193. But if you consider workforce numbers each American worker is almost as productive as 5 Chinese workers. So if productivity were equal that 7.47 Trillion would drop further to  only 1.26 Trillion.  Now we're talking a mere $8187 a year paid to each worker.

The problem with communism and communists is that they have the false belief that economies and workers are going to behave the same under communism as they do under capitalism.  Every attempt at implementation has proven that they don't, which is why workers thrive under capitalism and wallow in misery under communism.  When the state consumes all and redistributes it from each according to his ability to each according to his need, worker productivity plummets, there is no incentive other than to show up, punch in, do as little as possible, and punch out. 


Chinese GDP

US Median Household Income

Chinese Median Household Income

US Workforce

Chinese Workforce


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