I’m going to challenge the “Socialism works if its run properly” argument and say that it is logistically impossible for socialism to function the way most idealists want it to. To make things more challenging, I will not be criticizing market socialism and its prospects of success. The reason I’m doing this is because so many other (more qualified) economists and academics have dismantled (torn apart, really) the theories of the socialist market system.

Let us assume that the socialist economic principle of collective ownership over the means of production is viable. The market will prosper, the factories will produce goods that people would want to buy, the system is efficient and revenue generating, and all of these benefits go directly to the people. This sounds more like Candyland than real life, but for the sake of argument, let us assume it works.

Socialism is different from communism with respect to the logistics of the redistribution of wealth or income. Some socialists advocate for the abolishment of private property and ownership and replace this with common ownership, but in most cases, the only instance where this is even logistically possible is if the state acts on behalf of the common good. Even then, it is still a long shot. There will always be loopholes and errors that are foreseeable yet unsolvable. The problem of crime and theft, gray or undocumented income, and the bureaucratic class of people who will, of course, never cheat the system.



The only way to ensure relatively equal ownership of wealth and goods is to have government forcibly take wealth away from some and give it to others. Never mind what would happen to the economy once the incentive to earn wealth is gone, what systems would be in place to ensure that the middle man (the state) is accountable for their actions? How can we be sure that the type of socialism that is “best for everyone” will be implemented when the being responsible (the state) has historically been easily corruptible?

In an ideal world, almost every political ideology can function. Reality, however, is about the implementation of the idea. Paradise does not exist on Earth and it never will. There will always be groups who will exploit for their own self-interest, but socialism claims it can solve the exploitation of the worker through a system of collective ownership via the state. They forget to mention, however, that in every socialist state the downfall mostly comes down to executive/legislative corruption or market failure. To put it simply, too much big government fails to function for long periods of time. It will, someday, run out of money or destroy individual freedom or both.

The tragic flaw of this system is the corruption of the bureaucrats. Karl Marx talked of the working class proletariat versus the upper class bourgeois, yet there is a similar paradigm in the most socialist or communist of societies. The elite bureaucratic class or the other high-ranking members of the state and everyone else. The only difference is that in Marx’s vision of capitalism, the prole had slightly more control of their own fate. In the USSR, it was all about who you knew and what your last name was.

In the USSR, people would see the bureaucrats riding in limousines, consuming more, dressing nicer, and spending more than the working class. In Cuba, each household gets 12 eggs a month and a small bag of rice, while Fidel Castro and his associates are dining on much more than that per person. The only reason Venezuela survived as long as it did is because of it exploited its natural resources. It will only be a matter of time before the system collapses. (At least that is my own guess, but not one without fact.)

One of the biggest problems of socialism is bureaucracy. Sometimes it is good, but in the instance of this scale of government, the division of class is extremely likely, which is counter-productive to the prime goal of this idea.

The final problem socialism will encounter is the problem of power transition. Perhaps you will have a state where the officials are sincere, virtuous, and they stand for the common good (whatever that may be.) Perhaps society and the market could function more effectively if this sincere state had more power as it would do good for society. What would happen when the leader and his/her network dies or changes his/her mind?

Lenin was a beast, but he caused little damage if compared with Stalin. When Stalin took control of a state with so much power over society, the libertarian-leaning socialism that Marx spoke so highly of, and Lenin kind of implemented was lost in a Big Brother nationalist police state. The people were in poverty, they had little control of their funds, the state failed to feed its people (actually it robbed them of their food, sold them to other countries and spent the profits on military machines), and millions died.



Unfair inequality, meaning being denied the opportunity for success even though you choose to work hard for it, will unfortunately always exist but at least under capitalism people could foreseeably rise from the odds that are turned against them. According to a study done by the Brookings Institute, income mobility is still strong and 2 of 3 people on average will end up making more money than their parents (adjusted for inflation). Do not misunderstand, there are many problems with capitalism. I am actually fond of some of Marx’s and Lenin’s criticisms of monopoly capitalism. Their solutions, however, are abysmal and can fool the naive and the careless.