Kapitalism: Effektiv demokrati

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In my last post yesterday, I wrote about 8 arguments that debunks socialism. Today’s post can be seen as somewhat of a follow-up post, but even if you didn’t read the one from yesterday, you’ll still understand this one.

You see, democracy is a very inefficient system. In democracy, everything has to be discussed, sometimes for many years, before a decision is made. In the United States, it’s even more complicated: With a senate, a house of representatives and a president with the power to veto bills, the legislative process can often take years.

Now imagine if every decision had to be made that way: If production were to be controlled by the state, the senate would soon be having hearings about whether the next spring fashion should be green or blue. Stores today, if they run out of something, it will just take them a few hours or days to fix it. If congress was made responsible for this, it would likely take months or years - they aren’t efficient at what they are doing right now, what makes you think they would be more efficient if they were given even more responsibility?

The problem with socialism is the inherent need of a dictator. Only a dictator can make decisions fast enough that socialism can (although barely) work. A socialistic democracy would soon fall apart because no-one would be able to agree on exactly how much and what to produce. The special interests would have christmas every day (as if they don’t already have that). This was described by FA Hayek in his book “The road to serfdom”. A strong dictator is needed to unite the people and set the course. And to make sure that the people trusts and obeys him, he must have 1) a personality cult (like Kim Jong-Il) and 2) a strong military, always ready to kill anyone who suggests that maybe the potato chips should have another flavor or that maybe the stores should sell meat (there was a constant shortage of meat in the Soviet union).

Socialism and democracy cannot coexist.

It is therefore rather comical to hear socialists complain about capitalism being undemocratic. Capitalism is always democratic. Instead of voting for a government every fourth year that promises to produce more of something you want and less of something you don’t want, you vote every day in the mall. Actually, you vote before you go to the mall, when you decide which mall to go to. If a shop changes it’s range of products, you can leave the shop and go somewhere else. You vote with your money.

But don’t this mean that the rich has many more votes than the poor? Yes and no. The rich can potentially buy more, but they also buy largely other things than the poor. Companies such as Rolex don’t care about what the poor thinks, because poor people don’t buy Rolex watches. On the other hand, low-price brands don’t care about what the rich thinks - because the rich don’t buy those brands. Every company cares about it’s customers.

This way, you can in general only affect the companies you shop from (or the companies which sees you as a potential customer). This way, I as a man cannot affect how women shoes are designed - because I’m not a customer nor am I a potential customer, and so no designer of women shoes gives a darn about what I think. In a communist state, I would be able to affect the design of women shoes as much as any other guy - or girl, for that matter. The politicians would decide how the shoes were designed, and since politicians are elected by both men and women, they would have to take my opinion as a man into account (supposing I for whatever the reason would have an opinion about women and their shoes) and try to appease me to win my vote. Similarly, people who do not hunt would have a say about how many guns should be produced and how they should look (that too would be decided by politicians, seeing as they would control production).

Also, if the majority didn’t want something, it would not be produced. Does that sound fair? Maybe, but it’s disastrous. The majority in 1991 surely didn’t understand the point with the Internet, which was just about to be developed. No-one believed in the airplanes when they had just been invented, and so if there had been a referendum, a majority of people would have voted against funding the airplanes and the Internet as well. In capitalism, an inventor (who does not himself have a large bank account) have to look for investors who believes in him. These investors will ask themselves whether there is a reasonable chance that consumers will buy this product anytime in the foreseeable future. Politicians only think about re-election, but investors in general have a more long-term view.

And, you can use a product even if the majority disapproves of you. The majority may not like your aftershave or your toothpaste, but if you like it and you are willing to pay for it, you’ll get it anyway. This maximizes happiness and satisfaction in society since we don’t have to belong to the mainstream to be able to do what we want to do. The consumers decide what will be sold (and therefore in the long run produced), and the companies who are the quickest adopters to changing demands will win. No need to hold elections or referendums to decide it; just let the companies compete.

Another argument which I feel has to be mentioned, and which you should definitely mention when talking to socialists and liberals about capitalism, is that capitalism is self-correcting while socialism is not. For every recession when companies are allowed to fail, our capitalistic system gets a little better. Every failure and every success means a lesson that companies will have to learn to survive. This self-correcting mechanism argument may seem odd to some people, especially after leftist media have done everything to make everyone believe that this crisis ultimately proves that capitalism does not correct itself. But the fact is that with no bailouts, the market would have learned it’s lesson and moved on. Governments, however, never learn. And when a socialist state has become a dictatorship, there is no turning back, no self-correction.

Much of what I’ve written about regarding capitalism and efficiency has been proven in Sweden. We’re not a dictatorship, for sure, but the political process is much simpler and more effective to make an efficient managing of the welfare state possible. It still isn’t efficient, but better than it would be than if we had America’s system. In Sweden, there is only one chamber in the parliament, the prime minister is elected by the parliament and does not have the power to veto bills. The Supreme court cannot rule that a bill is unconstitutional, and the Swedish constitution gives practically no limit whatsoever for the government’s power. Members of Parliament are not directly elected by the people; instead they are chosen by the party establishment. You vote for a party, they select your MPs. MPs crossing the party lines are very rare since that means they won’t be selected for another term by the establishment after the next election.

That kind of streamlining was necessary to make our welfare state possible. It turns politics lifeless and undramatic; you already know how every vote will end. There’s nothing that can interest anyone, it’s virtually impossible to change anything since people who wants to dramatically change stuff won’t be selected as MPs. That is one of the reasons why I’m interested in American politics in the first place; it’s so exciting. But with a growing welfare state, you too will have to streamline your politics the same way we did. And that kind of streamlining, it it’s allowed to go far enough, will take away any chance any grassroots movement has of influencing politics.

Socialism is incompatible with democracy. Any kind of socialism is doomed to lead to a zombie democracy in which no-one really cares and grassroots are cleansed out with poisonous weedkillers. Capitalism gives you a chance to vote every day.

What do you want?

John Gustavsson

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