A Freer Market vs. Central Planning

Socialist and Capitalist systems of government are similar but different. They both use capitalism as a tool to generate wealth. In a capitalist system, this tool is available to all people. Whereas, in a socialist system, it belongs solely to the government.

Socialist and communist countries rely upon central planning to make the decisions for the "good of the many." Capitalist systems rely upon a free market which automatically determines the price of goods and services, based on supply and demand.

People take the free market for granted because they fail to see and recognize the beauty in it. It doesn't guarantee utopia and equality for all people. No system of government has done this in the past. However, many have tried and failed under the banner of either socialism or communism.

Here are a couple of short videos for people who are seriously interested in this topic. The first one highlights the beauty of the free market and shows our collective intelligence at work. The second one is a thought experiment that shows what happens when you cripple this collective decision making by putting it solely into the hands of state central planners.

One thing I'd like to highlight before I share these videos is the fact that many governments, including America, are a mix that has both capitalist and socialist elements. If America had a truly free market, the government would allow businesses to fail, instead of propping them up with corporate welfare funded by the people.

I think if proponents of communism/socialism truly appreciated the intelligence behind freer markets, they'd have an easier time letting go of their communist ideals. It's not just the intelligence behind freer markets but also the absence of this crowd wisdom in Governments that rely upon central planning.

When untold numbers of individuals make billions of voluntary business deals in pursuit of self-interest, the result is a happier outcome for all involved because all of the deals are voluntary. If you come across an offer you don't like; the simple answer is "hell to the no" move along, I'll do business with someone else. When you finally do make a deal, it'll be a good deal because both parties are happy.

This is something central planning cannot do, because of the sheer volume of wheeling and dealing that it takes to discover a happy medium. In addition to that, without market prices, central planners cannot make intelligent business decisions.

The wisdom of the crowd in a free market works without interference, and it's something we've taken for granted. The moment you begin to unnaturally interfere by removing the crowd wisdom or adding corporate welfare, then all the things and stuff begin to either breakdown or get worse. Exercises in communism generally tend to lead to democide. People culled to the tune of hundreds of millions because of these failed experiments.