If you want to create the maximum amount of efficiency in a society and an economy, communism is not the way to go.
No doubt about it.
I’ve spent thirty years in manufacturing and while communism shares the same goals as a high volume/low mix industrial factory – planning, standardization, and a condition of “sameness” – more properly a lack of variation in the production process that will yield products that are all alike, it does not include a very important component.
People who manage entities in this segment of the industrial world work to create specific procedures for employees to follow, design equipment with exacting tolerances to eliminate variation and we use all sorts of statistical tools to plan and execute the manufacturing process so that everything we make is exactly the same. We essentially try as much as possible to take the human element out of it because humans are natural sources of variation. We rely on the “process” to successfully produce the products we expect at the level of quality we designed.
This is actually how Genichi Taguchi, a leading Japanese manufacturing guru, defines quality. He invented what is called the Loss Function of Quality:
Quality is the loss imparted to society through variation.
I’ve always thought it strange that Marx, when fighting against reduction in value of physical labor brought about by machines, factories and industrialization, created an economic and social theory that sought to turn the world into nothing more than a factory for humans. He took the very theories that he detested in the industrial environment and applied them to humans – even though these theories were driving massive increases in productivity and rapidly decreasing prices of factory made goods. Marx essentially viewed the world as a factory and humans as both its assets and its product.
Look at how collectivists think:
- They define “freedom” as the elimination of risk though having everything planned for you.
- They define equality as everybody having exactly the same kinds and amounts of “stuff” – no variation.
- They believe that both can be brought about by central planning and collective ownership of all productive assets.
- They believe that the role of people is to fulfill the plan, no more and no less. Variation is not allowed.
- They believe that happiness, freedom and fulfillment are found by working to the glory of the state that makes the plan.
Collectivists (and I use this terminology to define all socialists/Marxists/communists) like the acolytes of Marx make one simple but glaring mistake when they claim that a collectivist system will produce true “freedom” through a planned economy.
That mistake is that they ignore half of the equation. They believe that the central authority should own all the means of production but don’t realize that to do this effectively and efficiently, they must also regulate consumption because in a closed, planned system, these two must be equal. That means that if the total refrigerator factory output that was planned for 2013 was for 5 million refrigerators (all exactly alike, by the way), then demand must also be for 5 million refrigerators.
But what if the true demand (need) is for 6 million? How does that get balanced?
It gets balanced by 1 million potential consumers of refrigerators not getting them. Their choice is restricted regardless of their true need because in a collectivist economy, the plan is the determinant because all things must conform to the plan in order for the economy to be balanced.
What if the true demand (need) is for 4 million? How does that get balanced?
Citizens will necessarily be forced to consume the overage until the plan can be altered.
This is common in planned economies where overproduction and shortages existed at the same time.
In a state-owned economy, there are no real-time economic signals to indicate changes in the slope of the supply/demand curve. In a capitalist economy, this is what prices do. In an industrial environment, we use real time feedback from the process to constantly adjust. It seems counterintuitive that a stable process requires constant adjustment – but due to the infinite number of changing conditions that impact a process, it is true.
But for collectivists to control an economy there is only the plan.
Think about this in terms of your entire life being subjected to this refrigerator example in every single facet – from toilet paper to entertainment.
Planning and designing a human based economy or society to eliminate variation eliminates choice. If one cannot choose, one is cannot be free.
Contrary to the claims of the collectivists, the way to create the maximum amount of efficiency in a society and an economy is not collectivism. Collectivism guarantees mismatches in supply and demand. With these mismatches comes a restriction of freedom of choice, the result of which is the least amount of freedom.