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Should the UK Convert into a Socialist/Communist Economy from a Mixed Economy?

Apagg

Producer surplus doesn't mean there is excess supply. It means there are producers more efficient than others who would happily sell for less. Just like consumer surplus means there are consumers who value the product more highly than others and would happily pay more.
I don't think you understand what efficiency means. It is very rare that the government is able to improve on a market allocation in terms of efficiency, and government control of prices almost always fails, resulting in unemployment, inflation, shortages, impeded growth...
Typically, when a government is able to improve on the "market" solution, it is because the government broke the market in the first place.
I could give you mathematical proofs of the above, but they'd be wasted on you

I'd be very interested in the proofs. Could you post them here or PM them please? It would be really appreciated.

Reply 41

XCRUSHESX

15

I don't know, I'd prefer the country to become more independent of the world (so I am for nationalising and not having companies being run by other countries), I admire how we used to work for our own things, no major reliance on other countries and all that jazz...It does feel great knowing that you are working for something that directly benefits your country, government and people, rather than a countries thousands of miles away from us...more nationalising would be good, we would gain back the responsability that would help us grow up a bit, our society does seem a lil mixed up, half of society are products of made of those who worked for what they got and saw a country who actually were working mostly for themselves and the other half of society are products of a consumer mentality where they use the globe to satisfy their 'consumer habits'...It is kinda annoying, not a massive fan of 'l'aissez faire', a lil control never hurt anyone and I would see more nationalisation to be v. beneficial for the UK...

Reply 42

Amit92

OP

14

Oh yeh, whats the point of having like 100s of the same products that are just branded differently by private firms?! If the government controlled the allocation of certain products then there would only be a few different types.

Don't you think this is much more fair by limiting our wants for certain products and making better use of scarce resources?Scarcity of certain resources can be minimised slightly! C'mon if a product is inferior or normal, it is going to do the same job at the end of the day isn't it? A rather see a country where social class doesn't come into account. Where we all have certain products that are the same and not a dealignment where the poor stick to inferior goods and the wealthy stick to normal/luxary goods!

Reply 43

KwungSun

13

Supply and Demand "estimated" by the market? What?

Reply 44

KwungSun

13

Amit92

Oh yeh, whats the point of having like 100s of the same products that are just branded differently by private firms?! If the government controlled the allocation of certain products then there would only be a few different types.

Don't you think this is much more fair by limiting our wants for certain products and making better use of scarce resources?Scarcity of certain resources can be minimised slightly! C'mon if a product is inferior or normal, it is going to do the same job at the end of the day isn't it? A rather see a country where social class doesn't come into account. Where we all have certain products that are the same and not a dealignment where the poor stick to inferior goods and the wealthy stick to normal/luxary goods!

Have you just started AS Economics by any chance?

Reply 45

jacketpotato

20

Amit92

Oh yeh, whats the point of having like 100s of the same products that are just branded differently by private firms?! If the government controlled the allocation of certain products then there would only be a few different types.

Don't you think this is much more fair by limiting our wants for certain products and making better use of scarce resources?Scarcity of certain resources can be minimised slightly! C'mon if a product is inferior or normal, it is going to do the same job at the end of the day isn't it? A rather see a country where social class doesn't come into account. Where we all have certain products that are the same and not a dealignment where the poor stick to inferior goods and the wealthy stick to normal/luxary goods!

"If the government controlled the allocation of certain products than there would only be a few different types", indeed. THIS IS A VERY BAD THING.
I like my choice of cereals/cars/books, thank you very much

A country where social class doesn't come into account and where everyone all has the same products? This is a country where effort, risk and enterprise don't get rewarded. There would no longer be any incentive for people to work hard, you might as well just sit in your room playing videogames all day instead of working.

Reply 46

Amit92

OP

14

jacketpotato

"If the government controlled the allocation of certain products than there would only be a few different types", indeed. THIS IS A VERY BAD THING.
I like my choice of cereals/cars/books, thank you very much

A country where social class doesn't come into account and where everyone all has the same products? This is a country where effort, risk and enterprise don't get rewarded. There would no longer be any incentive for people to work hard, you might as well just sit in your room playing videogames all day instead of working.

Yes Yes true,but communism helped the Soviet Union get powerful even though there society dissolved?

Reply 47

Bagration

18

Amit92

Yes Yes true,but communism helped the Soviet Union get powerful even though there society dissolved?

Helped it get powerful. lol.

USSR had to import grain to the tune of 8 million tons a year by the 1980s.

Its economy was hampered by shortages and overproduction.

USSR's industrialisation was at the cost of 10 million Ukrainians. The necessity of forced industrialisation introduced a system of totalitarianism that ended up being run by one of history's worst dictators.

I'll take liberty any day, thanks.

Reply 48

Bagration

18

XCRUSHESX

I don't know, I'd prefer the country to become more independent of the world (so I am for nationalising and not having companies being run by other countries), I admire how we used to work for our own things, no major reliance on other countries and all that jazz...It does feel great knowing that you are working for something that directly benefits your country, government and people, rather than a countries thousands of miles away from us...more nationalising would be good, we would gain back the responsability that would help us grow up a bit, our society does seem a lil mixed up, half of society are products of made of those who worked for what they got and saw a country who actually were working mostly for themselves and the other half of society are products of a consumer mentality where they use the globe to satisfy their 'consumer habits'...It is kinda annoying, not a massive fan of 'l'aissez faire', a lil control never hurt anyone and I would see more nationalisation to be v. beneficial for the UK...

Our country to be more 'independent' of the world? Globalisation is just the division of labour throughout borders. That is it. We have division of labour in our country - a haulage company in Portsmouth might bring tuna to a processing plant in Birmingham - what difference does it make if this haulage company transports tuna across the channel? Division of labour has proved to create more products at a greater quantity at a cheaper price. Why you would want to intentionally inflict economic damage upon yourself by denying it across borders for the sake of "helping our country" is beyond me. People are helped by lower prices at the till, not by being bled dry by taxes to go to unproductive industries.

All trades are done because they are beneficial to both parties in the trade. If I make toothbrushes that are sold to China then I'm doing that because I agree to it and because the Chinese agree to it. Does it make any difference if my toothbrushes are sold to China than Birmingham? Producers make their choices, generally, because they give them the most profit for the most cost. Denying this and directed the economy towards inwards-looking objectives decreases a firms profits, it decreases the amount of people it employs and their wages and salaries. That isn't good for our country. That's very bad for our country.

And if they are nationalised, it is even worse. Employment may be higher but innovation is stifled; there is no incentive or need to progress to higher forms of technology or management - if we had nationalised our horse and cart industry we would not have cars today; if we had nationalised our candle industry we would not have lightbulbs. Nationalised industries suck up taxpayer money. It diverts the money they would have spent and invested in productive (i.e. profitable) sources which would have increased productivity and the general wealth of the country, to unproductive (i.e. unprofitable) sources, such as nationalised industries (industries that are nationalised are done so by their very nature as unprofitable i.e. if coal was profitable it would not have been denationalised).

When the Government owns a sector of the economy it has no way to calculate supply and demand by the price mechanism. Unlike market oligopolies or even monopolies the Government sets the output and price at levels not decided by the market but by central planners. The price mechanism is the only method of compiling the data of millions of people into one understandable format where businesses can set their output and prices at the most profitable levels. Because no one person can know all the information, limited information is spread throughout the economy. There is no need for a man who produces toothbrushes to know the price of coal, and visa versa. Their prices and outputs are not determined by centralised information but by only the necessary information themselves and their competitors have garnered.

No central planner can hope to absorb all this information and so the price and output of nationalised industries is naturally skewered. This creates shortages and overconsumption, misallocation, bad quality, and economic chaos. The marketplace naturally tunes itself to the economic situation of the time. Central planning cannot do that because it cannot hope to compile all information centrally, regardless of the size of a bureau.

"Consumer demands" merely constitutes the demands of the population to receive the goods they like at the price necessary. At the times when our society has been most cohesive, it has been because prices were low and goods were plentiful. In all historical situations, the opposite of social cohesion has come about because of economic poverty. The best method of binding a society together is to allocate resources in the provision of goods at maximum efficiency; i.e. the free market.

When the Government owns a sector of the economy, as I have mentioned, it chooses output, price, and allocation of resources. Therefore it suits the purpose of this argument to point out that when the Government chooses output, price, and allocation, it can do so not for economic, but for social measures. During the 1930s, the BBC had a monopoly on radio. The Government's official line was appeasement. Guess who it banned from talking on the Government-owned radio monopoly? That's right, Winston Churchill himself. The Government, if it owns a sector of the economy, can choose to whom what resources are allocated at what price. It can restrict output, not liek the market does for the means of allocation at a later date, but for malign purposes of damaging a sector of the population.

Poverty and tyranny are not good for our country and society.

Prosperity and liberty are.

Reply 49

jacketpotato

20

Amit92

Yes Yes true,but communism helped the Soviet Union get powerful even though there society dissolved?

The Soviet Union didn't become powerful on Socialist/Communist principles, quite the opposite. It grew rapidly in power because of an approach which put the advancement of government and state above all else. What you really had was massive investment in the military and massive acquisition of resources on behalf of the state, rather than wealth which actually benefited the citizens of the USSR.

Reply 50

Amit92

OP

14

We can conclude that the majority are happy with our mixed Economy and many want to go next level to a Capitalist Economy but the Communist/Socialist Economy is in the decline!