Q: Why is communism good theoretically but bad practically?
A: The most brilliant answer I just recently learned, and it works in complete harmony with another idea I’ve known for a while. Two different smart dudes, same general principle, sorta. It's math.
Jordan Peterson & Pareto Law
What state socialism and what Marx himself did not recognize was the Pareto Law. The Pareto Law works in capitalism in a way that everybody understands. When you have a lot of money, it ends up accumulating in the hands of a few people. When you have a lot of power and influence, it ends up accumulating in the hands of a few people. Famous people who were famous when you were born, are STILL famous now. Marx rightly understand that criticism of capitalism, but didn’t understand how many systems it applied to. It applies to socialism and communism as well. It’s universal. When people say that the Soviets just made mistakes and that a few in the party got too much power, they are wrong. It’s how power works, among other systems that obey Pareto Law.
Pareto Law works like this: if you take 1000 composers over time, about 32 of those composers will get 50% of the attention. If you have 10,000 rock songs, about 100 of them will get 50% of the airplay.
Nassim Taleb & Extremistan
Taleb describes human variability in terms of Mediocristan and Extremistan.
If you describe certain variabilities like height, you will get a very reasonable bell curve distribution. The range of that distribution will be within the same order of magnitude. This is Mediocristan. Height, weight, IQ, golf scores: these are typical human attributes that live in Mediocristan. You can expect someone to be 6 feet tall. If you have a football stadium full of people and take a representative sampling you might get a few adults somewhere around 4 and a half feet on the short side and a few somewhere around 7 feet on the tall side. But you would never get anybody ten times taller than 7 feet or ten times shorter than 4.5 feet. That’s Mediocristan.
Now change that to hits on their YouTube channel. Now you’re in Extremistan. You might find somebody with 1000 views per year, 100,000 views per year or even 10 million views per year. Many orders of magnitude different. When people think of income inequality, they think income should be one of those things bounded by small multiples, not several orders of magnitude. But income, like fame, works in the domain of numbers called Extremistan.
So economies and matters of wealth and power are systems that:
Belong in the realm of Extremistan
Operate under Pareto Law
Both capitalism and communism have these bounds. The difference is that in socialism and communism the power and the money all accrues to the (single) political party in control of the government. Under capitalism, power accrues to the government and money to the capitalists. So it has that particular benefit over communism and socialism that it is less likely to be authoritarian.
So under state socialism or communism, the state will get all of the power and the money, and certain members of the party will get the lion’s share of that. When they say for you to sacrifice your ‘surplus’ wheat or coal or whatever it is you produce, you have no choice. You will produce your quota and you will get the price they dictate. Extra-productive people (who have skills in Extremistan) will be forced to give up more because they will be compared to people with average skills.
Look what happened to the Kulak farmers in the Soviet Union. They were murdered because of their skill in farming - they made everybody else look bad. Why? Because crop yields are in Extremistan. You either grow 20,000 pounds of corn per acre like a good farmer or you grow zero, like a bonehead like me. So when the state says “Every farmer will produce an average of 10,000 bushels of wheat and be paid 1.99 per year per bushel”. What do you think happened? I tell you what happened, the excellent farmers where shot for acting like “capitalists,” and the newb farmers were shot for not fulfilling their patriotic quota.
A market mechanism sounds like the obvious answer. It is. But socialist states refuse market mechanisms because they apply ‘equality’ on first principles. This ‘equality’ is mathematically impossible to sustain.
I want to add to this with regard to the fact that Pareto operates on ideas and concepts as well. It doesn’t matter whether or not the idea is good, so much as whether or not it is popular and that it bears some relation to the perceptible truth. I think of this when I think of racial stereotypes and political platforms. But these are, unlike the actual rules of numbers, related to the limits of human perception and evolutionary fitness.
Consider racial stereotypes. They persist not because they apply very well, but that they can apply and they have applied over long periods of time. When I speak about racism as compared to xenophobia or hatred, you must notice how the latter are generic whereas a racist stereotype is specific. You don’t hate Jews and Mexicans for the same reasons. The persistent stereotypes about Italians are different than those for Blacks or Irish. One of the reasons latent wokeness is so intellectually vacuous is that it grabs at anything that might be offensive and categorizes it as racist. It doesn’t even make the distinctions between discriminations.
The policy that Democrats are responsible for if and when they have the majority in Congress spans every Federal program and law of the land. Nevertheless Democrats will always campaign on a few concepts that Pareto supplies; education, healthcare, free trade, civil liberty. All the airwaves in the land can be saturated by these few topics despite the fact that they are the tip of the iceberg of Democrat responsibility and concern. Recently, much to my consternation, Progressive talking points have dominated media despite the fact that much more needs addressing these days. My point is that there is a Pareto effect on concepts and these are what I consider to be good examples - not just on actual geopolitical arrangements like capitalism and communism.
I will go one step further and bring in my life’s obsession with human and computer decision making, with the latter as proxy for the former privileging us coders, in the same way law privileges legislators in matters of human moral judgement. We will face, at some point in the future, the ability for our programmed and self-evolved intelligent machines to remind us of everything down the fat tails of decision choices in spite of Pareto. It was the exploitation of such power laws that made it theoretically possible for Amazon to become a successful bookseller in its infancy. We should always remember that the ‘other’ bucket can outweigh what we perceive to be permanent majorities. So my stoic warning of the day is to beware of decreasing certainty amid increasing choice. This relates to all of the above with respect to the ways and means that people attempt to aggregate the long tails of individual choices into something that topples the established order. I don’t want to editorialize this further. I’m still in the Christmas spirit.