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AndyThomas
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Postby AndyThomas » Thu Dec 05, 2002 9:58 pm

Just as an aside - have a look towards the bottom of this page and note the production costs figures, this for a channel which apparently isn't as good as the commercial equivalents:http://news.bbc.co.uk/1/hi/entertainmen ... Publically funded doesn't necessarily mean efficient, it would seem, or cheap...
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felice
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Postby felice » Fri Dec 06, 2002 5:48 am

> But this doesn't magically happen overnight, even if> people's skills were directly transferable. True. And capitalism doesn't hande such delays well. But it would happen. Maybe the newly unemployed wouldn't have transferable skills, but the previously unemployed would have skills that were needed.> You also> assume that removing advertising, removing demand,> will actually encourage growth. Why would it? If the> industries were the sort that needed to advertise, then> clearly their sales will suffer from lack of advertisingWill they? Advertising is a vicious circle. Businesses have to advertise because their competition advertises, and if they don't advertise too they'll loose customers to the competition. But the net benefit for all the businesses is zero.> how much do you think advertising actually costs,> incidentally? More than enough to fund tv production, subsidise print media, etc. Ie, more than the amount you're saying is too massive a burden to place on taxpayers. The actual numbers are irrelevant.> No new jobs would be created. The turnover the dead> companies were producing WILL disappearHang on. Put the supposed drop in demand from lack of advertising aside for the moment. And put aside the reduction in income for the newly unemployed, because that is cancelled out by the reduction in expenditure for the businesses that were previously paying for them. At this moment in time, the total amount of money in the system is exactly the same as it was before advertising ceased. Now, what are people going to do with that money? Continue to spend it, albeit on slightly different things? Then there is no net fall in demand, and other industries will grow to replace the vanished ones, in areas where demand has increased. Save it? Then interest rates fall, encouraging borrowing, reversing the drop in consumer spending and increasing business's willingness to invest in increased production etc. Throw it away? Er, not likely. Any other possibilities?> you'll probably find that the government is having to> increase spending on re-training and unemployment.The increased spending required there would be less than the difference between the total amount previously spent on advertising and the amount needed to fund data production, since that difference was what paid the people who worked in advertising.> Oh goody, more state funded media empires. State funded is not the same as state controlled. I expect internet radio would take off in a big way; online stations would no longer need to pay to broadcast popular songs, news bulletins, etc, or for bandwidth. So people would have much greater choice.> More expensive newspapers because they can no> longer sell advertising space to subsidise production > costs. People would be able to afford to pay more for newspapers, because they'd be paying less for the products previously advertised in them.> Massive rise in demand for on-line information? How do> you think free-information sites fund themselves? Yes, > you've guessed it, advertising. Even I try and use a bit> to subsidise my overheads! Plus, now you're going to> make it more expensive for the consumer to get> content in the first place! Instead, not plus. Online content is generated either because people choose to do so freely, or paid for by the Data Fund. And bandwith should be paid for entirely by the person requesting the data; the provider shouldn't have to pay more if more people look at the data. That would _not_ make a big difference to consumers; the cost of bandwith for content providers is a lot less than that charged to users already.> The burden you're placing on consumers here is> massive...There's no real increase; they're just bearing the burden directly, instead of bearing corporations who bear the burden.> Ah, but you're missing something there. You say that a> capitalist system is "unstable". But critically, it's > dynamically unstable. Over time, it will re-establish an> equilibrium if disturbedEventually, yes, causing a lot of people a great deal of hardship in the meantime. A socialist system can respond much faster.> Hence, just suddenly coming along and ripping out> several industries at a time with all the after effects> that would bring could actually be catastrophic, yes. > if you take the biological example, we might survive the> loss of a finger, a toe, but lose a leg and although we> might survive it'll take a lot of adaptation to return to> something like the state you were in before. On the other hand, swapping a badly functioning body part for an artificial replacement may be very traumatic and take time to recover from, but it will leave you better off in the long run.> Both of which would be heavily reliant on, yes, you> guessed it, advertising revenues to exist. So maybe> they'd be too expensive for me to buy. ####, if you can't> advertise at all, then maybe they don't even get review> copies of the game!Games are data, so both you and the reviewers would get them for free. So the money you'd save on games could be used to buy the review magazines. Also, people would continue to write and publish reviews for free because they like reviewing games, as they do now.> I don't know how it works abroad, but I don't have to> see my doctor - or a pharmacist - to buy certain> medicines. You still wouldn't have to. But you can ask them for advice, or read reviews of the options. Ads don't help you make an _informed_ choice.> Oh, and doctors often can't afford to prescribe the best> option available - so I might want to know about other> options. Huh? In most countries the patient pays for the prescription, or part thereof if it's subsidised. And in any case, ads are no good for determining the best option; all ads will claim that their own product is best. You need to check independent research to make an informed choice.> Perhaps not. Do you really think all people turn into> zombies when they see ads, immediately walk out the> door and start buying everything that was advertised? No, but ads do have _some_ effect, otherwise businesses wouldn't use them.> If you feel that society is being brainwashed by ads,> well, perhaps that's more of an educational issue! Yes, have businesses pouring money in to making ads, and the government pouring money in to teaching people not to be affected by them. Now that's what I call efficient use of resources.> You are talking about this in terms of mind control by> using the term propagandaI'm using it to mean biased information intended to provoke a particular response. Whether you call that mind control or not isn't important.> Consumers aren't forced to buy anything. Advertising> presents them with choicesThey already have choices; advertising tries to influence which choices they make in a particular direction, regardless of whether or not its better for the consumer.> I'm not convinced that advertising has the level of> impact you describe. Then why do businesses pay for it?> In fashion-led industries, perhaps, because there the> quality issue is paramount and can be quite notional. > Hey, there's another industry gone from lack of> advertising...! Yay! The more parasite industries we can get rid of, the better. "Fashion" is horribly inefficient - "you can't wear that any more, it's not fashionable this season" is just an excuse to persuade people to buy new clothes when they already have enough perfectly good outfits. People would still be able to buy new clothes when _they_ decided they wanted to, but they wouldn't be pressured in to it.> Advertising actually keeps a lot of very smart, inventive> people in work as well if y
ou think about it - it'd be a> shame to see those talents be wasted.Their talents are already being wasted _now_. Imagine what those smart, inventive people could achieve if they set there minds to doing things that would actually benefit humanity, instead of wasting their efforts on advertising?> It doesn't depend on your point of view at all. It's an> objective measurement. Yes, but "big" and "small" are subjective, and whether you look at single items or aggregates makes a big difference.> Even the low-priced supermarkets over here advertise. > If it's so expensive, how can they afford to do it and> still remain low-priced? They don't. All the low-priced supermarkets advertise, so they all charge more than they would otherwise. High-priced supermarkets presumably advertise a lot more.> Advertising lets people know they're low-pricedSo do, say, independent online price comparison guides, and word of mouth.> Advertising might be an "evil" but it's a necessary one> for efficiency. I thoroughly disagree.> Oh, and you don't really thing check-out staff would see> the benefit of cost cutting on advertising do you? Even> if there were any? Probably not; it was just an example of how perspective affects how big something seems.> You can't generally loss lead long enough to put similar> competitors out of business. Yes, but you can put dissimilar competitors out of business, eg a big corporation can run one store at a loss to put a small independent store out of business.> Customer loyalty is certainly a reason they do it - but if> they then started ripping people off do you really think> people would hang around? Then why do _you_ think businesses loss lead?> Well, if the supply curve sloped in the same way it'd> never meet the demand curve so there'd be no way of> determing a price. Not true; they'd have different steepness. Actually, the supply curve would often tend to be a "C" shape; there'd be an upper limit beyond which no more could be made at any price.> You say you want market forces to be given more> freedom, but the profit incentive is the fundamental> market force. The desire to benefit from a trade is the fundamental market force; the profit motive is simply one side of the coin. Consumers have a similar benefit, the value provided by the goods they purchase. Demand and supply are fundamentally the same thing, from two sides pitched against each other. Each wants to maximise their own benefit. The profit incentive is what creates the two sides, and hides the actual cost of production as merely a factor influencing the shape of the supply curve. It would be a much saner system to have a graph with just demand and cost curves.> Note that quantity isn't quantity produced in demand> graphs, it's quantity SOLD at the MARKET price. If there's a significant difference between the two, then something is wrong.> If you want to remove the profit element then you have> to decide how much you're going to supply without> reference to profit. Hence the price is irrelevant and> you supply a fixed amount at whatever price. No, you supply the quantity at the intersection of production cost and demand.> What THAT gives you isn't a curve, it's a vertical line.You mean a horizontal line, at an arbitrary point? That's ignoring production cost as well as profit, which would be crazy. A vertical line isn't a problem; it means per unit cost is invariable, so make whatever quantity is demanded at that price.> This is the classic communist set-up incidentally - > market forces be damned, you take a best guess at> how much people want and you supply that many> regardless of the cost.Possibly, but it's absolutely nothing like what I'm suggesting. Instead, the people say what they want and the upper limit that they're prepared to pay for it to get the demand curve, the factories provide the cost curve, and what gets made is the intersection of the two curves, with people being charged the actual cost (which was less than many of them were willing to pay).> This can causes difficulties for a number of reason. An> example will help. Suppose I guess that 100 cars will> be demanded by people. Why would I do that? Why not ask the people how many cars they want, and make that many?> But hey, that's OK, I've got 100 made and I'm not> bothered about profit so the other 20 will just rust> because all I want to do is meet demand.And break even!> If the guy was responding to market forces, he'd only> supply 80 cars and his workforce, raw material costs> etc would be lowerIn other words, increased unemployment etc.> The next year I make 100 cars again. Motorbikes turn> out to have a bad safety record. People want cars> again. The people ask for 120 cars. Oh dear. I only> have 100. I'm sold out. But as I don't care about> profit, I don't make any moreBut you do care about meeting demand!> If the guy was responding to market forces, there'd be> no shortage of cars because he'd expand his factory> and workforce. Or just take advantage of the shortage to charge more and make a bigger profit.> then other businessmen will be encouraged to start> making cars. Supply will increase, reducing prices again> as the businessmen compete for business.Eventually, but in the short term the public get ripped off.> So you see, if you ignore profit, your ability to supply is> very rigid. If you ignore profit, demand, _and_ production costs, then yes. Though "arbitrary" is perhaps more accurate than "rigid" - supply is still flexible, it's just being set by the whims of a madman.> A surplus may not be a problemIt is for perishable goods. Not so much for cars, for example, since they can be put in storage till they're needed.> but a shortage could be if you're trying to produce> something vital and don't have the spare production> capacity. True under any system. A socialist system would increase production capacity with demand just as a capitalist one would, except it's better able to reallocate resources (eg borrowing workers and equipment from the motorbike factory to help build extra cars).> The profit incentive causes players to enter the market > when prices rise and leave it when prices decrease To an extent, but there's a great deal of intertia; it costs a lot to build a car factory, so businesses have to be very sure prices will stay up, and when prices fall, businesses are very reluctant to throw away their investment.> Oh, and hey, if we want to talk about uplifts on> consumer goods - consider how much government> taxes add to prices across the board. For a good cause. I'm in favour of setting the tax rate by referendum; if people want better public services, they can vote for higher taxes.> In these examples I assume that the cars wouldn't be> sold at cost - that at least most of the cost of> production would be covered by 100 cars being sold.That is at cost.> Consider that in your state-funded DVD model, only the> materials costs were being covered by the sale price. > None of the manpower in terms of actors, directors,> editors, DVD creators, or fixed costs like buildings, set> design, props etc were being cost. Materials costs, and the cost of labour required to create the physical item. It's the same with cars; the design of the car is data work, paid for by the government. The construction costs of each car, including materials and labour, is charged to the user. The only difference being that DVDs have a very high data cost and a very low unit cost, whereas for cars it's the other way around.> If the demand for your entertainment is n
ot high, then> the demand curve is way off to the left and your supply> curve, being vertical, might not even meet the foot of> your demand curve. In which case no entertainment would be made. But there's no reason for the production cost curve to be vertical. Actually, this is a special case; we're dealing with how big a single shared item should be, not how many units of personal items. So we're measuring total cost, which means the production cost curve slopes in the opposite direction to normal (ie the same way as the supply curve under capitalism).> So, you'd certainly meet demand, but you'd have the> equivalent of a skyscraper of unwanted cars - all of> which would have to be funded from taxation. No, production would never be above the demand curve.> There's a reason communist states ran into financial> difficulties...Yes, they were police states run by dictators, which is even worse than capitalism, instead of _democratic_ socialist states, which would be a big improvement.> On the first point - why shouldn't the masters be> available? To who? Someone has to store the masters, and a decent release requires expensive equipment, cleanup of the sound and video, etc. An amateur could do irreperable damage.> It's something of a moot point for digital media anyway,> one copy's as good as another. True, but not everything is digital yet, or is likely to be for some time.> It might not prevent piracy of new items (what would?)Treating data as a public good that can be distributed freely? 8)> but it would allow enthusiasts to reproduce items at> cost later - which is relevant in the context of video CDs> of shows like Star Fleet of courseBut at lesser quality than you'd get from a professional release overseen by someone with a decent budget who cared about the show.

felice
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video cd's

Postby felice » Fri Dec 06, 2002 6:02 am

> Just as an aside - have a look towards the bottom of> this page and note the production costs figures, this> for a channel which apparently isn't as good as the> commercial equivalents:> Publically funded doesn't necessarily mean efficient, it> would seem, or cheap...Interesting... but I think the production costs given can be ignored; there's far too little detail given to draw any conclusions. Perhaps the BBC films more original material than the other channels, and makes a profit from reselling it that isn't included in the supplied figures. The text of the article doesn't mention excessive costs at all, which would be very strange if it really was spending unreasonably.And this article is a good example of the problems with a competitive system; the channel is being simultaneously criticised for being too much like the competition, and for focusing on different areas. It's expected to increase regional coverage, but still achieve national ratings. They want it to be just like the competition, only different, and better in every respect.

AndyThomas
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Postby AndyThomas » Fri Dec 06, 2002 2:39 pm

Felice, I can't carry on with this. Your economic arguments just aren't logical, and I don't have the time to explain things in more detail than I have. What I will say is that communist states thought they could predict demand for goods. You seem to think that people will have the time or the desire to vote for every single thing they might consume months in advance, that there will be incredibly rapid governmental responses to re-allocate resources as needed. That's utterly unrealistic.It is notoriously difficult to get any sort of funding out of a government for a project no matter how popular it might be - how would a factory producing something non-essential be able to get funds to expand as quickly as, say, a private company able to borrow directly from a bank? You'd have every company in the nation competing for the same centralised tax funded pool. It just can't function effectively like that. And now you've even got designs of cars being free. This Fund is supposed to cover the production of every single piece of intellectual property? Support the entire services industry? No chance.Sorry, but there's power to the people and then there's too much power to the people. You can't possibly give everyone a say to the level you seem to feel is necessary, and even if you could, you've got no guarantee that the decisions reached will be informed ones. At least with a civil service people with experience are in charge of day-to-day decisions. Whilst you do make some good points, there's no point in my continuing with this if you don't understand the underlying economics.
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felice
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Postby felice » Mon Dec 09, 2002 4:22 am

> Felice, I can't carry on with this. Your economic> arguments just aren't logicalAs far as I can tell, it's not the logic of my economics that you're objecting to; rather, you don't believe that it's possible for a governmental organisation to be sufficiently competent to manage the entire economy. Is that an accurate interpretation of your viewpoint?> What I will say is that communist states thought they> could predict demand for goods. Which was very silly of them. But I think the fundamental economic problem with historical communist states is that they've simply all been extremely poor.> You seem to think that people will have the time or the> desire to vote for every single thing they might> consume months in advanceNo; everyday items would be in continuous production, with the quantity produced adjusted to meet fluctuations in demand. Less frequently purchased highly customiseable items might have to be ordered in advance and take a few days to arrive, but very few things would take months (I can't think of any examples of things that might). And it would be more like using a mail order catalogue than "voting". And pretty much everything would be available more or less immediately if you were willing to compromise on style, colour, etc.> that there will be incredibly rapid governmental> responses to re-allocate resources as needed. That's> utterly unrealistic.I don't know about incredibly rapid, but it should certainly be theoretically possible to be significantly more rapid than under a capitalist system, where the various owners of the resources have no incentive to cooperate and the process causes hardship for the workers while it's going on.> It is notoriously difficult to get any sort of funding out of> a government for a project no matter how popular it> might be - how would a factory producing something> non-essential be able to get funds to expand as quickly> as, say, a private company able to borrow directly from> a bank? Given that the government would _own_ the bank, I don't think it would be a problem. The current government has very limited funds; if it had access to the total profit of all industries in the country, it could afford to be a lot more generous.> You'd have every company in the nation competing for> the same centralised tax funded pool. It just can't> function effectively like that. The pool could be divided up in to sub-pools for various industries/regions. And the companies wouldn't be competing; for expansion, the funds would be allocated to whichever factories had the best combination of room to expand, available workforce, proximity to customers, etc.> And now you've even got designs of cars being free.> This Fund is supposed to cover the production of every> single piece of intellectual property? Support the entire> services industry? Under a fully socialist system, yes. With the entire profit of the economy to work with, that would be no problem at all. Under an only data-socialised system, things like car designs could still be developed by private companies, since they're extremely specialised-interest items, which makes enforcement of intellectual property laws a lot easier.> Sorry, but there's power to the people and then there's> too much power to the people. You can't possibly give> everyone a say to the level you seem to feel is> necessaryPeople already have that much say; they choose where to shop and what to buy. All I'm proposing is removing the socially harmful attempts to manipulate what their decisions are, and reducing the reliance on guesswork as to what people might want (at the price of small delays in availability for some items).> and even if you could, you've got no guarantee that the> decisions reached will be informed ones. *shrug* If people don't like the outcomes of their choices, then they'll have an incentive to become more informed in future.> At least with a civil service people with experience are> in charge of day-to-day decisions. There would still be a civil service to give advice and manage the practical issues of how best to implement the wishes of the people.> Whilst you do make some good points, there's no point> in my continuing with this if you don't understand the> underlying economics.I understand the economics perfectly well. Practical difficulties in implementing a system are a completely different issue from flaws in the economic theory. If there are flaws in my theory, I'd like you to point them out. If not, I think it would be more worthwhile and interesting to cooperate on trying to find ways to overcome the practical difficulties, rather than just saying "it can't be done".

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Postby AndyThomas » Mon Dec 09, 2002 7:07 pm

> As far as I can tell, it's not the logic of my economics> that you're objecting to; rather, you don't believe that> it's possible for a governmental organisation to be> sufficiently competent to manage the entire economy.> Is that an accurate interpretation of your viewpoint?No, not really.  Your economic arguments aren't valid, and yes, if you're now suggesting a government body could be adequatley flexible and dynamic to respond to market forces, then I don't agree with that either.  Whilst this discussion was interesting when we were talking about the pricing of data, it's gotten to the point where you're talking about social re-engineering on a grand scale and I just don't have the time to help you come up with a theory for a workable socialist economy!  I don't think either of us is qualified to do so.  For instance, you say communist states were poor.  Russia wasn't poor.  It was a superpower.  Its problem was that the distribution of its resources was so poorly engineered by its government that it came apart.  The government concentrated on what it viewed as important.  I know that in your version you'd have the people deciding - and yet, they can't decide on everything, and you have the government running everything.  Or trying to.  So politics comes into it, red tape, debates about where to allocate funds, and so it goes on - until the people decide capitalists were better with the economy than bureaucrats; capitalists will give people what they want, bureaucrats will give people what they think they "require".
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felice
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Postby felice » Tue Dec 10, 2002 4:19 am

> No, not really. Your economic arguments aren't validCan you provide any examples of logical flaws in my economic arguments, as opposed to practical difficulties in implementation and enforcement?> and yes, if you're now suggesting a government body> could be adequatley flexible and dynamic to respond to> market forces, then I don't agree with that either.You think it's theoretically impossible? Certainly the current UK government isn't up to the task, but I don't see why a dynamic, flexible system to track and predict demand and allocate resources accordingly _couldn't_ be created.> Whilst this discussion was interesting when we were> talking about the pricing of data, it's gotten to the point> where you're talking about social re-engineering on a> grand scale Massive social re-engineering would be required just for socialisation of data; I don't think extending it to the whole economy would be that big a change in scale.> I just don't have the time to help you come up with a> theory for a workable socialist economy! But you do have time to look for flaws in the theory?> I don't think either of us is qualified to do so. For> instance, you say communist states were poor. Russia> wasn't poor. It was a superpower. It _became_ a superpower under Stalinist dictatorship. At the time of the revolution, Russia was a relatively unindustrialised country, ravaged by war, suffering from widespread poverty, food shortages, and economic collapse. This was followed by another three years of "civil" war (counter-revolutionaries strongly supported by foreign powers), drastically worsening the already bad situation and resulting in the loss of the bulk of the revolutionary workers who had put the communists in power and would have resisted the state turning into a dictatorship. Communist revolutions generally occur during times of hardship when the free market economy is failing to meet peoples' needs. I'm not aware of any revolutions that have taken place in well-off countries.> Its problem was that the distribution of its resources> was so poorly engineered by its government that it> came apart. The government concentrated on what it> viewed as important. Ie, becomming a superpower, which it suceeded in doing. Hardly a convincing argument for the incompetence of governments. The problem was that it failed to concentrate on what the people considered to be important. It wasn't incapable of distributing resources efficiently, it simply diverted virtually everything towards catching up with the more developed nations, sacrificing the needs and freedom of the people in order to build up industry as fast as possible.> I know that in your version you'd have the people> deciding - and yet, they can't decide on everythingCan you give me some examples of the sorts of things that they can't decide on?> and you have the government running everything. Or> trying to. So politics comes into it, red tape, debates> about where to allocate funds, and so it goes onWhich is why the government needs to be a system to implement the wishes of the people, not to make policy decisions.> capitalists will give people what they want, bureaucrats> will give people what they think they "require". Even if the bureaucrats' jobs are to give people what they want?

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Postby AndyThomas » Tue Dec 10, 2002 6:16 am

Felice, if you want to go any further with this I suggest you find a politics newsgroup. I just don't have the time to answer your questions in the sort of depth you're demanding. You know what the core problem is? You're assuming too much from the average human being. You say government isn't there to make policies, it's supposed to do what the people want. "The people" could never agree on what they want. So the government has to make its policy on the basis of what it thinks most people want.You're ignoring the economic fundamental of limited resources - it's fundamentally impossible for everyone to have what they want. If you gave everyone the option of a small black and white TV versus a big widescreen colour TV, they'd all go for the latter but that doesn't mean you can produce enough units to give everyone one. Therefore for your system to work, you'd have to eliminate greed and make everyone happy with what the state could actually afford to give them. Unlikely.Oh, and there IS a dynamic, flexible system to track and predict demand and allocate resources accordingly - it's called capitalism. It may not cater to all of society's needs, but societies clearly find it acceptable. Your whole argument involves forcing the people into a socialist economy, which is ironic when you stop and think about it.
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felice
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Postby felice » Tue Dec 10, 2002 11:08 pm

> You're assuming too much from the average human> being. You say government isn't there to make policies,> it's supposed to do what the people want. "The> people" could never agree on what they want. So the> government has to make its policy on the basis of what> it thinks most people want.Why bring "what it thinks" in to it? Why not just do what most people actually do want?> You're ignoring the economic fundamental of limited> resources - it's fundamentally impossible for everyone> to have what they want. If you gave everyone the> option of a small black and white TV versus a big> widescreen colour TV, they'd all go for the latter but> that doesn't mean you can produce enough units to> give everyone one. No, I'm not ignoring limited resources. Under the kind of socialist system I'm advocating, people would continue to be paid for their work, and choose what they want to buy. If everyone wanted to buy a widescreen colour TV at the price on the cost curve for that quantity, no problem. Though it's much more likely that some people would prefer to buy a cheap black and white TV and spend the rest of their money on other things.> Therefore for your system to work, you'd have to> eliminate greed and make everyone happy with what> the state could actually afford to give them. Unlikely.No, people would have to be happy with what they can afford to buy, just as they do now. Except they'd have much more control over what they could afford, with the elimination of unemployment, flexible hours, and a consistent rate of pay for all jobs.> Oh, and there IS a dynamic, flexible system to track and> predict demand and allocate resources accordingly - it's> called capitalism. As a side effect of a process that demands perpetual growth and inherently increases the gap between rich and poor? That doesn't sound very efficient to me.> It may not cater to all of society's needs, but societies> clearly find it acceptable. Oh? What choice do they have? Societies don't make decisions, the individuals within them do. And the minority who benefit from the current system have much more power than the average individual.> Your whole argument involves forcing the people into a> socialist economy, which is ironic when you stop and> think about it. It's not _possible_ to force people in to a socialist economy; the majority would have to _want_ it first. Which means convincing people that it's a good idea.


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