Collectivism vs Free Market/Competitive Market – Pt 1

Introduction

In the course of studying systems of government and economics, one must necessarily examine the merits of a collectivist society versus a competitive society. My own studies of the effects of collectivism on America have led, inevitably, to a study of the various forms of collectivist societies and their opponent–competitive societies.

Around half of America and most of those I speak to as an author, certainly, are all for various forms of collectivism. The problem I have noticed, in speaking to various individuals, is that most of them have no idea what the implications of such a view might be, and they certainly hold to the belief that collectivism and liberty can co-exist. I will warn you up front that this is likely to be a longer post since we will go through a list of the major objections for both sides. So if you’re interested in the topic, please stick with me. I will do my best to be concise and to give you the most information I can while doing so. If you’re still here after the warning on reading length, let us move forward to examine the implications and results of both a collectivist and a competition-oriented economy. Then let us ask the question: which one can co-exist with liberty and to what degrees can either support it if either.

Because this is a longer topic, I’m going to focus on collectivism here. Next week, we will get into the competitive side of things and the arguments against that to determine whether those arguments have valid points and which system is better. For now, to make the reading manageable, I will wait to get into that.

The Foundation of Collectivism

To understand either system, we must first understand what the base principles and premises underlying that system are. Let us begin with collectivism.

Collectivism, by way of definition, here refers to any form of a planning-oriented society. This would include the welfare state, all forms of socialist societies however soft, and communist/fascist regimes. The main principle that guides collectivism is the idea that if we can just plan enough we can ensure a society that is–if not perfectly equal in outcome–more equal. The goal is not to in any way promote liberty as an end in and of itself but merely to ensure that, through careful planning, we achieve equality of outcome.

Those supporting this viewpoint most often consider that equality of outcome we are striving for that everyone will make a good, equal wage, everyone will achieve similar outcomes in quality of life, and everyone will be starting from the same point. Some of the best known individuals in the US who have stated that this was the goal were Lyndon B Johnson, FDR with his New Deal, and more recently most of the major names in the Democrat Party in the US. We are not yet going to make a judgment on the foundation that the collectivist mindset is built on. The point here is to first establish what is underlying the viewpoint.

Now, while equality of outcome is the main motivation and goal, a collectivist worldview also rests on the idea that the individual is only important in so far as he is a member of the larger picture of society. If he ceases to be useful or is in the way of society, the collectivist sees him as a problem, not an individual who simply does not care for the same things they do. We are all cogs in the wheel, working together to achieve whatever aims society is directing us toward, and of course, in practicality, this means whoever is in charge is doing the directing because society is somewhat amorphous or ambiguous.

The Objections to Collectivism

Now that we understand the main base upon which both of these societies rest, let us examine the objections to each. Once done, we can then move on to asking the question: are the objections held up by history, fact, and reality?

Let us start, once again, with collectivism. I will put them in list format to make them easier to follow along with.

  1. Reduced competition.
  2. Reduced diversity in who is doing what jobs.
  3. Government becomes the worst type of monopolist.
  4. Individuals have no rights to their own labor.
  5. Free press is either silenced by force or by government control of the goods necessary to keep the press running because a collectivist society has no room for anything that would challenge or upset the balance established by the planners.
  6. Production and distribution of wealth is usually worse than a competition-based society. At best, it might equal the others, but the other costs outweigh any benefits supposedly achieved.
  7. Law becomes unreliable and based on the whims of the rulers who are deciding what is best and what the plan should be.
  8. The individualist/individualistic thinking becomes the greatest enemy. No one can be allowed to think that their liberty is more important than the aims of society as a whole.
  9. Private property–in business to begin with but then in even private life as the regime becomes more and more totalitarian–is no longer protected nor are those who do or wish to hold it.
  10. The only power worth having will be a share in the governing authority. No other forms of influence or power will matter.
  11. Liberty is destroyed.
  12. Driven on envy of those who have less than another.
  13. The moral values that lead to it are not usually the ones that end up leading it, and morals end as a political function, determined at the whims of government.

Examining The Points Against Collectivism

Reduced competition and diversity in the workforce

The first two points on our list go a bit hand-in-hand. The claim is that collectivism reduces competition and reduces the diversity of who is doing what job. This is a perfectly valid claim. Why? Because first of all, a planning society has to reduce competition by its very nature. It must ensure that every resource is used in the most efficient way, and this means they must take control of both the production and distribution of the resources in one way or another. If they did not, they would not be able to effectively plan.

Secondly, the diversity of job holders in a specific field is also hampered because if you want to produce the products in the most efficient way, you have to ensure that the only people working on it are the people who you believe are best suited to the position. An example of this would be seen in countries–historical or modern–who had their students take placement tests and assigned them to careers accordingly. Prussia is a notable example of a country that did this. What would never happen is an individual who is not naturally talented in an area being allowed to work hard until he or she is capable of working in that area with competency. So, therefore, the diversity of who is doing what job is decreased.

Note that the diversity objection here has nothing at all to do with diversity in the sense most think of it today. We are not, in general, discussing a diversity in beliefs, sex, age, or color. While these factors could come into play depending on the society and the job, that is not the way diversity is being defined. It is a diversity of talent and skill sets that will be hampered most predominantly.

Government becomes the worst kind of monopolist

Again, this claim is also true. In taking control of at least the production, even if they do not themselves staff and own the methods of production, the government becomes the strongest sort of monopolist: the one that no one can take down short of a revolution. They destroy competition in the name of better planning, and control becomes the name of the game whether it is under the guise of good motives or openly tyrannical.

Individuals have no rights to their individual labor

This goes hand in hand with the first two points, but a planning society must view labor as a means of production, and if they are in control of production and the methods of producing, they must control labor. This goes back to the point about planning who will do what job, but it has broader implications too. A collectivist government can force an individual to work, and no one in that society could complain that it is not allowed on the basis of rights because the society refuses to recognize an individual’s right to their labor.

If you own a printing company in a collectivist society, for example, you could be forced to print government propaganda at half the price of what you could earn printing someone else’s material, but you would do it because you do not own the right to your labor. You cannot say no. I am unable to judge how that sounds to anyone else, but to me, this alone is a reason not to be in favor of a collectivist system. No one should have a right to demand my labor of me on the merit that they need it or can take it by force. But a collectivist society can do that, and they have repeatedly done so in history from Russia to Nazi Germany to modern day China.

Free Press is silenced

Once again, if control is the name of the game, you cannot allow anything that would threaten that control or the often delicate balance of power you have erected to keep and assert that control. Free press is the antithesis of that goal because a free press says what it wishes. For the press to remain free, they must be allowed to print whatever opinions or news they wish, even if it threatens the control of the ruling class. That cannot be tolerated in a collectivist society, and once again, history has proven this out time and time again.

Production and Distribution of Wealth is Worse

So with this one, the claim may or may not be accurate. Sometimes, a planning society may be able to make the production and distribution of wealth equal to other systems who are operating under a laizzes-faire capitalism because the other systems are also restricting the free market and competition. However, in the least, we can say honestly that it is no better and does not in any way justify the other violations of liberty and justice that the systems of collectivism promote. Nevertheless, generally speaking, countries that adopt a collectivist system do end up seeing a decline in productivity and an average income that drops because, as it turns out, the rich do not actually possess enough wealth between them to provide the much larger class of poor with a living wage.

This is nowhere seen more clearly than in the numbers if you were to take America as an example. If we added up all the wealth of the top 1% that collectivists today say should be taxed to provide for the poor, and if we then did what no one has proposed we do and take it all away from them in its entirety to be redistributed evenly to the entire population of less well-off individuals, we wouldn’t have enough to live off for more than a year.

I am an accountant by training, so I do like looking at numbers and stats. Here is the breakdown. Estimates of the wealth owned by the top 1% say they have about 21 trillion in all. There are 328.2 million people in the US. If we divide 21 trillion by 328.2 million, everyone would get about 64K. One time deal, by the way, because if we distribute it all at one time in this hypothetical, we would have nothing left to give later on. But we’d all be equal in what we had. I think we can all see that we do not have enough wealth in the country to ensure that everyone would get an equal distribution if we just taxed the rich on everything they owned. At some point, the “cash cow” dries up and we all suffer.

This particular accusation then is not only valid but also a statement on the logic of the position.

Law becomes unreliable

In a planned society, it becomes necessary to have a plethora of rules, and every situation will call for a different application of rules in order for that ever-growing list of rules to be in any way useful or tenable. But this means that, since law is no longer applied equally to every situation governed by that law, citizens can no longer plan their lives around that. They can never know for certain that the law will be on their side in any matter since how the law applies to them must be determined by the will of the planners judging the situation. This, then, is also a fair accusation.

The Individualist/Individual Thought Becomes the Greatest Enemy

This one is a necessary conclusion of a system based on collectivism. This is because collectivist societies focus on what is best for the collective or the state even if it is necessary to sacrifice the individual and their wants or needs. Nowhere is this seen more clearly than in the Russian Communist saying, “You have to crack a few eggs to make an omelet.” The individual becomes the enemy if they choose to go against what has been prescribed for them or if they choose to do what is best for them but not what is best for the collective or society.

Note that this doesn’t necessarily mean that the individual is harming society. They have only to be doing something that does not give the most benefit to society or to think for themselves and question the status quo to become the enemy. There is no room for free thought any more than there is room for free press in so far as it may disagree with the rulers of the collective.

After all, no individual should be selfish. They ought all to serve the collective. Of course, the issue here is that humans are imperfect creatures. Those making the demands on those of us who must bear the burden of those demands are the most selfish of all. They are the ones who simultaneously demand that we be “unselfish” in serving their wishes, but do not themselves give up their wishes to serve ours. This is a natural result of human nature, which leads us to crave power once we have tasted too much, and undeniably, the ultimate power is in being able to plan society and the lives of its individuals down to the minutest detail in the way you wish it to go.

Private Property Is No Longer Protected

In a collectivist society, the individual’s rights never trump those of the collective. A planner at the top of that collectivist society has only to prove that their proposed measure is in some vague way necessary to benefit the collective and they will be granted that measure. This extends not just to regulating who does what job or what you can or cannot say but also to what you own. Particularly in the case of business, private property is no longer protected. If it proves more beneficial to the state that the government hold all property, then they may seize property with no regard to private ownership, and no one has the power to deny them.

Power in Government is the Only Power Worth Having

Again, a fair accusation. If government has all of the power, which it does in a planning/collectivist society, what other power is left to have? And if you have it, what good will it do you if you do not also possess power within the government to ensure that your will or wish is enforced? In the end, the whole system will devolve to who has enough clout politically to get what they want and get it quickly before winds of power shift against them. This is great for those who have political influence or power while their interests are the popular ones. When they are no longer popular, then the individuals representing those interests also become unpopular and lose their power. Then it is no longer so wonderful.

Liberty is Destroyed

This also must follow from a planning society. Why? Because if a government is to be able to plan every sphere of life to the degree proposed by those individuals in full support of real socialism, communism, or welfare states, they must remove liberty from the individual. Making decisions at the individual level and keeping the government out of private and public life as much as is possible is inherently opposed to the planning economy or society. This should be a simple logical conclusion, but it seems to be one people often argue is not a necessary one. This, at least, has been my personal experience in discussing this with people, and it has been the experience of many of those arguing against a planned society as well.

Unfortunately, a society that plans beyond what is absolutely necessary to allow individuals to live life as freely as possible without having no recourse of law if wronged in commerce or other arenas of life must take away one liberty after another in their quest to control all of the areas of life they feel is necessary. As there is no limiting factor in this system, eventually the planning society must end by taking away liberty entirely in favor of government control.

Driven on Envy

Once again, this is an accurate claim. Historically, proponents of a planning society have based their arguments on promising less fortunate classes that they will be given a life equal to that of the more fortunate classes.

It is based wholly on pointing to the natural disparities that occur in economic positions due to a wide range of variables and then telling those on the bottom that they’re right to envy the top and that the top should be made to give up what they have to those who do not have. Even in cases where wealth distribution is not promised–which is rare indeed–the basis is still greed and envy because you must still tell the classes you want supporting you that you will make sure they have the things someone else does that they have always wanted. Those arguing for planning societies are appealing to the envy of the lower classes toward those who have more to get them on the side of the planning supporters.

Morality Becomes a Political Function

Typically, those beginning a planning society do not start out believing it will adhere to morals they would disagree with. They would not, usually, begin with the belief that their successors will abuse the very classes they claim to wish to help. Here, I make a distinction between politicians who are supporting this for their own gain and those who have truly bought into the planning agenda and did so because they thought it would right the ills they were unwilling to leave to the competitive society to address.

Unfortunately, the worst sorts of people are usually the ones most attracted to positions of unbridled power. So even if the goals of the original leaders started out good (which they very often do not), those who follow after are usually worse than they are. Furthermore, the morals held by those who started the planning are often higher than those held by those who come after them.

Eventually, morality devolves to a government regulation. Citizens are told what is wrong and what is right, and the rules change with whoever is in control. Things that would not be considered wrong under the old morality suddenly are. It is no longer a situation of true moral good and evil. It is the government who decides, and that standard can change. It is all relative.

Conclusion

As we examine the accusations against collectivism, we find that most of them have some validity. There are some significant issues with a planning society if we look at it from a purely logical viewpoint. However well-intentioned the goals of those who propose collectivism as the solution to societal ills, the facts remain that the system has several serious flaws that will lead to tyranny in nearly every case and must lead to exactly that if men without the restraints of morality and wisdom come to power.

But we still do not have the full picture without also examining the alternative: competitive societies. There are objections levelled at this alternative by supporters of collectivism just as those of us on the competitive side levy accusations and objections at the collectivist proposals. To have the full view, we have to examine those as well and then evaluate both sets of claims to decide which system is best able to promote liberty, pursuit of happiness, and life for its members. That is what we will examine next time.

For now, if you want a closer look at the arguments against collectivism, F.A. Hayek’s Road to Serfdom is an excellent place to start.