There is an ongoing debate over which system, Capitalism or Socialism, best meets people's needs. Socialism, in particular, has been growing in popularity, especially in intellectual circles since it appears to address many of the problems of social justice, equitable distribution of incomes, poverty, war, and probably the apparent lack of unicorns. It is especially popular among those calling themselves Democratic Socialists because they see it as a road to the power which they currently lack.

The foundation of Socialism was laid out by the German philosopher, Karl Marx, not to be confused with Groucho, Chico, and Harpo Marx—later American philosophers. Karl was a brilliant writer who expressed his thoughts in his famous work: "Das Kapital", which few people seem to have read.

Unfortunately, Karl knew nothing about economics and human motivation, although those shortcomings did not seem to handicap him in his writing. He also appears to have known nothing of cybernetics—a topic essential to understanding the myriad failures of Socialism regardless how often it is tried—whether it is Democratic or not.

Cybernetics is the study of how systems process information, react to their environment, and use feedback to adjust their behavior and achieve specific goals. Today, cybernetic systems are often understood to be computers, but human networks, such as an economy, can also be understood as cybernetic systems. An economy can be thought of as a system to manage the allocation of resources among those who need them, and to support the development and production of new resources.

Cybernetic systems fall into two broad categories: distributed and centralized. In economic terms, Capitalism is a distributed system, while Socialism is centralized. In Capitalism, millions of people, businesses, governments, and others make decisions based on their situations at the time. Some decisions are based on need, some on ability, some on demand, and some just on whimsy. Typically, those decisions do not involve consideration of global social needs or what decisions are being made in other distant locations.

Through the mechanisms of pricing, competition, auctions, and availability, Capitalism acts as a cybernetic system to ensure that goods and services are produced to meet the demands for those commodities. This process is automatic and has been called the "invisible hand" because the efficient operation of a Capitalist economy seems to be directed by some invisible operator without an obvious guiding agent.

To Socialist philosophers, this system seems messy, inefficient, wasteful, unfair, exploitive, and vulnerable to abuse and injustice. Socialists assume that a centralized control can fairly evaluate needs across the economy, manage production so that the needs are met, avoid waste and inefficiency by exactly matching production to needs, and by ensuring the system only produces what is needed without wasteful excess. They see Socialism as equitable, fair and just so that needs for food, shelter, clothing, smartphones, lawnmowers, and every other commodity is provided to those, and only those who need them in just the quantities they need. Wise government agents would see that there was no corruption or exploitation or favoritism in production or distribution. The operation of the system would be visible to all, and an optimum economy.

In other words, Capitalism is a distributed cybernetic system, while Socialism is centralized. With that understanding, we can look at the great body of experience that has been obtained from other cybernetic systems to see why some forms work better than others and under what conditions.

One of the first questions is how robust is the system to perturbations. Sorry for the technical terms. They just mean how well can the system handle unexpected events and continue functioning reliably. A perturbation is just some often unforeseen event that disrupts smooth operation.

In an economy, perturbations are common, ranging from large scale like wars, earthquakes, hurricanes, droughts, to personal scale when a house burns down, a car needs repair, or a girlfriend gets pregnant.

Distributed systems are especially good at dealing with perturbations at almost any scale. Whatever the event, it will affect each individually differently, and that individual will respond according to their needs at the time. While some needs will be common to many individuals in a situation, such as food and water during a famine, other needs will differ even in a shared situation. In war, for example, some may need more ammunition, while others will need medical supplies. Even at the personal level, when a car needs repair, there are usually many sources of parts and services. Often, production can be shifted quickly in response to changing needs, since decisions are generally made locally.

As a distributed system, Capitalism can respond quickly to changes in circumstances at all scales, often through changes at a small, local level without a need to disrupt the larger economy. In part, this is because of something called fungibility, which is just the exchange of one thing for something else of equal value or utility. Dollar bills, a gallon of gas, and many other things are generally fungible, while things like houses and spouses are not, although some might argue otherwise about that latter item.

As a trivial example, you go to a hardware store looking for a 1 inch long 1/4 inch bolt. Unfortunately, the store is out of that item. Likely you could find it at a different store, but perhaps you could use a 1/4 inch bolt that is 3/4 inch or 1.5 inch long instead. Perhaps you could even use a nail or glue. The point is that even if the particular item is not available, there are many fungible alternatives available to meet your need. This fungibility in nearly every area is a key feature of Capitalism and makes it especially able to deal with perturbations.

Socialism, on the other hand, is centralized. In order to achieve an optimum, a centralized systems must have information about every part of the system. Moreover, that information must be current. as any lags in communication can affect the computation of the optimum operation. Whenever there is a perturbation to the system, the optimum must be recomputed. Every new need, every change in productive capacity, every variation in materials, distribution, and every other factor in the economy must be re-evaluated. Since many perturbations also involve a disruption in the flow of information, the system will often lack essential information, or may not obtain accurate information in time, or might even get wrong information.

Once an optimum in determined, the necessary information must be communicated throughout the system. Goods must be shifted to different locations, production of some items must be stopped while other items are given priority. Workers must be given new tasks. In some cases, temporary measures must be implemented, knowing that new measures will be required in the future, leading to an even greater load on computation, planning, and execution. Too often, the computational load will exceed the capacity of the centralized system, causing breakdown and the often seen failure of the system to meet even basic needs.

Consider our trivial example above. You go into a Socialist hardware store looking for your bolt. The store is out, but since there is no need for redundant other stores, there is no other store available. You can't substitute a different size bolt since all other sizes have been efficiently allocated to other uses, and yours isn't one of them. The store will have you fill out a requisition for a new bolt, and will pass that request on to central planning. The planners will evaluate the resource requirements of your request and may schedule the production of a new bolt for you when appropriate—sometime in the next two to three years.

You return home without your bolt and with no fungible alternative. As a result, you cannot fix your car so you can no longer get to work. The factory where you work is now short a worker and cannot meet its production quota. Other entities that depend on that production are adversely affected and cannot sustain their production.

The central planning facility is now overwhelmed with information on new needs and revised capacity. Unable to compute a new optimum, distribute new instructions, and realign production properly, the system collapses and reverts to a black market economy bearing uncanny resemblance to a form of dreaded Capitalism. For the want of a nail....

Now we begin to see why Socialism fails. As a centralized system, sometimes called a "command economy", it cannot respond effectively, or even at all, to changes. Human managers in such circumstances will often blame outside agents for failure, claiming that it is subversion that is responsible, rather than inherent flaws in the theory. Billionaires, conservatives, Jews, and Republicans, along with Big Oil, Corporations, Elon Musk, and Donald Trump are all to blame when Socialism breaks down.

Life is messy. It is not the nice consistent, predictable system many would desire. The unforeseen happens and those best able to deal with uncertainty and change are best suited to survive. Socialism and Communism have been presented as ideal systems, with progressivism as the process of transforming primitive Capitalism into the ideal solutions of Socialism and Capitalism.

In reality, progressivism has it backwards. It is Capitalism that is the robust survivor able to handle the realities of life, with Socialism and Communism as the fragile, weak systems that collapse even under normal demands.

David Robb——Bio and Archives

David Robb is a practicing scientist and CTO of a small firm developing new security technologies for detection of drugs and other contraband.  Dave has published extensively in TheBlueStateConservative, and occasionally in American Thinker.