Tuesday, March 2, 2010

Labour Merit, Milk and Marx

Reading the Communist manifesto reminded me of Eric Blair's (pseudonym: George Orwell) book "1984". The idea of the lower class, the proletariat arising to overthrow their oppressors and establish a new social order has been around for a long time. As long as human history, I suspect. Throughout history the oppressed lower classes have revolted, sometimes successfully and established new systems of human order. The tendency has almost invariably been for the oppressed to become the oppressor.

It is unfortunate that Carl Marx did not live to see the development of his dreaded bourgeoisie society, he would have then been able to witness the most level playing field in the history of human kind. Even though we have the rich and the poor and some of the rich are very rich, and some of the poor are very poor, never in history has the ever been a large, more comfortable and influential middle class as their exists today. Standards of living have risen across the globe giving people more freedom and luxury than any other group throughout history. The exact opposite of what Mr. Marx feared.

It is hard for us to understand the point of view behind the Communist Manifesto. In a system without individual property where goods are allocated by "need" rather than by what I shall call "labour merit" (deliberately using the British spelling) inefficiencies abound. As much as we'd all like to live in a society where everyone yielded to the needs of others and placed others' priorities above their own, that will not happen with the human state. Man kind needs incentive to motivate him to engage in labour.

The other problem with the communist system is that deciding how to allocate resources on a need-based system is not as straight-forward as it seems on paper. In same cases it might be obvious: if Josh is dying of pneumonia I would agree that he needs the antibiotics more urgently than I do for my petty flu. However, which of us needs more milk is more ambiguous. We could both argue eloquently for increased milk rations, him for his milk and cookies, me for my homemade morning espressos but deciding between those two "needs" is arbitrary.

That is where the price system intervenes to establish who gets the scarce resource of milk. It may seem cold or arbitrary in its own right but it has proven itself to be the most effective and "fair" method. With the readings we have done the past weeks I don't feel I need to elaborate more on why this is so.

It is getting close to midnight and I want my $10, so I will end this rambling post here. Hey, wait. That's the price system in action, isn't it?

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