Wednesday, November 17, 2010

Socialism (Is) For Dummies

Let’s talk about an issue that came up in the comments the other day. Leftists don’t understand why the private market is the only sane way to run an economy. In fact, they love the idea of pointy-headed experts "organizing" the economy. But does this make any sense? Let me ask a few questions and then you tell me.

Question 1: A hamburger is a fairly easy product to make, right? After all, it contains few ingredients, there are no hidden tricks, it requires no ultra complex high-tech equipment, and its appeal is well-known.

Question 2: Tell me everything that goes into making a hamburger.

Easy right? Beef, some mustard, some bread, maybe an onion and a little labor to put the whole thing together. Simple. But that’s not everything, is it? Where does the beef come from? That’s right, a cattle ranch. So a hamburger requires a cattle ranch. And of course, that means it needs farm labor. And they need cattle feed, which comes from somewhere too. They also need trucks to get the cows to the slaughterhouse.

Hmmm. . . trucks. Wow, what all goes into making a truck? Well, let’s skip that for now. To make the slaughterhouse, you need a building, which means construction equipment, which means a metal foundry, which means chemicals and raw minerals. Since those are usually overseas, that means ships, which means docks. I wonder how big the ships should be? And what's this I hear about mining equipment?

But back to the slaughterhouse. They use metal equipment, which means machine tools, and more minerals. It also mean electricity to keep those plants running. . . not everyone has Boiler Elves. And of course, they need refrigeration, which is another whole industry. And let’s not forget the labor to make these tools, dig the minerals, construct the ports, the roads, the farms, and design all of it.

Suddenly, a simple hamburger doesn't seem so simple does it? And we’ve only scratched the surface, haven’t we? Don’t forget that we never delved too deeply into secondary products like what it takes to make that pesky truck. . . what the heck is a solenoid anyways? Nor did we talk about how to price these goods or to make sure that there is labor at each step, or that the labor has homes and can get their hands on food and electricity and water and sanitation and health care and transportation and. . .

If it’s this difficult to get a simple hamburger into your hands, how hard do you think it will be to design an entire economy that provides for the needs of 300 million American citizens? What happens if you forget to carry the one somewhere in your equation of the American people? Is it any wonder that bread lines are a common symptom of socialist countries, i.e. "command economies"?

Hopefully, you see the point of this exercise. Just looking at the complexity of this seemingly simple product, it should be obvious that a panel of even the pointiest-headed experts could never be up to the task of "organizing" our economy. And they certainly couldn't do it as well as the 300 million Americans who make a trillion decisions every day about what resources to spend on what and at what price?

And if they aren't up to making a hamburger, why should we think they're any better at "organizing" something larger. . . like the health care system?


Tennessee Jed said...

How true, Andrew, how true.

To quote the Reverend Horton Heat: "eat steak, eat steak, eat a big old steer, eat steak, eat steak, do we have some dear; eat meat, eat meat, it's pretty good food, makes a Grade A meal when I'm in the mood."

AndrewPrice said...

Jed, I'd never heard that before, but being a huge fan of steak... I have to say I like it!

I've used this example on liberals in the past and they just started at me unable to compute why they couldn't explain this away without admitting that their personal beliefs were wrong. Good times!

rlaWTX said...

[1] excellent!!!!!!!

[2] Libs being wrong: that idea is a "does not compute" moment for them. How can everything they have been taught (home, school, esp college, from media) be WRONG??? That is like dividing by zero!
I also think that's why they are so offensive about our perceived "stupidity". The libs I know (& am related too) generally assume that everyone in the room agrees with them. When they discover that someone doesn't, that person must be un-educated on that subject specifically or stupid in general. For someone to have a reasoned, informed non-lib opinion is beyond comprehension.
I'll keep this explanation on file!

AndrewPrice said...

rlaWTX, Thanks! I'm glad to be of assistance!

I know exactly what you mean about the way liberals behave. They really do believe that everyone thinks like they do, and when they find someone who doesn't, they assume that those people are stupid and uneducated. Wrong. Liberals are the ones who are crawling with illogic and ignorance. They are the ones whose beliefs make no sense and can't stand up to being tested.

And you're right to call this a "does not compute" moment. They will grasp that each piece is true and that the conclusion must follow from the pieces, but then they flip out because the conclusion flies in the face of the things they believe. And since they assume they can't be wrong, then this must be wrong... or it's a trick of some sort!

I've found that once they can't come up with an adequate answer, they will usually just drop the conversation. Nothing says "invalid beliefs" like being unable to sustain them in a debate.

T_Rav said...

Andrew, this argument (which is awesome, by the way) could also be used to blow away those calls for a "fair wage." What, after all, is a fair wage? Is it the same for a university professor--okay, bad example--as a convenience store clerk? And even within professions, what about the ones who have more experience and do higher-quality work? Shouldn't they earn more than their lower-grade colleagues? Hayek was right: Once you legislate nice-sounding concepts like this, you end up having to control every facet of existence if you want it to have any meaning, and then you wind up with despotism, and a pretty inefficient one at that.

Joel Farnham said...


You could also add the underlying technology to cook the hamburger. The stove, the spatula, the frying pan, the knives, the grinder to make the meat into hamburger, and the plate, the untensils to eat and the table with which to sit.

This lowly hamburger really can be considered the epitome of society.

Anonymous said...

Andrew: And we must never forget that these Luddites are the same ones who think that electricity comes from the wall socket.

Ponderosa said...

It takes a market to build a burger.
by Andrew Price

Dedicated to liberal children of all ages...

AndrewPrice said...

T_Rav, Thanks! Feel free to use this against your liberal friends! ;-)

You make a great point, particularly in that you are adding yet another layer of complexity to this. Even the "simple" model I've discussed doesn't differentiate the labor. How do you decide who should be destined to flip burgers versus who will become a professor? And what do you pay them to do those different tasks? And do you pay them more once they have some seniority or do you pay everyone the same?

As you can see, once you start trying to "organize an economy, the number of variables that you need to consider is simply impossibly complex to work out -- and that assumes you even have a formula to use to work it out with.

Yet, somehow, we're supposed to see as credible arguments that are based on the government controlling the economy? No way.

AndrewPrice said...

Joel, In truth, you could probably go on for days and not even scratch the surface of everything it takes to bring a hamburger to market. And that's the point. How in the world can anyone, even a room full of experts make all the decisions needed to produce a single hamburger.


How do they also consider the needs of every other product?


How do you balance all those needs? Every person you train to make burgers is a person who can't be used to fix trains. So even beyond simply gathering all the parts and finding the prices, you still need to balance all the inputs.

This is simply impossible. The only way this can be done is with billions of people making these decisions themselves on a personal level.

AndrewPrice said...

What do you mean Lawhawk? Of course it comes from the wall, just like food comes from the market. How hard can it really be to run an economy?

AndrewPrice said...

Ponderosa, I love the title, Hillary would be furious!

Dane said...

Wow! Just wow! Great argument!

AndrewPrice said...

Thanks Dane!

T_Rav said...

Thanks Andrew. And in spite of all that, darned if I haven't heard a pastor at the church I go to talk about how all Christians "need to support a living wage." What the #@%$? We're supposed to be smarter than that, people.

AndrewPrice said...

T_Rav, You're welcome.

The problem is that it sounds great to say "I'm for helping people". Plus ignorance is easy.

If you want to help people, get them better skills, don't try to artificially impose wage or price controls. That just leads to market distortions, i.e. the over-valuing of labor, which leads to unemployment and inflation.... which makes the new wage "unlivable" again.

There is no such thing as a free lunch, and trying to grant one by fiat only hurts the people you are trying to help or others in similar circumstances.

Tehachapi Tom said...

Don't they make meat in the back room of the butcher section of the super market?
It comes out all portioned and wrapped in saran wrap ready to take home and cook.
With this method who needs trucks, cattle ranches or slaughter houses.
Can't the bo group just pass a law so there is more of everything?
I'm just surprised at your conservative narrow mindedness.

AndrewPrice said...

Tom, I have to admit, that the idea of passing a law to just give everyone everything they want makes a lot of sense. Perhaps there is something to this "liberalism" of which you speak! ;-)

Tehachapi Tom said...

Yes Andrew there is something to the liberalism I out lined. It is gross stupidity and guaranteed ruin.
The government has almost put the family farm into the same state as the dinosaurs. The multinational packing plants are steadfastly ruining the American cattle industry for one.
Monsanto is making tremendous leaps in ruining the grain farmers. Dairymen are not exempt as milk is so regulated as to only produced by the mega farmer. When society is crushed by the onerous regulations put in place on industries by people who do not understand them we will be toast, not edible either. We are becoming dependent on imported food.

Look at Japan as an example.
Foreign rice carries a 777.77% tariff in Japan. Why you might ask? Seems the Japanese understand domestic food production is the only safe way to assure feeding your population.
Meat, grains and vegetables also carry hefty tariffs also to insure a domestic supply to feed their nation. On the rice subject our farmers in South Eastern Missouri and Arkansas can put rice into a Japanese home for one tenth the cost of their domestic rice. Yet domestic sources are so important to the Japanese that that is not going to happen.
When the United States begins to demand the same regulations apply to foreign farmers that are applied to domestic farmers at least the field will be somewhat leveled. In the meantime I recommend embrace the Boy Scout Motto "Be Prepared".

Notawonk said...


i sense a lefty's head just 'sploded over such pure logic..

AndrewPrice said...

Thanks Patti! I'm glad you liked it!

AndrewPrice said...

Tom, One of the problems with the government delving into industry is exactly what you mention, it's easiest for them either to strangle consumers or strangle small producers in favor of large ones. There is no middle ground once the government starts making decision. Small farms are being crushed by large agribusiness who are using government support to do it.

DUQ said...

Great argument! This is a keeper.

AndrewPrice said...

Thanks DUQ, Store it away for a rainy day! :-)

Ed said...

This is great! Thank you! I'm going to use this today. :D

AndrewPrice said...

You're welcome Ed, use it on all the liberals you can find.

CrispyRice said...

Very well put, Andrew! Thanks!

AndrewPrice said...

Thanks Crispy, Use this on all your liberal friends! Maybe a little light can open their eyes?

Ed said...

I thought I would let you know that I used this argument on a liberal friend of mine and they were stunned. It was awesome!

AndrewPrice said...

Great Ed! Hopefully, you've opened some eyes?

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