Communism Will Always Fail

why communism fails

The people never give up their liberties but under some delusion.” – Edmund Burke

A spectre is haunting the world – the spectre of communism. In the US and the UK, two openly socialist candidates, Jeremy Corbyn and Bernie Sanders have their sights set on the top job. Everyday, I encounter intellectuals on social media who describe themselves as “Communist” (I regard the difference between socialism and communism to be one of degree not kind).

I must admit to being somewhat baffled by this ongoing fascination with communism, a system that has consistently failed wherever it has been implemented. Venezuela is currently suffering severe food shortages , a common ailment of communist societies. Read More…

Markets Are Not Human Inventions

Markets have arisen independently of intentional design, just as the human eye, for the non-religiously inclined at least –  as useful and as complex organism as it may be – evolved independently of intentional design. Counter-intuitively, therefore, it is fallacious to regard markets as a human invention.  Markets are so intrinsic an aspect of human living that we may regard them as a correlative of human life as much as a swelling belly is a correlative of pregnancy. They are as intrinsically a part of human life as the formation of groups, communities or societies. They are the default position that occurs under conditions of freedom. They are – quite literally – as old as the existence of homo sapiens. Anthropologists have formulated many biological categories to identify the earliest homo, but the one that Dawie Roodt and I have formulated for use in our impending book Maverick Economics is homo tradiensis – trading man. When two people or more form a group, they form, a market; it exists independently of their volition.

Markets exist as a consequence of the fact that no single human being can ever do everything to sustain life by himself or herself. The earliest forms of markets took the form of co-operative trades: trades of strength, of speed, of dexterity, of guile. Author Haim Ofek in his book Second Nature argues that the biological evolution of the free hands of the bipedal hominid led to the use of weapons, which led in turn to the emergence of tradable private property.

Ofek suggests that fire makers and custodians exchanged access to their fires for food. Fire makers were pioneers in the exchange of services for things. They set up their markets in caves in wooded areas, carefully nurturing several hearths used to kindle fires for other groups in exchange for food, skins, and other resources. Trade allowed the fire keepers to concentrate on maintaining the all-important fires, while simultaneously freeing the other groups to specialise in food and resource acquisition. Work specialisation and private property rights not only provided the grounds for intra-kin trades, they inevitably provided the grounds for extra-kin trade, because extra-kin trade provided access to an endlessly increasing range of specialisations and rewards. Within this axis of specialization, private property rights, and extra-kin engagement markets were born, and markets provided the necessary impetus for the evolution of the large brain. Markets were thus not the consequence of the emergence of casino online species homo sapiens, but its cause – which is why we call our earliest forebear homo tradiensis.

The proposition that markets are not a human invention is not one that people will naturally agree with, even people who regard themselves as “free marketers”. This is because markets have every appearance of being an enormously useful institution that we actively form or establish to our great advantage. We elect, for instance, to form a stock market, or a Saturday morning village market.  But I would like readers to consider that, in establishing a market, we are not establishing the concept of a market, because the concept of a market is intrinsic.   It might strike some as a fanciful analogy – sorry, I can’t think of another one – but we don’t invent the concept of love every time we fall in love. We simply do what comes naturally, in the same way that we do what comes naturally when we “go to market”.

Markets are not systems.

Markets are not systems. They are not comparable with any –ism designed to achieve a utilitarian outcome.  They are neither intrinsically good nor bad, and since they are not designed to deliver a normative outcome, it makes absolutely no sense to talk of “market failure”. It is humans who succeed or fail, not markets.  Whilst markets have a great many characteristics we may choose to regard highly if we want to – they are inimical to war, they are socially enriching, they build cultural and linguistic bridges, they transform production into wealth, they meet material needs of consumers – they are actually not specifically designed to achieve any of these purposes.

For these reasons I occupy what may be regarded as the unhelpful  position of regarding arguments about  the value or otherwise of markets as what the lawyers call (I think) supererogatory – proving the existence of something that doesn’t need to be proved. Striving to prove that one is alive is also supererogatory. Markets are not in a competition against any other form of organised behaviour, just as breathing is not in a competition against dietary supplements. Those who claim they don’t like markets love to present us with an apparent choice between markets and person-made systems like central planning or price control. These are bogus choices.  The real choice is better presented thus: you can have markets, or you can ban or disallow markets.  The concomitant choice is: you can have freedom or you can have servility. The opposite of reason is not emotion, it is unreason; the opposite of markets is not state control, it is no markets

Markets are not brought into existence  by virtue of the apologia we make for them, or the rationale we may – mistakenly in my view – make on their behalf, just as love isn’t brought into existence by love poetry. People who claim to dislike markets are liars; everybody loves markets, and everybody makes use of markets. Markets exist when two people come together to make a private transaction; they exist at the side of roads; they exist in towns and villages where people buy local produce; they exist in rural communities; they exit in all their glory in Fez and Marrakesh, and throughout the Arab world; they exist in Portobello Road; they exist on the Internet; and of course they exist on bourses. Markets are pervasive; they inhabit every single nook and cranny of our lives, except when they are physically prevented from existing by human intervention, an intervention always characterised by a limitation of freedom.  But no amount of illegalisation or proscription will ever finally extirpate market transactions: witness the global trade in narcotics, in rhino horn and in stolen goods.

So, in answer to the question: why do markets matter? I don’t provide an answer, but instead I ask market antagonists a question of my own: why don’t markets matter?  Of course, they never will provide an answer.