Capitalism is broken

[ManusJustus]

I think a lot of people here are looking past what truly matters in economics, and its not terms like socialism or capitalism, its incentive.

Personal incentive is the sole driver of economic productivity, and it governs everything from overhead business decisions to what you are going to buy for diner. Contrary to what many here believe, there is no difference between communism and capitalism when it comes to this important characteristic, as personal incentive works the same in communist and capitalist economies. Which ever economy provides more personal incentive will be the economy that is more productive, regardless of what it calls itself.

Capitalism obvioulsy offers a lot of personal incentive, but it fails in many regards. Everyone from doctors to Wal-Mart employs (personal experience for both) create inefficiencies because of lack of personal incentive. There are doctors who make bad medical decisions because their personal incentives are misplaced, and there retail employees napping in the bathroom or fiddling in the back because they have no personal incentive to work when the boss isn't in sight.

The same can be said for communism. Stalinism, believe it or not, was very productive. The Soviet Union was the first country in space and Americans were afraid of the Soviets powerful economic machine, the problem was that the personal incentive here was personal harm (same goes for slavery in America). Nothing makes someone want to work harder than fear of being put in a gulag. This is not an acceptible form of personal incentive. Obviously, collective farms with no personal incentives for production (monetary or punishment wise), which is what many people think of communism as, is very unproductive. Why should I work hard if it doesnt benefit me? Same goes for many government workers and the above mentioned Wal-Mart employees.

However, some forms of communism can create more personal incentive and be more productive than their capitalist counterpart. That personal incentive is worker ownership of production. When Russian farmers were given the land that they once leased from feudal lords, they became more productive. When every effort that a factory worker puts into his product is returned to him, they become more productive. Some forms of Marxism, Troskyism, and Lenin's early Soviet Communism is an example of this, and it uses the same method of incentive as many businesses today, only to a much higher degree. Profit sharing, which many business do with their employees, leads to more productive workers. Imagine how productive all workers would be if they recieved full profit sharing, which is essentially what worker owns of production is.