If you played with two electrets you would immediately comprehend the "action". It is the same as that of magnets. However, if you take one electret and one magnet you will get a surprise. When not in motion, these two differing objects will have no effect on one another. It is only when you move them that anything happens ... and ... it is not the familiar attraction-repulsion. When a pole of the magnet is in relative motion to a "pole" of the electret they push each other at 90 degrees to the direction of motion. The effect is entirely odd and immediately unfamiliar (unless you are a physics student).
There is an analog to this in psychology. At some fundamental level, male - female interactions are of this type. Inscrutable. Hence, the sexes do not understand one another as well as those of the same sex. Yet ... somehow ... things work out well enough to create and maintain families which are the foundation of civilization.
So too with capitalism and communism. They are at the most fundamental level the same situation as the above. To keep them together in a viable arrangement requires dynamic management. You could not, for instance, write a "detailed" constitution incorporating capitalism an communism and expect it to work out over time. Such an incorporation (socialism) will of its nature collapse if forced to adhere to a static set of rules.
The Cause of the Decay Socialist Systems
Capitalism and communism are fundamentally incompatible ... just like men and women. Yet they can be made to "bed" down together for indefinite periods ... if ... the right personal do the dynamic management.
They must overcome the tendency of communism to compress individual incomes into the same amount (one of its stated goals). And, they must overcome the tendency of capitalism to expand incomes into a standard Maxwellian distribution.
The first tendency (compression) results in mass death if taken to extremes. If productive individuals see no "profit" in their labor in excess of that received by non-productive workers, they gradually cease to produce resulting in critical shortages and concommitant civil strife.
In the second tendency (expansion), those at the bottom of the culture continue to stay there while those above them take an inordinate share of the profit from productive efforts. Even if an individual at the bottom is productive, he will still receive a share in the increasing productivity of a healthy economy which is inordinately low.
Compression is unfair because it fails to acknowledge the obvious fact that any individual ought properly to "belong to himself". He must be free to determine his own fate. I belong to me and not to the state. These ideas are so well known in the USA that they scarcely need to be elaborated.
Expansion is unfair because clearly what we now produce is by the grace of those who have gone before. Left to our own devices we can expect no more than a straw+mud hut and a hand fashioned spear or bow & arrow. All the 21st century goods you see, come to us (99%) from those who have gone before and 1% from our present input. The 99% is our human heritage. Is it fair that the distribution be arranged such that nearly all is given to those who input the 1% and next to nothing to him who adds nothing or nearly nothing? If you could poll all those who have gone before (those scientists, inventors, engineers) who made our civilization possible, they would uniformly bequeath their discoveries to humanity at large and not soley to the upper 50%. They would not expect to see some individuals drooling over the latest electronic doodads whilst others were permanently resigned to scratching out a subsistence living.
nor a fully autonomous being.
The last thing any individual will give up is his autonomy ... the right to come and go as one pleases. But, on the other hand, no man can live a rewarding life without the company of others. We wish to be independent of others yet interact with them in ways that clearly render us dependent upon them both for our physical existence and mental sense of well-being. Which would you choose? ... to be a Robinson Crusoe but bereft of even the hope of ever seeing another human being ... or ... a whip driven galley slave like Ben Hur but bereft of even the hope of ever being free? Between these two alternatives it is impossible to choose.
What we inevitably accept is a mixture of both sides of the issue.
To manage this "mixed" economy of Socialism ...
It is necessary to achieve a blend of the two which achieves the effect of keeping the Maxwellian distribution of wages stable (neither expanding or compressing it) ... while at the same time moving the distribution forward in a manner which would not naturally occur. One must create an "unnatural" government, i.e. one which would not come about on its own, a contrivance. And that contrivance must be dynamically managed by competent officials who are able to see the causal agents operating in the system and obviate the "natural" tendencies of both capitalism and communism to steal the whole show for themselves.
In this way, the income ratio between rich and "not rich" (Remember- There are no poor men ...) will lessen while no one will be forbidden to compete in the economy for more "market share".
Note: This is not like the above compression mode of communism. The rich would not lose money but rather would gain it at a lesser rate than the bottom of the culture.To accomplish this requires (absolutely) personel selected in the way I have suggested. Using people that now populate government would not suffice. They are incompetent by my standards and fundamentally unable to do induction which would be necessary to handle the dynamic management.
One of the first things to do ...
is to identify the main problems that one could reasonably resolve ... then attempt to do so by some thoughtful plan ... then ... see if it works out. If it does advance civilization to the above goal, try another new thing.
Keep moving the distribution along until such time as the people are ready for "income by vote", i.e. they vote each others pay in the manner given in "The End of Economics" (in this section).
The main economic problem in America at present is housing (because it takes up the biggest chunk of our incomes). What to do?
My proposal (at present) is to give every American the right to obtain a $30,000 no interest home loan from a United States Bank (doesn't exist yet). You put your money in this no interest savings & loan in order to be eligible for the loan ... and ... the FDIC is abolished so that the USA Bank is the only guaranteed bank. Now, couple this with a right to "buy" your apartment instead of leasing it and you have your seed money to buy you own home (after you pay off the loan whilst living in an apartment).
This would solve the housing problem for perhaps 10-20 years. That's how long it would take for these people to "bid" themselves into such low paying jobs that a no interest loan is no longer economically helpful. Here you see why socialism must be managed dynamically. Anything you do will be inexorably cancelled out by the free market which will try to reset the "jungle system".
Government should also take over all arterial systems, i.e. those things which require rights of way and or communal systems ... like electricity, phone, roads, bridges, cable TV, rivers, sewage treatment, hospitals ... they already do some of these ... and probably those businesses which constitute the core of physical civilization and are comparatively unchanging like ... mining, forrestry, energy production, etc. but not something like the auto industry which produces new things yearly ... just the base of civilization.
Note: I don't mean our present system of government. I mean the type of government I devised in this section of my site. It is the only form of government that can reasonably acknowledge an error and go back and try again.