Marx still (mostly) wrong, but not for the reason everyone thinks: Capitalism, Marxism, and Distributed Error

One of the greatest problems with Marxist theory is the failure of central planners to correctly organize an economy. When the supplies at every grocery store are determined not by the owners or managers of each grocery story, but by the central planners, the result was a seemingly random mix of absurd oversupply of some items and crippling scarcity of other items.

One typical justification for this–and one that has become a pillar of one U.S. political party’s thinking–is that the government is simply bad at economic intervention (and, by extension, the private sector is remarkably good at it). This is wrong. I would suggest that both are equally skilled.

Instead, what I believe is happening is simply a statistical issue. If there is only one decision making authority, the errors of that authority are amplified and show up in every store. However, if every store is its own decision maker, then the errors of one store will tend to be cancelled out by another store. If one store incorrectly orders too many boots and not enough flour, its likely that another store will have extra flour, and still another will not have enough boots. With decentralized control, each individual private enterprise need be no better than the central planner for the net effect to be far more positive.

So government is not necessarily worse or better than any other group at such planning (and likely at most everything else). It’s just that, as when rolling dice, more rolls will tend to yield an overall result closer to the statistical average than will fewer rolls.

So Marxism still doesn’t work, but let’s not learn the wrong lessons from this.

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Author: Steve

Researching the narrative components of political identity. Teaching at South Texas College. Trying to break a 20 minute 5k.

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