To the Editor:
All hail to Conor Dugan for his dismantling of communism, both as an idea and as a practice ("The Problem With Communism", The Dartmouth, May 18). Dugan however overlooks the most fundamental reason why communism, even in theory, cannot work: the power of incentives, and the decentralization that a market economy (insert "capitalist" if you like) affords. The debate is an old one and, one might have hoped, was by now decisively over. Anyhow, the argument is that the decentralized working of a price system, in which prices adjust freely in reflection of the scarcity (relative to people's wants) of goods or services, allocates those scarce goods precisely to the people who most want them. Prices, of course, act both as an allocation mechanism (of scarce goods to the people who most want them) and, in the form of profits, as an incentive to produce just the right goods (those that people most want). By contrast, just imagine the enormous task of calculating centrally from people's tastes and a country's production possibilities how exactly goods should be produced and allocated. (Of course there is always the additional problem that, when asked about what they would like to have, and how badly they would like to have it, people tend to lie to you.) And incentives to do the right thing (that is, freely adjusting prices) of course presuppose clearly defined property rights and ownership: for instance, what incentive is there for you to produce the right goods (those that people want) if you cannot claim ownership to the profits you make?
To an economist it seems baffling that this debate still seems to simmer on. Maybe this is the time we should finally bury it, and work instead on the real issues for which communism is such a poor solution: do we want income redistribution, and if yes, how much? Which goods should we, for efficiency reasons, provide publicly, and which are better provided privately? For all we know, these are difficult questions; but like for most things in life, a blanket answer like communism does not do.
