alt Hacker NewsMarkets are optimal but capitalism is not. If you let supply and demand set prices but don't allow extracting value you get an economy that is both fair and efficient. The rule is all profits must be reinvested or paid out to workers and the state can impose price controls if margins are too high.
Yugoslavia tried it and they had the best economy from the eastern bloc growing faster than a lot of the west. China and Vietnam went further in their reforms and allowed private investment but they still kept state owned corporations instead of privatizing everything, and they don't worship markets and property like America does.
I don't think it's an accident that all these mixed economies got ahead of pure socialist or capitalist systems.
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If I'm not allowed to extract value, what is the incentive to start or invest in a business? Why bother owning or running a company?
Ah, the familiar twinge of sorrow and rue at reading the name "Yugoslavia"...
Do you have any source defending your point better than you can in small comment ? I am interested but a bit unconvinced so far
> The rule is all profits must be reinvested or paid out
We're already there today with struggles to properly allocate capital etc. If you pay (workers or investors/capital owners) too much, the facilities break down etc. and eventually you can't meet overall demand cashing prices to go up, encouraging higher investment (right when the workers want more payments because revenue's increasing, and maybe their personal costs) but maybe investment everywhere goes up, increasing capacity too much and tanking revenues (the business cycle) etc.
> Yugoslavia
For a lot of the time, East Germany by many metrics (GDP/cap etc. ignoring the (stronger) surveillance state etc.) was ahead of Yugoslavia (but because of a lot of debt, leading to East German stagnation in the 80s). But Slovenia (the wealthiest part of Yugoslavia) even surpassed the UK and Italy's standard of living in the 80s! (Northern Italy was still better off, though.)