On a recent episode of the EconTalk podcast, Stanford economist Ran Abramitzky talks about his book on the Kibbutz.
For those who don’t know, the Kibbutz is one of the best and most successful (at least for a while) implementations of actual socialism. While some Kibbutzim (plural of Kibbutz) varied in their practices, the rule of the classical Kibbutz is that all private property is abolished. Everyone works for the collective good, and if you leave, you can only take the clothes on your back and “your brain,” as Abramitzky puts it. It’s a fascinating conversation for a lot of reasons. But one of the things that I was particularly interested in were the informal mechanisms established to prevent shirking. For instance, if you were seen as someone who didn’t put in your fair share of effort, you were shunned at the dining hall — and all meals are communal in the Kibbutz. You can see how reputation is hugely important in a society organized that way. Also, there’s a powerful self-selection factor. The Kibbutzim have long probationary period for new members, so that they can be sure that newcomers aren’t looking to mooch off the community. On the other side, few people who find communal life oppressive stay in the Kibbutz. The division of labor is limited. So if you want to be a neurosurgeon or opera singer, that life probably isn’t for you. Though some now Kibbutzim allow people to work offsite. They just have to hand all of their wages over to the group.
Because of this, Kibbutzim aren’t scalable. These communities only work when everybody knows everybody and can monitor each other informally. Make them too big, and it becomes possible to hide in crowds, as it were. Also, the pursuit of efficiency is corrosive to collective effort. For example, it would save money for Kibbutzim to pool their laundry services with similar communities, but that would remove functions of interdependency within these small societies.
Anyway, what I keep thinking about is how China is trying to defy the scalability problem by turning a country of 1.4 billion people into a vast Kibbutz with Chinese characteristics. Yes, I know the profit motive is alive and well in China. But the freedom and chaos of the free(ish) market is a threat to the political power of the Communist Party. In order to counteract that and maintain control of the people, the government is using artificial intelligence, facial recognition, and other technologies to “score” its citizens’ reputations and behaviors. The Chinese “social-credit system” monitors who you talk to, how you spend your money and time, what you read online, etc. As the government explains it, the system “uses encouragement to keep trust and constraints against breaking trust as incentive mechanisms, and its objective is raising the honest mentality and credit levels of the entire society . . . commend sincerity and punish insincerity.”
The consequences of a bad score are far worse than getting a cold shoulder or having people refuse to pass you the hummus. For instance:
In June of this year, the Chinese government outed 169 people’s identity on Credit China’s website, announcing that all were subject to a one-year ban on buying flight or train tickets due to their “bad” behavior, such as “provocation on a flight, trying to take a lighter through airport security, smoking on a high-speed train, tax evasion and not paying fines.”
These 169 people are not the only ones punished by the Chinese government based on their social credit rankings. They only had the misfortune to be shamed on a nationwide platform. Previously, Beijing reportedly had “blocked millions of people from taking more than 11 million flights and some 4 million train trips in early trials of the system” and “some 10.5 million people had been named and shamed by the courts by the end of April, 2018.”
This seems to me a perfect example of the problem of confusing the microcosm and the macrocosm. As Friedrich Hayek explained (and as I discuss in my book and Russ Roberts talks about all the time), it’s not so much that “socialism” is bad but that it’s bad when misapplied. The family, Hayek writes, is essentially a socialist institution in that we do not use prices, law, or contracts to define our roles within the family. I don’t charge my daughter for food nor does she have to pay rent (yet). The family is neither democratic nor market based; it is benignly authoritarian. This form of cooperation is not scalable to the entire society. Or rather it’s not scalable unless you are willing to replace benign forms of social sanction with authoritarian forms, and even then, historically, it doesn’t work. The Chinese think they’ve solved the problem with technology unavailable to the Soviet Union and other totalitarian regimes (proving that the clichés about technology always being on the side of liberty were always flawed).
I hope (and suspect) they’re wrong. But if they’re right, the Chinese model could be the most important boon to authoritarianism in human history and a terrifyingly competitive alternative to liberty.