The purpose of this blog is to explain why free market is so much better than a planned economy, and why democracy is so superior to feudalism, and also give possible extensions of the principle that drives both free market and democracy. But before, let us quickly take a look at why planned economy and communism fail 10 out of 10 times:
To explain one thing from the start: The problem is not only the nature of planned economy and communism, it is the nature of humans. Every person, no matter how much they try, are born with certain instincts and cravings that are as natural as hunger and thirst. The very basis of every organism, from bacteria or plant to humans, is the drive to reproduce. To this end we have certain other instincts like the alpha drive (you can reproduce more if you are above your peers) or survival instinct (when you're dead you can't do anything anymore) and various others. These stretch through all species and even in highly developed societies, humans are still governed by their initial "programming" a lot.
This alone is good. Just about every species that may have existed without these instincts would have died in a few generations, if any. However, humans have evolved above this great need for their species to survive. Human individuals no longer exist for the species, they exist for themselves. Humans are individualists. And so, their instincts, while certainly helpful, have turned into a double-edged sword in some cases. Followed through, these principles lead people to try and dominate each other. The natural result was tribe chiefs, kings, emperors and finally politicians, leading to hierarchy. Again, up to this point it is all the necessity of society. It cannot function without. So now let's take a look at the problem that spawns from all of this in communism and planned economy:
In communism, the leaders (politicians, kings) are not under the thumb of the collective people. They may act upon their power, however they can go against the wishes of almost the entire country so long as it doesn't spark a revolution, either because the people aren't fed up enough or simply can't take the forces under the leader control. This makes it possible for a leader to become an autocrat: Exhibiting power unrivaled. Planned economy is only a variation of this: The state decides who produces what and has absolute power. Even if you are at best an amateur at the job you are assigned, you have no choice but to comply. After this, let's look at why democracy and free market are so much superior.
In a democratic society, the leaders are faced with a major problem: Should they try to act as if they were dictators, the people would exhibit their power over the leaders, more specific: Elect someone else, provided of cause they can, which is the single most important mark of a healthy democracy. So while they may have a bigger power over the people individually, the collective will of the people is above them. This splits the alpha drive into two parts: On the one hand, it is all but natural for people to try and do what is unpopular, but on the other hand they will lose all power they have should they fail. Should they try and become fully-fledged dictators, survival instinct joins the ranks: The people may go as far as to kill or imprison a person attempting a coup. It is thus in the best interest of the leader to align their actions with the popular opinion.
Free market follows the same principle: If you get increased personal benefit from an increase in the quality, quantity of both from your work, then it is in your own best interest to give the greatest amount of highest-grade results you can archive. Material wealth always was a sign of superiority as a rich person could provide for a larger family, from the stone age to modern times. This is in opposition to the natural instinct to be as lazy as possible (which I believe comes from being energy-efficient and requiring less food to survive). Once again two vital instincts of humans have been turned against each other. In extreme cases, once more the survival instinct joins and prevents us from literally dying through laziness. If there were no social security policies (which, in limited use, I am not in opposition to!), there would be no people trying to get through life without lifting a finger on the pockets of society. The moment they run out of food, they would go to any lengths to survive.
You see, the principle of good society policies is to put different aspects of human beings against each other. The same is true for law and order: Part of you may try to steal if an opportunity arises, but your survival instinct gives you a good reason not to. It is part of humans to be able to act a bit like a schizophrenic, looking at something from different angles, brainstorming all possible options and deciding for one in the end. The list of examples goes on. From comparably little things like putting on your pants before you head out, otherwise people would look at you in disgust, to the huge archievement of altruism: Realizing that working together in the end trumps everyone sabotaging themselves in order to archive superiority over each other. Humans are governed in a democratic microcosm: All different sides and aspects present their options to the "You", deciding what you do. In most cases the result is something smarter than the next best action. From deciding to eat something when you feel hunger to the "You" deciding to help a person in need even if it costs you effort, material wealth or something else because of the fact that they are in need.
After understanding the concept, let us now put our heads together and think what we can do to put our innate instincts against each other in order to archive something that in the end benefits all. The first cause of action should be to make responsibility a greater deal in our society again. What we see now with the "progressive" movement is in essence a bunch of crybabies that had everything they ever wanted given to them for free. As such, they do no longer understand the concept of having to work towards something. They have given in to laziness because society has become so advanced that they could simply get all they wanted without ever having to give something. This is why I think that children should be taught in the future the concept of work. I am not calling for child labor, but I'd like to find a way to make them earn their allowance. This, however, is tied to their parents. The state managing how children grow up is the worst outcome I can imagine when trying to do this. It'd be something like as a society once again teaching the parents of tomorrow that their children should possibly wash the dishes or carry out the trash, being paid their allowance for every time they do as some sort of mini-job. They should be able to chose to do more and earn more, or do less and earn less. This cannot be something mandatory, I believe it could benefit a lot more than people being given things for free. If you earn something, you always see it of value because of the value you have put into it. If you were given something for free, well, not so much.
The reason why planned economies fail is because the people in charge expected their pawns to behave the same when they produce goods and do services for themselves as when they do it for others. But this is not true. If people get paid a certain amount of money no matter how good or bad their work is, then naturally the quality will go down. Same thing with quantity. Planned economies are too inefficient to work properly. On the other hand, communism assumes not only to have good leaders all the time, but that people in their nature suddenly become altruistic. This has not happened in the history of humans nor, so my estimation, will it happen for a long, long time. It is simply human to care for yourself first, even though an altruistic society would be vastly superior to our current one. The fact remains that humans simply aren't wired to function as a hive. They are at the core individuals.
For more on collectivism vs individualism, check out this blog.