Sometimes You Have Bread | Reclusive Libertarian

There is a line going around, and I like it: “Remember, kids, with capitalism sometimes you have bread lines. With socialism sometimes you have bread.” It works because it takes the oldest insult thrown at markets, the Soviet queue, and quietly turns it inside out. Yes, capitalism can give you a bread line. Socialism gives you the line and takes away the bread.

The punchline is about failure modes. Every system fails sometimes, and the question is what the failure looks like when it comes. A market that cannot supply enough bread shows it as a line, or better, as a higher price, and the line is short-lived because the price does the work of ending it. A loaf that sells out at a dollar and could have sold at two tells every baker in the city to bake more and every shopper to buy only what he needs, and within days the shelf refills. The shortage carries its own cure. A planned economy that cannot supply enough bread shows it as an empty shelf that stays empty, because nothing in the system is telling anyone that bread is short or that more of it is wanted. The line is a system correcting itself. The empty shelf is a system with no way to know it is wrong.

Most people who mean well by socialism do mean well. The problem is information, not virtue. A price is a signal, a compressed message about how scarce a thing is and how badly people want it, and it moves through the whole economy at once, coordinating millions of strangers who will never meet. Mises saw a century ago that an economy which abolishes prices for the means of production blinds itself. Hayek spent a career explaining that the knowledge a modern economy runs on is scattered across millions of heads and can never be gathered into a single planning office. Take away the price and you have put out the economy’s eyes. The planner is flying a continent-sized aircraft with the instruments torn out, and the empty bread shelf is where he comes down.

The bread lines people blame on capitalism are almost never caused by the market. They are caused by someone forbidding the price to move. When America had gas lines in the nineteen seventies, the market had not run out of gasoline. The government had capped the price, and the cap produced the line, the way a cap always will. Venezuela’s shelves went bare, by most accounts, after years of price controls and the seizure of the farms and bakeries that were supposed to fill them, to the point that the state was arresting bakers for baking the wrong kind of bread. A line forms when you outlaw the price. Which means the bread line, the very thing capitalism gets mocked for, is usually the one socialist mechanism that crept into an otherwise working market. The market’s answer to scarcity was never a line. It was a number.

The market produces plenty, the critic says, but it hands the loaf to whoever can pay and leaves the man who cannot to go hungry in front of a full shelf, and a full shelf you are priced out of is no kinder than an empty one. That is a serious point. Burning down the bakery does not answer it. Look at what the poor man is actually being charged for. Most of what makes his life expensive is the rent, the price of the land his apartment and the bakery both sit on, which no baker built and no worker earned. I have written a whole series about that. Capture the unearned rent of the land and return it to everyone as a dividend, and you have handed the hungry man the means to buy the loaf without touching the mechanism that makes sure the loaf exists. That is how you feed people. You keep the prices, because the prices are what keep the shelves full, and you fix the distribution at its root, in the land, rather than by seizing the ovens.

Sweden gets dragged in here. Look, they say, socialism works fine. Sweden is a market economy with private firms and real prices and a large welfare state bolted on top, which is a very different animal from a state that owns the means of production and plans them. You can argue about how high a floor a free society should build under its people, and I am on record wanting a real one. A floor under the market is not the abolition of the market. Sweden has bread. The empty shelf is the other animal, and the distance between them is the whole argument.

None of this makes capitalism a paradise, and I have no interest in pretending it does. Markets have busts that ruin people, and left alone they will let a few fence off things that belonged to everyone. I have spent plenty of words on those failures and I will spend more. There is still a difference between a system whose failures are painful and self-correcting and a system whose defining trait is that it cannot tell when it has failed. One gives you a recession you eventually climb out of. The other gives you a bread shelf that stays bare while the plan insists all is well.

So keep the joke, because the joke is true. With capitalism, sometimes, you have bread lines, and when you look closely at one you usually find a price control standing behind it. With socialism, sometimes, you have bread, and the rest of the time you have the line with nothing at the end of it. The line at least means the bread is real. Feeding people was never hard for lack of compassion. Compassion without prices is just a long wait in front of an empty shelf.

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