George Mason University economist Richard E. Wagner offers an interesting analogy in his American Conservatism encyclopedia entry on “socialism”:
Socialism treats the national economy as an extended family and approaches economic organization from the perspective of household management. The sentiment “from each according to his abilities, to each according to his needs,” does surely characterize well-working family relationships. The members of a family generally do contribute to the family economy according to their abilities, both in dealing with the outside world and in handling household tasks.
But while “[s]ocialism takes the ethical and organizational principles of a family and seeks to apply them to a national economy,” Wagner notes problems with the model.
Within a well-working household, decisions concerning resource allocation are based on intimacy and love. Family members possess detailed, concrete knowledge of each other’s abilities and needs, and they are bound together by love. But no matter how desirable an extension of the family model to a nation might sound, it is an utterly impossible extension to make. Socialism cannot resolve the problem of economic calculation, so it cannot achieve the social cooperation that is its pronounced objective. It is in no one’s capacity to organize the economic activities of a complex society. Household management may be possible, but national economic management is not.
