Most varieties of socialism implicitly assume unanimous agreement on goals. Everyone works for the glory of the nation, the common good, or whatever, and everyone agrees, at least in some general sense, on what that goal means. The economic problem, traditionally defined as the problem of allocating limited resources to diverse ends, does not exist; economics is reduced to the "engineering" problem of how best to use the available resources to achieve the common end.
The organization of a capitalist society implicitly assumes that different people have different ends and that the institutions of the society must allow for that difference.
This is one of the things behind the socialist claim that capitalism emphasizes competition whereas socialism emphasizes cooperation; it is one of the reasons why socialism seems, in the abstract, to be such an attractive system. If we all have different ends, we are, in a certain sense, in conflict with each other; each of us wishes to have the limited resources available used for his ends. The institution of private property allows for cooperation within that competition; we trade with each other in order that each may best use his resources to his ends, but the fundamental conflict of ends remains. Does this mean that socialism is better? No more than the desirability of sunny weather means that women should always wear bikinis or that men should never carry umbrellas.
There is a difference between what institutions allow and what they require. If in a capitalist society everyone is convinced of the desirability of one common goal, there is nothing in the structure of capitalist institutions to prevent them from cooperating to attain it. Capitalism allows for a conflict of ends; it does not require it.
Socialism does not allow for it. This does not mean that if we set up socialist institutions everyone will instantly have the same ends. The experiment has been tried; they do not. It means rather that a socialist society will work only if people do have the same ends. If they do not it will collapse or, worse, develop, as did the Soviet Union, into a monstrous parody of socialist ideals.
The experiment has been done many times on a more modest scale in this country. Communes that survive start with a common end, whether provided by a strong religion or a charismatic leader. Others do not.
I have encountered precisely the same error among libertarians who prefer limited government to anarcho-capitalism. Limited government, they say, can guarantee uniform justice based on objective principles. Under anarcho-capitalism, the law varies from place to place and person to person, according to the irrational desires and beliefs of the different customers that different protection and arbitration agencies must serve.
This argument assumes that the limited government is set up by a population most or all of whose members believe in the same just principles of law. Given such a population, anarcho-capitalism will produce that same uniform, just law; there will be no market for any other. But just as capitalism can accommodate to a diversity of individual ends, so anarcho-capitalism can accommodate to a diversity of individual judgments about justice.
An ideal objectivist society with a limited government is superior to an anarcho-capitalist society in precisely the same sense that an ideal socialist society is superior to a capitalist society. Socialism does better with perfect people than capitalism does with imperfect people; limited government does better with perfect people than anarcho-capitalism with imperfect. And it is better to wear a bikini with the sun shining than a raincoat when it is raining. That is no argument against carrying an umbrella.
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