Distribution of Wealth: is not always bad

There are two things to be distributed among people: a radio manufacturing plant and land (agriculture).

Lets first talk about the radio factory. It will be foolish to break the radio factory into pieces and give each equal amount of scrap metal. And if the factory is given to the workers only then the concept of equality is not satisfied (I mean not everybody is getting share). So there is only one possible option left with us, i.e., to give the ownership of the factory to a democratic authority which will be responsible to distribute the profit among all(generated by the radio factory).

Here comes the real problem. How will the workers or the authority be interested to run the factory, if, by taking no interest, they are not going to lose their share? neither they are getting any extra share by taking interest (because the final objective of the society is to guarantee equality).

In simple words, distribution of a radio factory is not going to help the society as a whole.

Now consider the case of land. If land is distributed equally (assuming that land everywhere is equally productive) everybody would be owner of equal amount of land. here the land is different from radio factory in the sense that the individual owners are able to use it to produce (grains and vegetables). Since everybody gets benefit from keeping the production level high thus overall production is not going to decrease (though I am not claiming here that the gross production will increase).

What is the difference we saw in between two cases above? The first one (the radio factory) needs a central authority but the second one needs no such authority.

There are many examples of successful land distribution programs. In Denmark, common people were greatly benefited from cooperative farming (link). In West Bengal, India land reform program in early 80s considerably reduced rural poverty (link).

Capitlism and Monarchy: a parallel

I assume that performance of a system depends largely on how efficient its administration is. Why private firms perform far better than public ones? I think it is because a private company has “a” owner. The owner has direct interest in running the system efficiently. And he can manage very well as he has the sole authority. Yeah, it is an example of central administration and no one other than the owner has “complete” autonomy to take any decision.

Competition makes things better

What if the owner of a private firm is not able to manage efficiently? The answer is very simple, he will make loss in business and some other private companies will conquer his business empire. For e. g., Hero-Honda motorbikes almost kicked Bajaj scooter manufacturer out of business and Google became king in online business.

Monarchy is a centralized system just like private companies, so it can be run efficiently if the monarch is able enough. What if the monarch is not efficient? The answer is same, he will loss his kingdom to an efficient monarch. Take the example of Chandragupta. Dhana Nanda had a very big empire but he was not a efficient manager. Chandragupta not only annexed Nanda’s kingdom but also he conquered most part of present day's India, Pakistan and Afghanistan. And really Chandragupta’s rule was one of the most prosperous epochs in Indian history. There are many other examples like Kharavela, Kaniska, Vikramadiya and Sher Shah Suri.

The only difference being, in the case of capitalism the mode competition is business whereas monarchs have to go to war.