Why Communism, Socialism, and Capitalism All Work (Until They Don’t)

WTF: Why Communism, Socialism, and Capitalism All Work

(Until They Don’t)

—or—
Why Your Family Home Is Basically a Tiny Communist State and the Internet Needs to Calm Down

Before we start, a small apology.

We’re about to cover three topics people usually lose their minds over individually — communism, socialism, and capitalism — which means this one’s going to be a bit longer than our usual “scroll, snort, share” experience.

So grab yourself a glass of your favourite poison ☕🍷🥃, sit back, and give us about ten minutes while we calmly explain why:

• everyone is secretly a communist,

• no economic system is evil,

• and almost every online argument about economics is missing the actual point.

Let’s get one thing out of the way early.

If you’ve ever argued about communism, socialism, or capitalism online, congratulations — you’ve participated in one of humanity’s least productive traditions.

Everyone is absolutely convinced their system would work perfectly…

👉 if only people behaved properly
👉 if only it was implemented correctly
👉 if only everyone else wasn’t an idiot

And to be fair?

They’re all right.
And they’re all wrong.

Not because the systems are evil.
Not because humans are broken.
But because scale matters, and almost nobody talks about it.

So we did.

The Big Mistake Everyone Makes

Most economic arguments quietly assume something like this:

“If a system works in principle, it should work everywhere.”

That single assumption is doing a lot of damage.

Human societies don’t scale smoothly like software updates.
They don’t go from version 1.0 to 2.0 without issues.

They jump between entirely different coordination problems as they grow.

What works brilliantly for:

• a family

• a village

• a workplace

…often collapses spectacularly when you try to apply it to:

• millions of strangers

• global markets

• anonymous institutions

Same humans.
Completely different problems.

Yet we keep acting shocked when things fall apart.

This mismatch — between how big a system is and how it’s designed to work — is what we call:

The Scale Illusion

And once you see it, you can’t unsee it.

Step 1: Everyone Is a Communist at Home (Yes, You Too)

Let’s start really small.

Your household.

Nobody invoices their partner for making tea.
Children don’t pay rent.
You don’t negotiate market rates for emotional support, childcare, or “can you hold this while I tie my shoe.”

No one’s standing in the kitchen shouting,

“Actually, I did 0.3 more dishes than you this week.”

Instead, most homes quietly run on a very old rule:

From each according to their ability, to each according to their need.

Congratulations.
That’s communism.

And — awkward pause — it works beautifully.

Why?

Because at small scale:

• Everyone knows everyone

• Contributions are visible (“Who didn’t take the bins out?”)

• Trust is high

• Free-riders get noticed immediately

• Enforcement is informal and brutally effective
  (“Oi. Do your share.”)

No bureaucracy.
No performance reviews.
No incentives spreadsheet.
No ideological manifesto taped to the fridge next to a takeaway menu.

Just humans doing human things — cooperating because they can see each other, depend on each other, and would feel deeply uncomfortable freeloading in front of people they care about.

At this scale, fairness is obvious, accountability is personal, and the system basically runs itself.

Which is why it works.

Step 2: Scale It Up a Bit — Hello Socialism

Now imagine a slightly larger group.

Not a household — but not a nation either.

Think:

• a community

• a cooperative

• a union

• a shared workplace

People don’t know everyone intimately anymore, but:

• identities overlap

• norms still matter

• reputation still counts

• fairness still feels important

This is where socialism often works best.

Shared ownership.
Managed redistribution.
Rules agreed by the group.

Still functional — but only while the group stays manageable.

Here’s the bit most arguments skip.

Humans have a rough cognitive limit on how many stable social relationships we can maintain.
It’s known as Dunbar’s Number, and it sits somewhere around 150 people.

Below that number:

• people can track who contributes

• reputations stick

• trust can be maintained

• social pressure still works

Above it?

Things start getting weird.

Once the group grows too large:

• social trust thins

• norms weaken

• enforcement costs rise

• disagreements multiply

Suddenly you need:

• committees

• procedures

• oversight

• rules about rules

And the moment you need rules about rules, you’re no longer relying on trust — you’re relying on structure.

That’s not a moral failure.
That’s a scale problem.

Socialism doesn’t break because people stop caring.
It breaks because brains have limits, and groups outgrow what informal cooperation can handle.

And now things start getting… spicy.

Step 3: Strangers Everywhere — Capitalism Enters the Chat

Now scale up again.

Not dozens.
Not hundreds.

Millions of people.

Nobody knows anyone.
There’s no shared identity.
No common norms.
No reason to trust the person on the other side of the transaction.

Trust? Gone.
Visibility? Gone.
Social pressure? Good luck.

This is where capitalism actually shines.

Markets don’t need trust.
They don’t need shared values.
They don’t even need people to like each other.

They just need:

• prices

• incentives

• competition

That’s it.

Price signals act like a giant, decentralised communication system, quietly coordinating behaviour across enormous populations. You don’t need to know who grew your food, built your phone, or shipped your parcel. You just respond to prices, availability, and incentives — and so does everyone else.

Somehow, this allows millions of strangers who will never meet, never agree, and often actively dislike each other to still:

• produce goods

• distribute resources

• innovate at scale

• keep shelves stocked

That’s not evil.
That’s astonishing.

But — and this matters — the same incentive-driven machinery that makes capitalism scale so well also creates its own problems. When optimisation becomes the goal, things like inequality, short-term thinking, and rule-gaming aren’t bugs — they’re predictable side effects.

Capitalism doesn’t fail because it’s immoral.
It struggles because incentives don’t care about long-term social cohesion unless you force them to.

Which brings us to the part everyone argues about…

So Where Does Everything Go Wrong?

Everywhere people pretend one system should work at every scale.

That’s the mistake.

Each system is built to solve a specific coordination problem.
Apply it outside that range, and it starts doing exactly what it was never designed to do.

Communism breaks at scale because:

• You can’t monitor everyone

• Free-riders hide easily

• Trust collapses under anonymity

• Enforcement explodes into bureaucracy

Systems built on shared obligation and visibility stop working when contributions disappear into the crowd. Once people believe their individual effort doesn’t matter, cooperation turns optional — and resentment fills the gap.

Socialism breaks at scale because:

• Bureaucracy grows to manage complexity

• Norms weaken as groups become diverse

• Group cohesion fades

• Conflict increases over redistribution and control

What begins as organised fairness slowly turns into rule-management, oversight layers, and endless negotiation. The system doesn’t fail because people stop caring — it fails because caring doesn’t scale cleanly.

Capitalism breaks at scale because:

• Incentives get distorted

• Short-term optimisation beats long-term stability

• Inequality compounds over time

• Institutions lose legitimacy and trust

When success is measured narrowly, behaviour follows the metric — even if the outcome damages the system itself. Capitalism doesn’t collapse from greed; it frays when incentives drift away from collective resilience.

None of these failures are surprising.

They’re not moral flaws.
They’re not ideological betrayals.

They’re structural consequences of scale.

The Real Reason People Fight About Economics Like It’s Religion

Here’s the psychological twist most debates never reach.

Economic systems don’t just organise resources.

They organise meaning.

They offer simple stories about:

• how the world works

• who deserves what

• why some people succeed

• why others struggle

Over time, people attach more than logic to these systems. They attach:

• morality

• identity

• status

• belonging

So when you criticise the system, what they don’t hear is a technical argument.

What they hear is:

“You are wrong.”
“Your values are wrong.”
“You are a bad person.”

At that point, evidence stops being information and starts being a threat.

You’re no longer discussing economics.
You’re threatening someone’s sense of self.

That’s why debates escalate instead of resolve.
That’s why people defend systems that are clearly failing in certain contexts.
That’s why no one ever concedes — because conceding feels like a moral loss, not an intellectual one.

And that’s why the internet feels permanently exhausted.

The Takeaway Everyone Avoids

There is no perfect system.

There never has been.

There are only:

• systems that fit the scale

• systems that don’t

That’s it.

The question we should be asking isn’t:

“Which ideology is correct?”

It’s:

“What coordination problem are we actually trying to solve?”

Because different problems need different tools.

Families need trust.
Communities need norms.
Nations need incentives.

Forcing one system to do everything — everywhere — isn’t principled.

It’s how systems fail.
Over and over again.

And until we stop arguing ideology and start talking scale, we’ll keep having the same fights — just louder, angrier, and with progressively worse memes.

So… What’s the Point?

The point isn’t to pick a side.

The point is to stop acting surprised when:

• communism works at home but not globally

• socialism works in communities but not nations

• capitalism feeds millions but fractures societies

These aren’t moral failures.
They’re not betrayals of “true” ideology.

They’re scale failures.

And until we’re honest about scale — about human limits, trust, incentives, and coordination — we’ll keep recycling the same arguments forever.

Same systems.
Same outrage.
Same certainty.

Just louder, angrier, and somehow still convinced this time it’ll be different.

Want the Boring Science Version?

This blog is the friendly, slightly sarcastic version.

If you want the actual research — citations, theory, and the full interdisciplinary framework — you can read the complete paper here:

👉 The Scale Illusion: Why Communism, Socialism, and Capitalism All Work—Until They Don’t
https://omgwtf.ltd/the-scale-illusion

Or, if you hate yourself just enough:
📧 hello@omgwtf.ltd for the full PDF with appendices.