As I understand more and more economics(by Economics I mean Austrian Economics, the real kind, not mathematical model of calculating how much you prefer your kids studying theory of evolution vs intelligent design and calculating National Patriotic Index), I realize more and more how easy is it to show the problems with theory of Socialism.
One of the things I realized early on was that a purely voluntary socialist worker’s union would be completely feasible in a capitalist society. If a bunch of men want to create a worker’s co-operative where profits are distributed equally among everybody, essentially it is the same thing as a company fully and equally owned by its workers. Just do not allow any individual who does not work in the company to own the capital goods(means of production).
I have eventually understood ‘capital’ to be nothing but deferred consumption. That means whenever you delay your present smaller consumption for the future larger consumption, that deferred consumption is essentially your capital. For example, if you have a bag of wheat, which you do not consume today but instead plant it a field so that a few months from now they will grow into wheat fields and you will now be able to reap a lot more wheat out of it. You in this case have deferred your present consumption 1 bag of wheat for 3 months where you hope to make 7-8 bags of wheat out of it. I have used the example of wheat because I can explain it only with the help of one actor. Generally though you defer your consumption and hand it to someone else who needs it in present more than in future. For example you may give away 100 cattle to someone today so that 5 years from now they return 200 cattle to you.

Capitalist is a deferred consumptionist

This explanation of capital as ‘deferred consumption’ opens up a plethora of new insights to things. For example, if capital is deferred consumption then capitalist must be the guy who defers his present consumption. This clearly explains to any individual who fails to see what a capitalist’s work actually involves, or why does he deserve profits from any venture.
Warren Buffet is technically the largest deferred consumptionist in US. This means he could consume so many things in present(billions and billions of dollars worth of goods) but he choses to not consume them, and instead he defers it for later consumption(which he probably will never do).

Utility of deferring your present consumption

You may now ask what utility does anyone delaying their present consumption may offer to the society as a whole, because this clearly sounds like a very selfish thing to do. The answer is really simple, almost no human action which does not directly satisfies the end we are looking for requires delaying our present consumption. For example, if you are hungry and you want to eat a pizza then the action of eating that pizza directly satisfies your want, therefore it is not deferred consumption because its an act of consumption itself.
On the other hand if you now have to make that pizza, now the series of actions to satisfy your desire are:
a) You bake the pizza
b) You eat the pizza
The first action involves deferring(albeit a really less amount considering it will take you only 20 mins to do it) your present consumption of raw pizza, or any other food, for later more satisfying consumption of cooked pizza.
You may ask now, that just because in this example I had to wait for 20 mins for pizza to be cooked doesn’t mean that I always have to defer my consumption, for example I could drive to a pizza shop and just buy the pizza without waiting for it to be cooked. My point is simple, someone at that point has already done the job of deferring the present consumption for the future consumption, someone has waited 20 minutes for you so that you can get it immediately and in return you have rewarded them with money(which is their larger future consumption). Of course lets also not forget that making a pizza requires flour, vegetables, cheese, chicken etc. So the total time taken to delay consumption for full making a pizza would be time required to grow wheat, make flour, grow vegetables, make cheese out of a cow you raised, and raising chickens. That means if you were living on an island with no civilization then to make a pizza you will require growing wheat, and vegetables for months, and capturing and raising cow and chicken for months before you are in position to make that pizza. Thankfully in any modern society someone has already done the job of deferring the present consumption so that you now can simply walk into a supermarket and buy all those things, or take even more shorter route and buy the cooked pizza from the pizzaria.
As you realize now that our society and civilization would be impossible if not for deferred consumption or capital. Essentially a capitalist society is a society where production of large operations is planned through deferred consumption of private individuals. This begs the next question.

Who defers their present consumption in Socialism?

This is now the most important question any socialist must answer. If you have read the article till now, you realize that its impossible to get rid of the capital from any society. The only capital-less society would be a highly primitive society where almost every action is aimed at direct consumption, this means the primitive men who created tools to help in hunting, actually ended up creating the first capitalist society of the world. In fact only animals do not perform indirect actions to achieve their ends. The only real world example in this case is a monkey recently in a zoo who planned to throw stones at visitors by collecting them in advance. Coming to think of it, even dogs hide bones for a later date.
The point here is that it is really impossible to eliminate capital from a society, so any claims made by the socialists of creating a new man who is not capitalist are ridiculously wrong. This generally eliminates that last claim and results in socialists making a more smarter claim, that in a socialist society, only the indirectly deferred consumption will not be allowed. For example, any individual can sow his bag of wheat to create 7 bags out of them 3 months later, but no individual is allowed to give his bag of wheat to another and hope to receive 7 bags three months later. This will completely stop a capitalist from ‘exploiting’ workers.
If a socialist makes this claim then it means he at least acknowledges why a capitalist deserves his profits. If in a shoe manufacturing factory, workers from start(homesteading the land, making bricks, concrete, sand, constructing the building, raising animals for leather), to the end(manufacturing the shoes, packaging them bringing them to the market), then they truly deserve the profits proportional to their role in the manufacturing process, but the fact is that this kind of action would be highly inefficient and ardous, and it would be much better of these workers defer their consumption in other ways(like saving money), or allow somenoe else who has delayed a lot of present consumption over time(capitalist) to invest in their venture and allow him to make profits.

This is why even the most hardworking socialist society is poor

The fact is that even in a socialist society someone must defer their present consumption, any socialist who claims that he envisions a society with no capital does not know what is he talking about. A smarter socialist might say that in his system the state will do the job of reallocating the deferring of present consumption equally among people, but that still leaves the big question about a socialist society and that is, if my deferring of present consumption does not lead in increased larger future consumption, then why should I delay my present consumption?
You may reward your workers proportional to what they have worked that day, sure people will work 18 hours a day to catch fish with their hands, but nobody will eat less fish of what they caught that day, just so that they can save enough fish to eventually build a net and be able to catch 10 times more fish than they can with merely using hands, and for a society to become prosperous deferred consumption is the single most important requirement.
If you are a socialist and you have thought of a socialist paradise, to be realistic you must not envision an advanced society, a truly realistic socialist society would be a society of primitive men who hunt animals and gather berries without using any kinds of tools.
Of course this brings us to a whole another set of issues with the so-called modern ‘capitalist’ societies such as US and UK, where the state depletes the deferred consumption of a society with the help of fiat currency, fractional reserve banking, central banks, and taxation. Not to mention the so called ‘free market magicians’, such as Milton Friedman and Chicago school who supports a Capitalist society, yet fails miserably in understanding what is really happening when a market crashes or how capital plans production, but that’s for another article.

Conclusion

My conclusion is simple, if you consider yourself as a Socialist(or any other leftist ideology where you are going to get rid of economic calculation and private ownership of wealth), you must explain me who in your system would be the deferred consumptionist. Who will reduce his present consumption for the future larger consumption. Sure socialists do talk about larger future consumption to be distributed equally among all its people, but what they fail to explain is who will be the person who will SAVE enough for the future date when nobody can work to do something else.