The Soviet Union didn't fail because of the funding of social safety nets, it failed because it had a command economy where too few people made resource decisions and they made them poorly. It matters little wether that command concentration comes from government or private sources. If the distribution of wealth becomes too skewed, the same economic failure could happen in capitalist economies. It's possible we've already seen the early symptoms of that kind of failure in the economy now.
Indeed--the TARP bank bailouts (where the government decided in a top-down manner which banks deserved to "live") were much closer to standard Soviet Union practice than a guaranteed income would be.
I'm divided on the TARP bailouts. On one hand they bailout went parties professed to be the most cognizant of their actions, and who should have had the knowledge and resources to to avoid their problems. In those terms, the banks did not deserve bailouts. On the other hand, as a short term measure I feel like it was reasonable to prevent larger scale chaos.
Overall, the need for TARP was driven by the weak long term oversight allowing concentrated influence in overlarge companies. That's often viewed as a failure of government to remain independent from influence, but at the root of the problem I think it was a shift in economic philosophy across business schools and the business community. The long term fix in my view is putting new focus on defining what criteria lead to healthy, competitive markets. Businesses themselves should recognize that poor competitiveness, and short term focus in markets can lead to poor long term performance in the economy for everybody. Different mechanisms to discourage oversized companies should be introduced into legislation, but now I'm rambling....
Actually, the Soviet Union didn't even fail for its lack of markets. It failed because entry and exit to economic activity was restricted, so no new ideas ever really got tried.
Remember, command economies work so well when the leadership knows what they're doing that they make up the structure of every successful business in "market capitalist" countries.
I agree with your first ideas, but not the last. There are successful companies that have allowed significant independence to the lower levels of management and employees to a point where I wouldn't class all companies command economies in any strongly centralized sense.
Also, the failure to generate new economic activity (or supressing new activity) is a prevalent theme in failed companies. Furthermore, when you look at new innovative products coming out of large companies, you'll often spot a phase goes something like: "A small group of employees broke off and put together <widget> after hours or out of sight of the upper management, etc". The new activity or market areas often come in spite of the controls in big companies.
