Authored by William Andersen via The Mises Institute,
The doctrines of socialism have been with us for more than 150 years, but no one had really tried it in a total way until the advent of the Soviet Union from the 1920s to the early 1990s. During that period, a number of communist/socialist revolutions occurred in Asia, Cuba, and Africa, all of which provided a laboratory to observe how these socialist economies would perform.
The socialist economies failed spectacularly, as Ludwig von Mises had predicted. His works on socialism published in 1920 and in 1923 show that, as an economic system, it was doomed before it ever was implemented because it had no practical system of economic calculation. Despite the propaganda beamed at people both from socialist governments and the western media that socialist economies were lifting vast numbers of people from poverty, the reality of socialism was what Mises had predicted.
By 1989, even die-hard socialists like Robert Heilbroner had to admit that socialism had been a huge failure. Indeed, by the mid-1990s, the only countries attempting to continue with the socialist experiment were Cuba and North Korea, and neither economy was one to be envied. Heilbroner wrote in The New Yorker:
The Soviet Union, China & Eastern Europe have given us the clearest possible proof that capitalism organizes the material affairs of humankind more satisfactorily than socialism: that however inequitably or irresponsibly the marketplace may distribute goods, it does so better than the queues of a planned economy…. the great question now seems how rapid will be the transformation of socialism into capitalism, & not the other way around, as things looked only half a century ago.
Yet, Heilbroner—echoing Joseph Schumpeter’s belief that capitalism could not survive in the modern age—was not convinced that a capitalist economy would do well under the cultural and political assaults coming from academic, social, and government elites that would always demand more from it than it could produce. Heilbroner admitted that Mises was right, that a socialist economy lacked the necessary economic calculation to flourish, but he could never get himself to endorse the capitalist system itself.
Today, when we see poverty, prices of goods increasing, housing shortages in New York City, or high food prices, the usual suspects blame capitalism, and they blame what has become the overriding symbol of capitalism—the billionaire. It does not matter that the housing problems are caused by rent control and other supply-restricting government interventions, that inflation is a government-caused phenomenon, and that Federal Reserve policies of creating financial bubbles have created a lot of on-paper billionaires, as the critics will blame free markets no matter what. Their arguments do not need to be coherent or logical to have an effect. As I recently wrote, many of the most economically-illiterate people in our midst have become wealthy by making public statements on economics. In our modern media age, even the most ignorant sage is considered an “expert” if one has the “correct” politics.
But despite socialism’s many failures as an economic system, it is more popular than ever as a political system. Declares the socialist publication Jacobin:
For socialists, establishing popular confidence in the feasibility of a socialist society is now an existential challenge. Without a renewed and grounded belief in the possibility of the goal, it’s near impossible to imagine reviving and sustaining the project. This, it needs emphasis, isn’t a matter of proving that socialism is possible (the future can’t be verified) nor of laying out a thorough blueprint (as with projecting capitalism before its arrival, such details can’t be known), but of presenting a framework that contributes to making the case for socialism’s plausibility. (emphasis theirs)
In other words, socialists don’t need to be successful in actually producing goods and services and ensuring people receive them. Instead, all that is needed is for them to promise those things, even if they cannot deliver on their promises, and then win elections. The socialist publication The Nation emphasized five years ago that the only victories needed are at the ballot box:
Most importantly for DSA (Democratic Socialists of America), Democrats cannot control their ballot lines like they once did. There are no mechanisms for dissuading DSA challengers from running; blocking a candidate from the ballot is far more difficult than it used to be. Today’s Democratic Party is a shell waiting to be inhabited by whoever claims the prizes of elected office.
If Bernie Sanders, a democratic socialist, is elected president of the United States, the Democratic Party will slowly become his party. And if he loses, inspiring still more DSA recruits and fueling down-ballot victories, socialists can continue to win council, legislative, and even congressional seats on Democratic lines, wielding tangible clout.
In New York, there is one socialist in the state legislature: DSA member Julia Salazar. She has helped lead campaigns for public control of power companies and a universal right to housing. Five DSA-backed candidates are seeking legislative seats this June, challenging establishment-backed Democrats. If they all win, they will start to gain back the momentum of the 1920s.
This time, there will be no reactionary legislative leaders to unseat the new socialists, no Red Scare to feed a public frenzy against their anti-capitalist views. Salazar is a member of the Democratic majority, an ally of the progressive block, unlikely to lose an election anytime soon. The DSA members seeking to join her will be free to advocate for radical change. It’s a future that would have surprised the class of 1920 because Socialists never took over New York, let alone America. But today’s socialists march into the 2020s without the daunting roadblocks of a century ago. They don’t need their own party anymore. They can just take someone else’s.
Today, the socialists not only have captured the mayor’s office of New York City, but also Seattle, where yet another so-called democratic socialist won by emulating Zohran Mamdani’s “affordability” campaign in New York, and the movement looks to capture the Democratic Party. Understand that neither Mamdani nor Katie Wilson in Seattle will be able to successfully keep even a fraction of their campaign promises, and whatever they impose will make life even more difficult for the people who voted them into office but their failures not only will not matter but rather will be reinterpreted as successes.
In his review of Paul Hollander’s Political Pilgrims, in which Hollander wrote about how western elites idealized communism, Paul Schlesinger, Jr., wrote:
In his account of the mechanisms of self-deception, Professor Hollander makes effective use of the concept of “contextual redefinition.” By this he means the way that activities are transformed by their context, so that what is detestable in one society becomes uplifting in another. Thus the left-wing intellectual feels that any society based on state ownership, whatever its superficial flaws, is essentially good; any society based on private ownership, whatever its superficial attractions, is essentially corrupt. Poverty represents a shameful failure in capitalism; but when associated with egalitarianism and the subordination of material to spiritual needs, it expresses a simple, uncorrupted way of life. Manual labor is demeaning under capitalism, ennobling under Communism. Child labor is abominable in the United States, but in Cuba the sight of children working 15 hours a week in the fields is symbolic of high and unified purpose. As Angela Davis once said, “The job of cutting cane had become qualitatively different since the revolution.” Contextual redefinition, Professor Hollander writes, also produces “euphoric response to objects, sights, or institutions in themselves unremarkable and also to be found in the visitors’ own societies.” “There is something about a Russian train standing at a station that thrills,” wrote Waldo Frank. “The little locomotive is human…. The dingy cars are human.”
Moreover, socialists (and especially socialists in higher education) are able to use words to create the imaginary capitalist hellhole that we supposedly inhabit. John Fea—history professor at the Christian college Messiah University—wrote the following screed in the now-defunct webpage “Current”:
As capitalists, we have a deep and abiding trust in financial markets. We believe that the economy, complete with the conspicuous consumption that fuels it, will be our salvation. We stare at the bottom of our screens as the ticker streams by, praying fervently that this will be the day the gods of the Dow perform their magic and bestow us with blessings.
But the prophet Adam Smith has only heard the prayers of a few. The invisible hand has done little to prevent inequality, instability, and environmental degradation. As historian Eugene McCarraher writes in Enchantments of Mammon: How Capitalism Became the Religion of Modernity, we worship at the throne of “capitalism’s ontology of pecuniary transubstantiation, its epistemology of technological dominion, and its morality of profit and productivity.” These gods have few answers when the pandemic comes, or when Black men and women are killed in the streets, or when we give birth to children who will live in a world that is becoming more uninhabitable by the year.
That Fea is describing an imaginary world is irrelevant in his domain and the domain of academic and media elites. To Fea and his fellow faculty members at Messiah and at most colleges and universities, the US economy is a living hell in which most people live in squalor (except for the billionaires), only a few people receive healthcare benefits, the capitalists have utterly polluted our planet, and where profits are gouged from the broken bodies of American workers. Nothing is permitted to contradict this belief. As Thomas Sowell has written about people like Fea:
It is usually futile to try to talk facts and analysis to people who are enjoying a sense of moral superiority in their ignorance.
Socialism, Fea claims, “is based on the fundamental belief in the worth and sacredness of man,” and it is the only moral form of social organization. Fea also argues that democratic socialism has nothing to do with communism and the dictatorships that accompanied that ideology. Yet, many of his blog posts show alliances with the hard leftists that did support those communist dictatorships.
Understand that Fea is not a fringe character in Christian higher education. He writes regularly for Christianity Today and is a sought-after speaker at Christian colleges.
Someone like Fea does not want to be bothered with issues of economic calculation—and since economic calculation depends upon things like market prices and profits, all of which Fea believes are immoral, any argument based upon economic calculation fails to pass the morality test in his view. What matters is intent and only intent. Socialism, he argues, is founded upon the highest ideals of the founding of the United States, so to oppose it is to oppose truth and decency itself.
Fea does address the so-called human nature argument against socialism, claiming that it is easily discredited, since good government via democracy will offset any innate selfishness in human beings. He quotes Ben Burgis of the radical socialist publication Jacobin:
The core of socialism is economic democracy. Whether we’re talking about decision-making in an individual workplace or bigger decisions with a broad impact on the course of society, socialists think that everyone who’s impacted should have a say.
One of the reasons that’s so important is precisely that giving anyone too much power over their fellow human beings creates the danger that their power will be abused. No system is perfect, of course, but the best recipe for minimizing the possibility of abuse as much as possible is to spread around power — political and economic — as much as possible.
The idea that the political process is a morally superior substitute for economic processes is not surprising coming from a college professor who would never accept free markets. But Fea and his allies believe that as long as people can vote in elections, then we can have “economic democracy,” which is little more than an abstract concept that has never squared with reality.
Note that in none of the current socialist writings does anyone actually attempt to deal with real economic questions. Instead, as Jeff Deist has written, socialists practice what he calls “antieconomics”:
Antieconomics…starts with abundance and works backward. It emphasizes redistribution, not production, as its central focus. At the heart of any antieconomics is a positivist worldview, the assumption that individuals and economies can be commanded by legislative fiat. Markets, which happen without centralized organization, give way to planning in the same way common law gives way to statutory law. This view is especially prevalent among left intellectuals, who view economics not as a science at all, but rather a pseudointellectual exercise to justify capital and wealthy business interests.
While socialists like Fea will appeal to “economic democracy,” in reality, the only entity that can carry out the kind of economic organization socialists demand is government. Granted, one will not ever read anything but abstract reasoning from socialists, since a successful socialist economy functions only in imaginary space. After all, Fea and the socialist journalists at The Nation and Jacobin don’t need to concern themselves with ever having to make large-scale economic decisions but they can score points simply by denouncing capitalism and demanding a “just” economy without having a clue as to how an economy even works. They don’t have to be right; all that is needed is for them to be seen as moral by their peers.
In the end, socialists are very good at discussing election strategies, not economics. They speak of their attractive candidates and the prospects for electing new socialists to office. What they cannot do is to present a coherent view on the economy, and when elected, they will have no more success than did the commissars and economic planners of the former Soviet Union who at least had the good sense in 1991 to close shop and turn out the lights.
