Next Contestant: Socialism
Part of a Four-Part Series on Choosing a Socio-Economic System for America
Ah, Socialism. The One People Love or Hate – And Seldom Understand
We started this little review and exploration of systems with capitalism. This time around let’s take a quick look at socialism. No one has any strong feelings about this one, do they? Oh, well, OK– maybe we do.
Remember our analogy for evaluating these systems- this is a bit like buying an automobile. Socio-economic systems carry a lot of the same characteristics we look for in automobiles. Capitalism was described most of all as being like a powerful engine. Socialism? This one is more about steering. Sort of a GPS on steroids.
First, Let’s Get Our Terminology Right
Socio-economic systems are really, really prone to being improperly defined. They are used and abused based on people’s misperceptions and sometimes by deliberate misstatements. This may be truer for socialism than for any other system.
For those of us of a certain age, we largely define socialism by the living experience we know – communism. The two are not synonymous, but they sure travel together a lot. Many of a younger generation – and some others as well – tend to view socialism through the rose-tinted view of its theoretical potential. That idea of all contribute what they can, all get back what they need.
Before we take on that disagreement, let’s be clear about the turf on which we are about to walk. By definition, socialism means one authority, the government, not only allocates resources, but it also owns the means of production. Essentially everything in the economic life of a country comes under one authority. If that is not the case – if private property abounds – it’s not socialism. That would be some other hybrid (a variant like that is coming up in our next posting).
The Gospel According to Mitch McConnell
Getting the definitions right helps evaluate what we hear from others. The current crop of Republican office holders calls about everything Democrats propose as socialism. Pretty much none of it is socialism, of course, but Mitch and the Gang love to try scaring people with the term. One of their problems is that dog doesn’t hunt anymore.
Sure, much of their base reacts as they hope, but most of the country either know that is BS or think a little socialism (as they interpret it) is not a bad thing. Just for historical context, the Republican party said EXACTLY the same thing about child labor laws, Social Security, Medicare, Medicaid, workplace safety laws, etc. See a pattern here?
On the other side, not a few people are calling for socialism. What they really mean is social welfare – putting resources into programs that do more good for more people and demanding that the fabulously well-off share a bit more. That is a noble idea, but it is quite different from the government owning the means of production.
What Does Socialism Do Well?
If nothing else, socialism can provide unified focus. It has the ability to decree what will be done with what resources, from start to finish. Going back to our vehicle analogy, this is one heck of a steering system, or if you like, a very robust GPS.
Modern China is very much a mixed economy these days, but still operates largely on socialist principles of the state owning much of the economic capacity and dictating how resources will be invested in effectively all sectors.
We toured much of China a couple of years ago and saw first-hand how that kind of focus can work. The range and scale of projects being undertaken was impressive to say the least. Doubly so when we considered how pitiful America’s investment in infrastructure has been for decades (that may finally be coming to an end, thanks to Biden).
In principle, it also can ensure the economy is fair, able to care for all segments of society. It potentially can be a checkmate for personal greed and private corruption. In principle.
So, What’s the Problem?
The problem, of course, is that true socialism lacks the necessary checks and balances, the self-correcting mechanism, that any human endeavor must have. It is, even more so than capitalism, subject to corruption and misuse. If one player owns all the assets, sets all the priorities, and has no mechanisms of oversight from anyone else, it is sure to run aground. Indeed, it always has.
In addition, socialism lacks the economic benchmarks that a true economic system has. Thus, great waste and inefficiency becomes the norm. Corruption is close behind. Look at most government resources in Russia today for an example of such utter failure by any reasonable standard.
In short, true socialism is a process dedicated to steering more than anything else, but without balance or corrective measures. Once it begins running off the road, there is little capacity or inclination to make a correction. To the best of my understanding, there are only two places in the world today that still have a genuinely socialist system, with only minor deviations: Cuba and North Korea.
Anyone want to live in either place, under the current rules? Yeah, I will pass, too. We also visited Cuba before Trump made that too hard to do. We came out thinking what an amazing place it could be with some economic and political freedom. The current system is crushingly hopeless and will never self-correct.
So, Is Socialism the Right Answer?
Almost surely, no. As we said earlier, every system has its strengths and weaknesses. Socialism, it seems to me, has far more of the latter than the former. Its aspirations can be admirable and perhaps could be adapted in some ways to a better model.
But at its core, it seems too narrow, to prone to abuse, and too inefficient. And incapable of reform on a meaningful scale. The idea has been around for a very long time. But it has yet to deliver on its theory and promise. Something better is needed.
Coming Up
Social Democracy. Is it an economic system? Is it a political system? Maybe a social structure? Perhaps all of the above. Coming up next, a short review of Social Democracy. Is it the Goldilocks of socio-economic systems? Stay tuned and we shall see.
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