The New York Times and Socialism

Socialism is not an alternative to capitalism; it is an alternative to any system under which men can live as human beings

by James E. Miller

In lieu of the election of Socialist President Francois Hollande and a Socialist Party collision as the majority in France’s Parliament, the New York Times recently asked “what does it mean to be a Socialist these days, anyway?”   According to The Grey Lady, socialism today is “certainly nothing radical” and simply meant the “the emancipation of the working class and its transformation into the middle class” during its heyday.  Essentially the article categorizes the contemporary socialist as one who is a rigorous defender of the welfare state.  The piece quotes French journalist Bernard-Henri Levy as saying “European socialists are essentially like American Democrats.”  It even accuses center-right political parties in the West of being quite comfortable with socialism’s accomplishments.

So is the New York Times correct?  Is socialism just a boogeyman evoked by the “fringes” to scare the public into questioning the morality and efficiency of the welfare state?

Going by the New York Times definition, socialism is just another word for social democracy.  But of course the word socialism never really referred to just welfare entitlements.  Properly defined, socialism is a society where the complete means of production and distribution of goods are solely in the hands of the state.  It is also a system defined by the absence of private property.  According to famed socialist and author Robert Heilbroner:

If tradition cannot, and the market system should not, underpin the socialist order, we are left with some form of command as the necessary means for securing its continuance and adaptation. Indeed, that is what planning means…

The factories and stores and farms and shops of a socialist socioeconomic formation must be coordinated…and this coordination must entail obedience to a central plan.

If capitalism and private property are the natural state of free men, socialism is the violent overthrow of liberty.  Outlawing of private property and free enterprise is no easy task.  It requires a large amount of enforcement to see to it that nobody trades without the state’s permission.  And it is because of its oppressive nature that it is only through totalitarian dictatorship can socialism be fully realized.  Economist George Reisman explains:

In sum, therefore, the requirements merely of enforcing price-control regulations is the adoption of essential features of a totalitarian state, namely, the establishment of the category of “economic crimes,” in which the peaceful pursuit of material self-interest is treated as a criminal offense, and the establishment of a totalitarian police apparatus replete with spies and informers and the power of arbitrary arrest and imprisonment.

Socialism cannot be ruled for very long except by terror. As soon as the terror is relaxed, resentment and hostility logically begin to well up against the rulers.

The New York Times paints socialism as a different picture.  The push for “democratic Marxism,” as the paper calls it, was responsible for creating a vibrant middle class with measures such as progressive taxation and a welfare safety net.  “Socialism and social democracy today are about a society with more solidarity, more protection of people, more egalitarianism” is how once-student revolt leader, now bureaucrat in the European Parliament Daniel Cohn-Bendit describes it.

No doubt these descriptions make for good political rhetoric.  State officials love nothing more than convincing the public they have brought them a standard of living beyond their wildest imagination.  Yet these claims are also completely false.  Government produces nothing; it can only redistribute using its implicit threat of violence.  Welfare transfer payments can’t be provided unless the private sector has produced wealth prior to confiscatory legislation.  Just as production must always precede consumption, government can’t rob Peter to pay Paul if Peter doesn’t first have something to steal.  No matter how hard they try, politicians can’t create a free lunch.  They can only order the citizenry around with the trigger of a gun.

This truth doesn’t fit well with the NYT’s favorable view of socialism.  The famously left-leaning newspaper never baulks at the chance to champion the newest scheme in government intervention.  Where the paper really misses the mark on actual socialism is the fact that it can’t work and is bound to fail.  True worldwide socialism will never create a worker’s paradise; just misery for all.

To proponents of incessant government control and regulation, such a statement is nonsense; even sacrilegious.  But in 1922 in his book “Socialism: An Economic and Sociological Analysis,” Ludwig von Mises not only explained why a market economy with private property is superior to socialism, he refuted the socialist doctrine beyond anything the movement could even begin to disprove. Socialists at the time had no answer for Mises’ critique.  The same holds true for socialists today.

What was Mises’ devastating theory?  It’s actually quite simple.  Under a market economy, economic calculation is able to take place as long as there is private property and a pricing system.  Since prices act as signals between producers and consumers, they provide the basis for the rational distribution of resources.  Producers can’t fulfill the desires of consumers if they can’t calculate input costs and revenue.  Without the possibility of profit, what motive is there for producing in the first place?  Or as Hans-Herman Hoppe summarizes:

If there is no private property in land and other production factors (everything is owned by one agent), then, by definition, there can also be no market prices for them. Hence, economic calculation, i.e. the comparison, in light of current prices, of anticipated revenue, and expected cost expressed in terms of a common medium of exchange—money— (permitting cardinal accounting operations), is literally impossible. There can be no “economizing” under socialism. Socialism is instead “planned chaos.”

So precise was Mises’ theory that when the Soviet Union finally collapsed, Robert Heilbroner would go on to write in an article for the New Yorker entitled “Reflections: After Communism” that “socialism has been a great tragedy this century” and “no one expected collapse.”  After decades of denying Mises’ refutation of socialism, he was finally forced to admit “that Mises was right.”

To the working man, pure socialism only results in a state of destitution.  It is by no means the “emancipation of the working class.”  It is a system of top-down enforcement where the masses are treated as cogs in need of fine tuning.  Socialism gained traction only because leading intellectuals saw it as a possible utopia and did their best to convince the ruling establishment of its merits. “Socialism has never and nowhere been at first a working-class movement” as F.A. Hayek put it.  It has always been an economics system favored by those elitists who hoped to find themselves crowned as central planners.

The New York Times article ends by quoting Marc-Oliver Padis, editor of the academic journal Esprit, who asks “Is socialism really more than pragmatism?”  The answer is no.  Even in its moderated European form, the socialist sees the state as the answer for all of society’s questions.  He values violence over peace; compulsory over voluntary, slavery over freedom, and submission over dignity.  As long as France continues down the road to socialism, its economic future is in grave danger.  Judging by the amount of wealthy businessmen who have begun to flee France in favor of London, it would seem that people in the end generally feel entitled to the sweat of their brow.  As Mises never tired of pointing out,

A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society. Socialism is not an alternative to capitalism; it is an alternative to any system under which men can live as human beings.