Socialism Still Doesn't Work

The clamouring for socialism as a solution to our social ills is growing in popularity. Over 100 years ago, Mises told his readers that socialism was indeed a bold idea, holding out a promise for a better world that was exceedingly attractive to that generation who had experienced such seismic changes and the devastation of WWI. In the 2020s in various polls conducted upwards of 67% of college students viewed socialism positively, while only 40% viewed capitalism as favorable. In one recent poll, 53% of American voters between the ages of 18 and 39 hoped that in 2028 we would elect a Democratic Socialist to be President of the US. Similarly, the vagaries of seismic changes in the economic landscape and the trauma of the permanent war economy have obviously made socialism exceedingly attractive once more.

There are many problems with polling and there is a lot of ambiguity about what socialism means to those being asked. In many ways, the term just means the vague promise to provide a more just society — one that addresses not only inequality, but critical questions such as the environment and sustainability. But all promises, whether vague or concrete must specify the means to be employed to achieve the ends sought. Enter economic analysis.

The economic critique of socialism was never a normative critique of the ends of a more just and equitable society, it was instead an analysis of whether the chosen means of socialists could achieve the given ends of socialists. This is still how best to engage in this critical discussion for the political economy of the ‘good society’. We cannot escape substituting promise and vague notions about the path, with hard headed analysis of the concrete plan to achieve those promises. Socialist intellectuals remain analytically irrelevant the more they evade this necessity. Surprisingly, of all places, this is laid out clearly in a recent piece in the Jacobin entitled: “Socialism Has A Future, Central Planning Doesn’t.”

The piece comes to us in an extended interview with Vivek Chibber, a Professor of Sociology at NYU, and author of articles such as “How to be a socialist in the 21st century” and books such as Confronting Capitalism. The interview is quite interesting to read. Chibber’s main concerns are similar to the questions about workability of socialism that were raised by Janos Kornia. His acceptance of the unworkability of comprehensive central planning, in this regard, is closer aligned with standard interpretations of Kornai’s Overcentralization in Economic Administration than the Mises/Hayek critique of socialism. In Public Choice Paul Gregory provides a nice summary of Kornai’s argument that you can learn from. In the same issue, Rosolino Candela and I have piece arguing for a greater congruence between these arguments than has been generally recognized in the comparative political economy literature.

It is critical to engage the contemporary arguments for socialism in the most serious way, and we cannot let promises of a better world stand without critical analysis of the effectiveness of the chosen means in achieving those promised results. In my book Why Perestroika Failed, I propose an intellectual test early in the book related to means/ends analysis of social systems of exchange and production. We have to ask first and foremost about means/ends — are the means chosen coherent with respect to the ends sought. If we can demonstrate incoherence than that proposal can be put aside, but if the means are coherent with respect to the ends sought, then we can proceed to the next test. That test asks how robust or resilient the system will be to the strategic opportunistic behavior of individuals within the system, including those entrusted with leadership. If incoherent, we can make sense of claims about impossibility; but if coherent, but vulnerable to opportunism, we make sense of impracticality of the system. Only those systems that are both coherent and robust/resilient toward opportunistic efforts can be considered on the menu of possible worlds that might deliver for us improvement in the human condition. The alternative of pursuing incoherent systems or vulnerable systems is a tragedy, one that was in fact most horrific for the people of the 20th century unfortunate enough to be subjected to these regimes.

I am grateful to the Jacobin for running this interview, and to Professor Chibber for his intellectual honesty is wrestling with a deeply normative issue with its set of moral commitments for many in a rational way. But my own view is several critical issues are still missing from the discussion that I hope would be rectified is one were to read my own (along with Rosolino Candela and Tegan Truitt’s) analysis of the history of these discussions.

It is critical for the scientific analysis of economic systems that we grapple with the question of socialism in the right way, and it is vital for the future of humanity that we learn the lessons from that scientific debate.