What is Socialism?

Robert Heilbroner (1919 – 2005) defined socialism as “a centrally planned economy in which the government controls all means of production.”

Why is Heilbroner worth quoting on this matter? Because he knew what he was talking about. He was a committed socialist all his life. He was a best-selling author. His book The Worldly Philosophers: The Lives, Times and Ideas of the Great Economic Thinkers (1953) sold over 4 million copies. Clearly he was not stupid. And when he could not deny the evidence, late in his life he came to recognize that socialism had failed and was honest enough to admit that he had been wrong.

Here’s more on socialism from Heilbroner.

Socialism … must depend for its economic direction on some form of planning, and for its culture on some form of commitment to the idea of a morally conscious collectivity …

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 …

The rights of individuals to their Millian liberties [are] directly opposed to the basic social commitment to a deliberately embraced collective moral goal … Under socialism, every dissenting voice raises a threat similar to that raised under a democracy by those who preach anti-democracy. [1]

Heilbroner’s assessment of socialism versus capitalism:

Capitalism has been as unmistakable a success as socialism has been a failure. Here is the part that’s hard to swallow. It has been the Friedmans, Hayeks, and von Miseses who have maintained that capitalism would flourish and that socialism would develop incurable ailments. All three have regarded capitalism as the ‘natural’ system of free men; all have maintained that left to its own devices capitalism would achieve material growth more successfully than any other system. From [my samplings] I draw the following discomforting generalization: The farther to the right one looks, the more prescient has been the historical foresight; the farther to the left, the less so. (Source: Dissent 1990.)

Here’s how Heilbroner began his a Jan 1989 essay “The Triumph of Capitalism” in the New Yorker.

Less than 75 years after it officially began, the contest between capitalism and socialism is over: capitalism has won. The Soviet Union, China, and 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; however mindless the culture of commercialism, it is more attractive than state moralism; and however deceptive the ideology of a business civilization, it is more believable than that of a socialist one. Indeed, it is difficult to observe the changes taking place in the world today and not conclude that the nose of the capitalist camel has been pushed so far under the socialist tent that the great question now seems how rapid will be the transformation of socialism into capitalism, and not the other way around, as things looked only half a century ago.[2]

Finally, the piece on socialism in the Library of Economics and Liberty by — guess who — Robert Heilbroner is a must read. Quote:

The Birth of Socialist Planning

It is often thought that the idea of socialism derives from the work of Karl Marx. In fact, Marx wrote only a few pages about socialism, as either a moral or a practical blueprint for society. The true architect of a socialist order was Lenin, who first faced the practical difficulties of organizing an economic system without the driving incentives of profit seeking or the self-generating constraints of competition. Lenin began from the long-standing delusion that economic organization would become less complex once the profit drive and the market mechanism had been dispensed with—“as self-evident,” he wrote, as “the extraordinarily simple operations of watching, recording, and issuing receipts, within the reach of anybody who can read and write and knows the first four rules of arithmetic.”

In fact, economic life pursued under these first four rules rapidly became so disorganized that within four years of the 1917 revolution, Soviet production had fallen to 14 percent of its pre-revolutionary level.[3]

Whatever socialism is, its effects on human welfare is not pretty. India is a socialist country. Game, set and match.

NOTES

[1] Heilbroner quoted by David Boaz in a 2005 piece “The Man Who Told the Truth: Robert Heilbroner fessed up to the failure of socialism.

[2] Robert Heilbroner, “The Triumph of Capitalism,” The New Yorker, January 23, 1989,

[3] Socialism: The Concise Encyclopedia of Economics