Socialism- Substance and Label

The Reverend Mr. Opitz is a member of the staff of the Foundation for Economic Educa­tion.

 

Americans appear to like most everything about socialism except the name. Let a politician lift a plank out of the old time Socialist Party platform, paint it red, white, and blue to disguise its origin, and the voters will go on a stampede until they find some of­fice for him. Socialism, thus do­mesticated, is safe and sane enough for a Fourth of July ora­tion. But if an opinion poll is taken of these same voters it re­veals that they are as hostile to the socialist label as they are friendly to its substance. “For the great majority of Americans,” la­ments a pair of certified thinkers who jointly edit a socialist month­ly, ” ‘socialism’ is little more than a dirty word.”

Thus it was necessary for Mr. W. Averell Harriman, when he di­rected the mutual security pro­gram, to explain away foreign “socialism” for the inquiring members of a Senate committee. “Now this word (sic!) ‘Socialist Party’ is much misunderstood here, because it is a general term. In many countries the Socialist Party is what we would call here the New Deal Party or a Fair Deal Party and not the theoretical so­cialist of the historic kind.”

This confusion about socialism as between substance and label be­speaks the need of a definition. As a first step, turn to Webster’s dic­tionary. There we read this: “So­cialism: A political and economic theory of social organization based on collective or governmental own­ership and democratic manage­ment of the essential means for the production and distribution of goods.” This definition may be sharpened to read as follows: “A conviction or belief that organized police force—government—should dictate the creative activities of citizens within a society by the ownership and/or control of the means of production and ex­change.”

Such definitions as these are all right as far as they go, but they omit an important fact about so­cialism: that it is a substitute religion for many people, arousing all the emotional response and eth­ical fervor of genuine religion. It is a dream of the kingdom of God on earth—but, as von Huegel ob­served, “without a king and with­out a God.”

It was such a religion to H. G. Wells, for example. Wells stands about halfway between Karl Marx and the present. He was active among the early Fabians in Great Britain and wrote his book, New Worlds for Old, about fifty years ago. In it he said:

“Socialism is to me a very great thing indeed, the form and sub­stance of my ideal life and all the religion I possess. I am, by a sort of predestination, a socialist. I perceive I cannot help talking and writing about socialism, and shap­ing and forwarding socialism. I am one of a succession—one of a growing multitude of witnesses, who will continue. It does not—in the larger sense—matter how many generations of us must toil and testify. It does not matter, ex­cept as our individual concern, how individually we succeed or fail, what blunders we make, what thwarting we encounter, what fol­lies and inadequacies darken our private hopes and level our per­sonal imaginations to the dust. We have the light. We know what we are for, and that the light that now glimmers so dimly through us must in the end prevail.”

This apocalyptic mood was shared by Americans in the early decades of this century. One of these was the prominent socialist, George D. Herron. He wrote, “There is approaching—and it is not so far off as it seems—a world arranged by the wisdom hid in the human heart; a world that is the organization of a strong and uni­versal kindness; a world redeemed from the fear of institutions and of poverty. Even now, derided and discouraged as it is, socially un­trained and inexperienced as it is, if the instinctual and repressed kindness of mankind were sudden­ly let loose upon the earth, sooner than we think would we be mem­bers one of another, sitting around one family hearthstone, and sing­ing the song of the new humanity.”

In Aristotle’s View

These harbingers of a terres­trial paradise by legislative fiat are not without antecedents. Aris­totle encountered them. Proposals for legislative interference have “a specious air of benevolence,” he says, causing an audience to accept them with delight, suppos­ing, “especially when abuses under the existing system are denounced as due to private property, that under communism everyone will miraculously become everyone else’s friend. ” But, Aristotle com­ments, “the real cause of these evils is not private property but the wickedness of human nature.”

The men for whom socialism is a kind of religion, see it as the ful­fillment of mankind’s age-old dream of justice and good will on earth. Lenin brought to fruition the seeds planted as far back as the Old Testament prophets! Harry Laidler, of the League for Industrial Democracy, opens his History of Socialist Thought (1927) with a chapter in praise of Amos, Hosea, Isaiah, Jesus, and St. Augustine. This tactic of mar­shaling the great figures of our religious tradition under the ban­ner of socialism is designed to make the critic of modern social­ism appear in opposition to the spiritual giants of our race.

The Methods Kill the Dream

But the dream of justice and good will among men is by no means the exclusive possession of socialists; it is a dream shared by all men of generous instincts. It is possible to demonstrate, moreover, that the good things, both material and spiritual, that we desire for all men are undermined by meth­ods socialists use to attain them. The socialist dream is shattered by the operational imperatives of socialist performance. This is not only true of Russian practice; it is implicit in socialist theory.

Socialists propose to realize their dreams by putting the pro­ductive powers of men under the direction and control of the state. Socialists prefer to speak of the social ownership of property. But society—which means all of us—cannot act as a whole to own and control property; it must act through its enforcement agency, which is government. The men who comprise the governing agen­cy in any society are a small mi­nority within that society.

In practice, therefore, a social­ist society is one in which the vast majority of men are controlled by the tiny minority which has power to direct their economic activities. We might put the matter differ­ently by saying that the socialist dream is based on the delusion that men’s other freedoms will be enhanced if they are deprived of economic liberty. By eliminating economic liberty and replacing it with a planned economy socialists hope to usher in a brave new world.

It hasn’t worked out that way in practice because the theory is all wrong. “Economic control is not merely control of a sector of human life which can be separated from the rest,” writes F. A. Hayek, “it is control of the means for all our ends.” Eliminate eco­nomic liberty in a society and you begin to institute a master-slave relationship. The guiding ideals which ushered in the modern pe­riod aimed at the liberation of the individual; from ecclesiastical cor­ruption, from political tyranny, and from economic bondage. These movements of liberation converge and the individual is more firmly fettered than ever be­fore. What a strange denouement! How did it happen?

Chronic Discontent

Socialism, as mood, theory, and practice, is a result of the mate­rial abundance made possible by the industrial revolution. Millions of people had toiled close to the soil for millennia, only to be re­warded by a bare subsistence, at best; at worst by plague and fam­ine. Until the modern era, pov­erty was hardly more attributed to human arrangements than to cosmic setting; one seemed about as fixed as the other. Generations toiled, fed, bred, and died and, be­cause of the general conviction that such was man’s fate, enter­tained little hope of bettering their circumstances. The expectation of unimaginable progress was re­leased by the revolutionary changes which mark the modern period, a period characterized un­til recently by expanding political liberty, invention and technology, capitalist production, and relative material abundance. Men ceased to yearn for compensatory delights in the world to come and began to dream of getting their New Jeru­salem now in “England‘s green and pleasant land.”

Secular hopes grew wildly, and material progress seemed to jus­tify them. Conditions of existence were ameliorated. Life expectancy increased; many diseases were eliminated. Populations have in­creased at an accelerated rate since 1800; but in spite of this, the additional mouths were better fed and the additional bodies were bet­ter housed and clothed. But this was not enough. For those whose expectations can only be summed up by one word, “More!” no addi­tional increment is ever enough.

Given this mood, discontent be­comes chronic in the modern world. Material progress must for­ever trail behind expectation be­cause, in the nature of things, eco­nomic goods are always in short supply. This does not reflect a hu­man failure; it is a built-in fea­ture of the universe. A thing is not an economic good unless it is scarce relative to human demand for it. Human demands, being lim­itless, invariably outrun supplies, which are naturally limited. This simple fact is widely overlooked, with the result that a sense of grievance has become endemic among large numbers of people. It is simply a reflex of the contrast between a utopian vision and ac­tual living conditions.

Being poor is endurable, and be­sides, poverty is a relative matter. But the feeling that one is being kept poor raises an issue of an al­together different sort; justice is involved. Embracing the practical possibility of a heaven on earth is the first false step; belief in a con­spiracy which prevents it from ar­riving is the second. A mind which entertains the first foolishness is ripe to be infected with the second.

A sense of grievance is, of all human emotions, the easiest to ex­ploit; and exploited it was, by grievance collectors and dema­gogues. Political power had been wrested from the kings and dis­tributed according to the demo­cratic formula. But after the glow of exaltation over popular sover­eignty had worn off, it was no­ticed that the anticipated new dawn had not broken. The imme­diate inference was that someone must be holding it back. The bot­tleneck could not be political—the democratic revolution assured that; therefore, it must be eco­nomic. A conspiracy of capitalists prevented the arrival of utopia! Obviously, we needed an economic revolution.

“Das Kapital”

The word “capitalist” was a Marxian term, imported into the language for polemical purposes and as a term of abuse. The “cap­italist” was the owner of the fac­tories, machines, and tools. He em­ployed people to run his equipment and then, in his depravity, stole everything they produced except for the pittance they needed to stay alive.

This “surplus value” theory would never have been broached—or, if broached, would never have caught on—except that the men­tality of the period consisted of a utopian expectation, a sense of grievance, and a belief that the masses were victims of a con­spiracy. Out of this soil sprang modern collectivist movements, Marxian and otherwise.

But collectivism has been fed by another tributary as well, a non-theoretical one. Classic liberalism distrusted the state, per se. On principle it threw up safeguards to protect society from undue ex­tensions of political power. But the democratic principle does not ad­dress itself to the problem of lim­iting political authority; it is con­cerned only to get the state oper­ating under popular auspices, or majority rule. If a majority wants the state to undertake some func­tion, there is nothing in the demo­cratic principle to forbid it, however unjust it might be, or how­ever violative of the principles of liberalism, which make for limited government.

Perpetuation of Power

The nature of political action is constant, regardless of the aus­pices under which it operates. It is of the nature of power to want to perpetuate itself and, following this mandate, every government seeks to create the means of its own support. The Court at Ver­sailles, under the old regime, was largely a group of wastrels depend­ing on government handouts for their mode of life. Their consump­tion was nothing if not conspicu­ous. Political subventions, under a democracy, are more subtle, but the feeling spreads that everyone is entitled to all he can get.

Government comes to be re­garded as a benign omnipotence possessing the magical properties of an Aladdin’s lamp. If properly approached—by means of a lobby or pressure group which knows which buttons to push, which lev­ers to pull—it delivers the goods as obediently as a vending ma­chine. Government is a tool capa­ble of accomplishing anything a majority can be mustered to de­mand. “Majority” is a technical term among political pros, refer­ring to a numerical figment used by a literal minority to justify a handout from the public treasury. Democracy and majority rule be­come a screen behind which in­siders operate under the formula: Votes and taxes for all, subsidies for us.

Given popular acceptance of the Service State – a political au­thority presumed to be responsive to majority demand, and it is in evitable that democratic govern­ments would get into the business of dispensing economic benefits—advantage for some at the expense of others.

Pyramiding Special Pleaders

There is only one way for man­kind to live and improve its eco­nomic circumstances, and that is by applying its energies to nature and nature’s products. Goods are produced in this way and in no other. But once produced, the goods of some men may be ac­quired by other men through po­litical manipulation. Let govern­ment perform this service and the trek to Washington is on. Once on, it will grow in geometric progres­sion as group after group organ­izes to apply political pressure to get something for nothing: organ­ized labor, the farm bloc, veter­ans, regional groups, educationists, the aged, and others.

Business and industry, strictly speaking, have to do only with the deploying of economic factors and resources—somebody making something, transporting it, ex­changing it. A businessman or in­dustrialist, pursuing his aims as an entrepreneur, seeks to turn a profit. The appearance of a profit indicates that his talents are being employed in a manner approved by a significant number of people. Ab­sence of a profit, on the other hand, ought to be his clue that people are instructing him to go into some other line. So long as a man produces and sells things people want at a price they are willing to pay, he operates according to the rules of economics. The vast ma­jority of our millions of business enterprises are conducted in this fashion. All that is necessary to keep this operation going is for the law to inhibit and penalize cases of theft, fraud, and violence.

A “Fair Advantage”

The processes of production and exchange are self-starting and self-fueled and need nothing from government but protection from predation. It is in the interests of business-as-a-whole to maintain this climate of freedom. But the immediate interests of a particu­lar businessman do not always co­incide with the interests of busi­ness-as-a-whole. That is to say, businessman X might find it prof­itable for himself if his respon­sive, democratic government will intervene to give him a preferen­tial position in the market by penalizing his competitors.

Such political intervention is contrary to the principles of clas­sic liberalism and has the effect of giving some men an economic ad­vantage at the expense of other men. Government intervention frustrates the workings of eco­nomic laws by forcing economic decisions contrary to the decisions of the unhampered market. The intervention annuls consumer choice, and the net result is eco­nomic advantage for political fa­vorites.

Economic success under capital­ism—the free market system—is measured by consumer satisfac­tions. If consumers are pleased with the goods and services pro­vided by a producer, as demon­strated by their willingness to pay for them, the producer makes a profit. But in a political setup where the politicians stand by to confer economic advantage in re­turn for lobbying and pressure group activity, material rewards may accrue to a man, even if con­sumers have returned a negative vote by not buying his goods or services.

When there is general accept­ance of the idea that it is the func­tion of the state to dispense eco­nomic privilege to its partisans, there will be competition among “businessmen” for political lar­gesse. This is a departure from capitalism into the practice of an under-the-counter socialism. The practice has been all too prevalent during the past century, and is one of the main influences feeding into the socialist trend. No busi­nessman wants over-all socialism, but many a businessman wants a little piece of socialism where it is to his immediate advantage. Add up all these little pieces and the society is no longer liberal. It may be called liberal by some merely because the word has a favorable connotation, but it is not liberal in the limited government sense of the word.

The Costs of Freedom

Classic liberalism meant free­dom: freedom to write and speak, to worship and teach, and, most neglected freedom of all, freedom of economic enterprise, i.e., con­sumer sovereignty in the market place. A believer in free speech ac­cepts this principle even though he is fully aware that its exercise will result in campaign oratory, social­ist tracts, uplift drivel, pornogra­phy, public relations prose, modern poetry, and the “literature” of a beat generation. The defender of free speech recognizes these things as corruptions of the divine gift of communication, but they are part of the price he is willing to pay for freedom. Freedom costs, and thus it cannot endure among a people who do not understand this or, if they do, are unwilling to incur these costs.

Accept the principle of religious liberty and things will happen which the civilized man will view with disgust. There will be holy roller revivals, store-front church­es, unlettered Bible thumpers, bingo, and baked bean suppers. But the man possessed of a sensi­tive religious conscience is aware that it is not up to him to tell God the kind of instruments He can use to work His mysterious ways; and he wishes to make it plain that the opponent of religious lib­erty, if he is logical, must invoke a kind of inquisition to curb those expressions of religion he finds distasteful.

Acceptance of the principle of economic liberty means that the consumer has a right to demand, and the producer a right to supply, any item which does not injure another—as injury is defined in laws against theft and fraud. This means that poor taste and doubt­ful morals will find expression here just as they do in the kindred fields of speech and religion. A rock-and-roll performer will ride around in a pink Cadillac while a symphony orchestra has to beg for funds. A race track will be built where common sense would dictate a playground. People ref use to buy mere transportation; they want a chariot with lots of chrome and three hundred horses under the hood. Worse yet, when political subventions are available, some businessmen will seek to get “one up” on their competitors with gov­ernment help.

Freedom costs, and the costs of freedom in the areas of speech, press, worship, and assemblage are generally acknowledged by a sig­nificant number of articulate peo­ple. These freedoms are not under assault—not in this country, at any rate. In the case of economic freedom the situation is different. Few people mistake the abuses of free speech for the principle it­self; but the abuses of economic liberty loom so large in the mod­ern eye that it cannot detect the market principle of which they are violations.

Properly Limited Government

Freedom, in sound theory, is all of a piece. It hinges on properly limiting government. A society may be called free when its gov­ernment does not dictate matters of religion and private conscience, does not censor reading material, curb speech, nor bar lawful assem­blage. But mere paper guarantees of these important freedoms are worthless if there is governmental control and bureaucratic planning of economic life. The guarantee of religious freedom is worth little if the devotees are denied the eco­nomic means to build their tem­ples, print their literature, and pay their spiritual guides. How meaningful is freedom of the press if there are no private means to buy paper and presses? And there is no full right to assemble if buildings, street corners, and va­cant lots are government owned. “Whoso controls our subsistence controls us.”

If government is properly lim­ited, men are free. In a free soci­ety a certain pattern of economic activity will be precipitated. This pattern will change constantly. It will respond as men have less or more political liberty. It will be modified as technology advances, taste is refined, and morals im­prove. Properly speaking, the eco­nomic pattern of a free society is capitalism, or the market econ­omy. Under capitalism the people are economically free, exercising control over their own subsistence, and thus they become self-control-ling in other freedoms as well.