All Commentary
Friday, March 1, 1963

Socialism: A Barren System

Socialism depends upon and pre­supposes material achievements which socialism itself can never create. Socialism is operative only in wealth situations brought about by modes of production other than its own. Socialism takes and re­distributes wealth, but it is ut­terly barren when it comes to pro­ducing wealth.1

Few Americans today would ob­ject were this devastating indict­ment leveled against communism. But accuse the U.S.A. brand of democratic socialism of barren­ness or sterility? For heaven’s sake! Are you actually implying, many would ask, that a vast ma­jority of Americans are rapidly committing themselves to a will-o’-the-wisp? Eating the seed corn? Acting as parasites? Yes, this is the indictment, and I shall do my best to demonstrate its truth.

But first, let the terms of dis­course be clarified. Socialism is state ownership and/or control of the means of production. And democratic socialism is no less so­cialism than the autocratic variety. Socialism is just as surely state ownership and/or control of the means of production when in­stalled by majority vote as when installed by a dictator. Socialism doesn’t give a hoot how it climbs into the political saddle.

Communism can be properly de­fined as the communalization by force of the product of all. Marx put it succinctly: “From each ac­cording to ability, to each accord­ing to need.” There have been some 200 small-scale communistic experiments in this country, one of the first being the Plymouth Colony during its first three years. The production of every colonist was forcibly directed into a com­mon warehouse and doled out by those in authority according to need. Free choice of what to do with the fruits of his own labor was denied the individual Pilgrim.

In what respect, then, do social­ism and communism differ? As far as their mode of operation is concerned, not at all. Bear in mind that Khrushchev and party refer to themselves as “communists,” but that they call their nation the “Union of Soviet Socialist Repub­lics.” They know full well, and we should know, that socializing the means of production and socializ­ing the results of production are but two sides of the same coin, in­separable in practice. The state that controls production is going to control the distribution of what is produced; and the state that distributes the product must, eventually, control its production.

That inescapable fact is just as true in the United States, with its democratic brand of socialism, as it is in Russia with its dictatorial socialism. In our own country, when we refer to the “planned economy,” we mean that wages, hours, prices, production, and ex­change shall be largely determined by state directives—and not by free response to market decisions. Though our “welfare state” poli­cies are currently more humane than their counterparts in Russia, socialism in both nations involves the forcible collection of the prod­uct from all people, in order to re­distribute it to political groups. While there are meaningless dif­ferences in detail between fascism, communism, and socialism, we must conclude that they are of the same warp and woof as the wel­fare state, the planned economy, Fabianism, nazism, and state in­terventionism: the application of state force to both the means and the results of production. And in­sofar as the policies of the New Deal, the Fair Deal, the New Re­publicanism, and the New Fron­tier socialize, or forcibly commu­nalize, or plan production and dis­tribution, then, to that extent they, too, exemplify the same col­lectivist principle.

Once it is clear that socialism, be it autocratic or democratic, so­cializes both the means and the re­sults of production, then it is ob­vious that compulsory social se­curity; subsidies to farmers; con­trol of rents, wages, production, or prices; tariffs; TVA; the U. S. Post Office; public housing; FHA loans and other governmental fi­nancing; all domestic and foreign aid programs; federal urban re­newal; federal aid to education; and so on are, in essence, socialis­tic or communistic. To paraphrase Shakespeare:

What’s in a name? That which we call communism

By any other name would be as odious. The above definitions and brief explanations have been made for the sole purpose of demonstrating that socialism is more than a some-other-country folly. To dis­cuss socialism is to take a hard look at what our own American mirror reveals, not to indulge in mere academic byplay. Such dis­cussion is self-analysis, not a dis­course on the political antics of power-drunk Russians.

The Premise, in Two Parts

Now to return to my original assumption. Socialism depends upon and presupposes material achievements which socialism it­self can never create.

This accusation has two parts: (1) there has to be wealth before wealth can be socialized; and (2) socialism cannot create the wealth in the first place.

With everyone’s wealth at zero, there is no one from whom any­thing can be taken. Many of our Pilgrim fathers starved during the first three years of community communism because there was so little in the warehouse to dole out. Communism, or one of our numer­ous names for the same thing, the welfare state, presupposes the existence of wealth which can be forcibly extorted. Is this not self-evident?

There remains, then, only to show that socialism—the planned economy—cannot give rise to the means of production; that is, state ownership and/or control of the means of production cannot create the wealth on which state wel­farism rests.

The Pilgrims’ warehouse had al­most nothing in it to dole out be­cause the system was nonproduc­tive. The standard of living of the Russian people is so much lower today than our own because their avowed but not wholly practiced system is productively sterile.’ Such goods as the Pilgrims did produce during their first three years, or as the Russians now pro­duce, can be explained only as the result of deviations from social­ism: leakages of free, creative hu­man energies! Had the Pilgrims practiced socialism 100 per cent, all the Pilgrims would have perished. Were the Russians practic­ing socialism 100 per cent, there would not be a living Russian. Life goes on in these and all other so­cialistically-inclined societies be­cause they do not practice the so­cialistic theory totally! If I can demonstrate this point, my origi­nal assumption becomes unassail­able.

Total Socialism

What, actually, is meant by total socialism? As a hint, here is a statement by Plato:

The greatest principle of all is that nobody, whether male or female, should be without a leader. Nor should the mind of anybody be ha­bituated to letting him do anything at all on his own initiative; neither out of zeal, nor even playfully. But in war and in the midst of peace—to his leader he shall direct his eye and follow him faithfully. For ex­ample, he should get up, or move, or wash, or take his meals… only if he has been told to do so. In a word, he should teach his soul, by long habit, never to dream of acting independently, and to become utterly incapable of it.³

The above quotation, however, does not describe socialism. It only outlines the extent to which an in­dividual might become a selfless nonentity, willingly subserving a leader, dog fashion. If socialism were total, this recommended sub­servience would be brought about not by voluntary adoption but in­voluntarily, and by a master’s coercion. In short, total socialism means the total elimination of all volitional action—and it means people in the role of robots. Free­dom of choice on any question would be nonexistent.

State socialism is authoritarian­ism; that is, it rests on coercive force. There is no socialistic act in this country, or in Russia, or any­where else, that is not backed by the police power of the state. If anyone has any doubt about this, let him refuse to pay his share of subsidies to farmers, or of TVA deficits, or of our governmental gifts to other socialistic govern­ments, or whatever. The penalty for noncompliance is severe, in­deed. This, or the threat of it, is coercion, pure and unadulterated!

The idea I am trying to develop will not make sense to any person who does not fully grasp the fact that all state action rests on force or the threat of force. Coercion is government’s essential and dis­tinguishing ingredient. The dis­tinction between you as an agent of government and you as a pri­vate citizen is that as an agent of government you have the constab­ulary back of you: issue an edict, and I obey or take the conse­quences. Lose the backing of the constabulary and you are restored to private citizenship: issue an edict, and it has no more force than a chamber of commerce reso­lution, and I do as I please.

Even if every citizen is in agreement with a particular law, the law still has the police force to support it. Government is law backed by force; this is govern­ment properly defined.

Coercion versus Creation

Now, consider the nature of co­ercive force. What can it do and what are its limitations? Keep in mind a gun, a billy club, a clenched fist. Clearly, they can inhibit, re­strain, penalize, destroy. These are what the law, or a government de­cree, can do, and all they can do.4 They cannot serve as creative forces.

Coercively directed action can create nothing. Consider the driv­ing of an automobile. No person would be a safe driver if he had to think his way through each act of steering, accelerating, or braking. Add up the time it takes for deci­sions to travel from the brain to the hands and feet, and it becomes plain that if drivers operated this way, one wreck would follow an­other. Any person who knows how to drive has succeeded in relegat­ing driving’s countless motions to the control of something akin to the autonomic nervous system. His responses have become as auto­matic as breathing or writing; that is, they have become condi­tioned reflexes.

Now, consider a situation in which the relationship between de­cision and action is enormously worsened: a gunman in the back seat is employing his thinking to command even the minutest ac­tions of the driver. There could be no driving at all!

No driving at all? None whatso­ever! Try an experiment: A coat hangs over the back of a chair. Find a person intelligent enough to dismiss absolutely all his knowl­edge of a coat, and capable of re­fraining from any and all voli­tional action: one who can force himself to be utterly incapable of independent response. In this situ­ation, now instruct him how to don the coat. He’ll never get it on.

The above explanations and as­sertions, however, have to do only with the first essential of creative action, that is, volitional action. That coercion cannot induce even this is a fact that appears to be self-evident.

An Illusion of Productivity

Socialism, we must admit, gives the illusion of being productive. The productivity, however, exists in spite of socialism, not because of it. The productivity originates in the free, creative energy which ignores or escapes socialism’s re­pression; that is, which oozes through or around socialism’s smothering blanket. In England following the Napoleonic Wars, and in the United States under the NRA and the OPA, legal re­strictions blanketed large areas of production and exchange. But note this: neither country’s socialistic decrees were entirely obeyed. In each instance there were gross violations of socialism, with the result that the people managed to live. Such material well-being as there was appeared to come from socialism. It actually came, how­ever, from free, creative energy which, for obvious reasons, was more or less hidden and unpub­licized.

Numerous other distractions help to hide socialism’s essential sterility. For instance, we observe that many government school­teachers act no less creatively than do teachers of private schools. Scientists in the employ of govern­ment have inventive experiences, as do independent scientists and those in corporate employ. TVA, a socialistic enterprise, produces electrical energy of the same qual­ity as that from an investor-owned plant. Agents of the state and pri­vate citizens more or less look alike, dress alike, behave alike. We choose our friends as often from one set as from the other. Meeting a stranger, one could not tell to which category he belongs.

What Really Happens

If we would properly evaluate the effect of coercion, with its ab­solute absence of creativeness, we should have to disregard these dis­tractions. We need to recognize that it is not the government schoolteacher who exercises the three types of coercion implicit in socialistic education: (1) compul­sory attendance, (2) government-dictated curricula, and (3) the forcible collection of the where­withal to pay the school bill. Fur­thermore, we rarely feel any coer­cions simply because we meekly obey the laws backed by force; that is, we do send our children to school, we do not prescribe our own curricula, we do pay the tax bill. But refuse to acquiesce in any one of these three phases of com­pulsion and see what happens!

The scientist employed by the state, trying to figure out how to put three men on the moon, exer­cises no coercion. The coercion is applied to the collection of the funds which pay him to work as a free agent. He will work just as freely, as creatively, regardless of how his salary is collected. A bil­lion dollars, whether garnered at the point of a gun or voluntarily donated, is in either case a billion dollars. A dollar extorted or a dol­lar freely given is still a dollar, with a dollar’s purchasing power.

In the absence of socialism’s coercion, each dollar would be used in accord with its owner’s choice, to buy food or clothing, to educate the children, to take a vacation, to buy a sailboat. Coercion only di­verts the dollars from owner use and puts them to state use. If, as predicted, putting three men on the moon will cost $20 billion to $40 billion, then that much free­dom of choice will be destroyed. This enormous portion of our pro­ductivity will be socialized. The people are coercively relieved of their individual choices in order to permit a single choice, exercised by whoever heads the socialistic regime. Authoritarianism is forci­bly substituted for individual liberty. What we witness here is a diversionary process accomplished by police action.

The Forgotten Man

We will go astray in our analysis of this complex process unless we examine coercion at one of its points of impact—for in­stance, the impact on the citizens who are forced to foot the bills. Let’s, then, ask ourselves this question: Is the extortion of your income (in order that another may have the say-so as to what it will be spent for) a creative act? Does it make any difference to what use the other will put it? Charity, re­lief, moon shots, or whatever? Does it make any real difference whether or not the other is a per­son or a collective? Is this extor­tion in itself creative? There is no rational, affirmative answer to these questions. Extortion—coer­cion—is destructive. It destroys your freedom of choice! Coercion, by its nature, is destructive.

Let’s draw an illustrative dis­tinction between the coercive act and the creative act. A slap in the face (or the threat thereof) is a mild example of coercion. It is much milder than the penalty for absolutely refusing to pay one’s tax for a federal urban renewal project in somebody else’s town.

Now here is a creative experi­ence: The medical student ex­amined the slide in his microscope, but the culture he had been in­structed to develop had failed to grow. Thousands of medical stu­dents had experienced that iden­tical failure. But this student, ob­serving that mold surrounded the hoped-for culture, had a flash thought: Is the mold, perhaps, an­tagonistic to the development of the culture? It was, and this ex­perience led to the discovery of penicillin.

Contrast the results of a slap in the face and of the flash thought, and the distinction between coer­cive and creative actions will be clear.

A Spiritual Genesis

That socialism, founded on coer­cion, cannot bring about the pro­duction which socialized distribu­tion presupposes, is plainly evident once we understand the genesis of all production. Ralph Waldo Trine put it plainly:

Everything is first worked out in the unseen before it is manifested in the seen, in the ideal before it is realized in the real, in the spiritual before it shows forth in the material. The realm of the unseen is the realm of cause. The realm of the seen is the realm of effect. The nature of effect is always determined and con­ditioned by the nature of its cause.5

Professor Ludwig von Mises, noted free market economist, sup­ports this view:

Production is a spiritual, intellec­tual, and ideological phenomenon. It is the method that man, directed by reason, employs for the best possible removal of uneasiness. What dis­tinguishes our conditions from those of our ancestors who lived one thousand or twenty thousand years ago is not something material, but some­thing spiritual. The material changes are the outcome of the spiritual changes.°

Just imagine how antagonistic is a slap in the face, or the threat of death or imprisonment, to those spiritual experiences which pre­cede all manufacture: insight, in­tuition, inventiveness, cognition.

The fact that creative action can and does take place even when financed by funds coercively col­lected does not in any way modify my assertion that coercive action is destructive, not creative. The Kremlin’s master destroys free­dom of choice on an enormous scale. Russians may not choose how the fruits of their labor are to be expended. Mr. Big does the choosing in their stead. He chooses to use much of the income thus ex­torted—socialized—for sputniks and other military hardware.

Misdirection of Resources

We now come to the most im­portant point in this thesis: True, Mr. Big, or the head of any other socialist state can, with the money he has obtained by diverting funds from producers’ use to his own use, induce creative action along the lines of his choice. But ob­serve where this authoritarian process channels creative ener­gies: it puts genius at work on questionable if not downright evil ends! Let us remember that not all genius is employed on the side of the angels. Is it not plain that creative energies can be turned to destructive ends? Do we need any more proof of this than the amazing ingenuity that has brought about the most destructive force ever devised by man? But putting aside the H-bomb, and such miraculous and fascinating follies as orbiting monkeys and men around our earth, reflect on the countless economy-destroying projects that result from man lording it over his fellow men. Man cannot feign the role of God with­out finally playing the devil’s part. This is to say, as Emerson so elo­quently phrased it:

Cause and effect, means and ends, seed and fruit, cannot be severed; for the effect already blooms in the cause, the end pre-exists in the means, the fruit in the seed.7

Stated in other terms, man can­not use coercion for other than destructive purposes; for even a legitimate police action for defense is still an inhibiting or de­structive action, however neces­sary a police force may be. Raise billions by destroying freedom of choice—the socialist format—and the creative energies the funds fi­nance will rarely serve the higher ends of life. Three men on the moon, subsidized farmers not growing wheat, flood control that floods the land forever, mail de­livery that bears a $2 million daily deficit, the rebuilding of urban areas that the market has de­serted, the financing of socialistic governments the world over, are cases in point. None of these is a creative or productive endeavor in the full sense of those terms.

I began this paper with the re­solve to demonstrate that social­ism depends upon and presupposes material achievements which so­cialism itself cannot create, that socialism is productively sterile. But after thinking it through, I must confess that my affirmation can be proven only to those per­sons who see the long-range effects of present actions; and to those who know that man playing God is a prime evil, an evil seed that must grow to a destructive bloom, however pretty it may look in its earlier stages.


1 This paper refers only to the eco­nomic barrenness of socialism, its unpro­ductivity. But even if socialism were the most productive of all economic systems, it would not merit approval. Socialism de-emphasizes self-responsibility, and, thus, it wastes the soul of man.

2 While state planning of the economy, and the coercive implementation of the state’s plans are more widely practiced in Russia than perhaps any other coun­try except China, we must remember that the Kremlin is more and more dis­regarding its own tenets and edging gradually toward the practices of a mar­ket economy. Incentives to induce pro­duction are on the increase, and a signif­icant acreage has been restored to a free market type of farming. What a picture: Russians damning capitalism as they drift into capitalistic practices, and Americans damning communism as they drift into communistic ways of life! Rus­sians are so impoverished that they must turn to capitalistic realities; Americans are so affluent that they indulge them­selves, at their peril, in communistic nonsense.

³ Karl R. Popper, The Open Society and Its Enemies (Princeton: Princeton University Press, 1950), p. 9.

4 The proper scope of governmental action is prescribed by what ought to be inhibited, restrained, penalized, de­stroyed. See my Government: An Ideal Concept. (The Foundation for Economic Education, Inc., Irvington-on-Hud­son, N. Y. $1.50 paper; $2.00 cloth.)

5 From In Tune with the Infinite (In­dianapolis: The Bobbs-Merrill Co., 1897). 6 From Human Action (New Haven: Yale University Press, 1949), p. 141.

7 From TheComplete Essays and Other Writings of Ralph Waldo Emerson (New York, N. Y.: The Modern Library, 1940). p. 176.

  • Leonard E. Read (1898-1983) was the founder of FEE, and the author of 29 works, including the classic parable “I, Pencil.”