All Commentary
Wednesday, July 31, 2019

Why You Never Hear Anyone Say “That Wasn’t Real Capitalism”

Socialists are novelty-seekers. They have to be because socialist experiments never age well.

Image Credit: PublicDomainPictures from Pixabay

Der heimliche Aufmarsch” (“The Secret Deployment”) is an old socialist revolutionary song from the Weimar Republic. It calls upon the workers and peasants to arm themselves, rise up, and smash the system.

Socialist Constitution

Thirty years later, a modified version of the song was re-released in the GDR. It was now called “Der offene Aufmarsch” (“The Open Deployment”), to reflect the fact that there was no longer any need for secrecy. The workers and the peasants had already risen up (with a little help from their Soviet comrades), and the working class, as a whole, was now collectively in charge. This, at least, was the official narrative, codified in the East German constitution:

The German Democratic Republic is a socialist state of the workers and the peasants. It is the political organisation of the labourers in town and country under the leadership of the working class.

You don’t have to be a socialist to “get” the appeal of songs like “Der heimliche Aufmarsch” at a visceral level. It is gripping, it is stirring, and it is full of righteous rage.

In the GDR’s sanitized re-release, however, not much of that energy survives. The original version is revolutionary, the newer one is fundamentally conservative. Workers and peasants are no longer implored to rise up, but to double down, to fulfill their duties, and to defend the status quo.

Where the old version says

Then from the ruins

Of the old order Shall arise,

the Socialist World Republic

the new version just says:

Today, socialism is a global power.

Why am I telling you this?

Experiments in Socialism

It’s got to do with some of the responses to my book Socialism: The Failed Idea That Never Dies. The book shows how Western intellectuals have long had a habit of lauding socialist experiments as long as they were in their prime, only to disown them later, now claiming that they were never “really” socialist to begin with. One of the most common responses I have been receiving lately is:

But you could say the exact same thing about capitalism! Is your next book going to be called “Capitalism: The Failed Idea That Never Dies”

It reminds me a bit of playground spats, where children whose verbal abilities are not that well developed yet often respond to taunts by simply redirecting the same taunt back: “No, you are!”

This, of course, only works in a pot-calling-the-kettle-black situation, where your opponent is indeed guilty of the same thing they are accusing you of. And this really isn’t the case here. You could not say the same thing about capitalism. Show me an example of free-market liberals acting in the same way as the socialist intellectuals I am citing in the book. Name a country that free-marketeers used to praise to the skies, and that they now dismiss as “not REAL capitalism.”

You can’t. Because this does not happen.

The Economic Histories of Countries 

Quite the opposite. I recently reread a few passages from Milton Friedman’s Free to Choose, which was first published in 1980. In terms of the places Friedman singles out as positive examples, I was struck by how little has changed since then. Friedman was very positive about the economy of Hong Kong, and to a lesser extent, the other “Asian Tigers,” such as Taiwan and Singapore. He described Switzerland as “a bastion of capitalism.”

He was cautiously optimistic that Britain’s then-new Prime Minister, Margaret Thatcher, would change the country for the better. He did not mention Chile in this book, presumably aware that any positive statement about the Chilean economy would be misconstrued as support for the Pinochet dictatorship. But we know from statements he made elsewhere around that time that he was also optimistic about Chile’s future economic prospects.

That was four decades ago. If you asked a free-marketeer today to name a successful capitalist economy—what examples would they pick? Why, more or less the same ones that Friedman picked in 1980. Switzerland would presumably come up. Socialists are novelty-seekers. They have to be because socialist experiments never age well.Almost certainly, so would Hong Kong and Singapore, and Taiwan might get a cameo appearance as well. They might point to Chile’s relative success. They might be lukewarm about the situation in Britain today, but they would certainly judge post-Thatcher Britain much more favorably than pre-Thatcher Britain. And they would probably mention how New Zealand has been catching up since the pro-market reforms of the 1980s.

In short, free-marketeers are consistent to the point of being bores. If there is an economic model that we already praised forty years ago, there is a high chance that we are still praising it today, and if there is an economic model that we are praising today, there is a high chance that we were already praising it forty years ago. It’s the exact opposite of the socialist utopia-hopping I describe in the book.

Socialists are novelty-seekers. They have to be because socialist experiments never age well. It is very easy to become a socialist. But if you want to remain one for long, you need the ability to quietly drop, and selectively forget socialist experiments when they turn sour, and quickly move on to the next one. You need to be able to quickly un-pin your hopes from the latest failed experiment, and pin them on the next one instead.

Abstract and Vague Beliefs 

Socialists are at their best when they can describe their projects in diffuse, abstract terms. This is why the most popular socialist movements are always those that are either in the ascendant, but not in power just yet, or those that have come to power very recently, but that have not fully settled yet, so everything is still in flux. Socialists are at their worst when they have to answer mundane questions, when they have to spell out, in tangible terms, how a system based on their high-minded ideals would work in practice.

Actually existing socialist regimes, of course, have to do this eventually, and since this cannot be done, they can never keep the initial enthusiasm alive for long. The above-mentioned contrast between “Der heimliche Aufmarsch” and “Der offene Aufmarsch” is a good illustration. The GDR regime evidently tried, unconvincingly, to extract, bottle, and store the energy contained in old revolutionary songs.

And we’re not looking for excitement, novelty, or an adrenaline rush from political ideas anyway.

But socialism needs the thrill of the novel, the excitement of smashing things up, the buzz of overthrowing an established order and starting from scratch again. It no longer works once socialism is the established order, once it becomes clear that that order falls far short of the initial expectations, and once it dawns on you that it is not going to get any better than this.

Liberals don’t have that problem. The economic models we hold up usually do deliver, or at least, they get a seven out of ten. So we can praise the same models for decades in a row. And we’re not looking for excitement, novelty, or an adrenaline rush from political ideas anyway.

This article is republished with permission from the Institute of Economic Affairs.

  • Dr. Kristian Niemietz is the Institute for Economic Affairs' Head of Health and Welfare.