There is a phenomenal amount of ignorance in what she says, but at the end, with her statement that it is the workers who create the wealth [to much applause] we are dealing with the Marxist form of socialism since the entrepreneur has no explicit function.
The problem in dealing with “socialism” is that it has a range of meanings, from a very light-on forms of the welfare state all the way to central planning and the complete nationalisation of the means of production. Whatever else it might mean, however, is that it is a desire to have something different from the present. Two items to help think about things. First this, which is a comment from a post at Powerline.
And before I get to it, I will just note that he leaves out, and indeed seems not to know, anything about the Socialist Calculation Debate, which states categorically that an economy without a price mechanism determined within the market by entrepreneurs who respond to the world as they find it and prices as they are generated in the market, is doomed to fail. That of itself will ensure the economy cannot function.
One of our problems has a lot to do with terminology. Maybe several of our problems have a lot to do with terminology. When someone says, “There’s a mess on the floor in the kitchen,” the lucky soul who will deal with the mess needs to know more about the mess. Of perhaps substitute a certain s-word for the word mess, but typing “a certain s-word” a bunch of times will tire me out.
The word “socialism” is being applied to many kinds of messes but they are not all socialism, just as people only sometimes mean s-word when they refer to “that s-word.”
Most commonly, “socialism” is being applied to a vision rather than an ideology or methodology, a vision where the great wealth created by an economy is distributed more widely so that the people with the least money get more benefit from the economy. In the wealthier countries of Europe and Asia, that vision is carried out with a welfare state and high level of command in an economy that is still based on private ownership and on free exchange. People in the UK or in Japan may still choose their occupations and their businesses are privately owned. There’s a large range of salaries among those who work for wages or salaries. Those who have somewhat larger incomes pay much higher taxes to subsidize welfare-state subsidies of those who make less money. You also have the panoply of labor laws that stifle economic development but do not kill it outright and you have a lot of petty laws, almost tyrannical laws, passed by the duly elected representatives of the very people who carp about high unemployment, high taxes, stagnant economic development, and the wickedness of the wealthy. But this system is not socialism as an economic system; it does less harm and it does it more slowly.
A near-command economy with the ownership and much of the profits of economic activity still in private hands is the fascist model. Since the owners connect closely with the political powers and since the owners still want profits, this brand of command economy will make efforts to keep up profits but those efforts will be misguided because command economies are inherently limited in their responsiveness. Beyond the inherent limits of attempting to run an economy by committee, every command economy has also wound up listening to the loudest and most influential voices but those voices rarely know or care about the broadest benefit for their societies.
Fascist societies are usually welfare states to bribe the common people — people like me.
Socialism involves the ownership of the economic entities by their workers. Now, strange to say, this can actually work if the businesses remain private and the government mostly keeps its hands off. If the workers and retirees of GM and Ore-Ida Foods owned the enterprises and still had to compete effectively with Ford and Tyson, the workers would have lots of reason to increase their productivity, improve their products, lower their costs, and otherwise operate for the enterprise’s benefit. In theory, at least, an economy could thrive this way and the workers might indeed have their standards of living rise and become somewhat more equal across the skills that the enterprise needs. A socialist economy could be a free exchange economy with nearly all the blessings of such an economy and perhaps relieving some of the problems that come with all economies.
Problem with this model is, history shows no examples of societies that have organically evolved worker-owned enterprises that compete as private businesses. The US has gone a few steps down this path but only a few. We don’t know if the theoretical success of such a system would turn up in real life because there’s such a huge push to immediately distribute the goodies and so the geese that lay golden eggs get slaughtered and you find out there’s no actual gold in the geese.
Communism, the ultimate command economy with state ownership of all major production and distribution and “equal” sharing of the fruits of the economy, has failed even worse than other command economies. I can’t figure out the relationship between having to impose communism by force and its invariable failures, but I am sure the two factors are linked. Perhaps a circle has neither beginning nor end.
Most of our soi-disant “socialists” are actually welfare-state nanny-bullies. Their policies and theories are not geared to collective ownership but to collective pillaging. In terms of discussion and dealing with the special brand of s-word that is socialism, it matters that that is not what is on the floor. We need to address the s-word of welfare-state nanny-bullyism because that is what is actually on the floor.
And then this: Young Americans are embracing socialism.
61% of Americans aged between 18 and 24 have a positive reaction to the word “socialism” — beating out “capitalism” at 58%. Overall, 39% of Americans are well-disposed toward socialism, but the gulf remains wide for men and those aged over 55.
It’s only a word. At the moment across the whole of society there are still 61% who react positively to the word “capitalism”. But that is if you are older and male.
Law of Markets 