24 July 2020

No, ‘democratic’ socialism doesn’t work either


Imagine a country with a dictatorial government introduced some completely irrational and destructive policy. Let’s say, they ban modern medicines, and as a result, the number of people dying from curable diseases explodes. Or they embark on some large-scale government prestige project which uses up huge amounts of water, and as a result, they suffer droughts and harvest failures.

Now imagine you find yourself arguing with a supporter of those policies. You confront them with the recent failure of those policies in the aforementioned country. They reply:

“No, you just don’t understand. Those policies failed in that country, because that country is a dictatorship. I don’t want a dictatorship. I’m a democrat. So what happened in that country has nothing to do with me. The fact that you’re holding this against me shows that you’re either malicious, or stupid.”

You would probably find that unconvincing. The negative consequences of the above-described policies are the result of the policies themselves. Whether this happens in a democracy, or a dictatorship, is completely irrelevant. What matters is the policy itself, not the system of government under which they are adopted.

Socialists, however, get away with this exact “logic” every single time. Mention the economic failures of the former Eastern Bloc countries, or Maoist China, or North Vietnam, or today, of Cuba or Venezuela or North Korea, and the answer will invariably be: “But that was a dictatorship! That’s got nothing to do with me, I’m a democratic socialist!”

Samuel Arnold, a professor of political theory at Texas Christian University, writes in Teen Vogue:

“[S]ocialism means ‘economic democracy’

This definition…is at odds with…deeply mistaken ways of understanding modern democratic socialism. The first…says that socialism just means state control of the economy, even if the state in question is profoundly undemocratic. This view regards dictatorships like the Soviet Union, Venezuela, and North Korea as socialist… But these examples are not at all socialist;…socialism requires robust political and economic democracy — the very antithesis of these authoritarian regimes”.

Bhaskar Sunkara, the founding editor of Jacobin magazine and former vice-chair of the Democratic Socialists of America (DSA), writes in his book “The Socialist Manifesto”:

“[S]ocialism essentially meant radical democracy.

It was not…an authoritarian dictatorship; Marx described an egalitarian, participatory democracy.

[Marx’s] demands for the socialist movement…would have resulted in a society where a radically transformed, democratic state held formerly private property and used it rationally under the direction and to the benefit of the people”.

In an interview with Douglas Carswell, the Marxist economist Grace Blakeley claims:

“We have had examples of state socialism, obviously, throughout the years, whether you look at…the USSR, or…Venezuela is an arguable case.

I would argue that…we have never had democratic socialism”.

At a stroke, this allows these authors to absolve themselves from over two dozen failed socialist projects.

Let’s leave aside the question of whether it was really just a coincidence that socialism has always, sooner or later, ended in dictatorship. Let’s also leave aside the question whether socialism could ever be meaningfully democratic, even if you had free elections and periodic changes in government. For the sake of the argument, let’s just assume that you could indeed combine a socialist economy with a role model democracy.

This society would probably be, in many ways, a better place to live than all the socialist societies that have so far existed. But there is no reason whatsoever to believe that it would be any more prosperous. The economic failures of socialism never had anything to do with a lack of democracy.

Democratisation improves many things, and is desirable for many reasons. But it does not, in and of itself, make countries richer. South Korea, Taiwan and Chile were not democracies when their economic take-offs started. Neither were Hong Kong or Singapore. Germany and Japan only became democracies long after they had become major industrial powers. The empirical literature on this subject finds no relationship either way between economic development, and the system of government.

To claim that the Soviet economy failed, because the Soviet Union was a dictatorship, is therefore as daft as claiming that it failed because people spoke Russian, or because they drank Vodka, or because it snows a lot. It just means pointing to an economically irrelevant fact about the country, and asserting that that irrelevant fact is somehow to blame for the failures of socialism.

If socialists want to make the case that democracy was the magic missing ingredient that would have made socialist economies work, then at the very least, they would have to identify a mechanism through which democracy is supposed to unfold its magic. How exactly would democracy have closed the economic gap between East and West Germany, or North and South Korea, or Cuba and Puerto Rico, or Maoist China and Taiwan, or the People’s Republic of Angola and Botswana, or Venezuela and Chile?

They cannot do this, because no such mechanism exists. The liberal critique of socialist economics applies to democratic and undemocratic socialism alike. Almost exactly a century ago, the Austrian economist Ludwig von Mises published Economic Calculation in the Socialist Commonwealth, perhaps the first systematic critique of socialist economics. The question whether that socialism is a democratic or a dictatorial one is so peripheral to von Mises’s argument, he doesn’t deem it worthy of more than a brief passing remark:

“Under socialism all the means of production are the property of the community… [T]he community…determines their use in production…through the setting up of a special body for the purpose. The structure of this body and the question of how it will articulate and represent the communal will is for us of subsidiary importance…[W]here the power is not vested in a dictatorship [this will depend] on the majority vote”.

Von Mises’s critique of socialism has aged rather well. What a shame that a hundred years on, we are still none the wiser.

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Kristian Niemietz is Head of Political Economy at the Institute of Economic Affairs

Columns are the author's own opinion and do not necessarily reflect the views of CapX.