What Is Democratic Socialism?

Manhattan is a great place to visit, but you sure don’t want to vote there. The recent mayoral primary for the Democratic Party pitted a discredited lockdown practitioner and former governor against a purveyor of old-style socialist economics in which everything we want comes to us for free. The latter guy won, although he will likely be defeated in the general election by the incumbent who is running as an independent.

The name of the victor is Zohran Mamdani, the 33-year-old son of a Columbia University professor of anthropology and hence hardly a living representative of the workers and peasants he wants to rise up against ruling-class capitalists. He proclaims himself a “democratic socialist,” which is to say he would like to see democracy deployed to realize socialist economics.

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What is socialist economics? In a strict sense, there is no such thing. Economics means the rational allocation of scarce resources to unlimited competing demands. The discipline of economics begins with the key observation that you cannot always get what you want but that the right systems can deliver the maximum amount of what we need.

Socialism in pure theory is the opposite. It begins with a dream that everyone gets everything for free, everyone shares everything together, no one is an owner of the means of production, and that utopia—a land of fantasy, schlaraffenland, Shangri-La, Garden of Eden—can be delivered by force of law. In the real world, it has always and everywhere ended up in a fascist or totalitarian state.

The reason should be obvious, although you do have to think about it. There is simply no way of making everyone the owner of a scarce resource for which there are competitive struggles over control. A dictator can declare socialism over my shoes, but that only ends in a big struggle over who gets to wear them.

It seems strange, but pure socialist theory has never dealt with this central problem. It has failed at the first task of economics: deciding the difference between mine and thine and constructing systems of law to enforce that distinction.

There are other, more technical problems. A collectively owned capital stock cannot be traded and hence rationally priced. The only possible result is chaos in cost accounting.

To be sure, the definition of socialism as a term has always been in dispute. Before the 1870s, there were many theoreticians who can be generally grouped as utopian socialists. They were great dreamers and not economists. They imagined a world of equality, justice, and plenty for all and tended to blame finance and large property owners for standing in the way of the dawning of a perfect world.

The second stage is marked by the works of Karl Marx, who was a better economist than his predecessors. He learned from the classical economists, incorporated the so-called labor theory of value, and posited that private capital owners were taking an unfair share of the value of production. He believed that this could be repaired by nationalizing resources via state ownership, after which the state would wither away. He united this theory with Hegelian historical dynamics to discern that his theories were inevitable via a revolution of the working classes against the ruling classes.

Marx’s theories are credited with inspiring the Bolshevik revolution in Russia. The year was 1917, and the theory of socialism had never been tested on a large scale. Upon taking power, Vladimir Lenin was pressed to explain what he would do. It’s not a subject that had consumed him beyond say, just once, that the whole economy would work like the post office. His first speech defaulted to fashionable cliches about the electrification of Russia.

The reality of the period of “war communism,” which began immediately following the revolution and lasted three years, was nothing short of catastrophic. The food ran out, the energy grids failed, the heating died, the newspapers were censored, and the peasants revolted against the new thugs who were running the system. Former champions of the revolution lost all faith in the party. Lenin quickly pivoted away from his extremism if only to maintain control.

By 1921, he announced the “New Economic Policy” (NEP), which turned out to mean a limited restoration of private property, market forces, and some freedom of enterprise. It snatched the Bolshevik victory from the jaws of defeat. Crucially, the NEP worked precisely because it was a betrayal of Marx’s vision, which had now been proven to have flopped.

It is common to say that Soviet communism failed in 1989, but actually, it failed immediately and was repudiated within three years after the revolution. The remainder of the time in which the Soviets survived amounted to one-party rule under a vast administrative bureaucracy that controlled what it could while presiding over a gradual downward spiral in lifespans and living standards.

Watching all this unfold were a gaggle of academic British scribblers who decades earlier had proclaimed themselves to be a different form of socialist. They called themselves Fabians. The word came from Quintus Fabius Maximus Verrucosus, a Roman general known as The Delayer. His strategy was to avoid direct battles and instead use gradual, persistent tactics to wear down stronger enemies.

The Fabians adopted this name to underscore a strategy not of a peasants’ revolt or working-class revolution but rather a gradual, incremental reform, achieving socialism through patient, strategic progress. If you slog through their writings, what you find is a theory of socialism that is very different from that of the utopians or the Marxists.

The Fabians were dedicated to the exaltation of academic expertise and science as the key to efficient economic management. In other words, the Fabians—all products of academia—aspired to displace the old aristocracy with rule by themselves. They yearned to create central planning by gradually taking over one sector after another: social provision, housing and food, energy and technology, communications and media, medicine and health care, banking and finance, and, of course, eventually, the demographics of procreation. The more bureaucracies, the better, because they would rule society under the advice of the intellectuals.

The term Fabian never really took hold in America but the strategies and habits certainly did. The economic depression, kicked off in 1929 with the stock market crash, gave rise to the victory of Franklin Delano Roosevelt in 1932. He pushed executive orders and legislation to create a flurry of agencies and programs that involved wealth redistribution, price control, industrial subsidies, wage floors, and bank nationalization. None of it worked to end the crisis; indeed it made it worse.

That was followed by even more intense economic controls and rationing during World War II, which further built the bureaucracy and extended it to the realm of military and arms manufacturing, a pattern that persisted through the Cold War and following.

Today, the idealism of the socialist ideology has been drained away entirely. It’s been reduced to the politics of avarice: tax the rich, seize the profits, harass the entrepreneurs, disable the successful, put maximum power and resources in the hands of the state, and otherwise impose as many idiotic and evil policies as possible.

It’s nothing more than that. The class appeal of this ideology is not directed to the poor or working classes but to the kids of the well-to-do who went to all the right schools and are associated with all the fashionable causes.

Will it make much progress in the American electorate? Certainly it has and will among the coastal elites. The commie kid could take New York City under some possible election scenarios. However, the rest of the country seems pretty well on to the game.

There is no such thing as socialist economics. There is economics and there is socialism, but they do not mix. Nor does socialism mix with democracy over the long term.

Authored by Jeffrey A. Tucker at Epoch Times