One of the current fallacies of socialism is that joint stock companies are a preliminary stage of the socialist undertaking. The heads of joint stock companies — it is argued — are not owners of the means of production, and yet the undertakings flourish under their direction. If, in place of the shareholders, society should assume the function of ownership, things would not be altered. The directors would not work worse for society than they would for the shareholders.

The Socialist Community is a great authoritarian association in which orders are issued and obeyed. This is what is implied by the words ‘planned economy’ and the ‘abolition of the anarchy of production’. The inner structure of a socialist community is best understood if we compare it with the inner structure of an army. Many socialists indeed prefer to speak of the ‘army of labour’. As in an army, so under Socialism, everything depends on the orders of the supreme authority. Everyone has a place to which he is appointed. Everyone has to remain in his place until he is moved to another.

Socialist society is a society of officials. The way of living prevailing in it, and the mode of thinking of its members, are determined by this fact. People who are always expecting promotion, people who had always a ‘chief’ on whom they depend, people who, because they receive a fixed salary, never understand the connection between production and their own consumption — the last ten years has witnessed the rise of this type everywhere in Europe. It is in Germany, however, where it is especially at home. The whole psychology of our time derives from it.

It is customary to describe the position of the individual under Socialism by saying that he would be unfree, that the socialist community would be a ‘prison state’. This expression contains a judgment of value which, as such, lies outside the sphere of scientific thought. Science cannot decide whether freedom is a good or an evil or a mere matter of indifference. It can only inquire wherein freedom consists and where freedom resides.

To assume stationary economic conditions is a theoretical expedient and not an attempt to describe reality. We cannot dispense with this line of thought if we wish to understand the laws of economic change. In order to study movement we must first imagine a condition where it does not exist. The stationary condition is that point of equilibrium to which we conceive all forms of economic activity to be tending and which would actually be attained if new factors did not, in the meantime, create a new point of equilibrium.

Socialist writers depict the socialist community as a land of heart’s desire. Fourier’s sickly fantasies go farthest in this direction. In Fourier’s state of the future all harmful beasts will have disappeared, and in their places will be animals which will assist man in his labours — or even do his work for him. An anti-beaver will see to the fishing; an anti-whale will move sailing ships in a calm; an antihippopotamus will tow the river boats.

If this is recognized, one of the main supports of socialist structure of thought collapses.