Power & Market

Is Socialism Viable? A Reply to David Gordon

In two columns, David Gordon reviewed my forthcoming book, Socialism: A Logical Introduction, and the Power & Market has very kindly given me the opportunity to reply.

As Gordon explains, I define socialism (chapter 2) as coming in degrees along two axes: (i) the degree of collective ownership and control of the means of production and (ii) the degree of egalitarian distribution of resources. The book then analyzes common arguments for and against socialism, and I ultimately advocate moving much further in the socialist direction than where we are in the United States, though I favor neither complete democratic control of the economy nor a completely equal distribution of resources. I argue that moving in the socialist direction would not violate rights (chapter 4) and that it would better promote human well-being than the more-capitalist alternative (chapters 6–12).

Gordon first takes issue with my treatment (in chapter 5) of an argument that many socialists make against capitalism: that by exploiting the workers, capitalism violates rights. I reconstruct and analyze versions of the argument, but in the end, I do not endorse it. Nonetheless, Gordon believes that I give the argument more credence than it deserves, and he says that I rely on a theory of the value of labor that economists generally reject. While I could defend my analysis, I’ll leave that point aside, since Gordon and I agree that this particular argument against capitalism does not clearly work.

Some of Gordon’s objections seem to rely on a misinterpretation of my view, though he began the review with a correct summary. For example, he says that it is a “glaring omission” that I do not respond to the argument of Ludwig von Mises, according to which “a socialist economy—by which he meant an economy run by central planners—would collapse into chaos” because “in the absence of numerical market prices, resources cannot be allocated rationally.”

Gordon is correct that I ignore this argument, but it is for the simple reason that I am not advocating for a centrally planned economy without numerical market prices. Such an economy would be the extreme version of the first axis of my definition of socialism; I never said—indeed I explicitly denied—that I advocate this extreme version.

Similarly, when I argue that socialism need not violate political rights and I point to the Scandinavian countries to illustrate this (chapter 2 shows that the Scandinavian countries are much further in the socialist direction on the two axes), Gordon responds: “Sehon misses a fundamental point. The [Scandinavian] countries he mentions aren’t centrally planned economies.” Indeed, they are not. Why is that relevant, given that I do not argue for a centrally planned economy?

Also, in the context of rights and socialism, Gordon says I ignore Friedrich von Hayek’s argument in The Road to Serfdom “that centrally planned economies suppress important political rights.” Again, I fail to see the relevance of an argument against a view that I do not hold. Even in Hayek’s “Present State of Debate,” an article that Gordon cites, Hayek makes no argument that is directly relevant to the sort of socialism I am defending. (This is not to say that nothing Hayek says is relevant or poses a challenge; I discuss Hayek at some length in chapters 9–11 of the book.)

I’m honestly not sure what to make of criticisms that assume that I argue for a view that Gordon’s own summary clearly indicates that I do not endorse. With respect to the first axis, it is as if Gordon thinks that there are only two alternatives: either a completely planned economy or a completely free market. However, this would clearly be wrong: both in principle and in practice, we see that there are varying degrees to which we can exert democratic control over the economy.

Perhaps Gordon’s thought is this instead: if a completely state-run and state-controlled economy would be disastrous, then any move away from state control is desirable—the further from central planning, the better. However, this does not follow. It is clearly possible that there is a sweet spot with markets and prices, but with significant democratic control, particularly in certain areas. That’s what I argue, especially in chapter 9, where I cover arguments inspired by Hayek and Milton Friedman for free markets, and then in chapters 10–12, where I consider areas where we can expect the market to fail as a mechanism for increasing human well-being.

There is one point that Gordon makes on which I will concede some ground. In chapter 4, I respond to an argument by Matthew Harwood in which (on one reconstruction of the argument) Harwood simply assumes that socialism is an awful system. Harwood then infers that socialists will violate political rights, with the idea being that proponents of an awful system will need to suppress opposing speech in order to stay in power.

I point out that this is essentially question begging: if one starts with the premise that socialism is an awful system, we don’t need the rest of the argument in order to know that we should not adopt socialism. Gordon agrees with this much. However, he says that this “doesn’t make the argument useless,” for “if you do have grounds to think that socialism is an awful system,” then Harwood’s argument would allow you to infer that it would also be likely to violate rights.

Fair enough; if we had grounds on which to claim that socialism is an awful system, then its awfulness would likely compound itself into the further awfulness of repressing speech. While that is a concession, it is not much of one. If I were willing to grant, as a premise, that socialism is an awful system, then I obviously would not have written a book defending it.

Of course, most readers of Power & Market probably do have the antecedent conviction that socialism is awful. I invite you to read my book to see whether I can convince you otherwise!

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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