February 22, 2020 Reading Time: 4 minutes

The answer is yes, we are seriously debating capitalism vs. socialism again. As it should be. And herein lies the silver lining in one of the most alarming trends in public life: a self-described socialist is leading in the polls to win the Democratic nomination. 

For nearly 100 years, public figures in America have dabbled in socialist ideology, learned from it, practiced it on a limited scale, imposed policies rooted in its logic, and been inspired by its conflict ethos that imagines markets to be inherently exploitative, unfair, and unjust. It makes some kind of weird sense that finally at the highest (?) levels of American public life, they would just finally come out and say it: we are all kind of socialist now. 

To contradict that claim requires that you see the problem with socialism, and to see that problem leads one to think through the logic of markets and economics, which in turn leads one to see the virtues of commercial freedom. But doing that, taking those hard steps to understand scarcity, creativity, prices, and exchange threatens to undermine the ideological infrastructure of the Democratic Party itself. What has emerged instead is a “no enemies to the left” ethos that allows the extremists to control the messaging. 

David Brooks, writing for the New York Times, makes the very compelling point that the reason Bernie Sanders is coming out on top is that he offers a clear (if utterly unrealistic) worldview that the others tacitly accept, so therefore they are not really in a position to shatter his presumptions:

Over the past five years Sanders and his fellow progressives have induced large parts of the Democratic Party to see through the Bernie lens. You can tell because every candidate on that stage has the categories and mental equipment to carve up a billionaire like Bloomberg. None have the categories or mental equipment to take down a socialist like Sanders.

Sanders goes untouched in these debates because the other candidates don’t have a mythic platform from which to launch an attack. Saying his plans cost too much is a pathetic response to a successful myth.

Myth is right, and it was too much for Michael Bloomberg, who called him out for favoring socialism in a country in which the most famous socialist owns three homes. To be sure, to someone like Sanders, there is nothing contradictory here. The dictatorship of the proletariat always needs a vanguard elite to channel the interests and energies of the working classes; it stands to reason that they should live well, in this way of thinking. Such has it always been. 

Socialism is a movement not of the working classes but of the elites, born of arrogance, snobbery, and preposterous pretense, kept alive not from lived experience but the astonishing capacity of an ideologically soaked brain to live in denial of reality. 

But what about this term capitalism? The case against it as a description of the market economy is that it was an invention of the Marxists, and for a reason: it was supposed to describe an economy ruled by the capitalists. In fact, capitalism is nothing more than the working out of the advanced stage of a society that respects private property, peace, and freedom of association and trade. It is not an imposition or even a system; it is a description of what happens when violent actors bow out of the process of social evolution. 

For this reason, many of my classically liberal friends would just as soon get rid of the term. 

On the other hand, the term does zero in on the main debate: whether and to what extent should the produced means of production (capital) be unmolested by public authority and accumulated by successful companies. The non-capitalists of the political class want to bust up and pillage businesses just because they are big and tax the rich just because they are rich. The problem is that this is the path to impoverishment. 

Capital, on the other hand, is institutionally essential for complex production structures and the division of labor. There is no doing without, though many societies have tried. 

What’s more, socialists will tell you that they aren’t against private property as such, just private ownership in the means of production. So there is a sense in which framing the debate over the future of freedom really is an argument about capitalism vs. socialism. The logic of this demand trends toward finding a stable truth: there is freedom and private property or there is not. We need to have this debate. Probably it should never stop. 

I personally recall that after 1989, I was pretty sure that the argument had been settled for all time and eternity. Part of me was disappointed because I had cut my teeth on this issue during the Cold War. Maybe all my knowledge would now be of historical interest only. Not so: the very next issue of a Marxian academic periodical headlined “the collapse of Stalinism” – announcing this only 40 years too late. 

So yes, the intellectual battle continues. Watch the movie and buy the two books: The Best of Marx and the Best of Mises

Jeffrey A. Tucker

Jeffrey A. Tucker served as Editorial Director for the American Institute for Economic Research from 2017 to 2021.

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