The Dangers of the New Democratic Socialism

In the ancient world, there was often a philosophy of life that the events surrounding man and the world he lived in went in circles and cycles. It certainly seems that way with the recent revival of the case for democratic socialism. After seeming to have been relegated to the dustbin of history following the collapse of Soviet-style socialism in the early 1990s, the idea of “socialism” is once again declared to be both relevant and alive as an alternative to the existing institutions of a still-market-based and still-liberal society.

For most of the last century, socialism was identified with political totalitarianism, comprehensive government central planning, and a terror state that tortured and murdered tens of millions of people in the name and promise of a wonderful and beautiful collectivist utopia to come that, it was said, would justify all the tragedy and torment that was needed to bring it about.

Socialist Disaster and Destruction

For those of us who had an opportunity to travel in the Soviet Union before its disappearance from the political map of the world in December 1991, the promised heaven on earth had turned out to be a graveyard of broken dreams, a place of ruined and impoverished lives, and a nightmare chamber of horrors.

Disastrous decades of centralized government planning had left the people of the Soviet Union in a stagnant poverty of empty shelves or shoddy unwanted goods in the “people’s” retail stores to which Soviet citizens trudged with grim faces to obtain some meager amounts of the things needed for everyday life.

Matching the poverty of economic planning were perpetual corruption and connivance to find ways to get the things you needed through the underworld of insider connections, bribes, and make-believe friendships without which you might not be able to get a pair of shoes for your child, or a ticket to go to the theater, or the medicine that was essential for you or a loved one not to die.

The land of promised socialist equality was a society that was politically and economically held together through an intricate network of privilege and favoritism. Nowhere as much as in the Soviet Union was George Orwell’s famous phrase from his novel Animal Farm so true that in the new socialist society everyone is no doubt equal, but some are more equal than others.

Members of the Communist party as well as the bureaucrats who managed the socialist planned economy used their power and privileged positions to divert towards themselves much of the available quantities and whatever better quality goods that were produced under their command. Special food stores; special clothing and household items stores; special vacation resorts; special hospitals and clinics, with medicines imported from the West — all these and many, many more were at the exclusive disposal of the lucky “servants of the people.”

The rest of the society, those toiling masses in whose name the entire system was rationalized, got by with barely a fraction of what most average citizens in the Western democracies in Europe and North America took for granted as their comfortable standards and qualities of life.

Soviet workers were certainly protected from the supposed evils of a capitalist consumer society. Of course, nothing makes you as crassly materialistic and absorbed with a desire for “stuff” as when you live in a society that has assured that you will have no such temptations because the socialist system under which you live fails at every turn to supply you with the things of everyday life that you desperately need and want. (See my article “How Communism Became the Disease It Tried to Cure.”)

Democratic Socialists and Soviet Socialism

Defenders of the socialist ideal in the West insisted for decades that the Soviet Union was an aberration and not the norm for what socialism represented and could be. Now, once again, more than a quarter of a century after the passing of the Soviet system from the stage of history, a new generation of “democratic socialists” has reappeared saying that their vision of the future has nothing to do with the experienced “socialism-in-practice” of the 20th century.

The new visionaries of socialism, represented by such high-profile political spokesmen as Bernie Sanders and Alexandria Ocasio-Cortez, assure people that theirs is a kinder and gentler socialism, a socialism of democratic inclusiveness, social justice, and egalitarian fairness for all. It will end human exploitation, save the planet from environmental destruction, and ensure that everyone gets their just deserts on the basis of an identity politics focusing on race, gender, and social class.

They say they reject the socialism of the old Soviet Union, and that to classify what they desire and offer as being in the same category as the Soviet system is merely an attempt to throw their ideal into disrepute through a process of guilt by association. The Soviet Union was the perverted and misnamed socialism; theirs is the good and true socialism.

New Socialists and Old Marxist Fallacies

But how do they see society any differently than the older, Soviet-based socialism that they claim to reject? At the core, it remains a view of society based on class conflict, just as it was in its 19th- and 20th-century Marxist forms. Reference to the wealthy “1 percent” is merely a modified Marxian terminology concerning the concentrated private owners of the means of production who extract supposedly unearned income by exploiting the multitude of workers whom they employ.

Marx and his loyal followers at least had a theory — however logically flawed and factually unrealistic it may have been — claiming to demonstrate that the value of goods was a reflection of the physical labor expended to produce them, and that the capitalists’ profits were the unjust taking of a portion of the surplus value over bare subsistence produced by the workers hired by those private businessmen.

Our new democratic socialists neither offer nor seem to reason from any coherent theory or explanation of what determines the wages of workers, or from where comes the savings and investment on the basis of which industry is undertaken and workers are paid salaries over the period of production before a finished product is ready and available for sale.

They merely assume an injustice in profits earned and interest incomes received in relation to wages paid to others in the processes of production within a competitive market economy. They moralizingly “emote” without a clue that interest income received is a necessary payment for people to save a portion of their previously earned income so it may be productively borrowed for the investment activities undertaken by others, and without a clue that profits are not exploitive extractions from the labor of workers, but the reward earned by entrepreneurs for successfully anticipating the future direction of consumer demands so the supplies of goods and services might be properly coordinated with the wants of everyone in society.

Wages, in turn, are the competitive market’s estimate of the value of each employee’s collaborative contribution in bringing desired goods to the shelves where consumers buy them. Savings facilitates investment in new, better, and more productive capital (machinery, tools, equipment) that increases the quantities and qualities of the finished goods and services that everyone in society has available for higher standards of living over time. And that same capital investment has the potential to increase the productivity of workers on the job, tending to increase the value of the workers employed and the wages they may receive, again, over time. (See my article “The Austrian Economists Who Refuted Marx [and Obama].”)

Slavery Through the Ages and Its Liberal Opponents

The new ingredient in the socialist mix of social conflict is the emphasis on supposed race and gender oppression and an accompanying “white privilege,” especially for men. It is certainly the case that if one looks over the long stretch of human history, human relationships for thousands of years were based on power, plunder, privilege, and slavery. Indeed, these were common features of the human landscape regardless of which society or civilization anywhere around the globe.

Women were often viewed as the property of fathers and husbands with limited or nearly no legal rights over their own lives. Slavery has traditionally been an “equal opportunity” institution of human bondage. That is, if conquerors did not kill the vanquished, they enslaved the defeated to work for them to do things they either could not or did not want to do. There was little or no regard concerning the race or ethnicity of those enslaved. Only in the 1500s and the 1600s did it take the particular twist of it being black Africans being transported to the Americas as the slaves of European conquerors and colonists.

But it is also the fact that in modern history it was some of those same Europeans, and their North American offshoots, who in the 1700s and 1800s came to call for the end of all slavery everywhere, including in their own countries and colonies, and who fervently spoke out against the race-based rationales for slavery especially in what became the American southern states of the union.

They did so based on the theory of each individual’s natural right as a human being to their life, liberty, and honestly acquired property. In the eyes of God and on the basis of any thinking man’s right reasoning it was clear that no one should claim or impose their rule over another by force and then maintain such bondage through continued coercion.

This revolutionary idea was the underpinning of the American Declaration of Independence, and eventually brought about the end to slavery in the United States and became the basis for an equivalent insistence for an equality of rights before the law regardless of either race or sex. The world may not have changed overnight, but like the continuous beating of drops of water on even the hardest of surfaces, the resistance to the ideas of individual liberty and equality before an impartial rule of law was slowly worn away.

Now, this does not mean that race prejudices and gender biases have disappeared from American society. But it is the case that a consistent philosophy of personal freedom and individual rights challenges and undermines notions of collectivist identity and favoritism. This is another way of saying that the America of today may not be race- or gender-blind when it comes to fully judging people as distinct individuals, but compared to 100 years ago or even 50 years ago, we have traveled light-years in the direction of a society more in tune with respect for each and every person separate from their race or gender.

From Class Conflict to Race and Gender Warfare

But the new socialists and their “progressive” collaborators in the arena of public policy have chosen to reawaken race and gender awareness and make it the basis of public policy. When most people in a country such as the United States view themselves as and are economically part of the broad middle class or even higher, there is not likely to be much traction from once again proclaiming as a rallying cry, “Workers of the world unite, you have nothing to lose but your chains.”

Instead, the new variation on the Marxian conception of class conflict between the workers and the capitalists is now the mostly white wealthy and privileged males versus the oppressed and underrepresented lexicon of race, gender, and interrelated minorities.

Among the leading tasks of a politically triumphant democratic socialism, we are told, is to bring about race and gender equity and fairness. But how is this to be done? And this brings us to the issue of whether the new socialism will or can be any less authoritarian and potentially tyrannical than the old one.

The starting premise is that unless an enlightened and socialist-oriented government replaces all or most of the institutions of a free market liberal society, racism and sexism inevitably and inescapably dominate and dictate human relationships and outcomes. That is, individual liberty and freedom of association naturally result in an unjust society through the institutions of private property and market competition.

(One might add that a peculiar tacit assumption underlying “identity politics” in general is that unless restrained by government command and control, white men have a seemingly natural superiority over women and people of color that results in them dominating society and the positions of power in a free society. A strange and unintended concession to the very white racism that the proponents of identity politics say they so much abhor!)

Planning the Plunder for the Underprivileged

If society is to be made over into a more socially just configuration, the socialists elected to positions of political authority through a democratic process must now introduce government planning to introduce comprehensive collective group fairness. The elected socialist politicians and the appointed bureaucratic managers in the government departments and agencies must now formally classify and categorize everyone in society in terms of social class, race, gender, and related “intersectionalities” to determine who has unjustified “privilege,” and who has been exploited, underrepresented, or in some way discriminated against for the undeserving benefit of others. (See my article “Collectivism’s Progress: From Marxism to Race and Gender Intersectionality.”)

Then it must be decided what redistribution of positions, wealth, and status across all facets of the society would move the United States in the direction of a rebalanced equity among all such groups and subgroups. If this is to be decided and done on a “democratic” basis, this will inevitably become a political contest among the groups and subgroups vying for revisions to their status in the society. But, in reality, the horse-trading will be done among those who have shown the political acumen for attaining influence and positions of power within each of the competing racial, gender and social groups.

This will inescapably devolve into a plunder politics of groups versus groups guided by their respective politically positioned leaders. Who will get a new housing project? What group will secure more government jobs? Which sector of the economy will receive increased government budgetary funding to ensure investment and employment opportunities for a still-underprivileged minority in a particular region of the country? What will be a fair wage for certain types of work, possibly based on race and gender deservedness? What is a reasonable profit margin or return on investment in regulated private industries? Which products will be either subsidized or produced directly by a government planning agency?

Where will medical-treatment and medical-care facilities be expanded or reduced in certain communities based on alternative and competing minority group concerns? To what extent are the problems and needs of transgender people of greater or lesser significance than those of gay or “straight” people in terms of social funding commitments of specific types? Who will decide whether increased funding should go to solar panel installing versus building more wind-power sources of energy, and in what parts of the country, and how will they do so? On whom and by how much will tax-based reparations payments be made to historically oppressed peoples, and who will decide exactly how much is received by each of the designated recipient groups?

From Democratic to Authoritarian Socialism

Once decided, on the basis of the power-trading democratic process, “the plan” and its interconnected network of governmental sub-plans cannot be overturned or radically changed without reopening up all the basic questions of deservedness and redistributive fairness. All in society, therefore, must conform to and be constrained within the socialist design of the society, regardless of how unfair, unjust, or frustrating the procedures or outcomes of it all may seem to any particular individuals.

After all, the socialist system does not exist for the freedom of individuals, but for society-wide results meant to best serve all the people as reflected in distributive income shares, planned employments, and centrally decided productions of what the socialist social engineers have agreed to through their “democratic” decision-making for the betterment of all the designated groups into which everyone has been assigned their place and position.

The Green New Deal, whether it is ever brought into existence or not, captures virtually everything that I have briefly suggested as the elements and aspects of the desired system of “democratic socialism.” To “save the planet,” the entire economy will have to be remade according to a central plan, so every corner of the society is changed and adapts to what is needed for a “carbon free” world. To do so requires changing many of the things people do and how they do it, and what alternative employments and lifestyles can be theirs in this new world.

If free and competitive markets are no longer to determine what gets produced and how, by whom and where, and what shall be the relative income remunerations for all those freely associating in the social system of division of labor, then those designing, directing, and imposing such a green central plan will have to decide all these things. Democratic power politics rather than peaceful competitive market prices will determine all that happens in the society. (See my articles “The Green New Dealers and the New Socialism” and “The Nightmare Fairyland of the Green New Dealers.”)

Regardless of the intentions or naïve beliefs, a system of democratic socialism cannot escape imposing commands and controls over economic life any noticeably different than those that were in existence in the old Soviet Union. But it might be said, even if the economy is made to conform to such a central plan, there need not be a secret police or a suppression of all dissenting views. Freedom and plan can exist side-by-side.

But what happens if dissatisfaction with the methods and the outcomes of socialist planning becomes great enough that a “democratic” removal of the socialist system is threatened? Will the central planners, along with the privileged and positioned identity-political groups, as well as all those who work within the socialist bureaucratic structures, fatalistically just hand over the keys of political power to those who declare an intention to reestablish a functioning free market economy based on individual rights and freedom of association instead of those group identities? (See my article “An ‘Identity Politics’ Victory Would Mean the End to Liberty.”)

It is far more likely that those democratic socialists, Green New Dealers, and progressive proponents of social justice and identity politics will demonstrate their ideological-DNA ties to their totalitarian relatives of the 20th century, and follow in the footsteps of their Soviet ancestors. That is why using the democratic process to prevent the triumph of democratic socialism is so important before there are put in place the institutions and the policies that once there will be extremely difficult to undo, with the restoring of a free society highly unlikely short of a severe societal crisis that envelops everyone.

(This article is based on a dinner talk given for the Society for Politics, Economics, and Law at North Carolina State University in Raleigh, North Carolina, on April 1, 2019.)

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Richard M. Ebeling

 Richard M. Ebeling, an AIER Senior Fellow, is the BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel, in Charleston, South Carolina. Ebeling lived on AIER's campus from 2008 to 2009.