Democratic Socialism Is Poetry, Not Economics

– August 27, 2018 Reading Time: 6 minutes

We are being inundated by new pitches for “democratic socialism.” This is due to the ballyhooed political success of a few self-proclaimed socialists, and this tempts the high-end pundit class to think that now is their time.

The word socialism is not toxic anymore, they hopefully observe. No more having to bury the real agenda in euphemisms like “economic democracy,” “participatory economics,” “worker empowerment,” or “social justice.” Let’s push this to the limit, call it socialism, and finally get over our enraptured attachment to markets and capitalism as the basis for economic organization.

I’ve read many of these, always in the hope that I will hear an argument that is not obviously false, or see a plan for precisely how this fantasy is going to be realized. It’s always a disappointment. These articles have the feel of dreams, not reality. There is nothing wrong with dreaming. The problem is when you make society your template for trying to make your fantasy come true.

What’s fascinating, too, about these attempts – and this has been true since Vladimir Lenin provided the briefest possible sketch on precisely how socialism would work – is that the writers rarely talk about what their socialism would mean for the expansion of government power.

Lenin spoke off-the-cuff as if the economic problem is easily solved. “The whole of society will have become a single office and a single factory, with equality of labor and pay.” That was his whole plan.

So too, they speak as if their socialism would happen without a hammer to pound it in place. They need only to get rid of capitalist “power” and the rest would take care of itself.

The Latest Attempt

Here’s a case, courtesy of Corey Robin, professor of political science at Brooklyn College.

The socialist argument against capitalism isn’t that it makes us poor. It’s that it makes us unfree. When my well-being depends upon your whim, when the basic needs of life compel submission to the market and subjugation at work, we live not in freedom but in domination. Socialists want to end that domination: to establish freedom from rule by the boss, from the need to smile for the sake of a sale, from the obligation to sell for the sake of survival.

Wait. He seriously just said that one of the great merits of socialism is that you won’t need to smile when you sell something. A society where everything is zero price and no one needs to smile. That’s the vision. That certainly accounts for the long record of misery and sadness wrought by past experiences of socialism. All those people without smiles: you see, they have been freed from the capitalist ethos of having to please others!

He goes on. The goal is “single-payer health care, free college, more unions and higher wages,” and socialism is the way to get there. He says “these are measures of emancipation, liberating men and women from the tyranny of the market and autocracy at work.” “The socialist,” you see, “believes that making things free makes people free.”

What Do They Mean by Free?

Notice the rhetorical play between meanings of free: free like speech and free like beer. They are absolutely different. The first refers to the human right to exercise volition. The second is a reference to a pricing scheme. I can offer you a free beer but that doesn’t mean that someone is not paying.

If there really is a way to create infinite abundance by writing about it, that would be awesome. No one could possibly refuse. I’ll take a Tesla, a vacation in China, a closet full of clothing, and all the fresh fish I can eat forever. Thank you!

Sadly, this dream commits a very simple error, one so fundamental that it denies a fundamental feature of the world. It denies the existence and the persistence of scarcity itself. That is to say, it denies that producing and allocating is even a problem. If you deny that, it’s hardly surprising that you have no regard for economics as a discipline of the social sciences.

To be sure, economists use the term “scarcity” in a particular way. It does not mean a shortage, though the possibility of shortages are a feature of scarcity. But a good or service can still be scarce even if it exists in abundance.

So, for example, just because the stores overflow with groceries, or because Internet startups are begging you to download applications, it doesn’t mean that we live in a post-scarcity age. There is no such thing as post-scarcity in this life.

Prices Solve Problems

So long as there is a contest for control over something, it is a scarce good. Let’s say you are sharing a pizza with friends. Every time you take a slice, another appears in its place. The pizza is magically reproducing itself. At some point, once having noticed this phenomenon, your behavior begins to change. There is no more rivalry over slices. Your control over a slice does not forbid another’s control. In this case, pizza has indeed become non-scarce. You can indeed have pizza socialism!

Then there is the world in which pizza doesn’t magically appear. Scarcity is baked into the nature of a good. If you can imagine people in some sort of argument about who gets to control or consume it, it is scarce. And fighting over “intellectual property” doesn’t count, because what that really involves is fighting over whether someone can use their scarce resources (computer drives, guitar strings, etc) to reproduce patterns (software, songs, etc).

Even copious goods can be scarce. Think of an Easter egg hunt with 100,000 eggs on a lawn. The kids will still run and struggle to collect them. They will trade them after the hunt. They will still revel in having more than others. The eggs still have the features of scarcity.

No Collective Ownership of Scarce Goods

Here’s the key point. So long as anything is scarce, there cannot be free, unlimited, collective access to it. Whatever it is will be over-utilized, depleted, and finally vanish following the final fight for the last scrap – sort of like what happened in Venezuela, and has happened in every socialist experiment in history.

That is to say, you can’t have socialism in a scarce good or service. Instead, it has to be allocated. Things can be allocated by arbitrary decision backed by force, or they can be allocated through agreement, trading, and gifting. The forceful way is what socialism has always become. This is for a reason: socialism does not deal with the reality of scarcity and the way the market-based system of property and pricing has solved it without violence.

What Is Nonscarce?

What doesn’t have the feature of scarcity? Think of any good or service over which there is no contest to control and consume. You can consume it and so can everyone else, unto infinity. The last word is key. For a good to be non-scarce, there can be no limits to its reproducibility.

Does air qualify? Not always, as you know if you have ever been stuck between floors on a crowded elevator. What about water? No, there is a reason why the bottled water market is so huge. These are like all things in the physical world: subject to limits and hence must be allocated.

On the other hand, let’s say you hear a catchy song. You can take the tune, sing it all day, and share it with your friends. Doing this takes nothing away from the original. In the same way, you can stare at an image, remember it, and reproduce it. And so it is with the ideas in this article. You can take them. I can’t stop you unless I attack or threaten your scarce body, or someone else (like the government) does so on my behalf. The idea portion of all these goods is non-scarce, so they do not need to be priced or owned.

How is it that you still end up paying for downloading books and purchasing music? The reason isn’t entirely due to copyright; it’s also because what you are paying for is not a good as such but a scarce service: all that is associated with accessing servers. Here is the scarce, and hence priced, service.

No Heaven on Earth

All this aside, socialists often don’t seem to get the very first point: for physical goods and human services, there is no imagined heaven on earth of unlimited plenty. All we can do is struggle to make more of everything available to as many people as possible, and encourage trading to take advantage of the division of labor. This is called a market, and it is based on the notion of private ownership in all scarce things (including capital goods) – the very thing that socialists want to end.

Socialism seems to be the most persistent non-falsifiable ideology on the planet. The socialists are like people who swear that gravity doesn’t exist and keep hopping around on two feet, expecting to rise into the clouds at any moment. It never happens, but the faith that there is no gravity remains unshaken.

It is not serious thought to go around simply demanding that everything be free. That demand solves no problem that has occupied the world of economics for a thousand years. Try to implement it and someone, everyone, is going to pay – long lines, impossible high taxes, hyperinflation, material deprivation – and not through choice.