The Essential Ethic of Socialism

“That’s socialism!” cry those on the right when they see government spending that they don’t like.

“Tap water is safe to drink because of socialism!” cry those on the left in response to those on the right.

The term ‘socialism’ has long been a usefully ambiguous word for people across the political spectrum to rally around without having to think too hard. This essay will finally put an end to that practice. I kid. My ambitions are more humble: to bring for those who care to think just a bit some clarity to what sorts of policies really do embody the socialist ethos. They are out there, but probably aren’t the policies you’re thinking of.

Two points of clarification. First, I take it as given that socialism comes in degrees. Full blown central planning is probably impossible, but some regimes come closer than others to attempting it. China is less socialist today than it was during the Great Leap Forward.

Second, by socialist ethics I don’t mean socialist aspirations. Neither egalite nor fraternite. These are the guiding values that many socialists seek to realize. Rather, I want to focus on the institutional means that socialists propose to achieve them. Institutions are rules that lay out certain ethical scripts: what you may do, what you must do, and what you are permitted to do. Views that count as socialist share an ethical presumption that is largely divorced from their aspirational ideals.

What Socialism Must Do

What do Leninist planning, market socialism, anarcho-syndicalism and other forms of self-designated socialism (mostly) have in common? The most common definition, and a useful starting point, is common ownership of the means of production. In another article, I use the socialist calculation debate to develop a complementary idea about what socialism must do to remain socialist. What is the functional nature of a socialist economy?

Oskar Lange proposed that socialists could use the economic theory of markets as a substitute for market competition. Hence “market socialism.” Central planners would set prices and tell managers of industries and firms to use those prices to make their calculations. F.A. Hayek’s famous arguments about dispersed knowledge can then be read as an answer to this question: What makes market socialist prices different from market capitalist prices? They reflect not merely the knowledge that central planners and their statistical underlings could furnish, but the dispersed, constantly changing, often local and tacit knowledge of virtually all market participants.

Israel Kirzner puts his finger on the key condition that allows market prices to reflect this vast amount of knowledge: freedom of entry into markets. If individuals are not free to enter a market, market prices cannot reflect their knowledge. Socialist central planners must prohibit freedom of entry. If they do not, there is no central plan, but rather dispersed planning. The only hope a private citizen with a new idea has is to convince a government functionary that his new idea is worth trying. This stands in direct contrast to what Adam Thierer has helpfully called “Permisionless Innovation.”

The same is true of many anarchist variants of socialism. If the means of production are held by the workers in common, someone with a new idea about what to make or how to make it must seek the approval of his peers. What Hayek, following Henry Manne, called “several property” —meaning property that is severed from joint group control — is an essential condition free initiative. Prohibiting free initiative is a common thread across most proposed socialisms, so I take it to be a defining aspect of the creed. Service to the community requires community oversight.

Mother Russia, May I?

You must ask for permission to serve other people. This is what I take to be the core ethic of socialism. When Jacobin writers attack private charity, we should take them at their word.

We serve others for many reasons in both capitalist and socialist regimes. One socialist factory worker aims to help his fellow working man. Another just wants to avoid punishment from his supervisor. One entrepreneur aims to make her customers happy. Another does it just for the money. Both capitalism and socialism assume a division of labor and thus service to others as an important part of how individuals spend their time, and allow for a wide variety of motivations to drive those decisions.

The difference is this: In a capitalist regime, howsoever selfish I may be, I need not ask permission to serve my fellow humans in a novel way. In a socialist regime, I must seek the permission of others — whether state officials or one’s fellow workers — before I serve them in a novel way.

Individual acts of service may be exempt. Forms of service that fit with The Plan (for central planners) or with what the community wants (for anarchist socialists) need not petition individually for permission. Service on a small enough scale is impossible to police and thus generally beyond enforcement. But freely changing how we serve one another at any scale is right out. That requires either adjusting The Plan or appealing to the Will of the Workers who control the means of production. Socialism is the absence of initiative in how we serve our fellows.

Please, Sir, Can I Serve Some More?

Healthcare professionals would like to make services available in rural areas. Sorry, they need a certificate of need. Individuals from various walks of life would like to make caskets, braid hair, or create floral arrangements. Sorry, they all need licenses. A developer would like to build multi-family, affordable housing. Sorry, there’s a zoning rule against that. 

Want to feed the homeless? Make sure to clear it with your city’s health inspectors first. 

That’s socialism. Or, more precisely, the socialist ethic at work. We must seek permission before we serve our fellow human beings.The procedures for seeking such permission vary in how onerous they are. The more onerous they are, the more perfectly has the socialist ethic been realized. Guild socialism is socialism.

What about the examples we started with, welfare benefits and government infrastructure? On the margin, increasing taxes and transfers generally leaves individuals free to serve the poor in other ways. One might worry that this creates a culture in which individuals view the state as their caretaker, but that would be a downstream effect of the policy rather than being in the nature of the policy. Similarly, government providing easy access to clean drinking water typically leaves others free to provide alternative or superior sources of water to consumers.

There is, however, a question of scale here. If public provision of some service becomes sufficiently large that it effectively crowds out private provision, it will de facto operate like socialism. To take an extreme and unrealistic case, if the government taxes 100 percent of individual income — offsetting factors would kick in well before anything like this would happen — there would be no resources left for individuals to allocate. 

To see why this might be important, consider an intermediate case: public education. Private schools exist and many flourish in the United States. And, for individuals rich enough to shop for a school district, there is a de facto market for public schools as well. But the resources commanded by public education are vast. There is a lot of crowding out, and it is difficult to compete with “free” public school. Moreover, states set educational policies (perhaps for good reason) that restrict the range of new ideas that can be tested out in the sector. What we are left with is a quasi-socialist, quasi-market system that falls somewhere in the middle.

Human beings find our highest calling in serving one another, whether through family and friendship, though charity and solidarity, or even through commerce. When you hear calls to prohibit forms of service, you are justified in responding, “That’s socialism!”

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