Why “Why Socialism Is Bad” is Bad

A dorm-room critique of socialism answered — sophomorically

“Ahhhh, but then doesn’t socialism just lead to an administrative, rather than economic elite?”

What does it mean to call an argument or set of ideas ‘dorm-room’? To my mind, it means that the ideas in question are cogent, and probably clearly articulated — though they are nowhere near as piercing or unique as they are presented to be. A dorm-room critique of atheism is that, with no God or godhead to firmly establish an ethical system upon, we have no rational basis for critiquing even the most psychopathic behavior; mere anarchy is loosed upon the world. A dorm-room critique of religiosity is that religion is at odds with reason in some way — faith is construed as ‘belief in spite of evidence,’ or something — and so it should be tossed off into the wastebasket of history.

A dorm-room critique of socialism — the dorm-room critique of socialism — is that, because socialism is the central planning of the economy by the government, it perforce leads to the government becoming all-too-powerful, a new oppressor instead of a liberator.

It’s surprising to see someone as thoroughly educated and experienced as Miller, then, offering this argument better befitting one of his own students, but here it is:

Socialism is a bad idea because it is naïve about power, which is the worst thing to be naïve about in politics. Increasing “popular control” over anything means, in constitutional terms, increasing government control. The government is the mechanism for enacting what “the people” want. If you want to increase “the people’s” ability to regulate, plan, and control the economy, you are increasing the government’s ability to do the same. They are inexorably linked — you cannot do the one without the other.

(So, if my previous comment didn’t already imply this, Miller has just recently been appointed to a position at Georgetown Univeristy’s school of foreign service, after having worked at the White House under two administrations, which is to say that I don’t have much to explain to him by way of political or economic theory. The explanations I offer here are for anyone who felt swayed by Miller’s short essay, then. I can’t say I know why Miller chose to present a definition of socialism divested of so many important details or distinctions — but I have my guesses.)

Socialism of course — yes — means the social ownership of the means of production. But what does the social ownership of the means of production mean? Well, contra Miller, it doesn’t mean state or government ownership — although it can. Social ownership basically happens when private ownership doesn’t, and private ownership happens when an enterprise (e.g., a bakery) is owned by one person or a small group of persons who alone have a right to the profits of that enterprise. So social ownership is when the profits of that enterprise belong to people outside of a small private group of investors, which can be conceived of in ever-widening circles. Something as simple as Wikipedia spells this out: “The ownership of the means of production can be based on direct ownership by the users of the productive property through worker cooperative; or commonly owned by all of society with management and control delegated to those who operate/use the means of production; or public ownership by a state apparatus.”

The very bright among you will notice where this is heading: Miller claims that the only way for popular control (social ownership) of the economy to increase is for the government’s regulatory power to increase, and yet we can see that’s only the last in a list of options. The option explored in the remainder of this short response will be the first, i.e. worker cooperatives. It will be important for that explanation to note at the top of things that the issue of worker cooperatives is simply an issue about how an individual firm might be organized, and is therefore orthogonal to larger issues like how an economy is to be run in the general sense (e.g. market vs. planned.) But more on that in a moment.

A worker cooperative, simply put, is an enterprise owned by the people who work at it — or, more precisely, an enterprise whose owners are all people who work at it, and are considered workers as such. I used the example of a bakery before and this was intentional: in my hometown there is a little co-op bakery called “Breadhive” run by a group of “worker-owners” and other workers who have the option to become owners, and accordingly Breadhive is a little piece of socialism.

B-But they sell non-voting shares — — B-B-But some workers aren’t owners.

Yes Breadhive is as stated a little piece of socialism; the distinction between capitalism and socialism is dimensional, not categorical, and so it’s more correct to talk about things being more or less capitalist or socialist, rather than talk about things being capitalist or socialist full-stop. So Breadhive is more socialist than not. If they opened themselves up to investors in the traditional sense, and accordingly gave said investors voting rights in re: the management of the company, then Breadhive would become more capitalist in nature.

Which feeds back into our earlier topic of firm organization being a distinct issue from the organization of an economy. An economy of worker cooperatives is, in keeping with the parlance in the previous paragraph, a more socialist economy than it is a capitalist one — that much can be agreed on. Now, it’s also true that this socialist economy could price its goods using a market system, because of course the worker-owned firms can still be in free competition with one another — there’s no contradiction to be found there. The values that Miller says demarcate classical liberalism from other ideologies are completely compatible with the social ownership of the means of production, i.e. socialism, as outlined above:

One of the tenets of classical liberalism is that the state is supposed to be neutral among competing factions, religions, businesses, conceptions of the good life, and philosophies. The state is supposed to create a system of ordered liberty and then stand back to let a thousand flowers bloom.

You can have socialism with all of the competition and blooming flowers watered by the sweet drink of freedom that you want, my friends. In a long section analyzing and defending different forms of cooperative work, Marx gives a characteristically technical treatment of how a socially-owned enterprise operates in a market system, and I think you’ll agree there are no mutually-excluding ideas here:

The plan of actual operations upon which successes have been reached in England seems to be briefly this: (1) To save capital, chiefly through co-operative associations; (2) to purchase or lease premises; (3) to engage managers, accountants, and officers at the ordinary salaries which such men can command in the market according to their ability; (4) to borrow capital on the credit of the association; (5) to pay upon capital subscribed by members the same rate of interest as that upon borrowed capital; (6) to regard as profit only that which remains after making payment for rent, materials, wages, all business outlays, and interest on capital; and (7) to divide the profits according to the salaries of all officers, wages of workmen, and purchases of customers.

Now, maybe you’re thinking that this is something of a non-starter: this is just one paragraph from Karl Marx, whose larger work is probably the best and most definitive illustration that social ownership of the means of production — no matter how innocently conceived — is always going to be part-and-parcel with state control, oppression, stifling of the human spirit, bad stuff, bad stuff, very scary words etc. Private ownership of the means of production is just fundamental to the austere, temperate, un-improvable worldview of classical liberalism, and, well, that can’t be helped.

But it’s not a non-starter, because that’s not a passage of Karl Marx it’s a passage from John Stuart Mill — though it is still nestled in a longer section analyzing and offering defenses of cooperatively owned enterprises. (It starts on page 609 of his textbook, Principles of Political Economy (in the PDF version!!)— which was, of course, the last and largest compendium of the classical economics that puts the “classical” in “classical liberalism”). So, yes, social ownership of the means of production — socialism — or, to be precise, some forms of socialism — the forms closest to the ground, and most easily achieved by working people — they are completely compatible with the values and goals of classical liberalism itself.

The advancement of socialism needn’t at all be enforced by the boots of the government; to say that is the only conceivable way forward for it is to be disingenuous.

Now, there are some other claims in Miller’s argument that I think are auxiliary to the one critiqued at length here. For instance, the perpetuation of the myth that socialism = everyone must have the exact same amount of money. But more specifically, his characterization of the effects of increased regulatory power — any kind of regulatory power — on the part of the government is highly misleading:

Giving government new powers over the economy means handing the state vast new grounds on which it can police us. The left usually distrusts the police. Ironically, then, the socialist platform advocates vastly increasing the scope, scale, jurisdiction, and number of police in America. What happens when the police inspect the books at the local shop of a black entrepreneur? Will socialism cure the police’s alleged penchant for racism and brutality? Or will the police be the same police that the left has regularly complained about during traffic stops and routine sidewalk encounters?

Of course, regulations on the economy— say, I don’t know, regulations to the effect that commercial banks aren’t allowed to be investment banks, because it’s a very very bad idea—are not policed by actual policemen. These regulations aren’t putting more patrol cars in the streets — the SEC isn’t sending beat cops up to the offices of Goldman Sachs to make sure everything looks on the level. These regulations are policed by forensic accountants, and lawyers, and auditors, etc. The actual police force is only involved if and when someone is charged with breaking these regulations, and needs to be brought in for an eventual arraignment.

So here, as well: implying that regulation of the economy necessarily leads to the big, militarized police forces the left so rightly complains about is disingenuous.

There are many substantive critiques one can loose against socialism; zero of them make an appearance in Mr. Miller’s essay.