The Free Market 18, no. 8 (August 2000)
Francis Fukuyama, the famed author of The End of History, has tried his hand at political prognostication on the question of socialism. Writing in Time Magazine, he argues that full-blown socialism is dead for the foreseeable future. There will be no more attempts to fully collectivize the means of production, much less abolish money and trade and the division of labor. However, he says, the egalitarian impulse is still alive, particularly in the demands the political left is making of international institutions like the WTO, the IMF, and the World Bank.
It’s true that the protestors at international trade meetings want nothing short of world-government regulations on labor and environment. They want global redistribution and antitrust. They want the UN to tax us and impose an international welfare state. And they hate anything-private property, corporations, national borders-that stands between them and their goal.
Are these groups powerless? Not at all: the Clinton regime has effectively endorsed a moderate (and politically acceptable) version of this program for global economic regulation. As Mises explained in Omnipotent Government (1944), this program will result in nothing more than global corporate cartelization. It will permit large corporations that can afford to abide by the regulations to insulate themselves from competition from upstarts. Moreover, it will seriously hinder the ability of workers and entrepreneurs in poor countries to use their comparative advantages and gain a foothold in the world market.
Complicating the problem is the fact that the institutions under attack are no great shakes from the point of view of free-market economics. The WTO, the IMF, and the World Bank are not forces for capitalism but agents of government control. They deserve to be protested, not because they protect property and markets but because they violate them. The confusion stems from the failure of market advocates to tell the truth about these institutions. How many market advocates pushed for the creation of the WTO when it might have been prevented with just a hair more pressure from our side? Instead, they defended these institutions as necessary for an “orderly” and “regulated” market economy.
The trouble with Fukuyama’s analysis is that it is too narrow. The program of today’s socialists is far broader. It includes the green agenda to promote the well-being of the “environment” (defined as anything but humans) at the expense of prosperity. It includes the civil-rights movement that wants to reconstruct society by severely restricting the freedoms of association and contract. It includes the “fair access” movement that wants to nationalize new technologies in the name of equality. Alive and kicking too are education socialists, road socialists, military socialists, protection and security socialists, and a thousand other types too.
But can all these groups who want to use the state to achieve their social and economic goals really be called socialists? Or is this a distortion of the meaning of the term? When Ludwig von Mises argued that socialism was impossible, he meant that the full-blown program, the one Fukuyama says will not return, could not do what it claimed it could do. Socialism as an economic system could not produce or allocate economically.
It’s been argued that Lenin demonstrated this during the period of War Communism of the Soviet Union: from 1918 to 1921 he attempted to abolish all markets, property, and trade. The result was an unparalleled man-made catastrophe. The Soviets then stepped back from the abyss to permit the reintroduction of aspects of the markets, and thereafter ruled over a highly bureaucratized total state that finally collapsed in 1990.
Can the Soviet economy between 1921 and 1990 be called socialist? Since the rise of Stalin, the left has said no. By calling it something else, the socialists do not thereby have to bear responsibility for the mass human suffering, bloodshed, and poverty of these years. And in one narrow sense they are correct: it wasn’t Marx’s vision that prevailed for those 70 years but an extreme version of traditional economic despotism in which the people are severely restricted in what they can produce and keep as their own.
A Misesian will also admit that this was not full-blown socialism because it is literally impossible to create anything resembling an economy in a fully socialist society. Production stops and people starve. The experiment comes to an end very quickly. But as Mises also understood, socialism is not only a full-blown social and economic model; it is a pattern of thinking that regards government means of economic organization as superior, for whatever reason, to market means. It is “nothing but a grandiose rationalization of petty resentments,” and these resentments are all over the map.
Hardly any area of public life today escapes the poison of petty socialism. What, for example, does the hard-core Marxist “International Committee of the Fourth International” (ICFI) have to say about the Microsoft case? Its analysis, as featured on the Socialist Website, is indistinguishable (no exaggeration!) from that of the New York Times and the Department of Justice. “The case against Microsoft,” say the commies, “reflects a growing recognition that the speed of technological change and the demand for new and better systems requires a technical leap that is being stifled by Microsoft’s continued dominance.” Sounds like Joel Klein. They are all socialists now.
Llewellyn H. Rockwell, Jr. is president of the Mises Institute. rockwell@mises.org
