Socialism in One Page

This essay was first published in the South Dakota Standard. 

The word “socialism” (and “socialist”) is thrown around a lot these days—and in the U.S., it is a term of reprobation. (Which is odd, since this doesn’t happen anywhere else in the world; most countries have socialist political parties—many quite conservative, some explicitly “Christian,” etc.). But regardless, what does it really mean?

The term “socialism” was coined in 1827 in The Cooperative Magazine in England. It generally referred to a group of radicals who believed in redistributing resources, land, and ownership amongst the people/workers. At that time, there were all kinds of attempts at creating small communities and reforming the workplace, some trying to abolish property altogether, others just trying to empower factory workers suffering under capitalism. The word evolved in the 1800s and could mean almost anything by around WWI—guild socialism, Fabian Collectivism, Bolshevism, Catholic Distributism, the cooperative movement, anarcho-syndicalism, the British Labor Party, the Socialist Party of America (1901-1972), Leninism, etc.

But the broadest sense of “socialism” generally refers to a group’s redistribution of resources according to need. It’s a well-known practice. Families redistribute resources when parents provide their children food. Churches redistribute resources when allocating funds in their budget to missionaries. Businesses redistribute resources to those functions and people that (good) executives deem necessary.

Likewise, governments redistribute resources within a region. Here in Rapid City, the police, fire department, the courts are all socialized. What that means is that these services are paid for by tax dollars instead of to the highest bidder in the market, so that they can be more widely available. Almost every country today has socialized healthcare, transportation, education, and military.

Why socialize anything? Because of (1) the hazards of allowing the wealthy and powerful to buy everything out; (2) despite “the invisible hand” and economic rhetoric, raw capitalism and markets regularly fail to help those who need it the most (e.g., compare rates of child poverty, infant mortality, homicide, balance of payments, student performance, mental health issues, paid holidays and leave, etc. of the U.S. to more socialized countries); (3) not everyone is born in a position to do well in a society of markets/competition; (4) there are more social and economic possibilities by pooling resources than going alone.

(1) was a concern to America’s founders—who saw how tycoons could buy up swaths of land, thereby getting richer (to do it all over again), which threatened the republic. In the words of John Adams in 1765: “Property monopolized or in the possession of a few is a curse to mankind: we should preserve not an absolute equality—this is unnecessary, but preserve all from extreme poverty, and all others from extravagant riches.” This was also the principle behind the Homestead Act: “The public lands of the United States belong to the people and should not be sold to individuals nor granted to corporations, but should be held as a sacred trust for the benefit of the people…” (Sadly, this act only applied to white people, helping create generational poverty in black communities.)

Many of the founders got these ideas from the Bible—such as the Jubilee in the Old Testament (land redistribution and cancellation of debts), and community redistribution (Acts 2:44-47; 4:32-35). In contrast to the market economy and inequalities of Rome, the Apostle Paul taught that “your surplus can fill their deficit so that in the future their surplus can fill your deficit. In this way there is equality. As it is written, ‘The one who gathered more didn’t have too much, and the one who gathered less didn’t have too little’,” (2 Cor 8:13-15). The principle was basically “from each according to their ability, to each according to their need.”

You can imagine the kinds of problems that would (and do) occur if, say, the justice system or police was entirely privatized and thus owned by the highest bidder. Remember that scene from Back to the Future 2? Biff is pointing a gun at Marty and Marty says “the cops are going to match the bullet to that gun and catch you!” and Biff replies: “Kid, I own the police!” This is the world of anarcho-capitalism. Can’t afford private rights-protection? You’re on your own. Can’t afford private, life-saving surgery because you can’t afford private insurance? Tough luck.

In short, socialists argue that “liberty and justice for all” is impossible when liberty and justice is primarily contingent on one’s ability to pay. If liberty and justice can be bought through market exchange, only those who can afford it will have it.

Many “socialist” countries implement price controls, while others don’t. Like almost any country, the United States controls agriculture prices through policy, tariffs, and subsidies. One indicator of a country’s socialization level is public spending as a percentage of GDP: Mexico (27%); United States (38%); UK (43%); Italy (50%); Denmark (55%); France (57%). Countries that run from around 40-75% are often called “democratic socialism,” and those around the 80-100%, “command economies” or “state socialism.” However, some argue that “state-socialism” is really state-capitalism, because the capitalist employer/employee relationship remains in place, so the state has simply become everyone’s employer (see Richard Wolff’s Understanding Socialism).

Critics argue that (1) without submitting to the market, there’s no prices, and without prices, there’s no calculation, and without calculation, it’s easier to waste resources; (2) while many of the most democratically-socialized countries are the most peaceful (e.g., Switzerland, Denmark, Germany, France, etc.), the ideology of socialism is prone to terminate in statism (i.e., political totalitarianism) if individual and workers’ rights are habitually sacrificed for the collective; (3) without direct democracy, the redistribution mechanism is easily manipulated by the powerful; “taxing the rich to help the poor” will not work if the rich control the process of redistribution; (4) proprietarians believe in the absolute sacredness of individual property rights and individualism (note Piketty 2020), such that no person has any moral, legal, or social obligation to help others in need.

In conclusion, “socialism” largely means economic democracy instead of just political democracy. An economic democracy is where the people choose how and what is produced and distributed in the economy—from the individual firm, all the way up to an assembly of firms and/or the government itself.