In Part One of this series, I provided a definition of socialism as a concept. In this installment I provide a brief historical perspective. Socialism’s birth is typically attributed to Karl Marx but, in fact, he wrote only a few pages about the concept in his well-known book, The Communist Manifesto. The original advocates of socialism criticized what they saw as the inequities of the Industrial Revolution. To remedy these perceived inequities they advocated a more egalitarian redistribution of wealth and a reordering of society into small utopian communities in which there would be no private property. Government ownership versus private ownership is at the heart of the differences between socialism and the free market.
Socialistic thinking has been prevalent in Europe since the late 19th Century. Socialists throughout Europe dominated the universities, influenced the thinking of intellectuals, and encouraged the spread of socialism in every way possible. The same thing is now happening in American universities. The Fabian Socialists of England were especially effective in bringing democratic socialism to that country. They also influenced socialist thought in America. The Fabians sought to bring about the spread of socialism by gradual means, beginning with scholarly but flawed works on economic history, and using popular literature to influence public opinion. The left in America copied and have been applying the Fabian model for decades.
In the United States, socialism was prominent in the thinking of rationalistic New England and Northern reformers. For example, the first “free” public schools were established by Unitarian socialists who wanted to use them as a vehicle for undermining Christianity, changing America’s cultural values, and promoting the acceptance of socialism. This was a brilliant strategy for the left. No institution in America that has been more effective in promoting the acceptance of socialist ideals than the public school system. Ironically, Americans have bought so completely into public education that they do not even associate it with socialism.
In politics, the 1890s and 1900s saw the emergence and growth in America of the Socialist Party and the Socialist Labor Party. The “Progressives” of the early 20th Century were strongly influenced by socialism. Consequently, they looked to government to exercise more control over business, and adopted—to some extent—socialist programs. Intellectuals in politics used their influence to encourage the acceptance and spread of socialism during these years. For example, President Woodrow Wilson—the former college professor—advanced socialist thinking through his public oratory and government policies during World War I.
Later, Franklin Delano Roosevelt (FDR), with the help of his left-wing “brain trust,” a Democrat-controlled Congress, and me-too Republicans, laid the foundation for American socialism with his New Deal policies, programs, and Supreme Court appointments. FDR’s enshrinement as one of America’s best-known and most popular presidents stems more from his leadership during World War II than from his pre-war government programs, most of which were failures. Presidents, Congressional leaders, and liberal Supreme-Court justices who followed FDR—aided and abetted by left-wing intellectuals in colleges, universities, journalism, and the entertainment industry—slowly but steadily advanced the spread of socialism in America. There was opposition, of course. But the left, borrowing a page from the rule book of the Fabians, moved slowly enough that the progress of socialism went unnoticed by the majority of Americans.
With the election of Barack Obama, the slow pace advocated by the Fabians suddenly shifted into high gear. As a result, a system that bankrupted the Soviet Union and has undermined the prosperity of Europe is now making great strides in the cradle of free-market economics—the United States of America.
The concept is known as boiling the frog, and it is one of the most effective ways to get around resistance to major societal change. If you throw a frog into a pot of water on the stove and turn the heat up gradually enough, the frog will grow accustomed to the slight increases in temperature and simply enjoy itself until it is too late. Liberals are experts at applying this concept. As a result, Americans are like frogs boiling in a pot. Obama’s mistake was getting impatient and turning up the heat too fast by ramming his ill-conceived spending programs through Congress. His impatience jolted thinking Americans wake, and many of them jumped out of the pot.
Socialism received a major boost when it was adopted by Lenin following the Russian Revolution in which Czar Nicholas was overthrown and his family murdered by the communists. Having defeated the Russian aristocracy, Lenin’s now-powerful followers had a free hand and no need to compromise with political opponents. Hence, they wasted little time in adopting their preferred economic model: socialism. Socialists everywhere applauded Lenin’s—and socialism’s—ascension to power and eagerly awaited the results of what they referred to as the “great experiment.”
Having seized power in Russia, Lenin immediately found himself in the uncomfortable position of having to follow through on his promise that socialism would improve lives. His followers expected their lives to be better than they had been under the Czar. Lenin believed that a nation’s economy would perform better with centralized state control of production, distribution, and commerce, and without what he thought of as the negative influences of the profit motive and competition. Nothing illustrates better how woefully inadequate the liberal’s views of human nature are than Lenin’s views on competition and the profit motive. It is the inherent drive to better one’s circumstances, not centralized government planning, that drives people to be productive. This inherent human drive is translated into practical terms by the profit motive and competition.
Predictably, Lenin’s attempt to apply socialist principles on a broad scale failed miserably. Just four years after Lenin instituted a socialist economy, production in the Soviet Union fell to only a fraction of its rate prior to the revolution. In fact, Lenin’s experiment was such an abysmal failure that he was forced to choose between the Soviet people starving and reinstituting the free-market incentives of capitalism, albeit on a limited basis. He opted for limited capitalism under what was called the New Economic Program (NEP).
This is where things stood when Lenin died and Stalin assumed the reins of power. Stalin and his successors until the collapse of the Soviet Union based the country’s economy on state planning of production based on a pyramid model. At the peak of the pyramid the state planning agency established broad targets and directives. These targets and directives cascaded down through a succession of ministries and regional planning organizations that, in turn, passed them down to factories. In the factories, the plans were reviewed by the factory managers and engineers who were expected to implement them.(20)
Lenin’s so-called experiment with socialism stumbled along for approximately 70 years—a textbook example of mass inefficiency and waste—until the Soviet Union’s economy finally collapsed under the weight of its own lethargy and inefficiency. Without massive and repeated infusions of economic aid from the United States and the countries of Western Europe in the form of technology and expertise—including factories and the technicians to run them—the failure of the “great experiment” would have occurred much sooner. For a thorough treatment of how the west assisted in the development of the Soviet economy, see Western Technology and Soviet Economic Development by Anthony Sutton.
Heilbroner describes the collapse of the Soviet Union’s doomed socialist economy in stark terms: “It is not surprising that this increasingly Byzantine system began to create serious dysfunctions beneath the overall statistics of growth. During the 1960s the Soviet Union became the first industrial country in history to suffer a prolonged peacetime fall in average life expectancy, a symptom of its disastrous misallocation of resources. Military research facilities could get whatever they needed, but hospitals were low on the priority list. By the 1970s the figures clearly indicated a slowing of overall production. By the 1980s the Soviet Union officially acknowledged a near end to growth that was, in reality, an unofficial decline.
In 1987 the first official law embodying perestroika—restructuring—was put into effect. President Mikhail Gorbachev announced his intention to revamp the economy from top to bottom by introducing the market, reestablishing private ownership, and opening the system to free economic interchange with the West. Seventy years of socialist rise had come to an end.”(21) The great experiment was over and it had been a dismal failure, yet liberals in America still opine mindlessly on the virtues of socialism. The mistake of well-meaning conservatives who have tried to explain reality to liberals has been in using facts, reason, and logic on people whose beliefs are based solely in a misguided emotional attachment. This is one of the greatest shortcomings of liberals such as President Obama: They think the world can be the way they want it to be simply because they want it to be that way.
Socialism has been tried many times by different nations over the years. Throughout all of this, it has consistently failed. Christian philosopher D. Elton Trueblood demonstrated that a centrally-planned economy requires the planners to know: 1) what resources are immediately available, 2) what resources will be available in the future, 3) what consumers want now, and 4) what consumers will want in the future. (22) In other words, to be effective the central planners must know what it is impossible to know. In a free-market economy, factors such as prices, profits, losses, and consumer demand are immediately available and provide businesses the information needed to respond quickly to market opportunities and threats. Free-market economics has built-in checks and balances that provide businesses with information that central planners in a socialist system do not and cannot have.
Other articles in this series: