Socialism: An Economic and Sociological Analysis


Socialism refers to a broad set of economic theories of social organization advocating state or collective ownership and administration of the means of production and distribution of goods, and the creation of an egalitarian society. Modern socialism originated in the late nineteenth-century working class political movement. Karl Marx posited that socialism would be achieved via class struggle and a proletarian revolution, it being the transitional stage between capitalism and communism.

Socialists mainly share the belief that capitalism unfairly concentrates power and wealth into a small section of society who control capital, and creates an unequal society. All socialists advocate the creation of an egalitarian society, in which wealth and power are distributed more evenly, although there is considerable disagreement among socialists over how, and to what extent this could be achieved.

Socialism is not a discrete philosophy of fixed doctrine and program; its branches advocate a degree of social interventionism and economic rationalization, sometimes opposing each other. Another dividing feature of the socialist movement is the split on how a socialist economy should be established between the reformists and the revolutionaries. Some socialists advocate complete nationalization of the means of production, distribution, and exchange; while others advocate state control of capital within the framework of a market economy. Social democrats propose selective nationalization of key national industries in mixed economies combined with tax-funded welfare programs; Libertarian socialism (which includes Socialist Anarchism and Libertarian Marxism) rejects state control and ownership of the economy altogether and advocates direct collective ownership of the means of production via co-operative workers' councils and workplace democracy.

In the 1970s and the 1980s, Yugoslavian, Hungarian, Polish and Chinese Communists instituted various forms of market socialism combining co-operative and State ownership models with the free market exchange. This is unlike the earlier theoretical market socialist proposal put forth by Oskar Lange in that it allows market forces, rather than central planners to guide production and exchange. Anarcho-syndicalists, Luxemburgists (such as those in the Socialist Party USA) and some elements of the United States New Left favor decentralized collective ownership in the form of cooperatives or workers' councils.

Historical precedents

Socialist thought and organization predate Socialism as ideology, which emerged in the first-half of the nineteenth century. In fifth-century Persia, the Mazdak proto-socialists challenged Noble and Clerical privilege, criticized private property to achieve an egalitarian society. In sixteenth-century literature, Utopia (1519), by Thomas More, posits a socialist utopia. In the nineteenth century, as socialist thought coalesced to formal ideology and programme, William Morris denoted the priest John Ball (1331–1381) as the first socialist in England, for having been a leader of the Peasants' Revolt (1381); moreover, Ball is credited the saying: When Adam delved and Eve span, who was, then, the gentleman? In the mid-seventeenth century English Civil War, the contemporary political socialists include the Levellers, and the Diggers, advocating common tenancy of land. In eighteenth-century France, Enlightenment criticism of enforced socio-economic inequality is Jean Jacques Rousseau's gist in the Social Contract, that begins: Man is born free, and he is everywhere in chains. After the French Revolution, François Noël Babeuf advocated common land-ownership and politico-economic equality of Citizens.

Origins of socialism

Etymologically, the English coinage socialism (1839) derives from the French socialisme (1832), the mainstream introduction of which usage is attributed, in France, to Pierre Leroux and to Marie Roch Louis Reybaud; and in Britain to Robert Owen in 1827, father of the cooperative movement.

Western European social critics were the first, modern socialists Robert Owen, Charles Fourier, Pierre-Joseph Proudhon, Louis Blanc, and Saint-Simon, who criticised the excessive poverty and inequality consequence of the Industrial Revolution, and advocated reform via the egalitarian distribution of wealth and the transformation of society to small communities without private property. Saint-Simon delineated collectivist principles reorganizing society to so build socialism upon planned, utopian communities.

Linguistically, the contemporary connotation of the words socialism and communism accorded with the adherents' and opponents' cultural attitude towards Religion. In Christian Europe, of the two, communism was believed the atheist way of life. In Protestant England, communism was too-culturally and -aurally close to the Papist Roman Catholic communion rite, hence English atheists denoted themselves socialists.

In 1847, Frederick Engels said Socialism was respectable on the Continent, while Communism was not; the Owenites, in England, and the Fourierists, in France, were considered Socialists, while working-class movements that "proclaimed the necessity of total social change" denoted themselves Communists. This, latter branch of Socialism, was "powerful enough" to produce the communisms of Étienne Cabet, in France, and Wilhelm Weitling, in Germany.

International Workingmen's Association First International

In 1864, the International Workingmen's Association (IWA) the First International was founded in London. Londoner Victor le Lubez, a French radical republican, invited Karl Marx to participate as a representative of German workers. In 1865, the IWA had its preliminary conference, and its first congress, at Geneva, in 1866. Karl Marx was member of the committee; he and Johann Georg Eccarius, a London tailor, were the two mainstays of the International, from its inception to its end; the First International was the premiere international forum promulgating socialism.

In 1869, under the influence of Marx and Engels, the Social Democratic Workers' Party of Germany was founded. In 1875, the SDW Party merged with the General German Workers' Association, of Ferdinand Lassalle, metamorphosing to the contemporary German Social Democratic Party (SPD). Since the 1870s, in Germany, Socialism was associated with trade unions, as the SPD constituted trade unions, while, in Austria, France, and other countries, socialist parties and anarchists did like-wise. That ideologic development greatly contrasts with the British experience of Socialism, wherein politically-moderate New Model Unions dominated unionized labor from the mid–nineteenth century, and trade-unionism was stronger than the political labor movement, until appearance of the Labour Party in the early twentieth century. The first U.S. socialist party was founded in 1876, then metamorphosed to a Marxist party in 1890; the Socialist Labor Party exists today. An early leader of the Socialist Labor Party was Daniel De Leon who had considerable influence beyond the United States as well.

Socialists supported and advocated many branches of Socialism from the Gradualism of trade unions to the radical Revolution of Marx and Engels to the Anarchists emphasizing small-scale communities and agrarianism; all co-existing with the most influential Marxism and Social Democracy. The Anarchists, led by the Mikhail Bakunin, believed Capitalism and State inseparable, neither can be abolished without abolishing the other.

The Second International

As the ideas of Marx and Engels became encarnate, especially in Central Europe, Socialists united into an international organization, and founded the Second International in 1889, the centennial of the French Revolution; from 20 countries, 300 socialist and labor union organizations sent 384 delegates. The Second International was denominated the Socialist International with Friedrich Engels its honorary third-congress president in 1893.

In 1895, Engels said there now is a single, generally recognized, crystal clear theory of Marx and a single, great international army of socialists.

Despite being outlawed in Germany by the Anti-Socialist Laws of 1878, the Social Democratic Party of Germany masterfully used the limited, universal, male suffrage available to exercise the electoral strength necessary to compel rescindment of the Anti-Socialist laws in 1890. In 1893, the SPD received 1,787,000 votes, a quarter of the votes cast. Before the SPD published Engels's 1895 introduction to Marx's Class Struggles in France 1848–1850, they deleted phrases felt too-revolutionary for mainstream readers.

Karl Marx believed possible a peaceful, socialist transformation of England, despite the British Aristocracy and Ruling Class revolting against such a popular victory. Whereas the United States and Holland might also effect peaceful transformations, not France; Marx thought it had perfected . . . an enormous, bureaucratic and military organization, with its ingenious State machinery that required forcible deposition; nevertheless, with Karl Marx only eight years dead, Engels said it was possible to achieve a peaceful, socialist revolution in France.

World War I

When World War I began in 1914,most European socialists supported the bellicose aims of their national governments. The British, French, Belgian, and German social democratic parties discarded their political commitments to proletarian internationalism and worker solidarity to co-operate with their imperial governments.

In Russia, N. Lenin, denounced the Europeans' Great War war as an imperialist conflict, and urged workers, worldwide, to use the war as occasion for proletarian revolution. The Second International dissolved during the war; Lenin, Leon Trotsky, Karl Liebknecht, and Rosa Luxemburg, and other anti-war Marxists conferred in the Zimmerwald Conference in September of 1915.

The Revolutions of 1917–23

By the year 1917, the third year of a ninety-day war, the patriotism propelling the First World War metamorphosed to political radicalism in most of Europe, the United States (cf. Socialism in the United States), and Australia. In February, popular revolution exploded in Russia when workers, soldiers, and peasants established soviets (councils) wielding executive power in a Provisional Government valid ’til convocation of a Constituent Assembly. In April, Lenin arrived in Russia from Germany, calling for All power to the soviets. In October, his party, the Bolsheviks, won support of most soviets, and, simultaneously, he and Trotsky led the October Revolution. On 25 October 1917, at the Petrograd Soviet, Lenin declared, Long live the world socialist revolution!

On 26 October, the day after assuming executive power, Lenin wrote Draft Regulations on Workers' Control, granting workers control of businesses with more than five workers and office employees, and access to all books, documents, and stocks, and whose decisions were to be binding upon the owners of the enterprises. Immediately, the Bolshevik Government nationalised banks, most industry, and disavowed the national debts of the deposed Romanov royal régime; it governed via elected soviets; and it sued for peace and withdrew from the First World War.

Despite that, the peasant Socialist-Revolutionary (SR) Party won the Constituent Assembly against the Bolshevik Party, who then acted resolutely the next day. The Constituent Assembly convened for thirteen hours (16.00 hrs 5 Jan – 4.40 hrs 6 Jan 1918). Socialist-Revolutionary Leader Victor Chernov was elected President of a Russian republic; next day, the Bolsheviks dissolved the Constituent Assembly. The Bolshevik Russian Revolution of October 1917 engendered Communist parties worldwide, and their concomitant revolutions of 1917-23. Few Communists, then, doubted that the Russian success of Socialism depended upon successful, working-class socialist revolutions effected in developed capitalist-economy countries; thus, in 1919, Lenin and Trotsky organised the world's Communist parties into a new international association of workers the Communist International, the Comintern, also denominated the Third International.

In November of 1918, the German Revolution deposed the monarchy; as in Russia, the councils of workers and soldiers were comprised mostly of SPD and USPD (Independent Social Democrats) revolutionaries installed to office as the Weimar republic; the SPD were in power, led by Friedrich Ebert. In January of 1919. the left-wing Spartacist Putsch challenged the SPD government, and President Ebert ordered the Army and Freikorps mercenaries to violently suppress the Workers' and Soldiers' councils. In the event, Communist leaders Karl Liebknecht and Rosa Luxemburg were captured and summarilly executed. Also that year, in Bavaria, the Communist régime of Kurt Eisner in Bavaria was so suppressed. In Hungary, Béla Kun briefly headed a Hungarian Communist government. Throughout, popular socialist revolutions in Vienna, Italy's northern industrial cities, the German Ruhr (1920) and Saxony (1923); all failed in spreading revolutionary socialism to Europe's advanced, capitalist countries.

In Russia, Socialist circumstances were desperate; in August of 1918, assassin Fanya Kaplan shot and wounded Lenin in the head, rendering him moribund. Earlier, in June, the Soviet Government had implemented War Communism to manage the foreign economic boycott of Russia, and invasions by Imperial Germany, Imperial Britain, the U.S., and France, interfering in the Russian Civil War beside royalist White Russians; to control starvation, private business was outlawed, strikers could be shot, the white collar classes were forced to work manually, and, from the peasantry, they required grain for workers in cities.

By 1920, as Red Army commander, Trotsky had mostly defeated the royalist White Armies. In 1921, War Communism was ended, and, under the New Economic Policy (NEP), private ownership was allowed for small and medium peasant enterprises; industry remained State-controlled, Lenin acknowledged that the NEP was a necessary capitalist measure for a country mostly unripe for Socialism, thus, the existence of NEP businessmen and NEP women (NEP Men) flourished, and the Kulaks gained capitalist power as rich peasants.

In 1923, on seeing the Soviet State's greatly coercive power, the moribund Lenin said Russia had reverted to a bourgeois tsarist machine . . . barely varnished with socialism. After his death (January 1924), the Communist Party of the Soviet Union then controlled by Joseph Stalin rejected the theory that socialism could not be built solely in the U.S.S.R., and declared the Socialism in One Country policy. Despite the marginal Left Opposition's demanding restoration of Soviet Democracy, Stalin developed a bureaucratic, authoritarian government, that was condemned by Democratic Socialists, Anarchists, Trotskyists, et alles, for undermining the initial Socialist ideals of the Bolshevik Russian Revolution.

The inter-war era and World War II

The Russian Revolution of October 1917 brought about the definitive ideological division between Communists as denoted with a capital "C" on the one hand and other communist and socialist trends such as anarcho-communists and social democrats, on the other. The Left Opposition in the Soviet Union gave rise to Trotskyism which was to remain isolated and insignificant for another fifty years, except in Sri Lanka where Trotskyism gained the majority and the pro-Moscow wing was expelled from the Communist Party.

In 1922, the fourth congress of the Communist International took up the policy of the United Front, urging Communists to work with rank and file Social Democrats while remaining critical of their leaders, who they criticized for "betraying" the working class by supporting the war efforts of their respective capitalist classes. For their part, the social democrats pointed to the dislocation caused by revolution, and later, the growing authoritarianism of the Communist Parties. When the Communist Party of Great Britain applied to affiliate to the Labour Party in 1920 it was turned down.

Socialism after World War II

In 1945, the world’s three great powers met at the Yalta Conference to negotiate an amicable and stable peace. UK Prime Minister Winston Churchill joined USA President Franklin D. Roosevelt and Joseph Stalin, General Secretary of the Communist Party of the Soviet Union's Central Committee. With the relative decline of Britain compared to the two superpowers, the USA and the Soviet Union, however, many viewed the world as "bi-polar" a world with two irreconcilable and antagonistic political and economic systems. Many termed the Soviet Union "socialist", not least the Soviet Union itself, but also commonly in the USA, China, Eastern Europe, and many parts of the world where Communist Parties had gained a mass base. In addition, scholarly critics of the Soviet Union, such as economist Friedrich Hayek were commonly cited as critics of socialism. This view was not universally shared, particularly in Europe, and especially in Britain, where the Communist Party was very weak. In 1951, British Health Minister Aneurin Bevan expressed the view that, "It is probably true that Western Europe would have gone socialist after the war if Soviet behaviour had not given it too grim a visage. Soviet Communism and Socialism are not yet sufficiently distinguished in many minds.

Chinese socialism

In 1949, the Chinese Revolution established a Communist state in China. Criticizing the invasion and trade embargo of the young Soviet state, Bevan wrote "At the moment it looks as though the United States is going to repeat the same folly in China... You cannot starve a national revolution into submission. You can starve it into a repressive dictatorship; you can starve it to the point where the hellish logic of the police state takes charge. In 1951, the Socialist International was refounded by the European social democratic parties. It declared: "Communism has split the International Labour Movement and has set back the realisation of Socialism in many countries for decades... Communism falsely claims a share in the Socialist tradition. In fact it has distorted that tradition beyond recognition. It has built up a rigid theology which is incompatible with the critical spirit of Marxism." In the postwar years, socialism became increasingly influential throughout the so-called Third World. Countries in Africa, Asia, and Latin America frequently adopted socialist economic programs. In many instances, these nations nationalized industries held by foreign owners. The Soviet Union had become a superpower through its adoption of a planned economy, albeit at enormous human cost. This achievement seemed hugely impressive from the outside, and convinced many nationalists in the former colonies, not necessarily communists or even socialists, of the virtues of state planning and state-guided models of social development. This was later to have important consequences in countries like China, India and Egypt, which tried to import some aspects of the Soviet model.

The last quarter of the twentieth century marked a period of major crisis for Communists in the Soviet Union and the Eastern bloc, where the growing shortages of housing and consumer goods, combined with the lack of individual rights to assembly and speech, began to disillusion more and more Communist party members. With the rapid collapse of Communist party rule in the Soviet Union and Eastern Europe between 1989 and 1991, the Soviet version of socialism has effectively disappeared as a worldwide political force.

South East Asian socialism

The Khmer Rouge was the ruling political party of Cambodia—which it renamed the Democratic Kampuchea—from 1975 to 1979.

The Khmer Rouge is remembered mainly for the deaths of an estimated 1.5 million people or 1/5 of the country's total population (estimates range from 850,000 to two million) under its regime, through execution, torture, starvation and forced labor. Following their leader Pol Pot, the Khmer Rouge imposed an extreme form of social engineering on Cambodian society—a radical form of agrarian communism where the whole population had to work in collective farms or forced labor projects. In terms of the number of people killed as a proportion of the population (est. 7.5 million people, as of 1975), it was one of the most lethal regimes of the 20th century.

One of their mottos, in reference to the New People, was: "To keep you is no benefit. To destroy you is no loss." The ideology of the Khmer Rouge evolved over time. In the early days, it was an orthodox communist party and looked to the Vietnamese Communists for guidance. It became more Stalinist and anti-intellectual when groups of students who had been studying in France returned to Cambodia. The students, including future party leader Pol Pot, had been heavily influenced by the example of the French Communist Party (PCF). After 1960, the Khmer Rouge developed its own unique political ideas. For example, contrary to most Marxist doctrine, the Khmer Rouge considered the farmers in the countryside to be the proletariat and the true representatives of the working class, a form of Maoism which brought them onto the PRC side of the Sino-Soviet Split.

Social Democracy in power

In 1945, the British Labour Party, led by Clement Attlee, was elected to office based upon a radical, socialist program. Socialist and Communist parties dominated the post-war French, Italian, Czehchoslovak, Belgian, Norwegian, and other, governments. In Sweden, the Social Democratic Party had held power since 1932; Labour parties governed Australia and New Zealand. In Germany, the Social Democrats lost in 1949. In Eastern Europe, the war-resistance unity, between Social Democrats and Communists, continued in the immediate postwar years, until Stalin imposed "Communist" régimes.

At first, Social Democracy held the view of having begun a serious assault against Want, Disease, Ignorance, Squalor, and Idleness, the five Giant Evils afflicting the working class, identified by the British social reformer William Beveridge; however, from the Labour Party's left wing, Aneurin Bevan, who had introduced the Labour Party’s National Health Service in 1948, criticised the Attlee Government for not progressing further, demanding that the main streams of economic activity are brought under public direction with economic planning, criticising the implementation of nationalization for not empowering the workers, in the nationalised industries, with democratic control of operations.

In Place of Fear, the most widely read socialist book of the period, Bevan begins: A young miner in a South Wales colliery, my concern was with one practical question: Where does the power lie in this particular state of Great Britain, and how can it be attained by the workers?

The Frankfurt Declaration of the re-founded Socialist International stated:

The post-war social democrat governments introduced social reform and wealth redistribution via state welfare and taxation. The new U.K. Labour Government effected the nationalizations of major public utilities such as mines, gas, coal, electricity, rail, iron, steel, and the Bank of England. To wit, France claimed to be the world's most State-controlled, capitalist country.

In the U.K., the National Health Service provided free health care to all of the British population. Working-class housing was provided in council housing estates, and university education available via a school grant system. Ellen Wilkinson, Minister for Education, introduced free milk in schools, sayining, in a 1946 Labor Party conference: Free milk will be provided in Hoxton and Shoreditch, in Eton and Harrow. What more social equality can you have than that? To wit, Clement Attlee's biographer says this contributed enormously to the defeat of childhood illnesses resulting from bad diet. Generations of poor children grew up stronger and healthier, because of this one, small, and inexpensive act of generosity, by the Attlee government.

In 1956, Anthony Crosland said that 25 per cent of British industry was nationalized, and that public employees, including those in nationalised industries, constituted a like percentage of the country's total employed population. Yet the Social Democrats did not seek ending capitalism; national outlook and dedication to the “post-war order” prevented nationalization of the industrial commanding heights, as Lenin put it. In 1945, they were denominated socialist, but, in the U.K., Social Democrats were the parliamentary majority, The government had not the smallest intention of bringing in the ‘common ownership of the means of production, distribution, and exchange’ as written in Clause 4 of the Labor Party Constitution; nevertheless, Crosland said Capitalism had ended: To the question, ‘Is this still capitalism?’, I would answer ‘No’. In 1959, the German Social Democratic Party adopted the Godesberg Program, rejecting class struggle and Marxism.

In 1980, with the rise of conservative neoliberal politicians such as Ronald Reagan, in the U.S., Margaret Thatcher, in Britain, and Brian Mulroney, in Canada, the Western, socialist welfare state was attacked from within. As Education Secretary of the Conservative Government, 1970–1974, Margaret Thatcher abolished free milk for school children; thus, monetarists and neoliberals attacked social welfare systems as impediments to private entrepreneurship at public expense.

In the 1980s and 1990s, Western European Socialists were pressured to reconcile their collectivist economic programmes with a free-market-based communal European economy. In the U.K., the Labour Party struggled much; its epitome is Neil Kinnock’s passionate and public attack against the Party's Militant Tendency at a Labour Party conference, and his repudiation of the demands of the defeated striking miners after a year-long strike against pit closures. In the 1990s, released from the Left's progressive pressure, the Labour Party, under Tony Blair, posited policies based upon the free market economy to deliver public services via private contractors.

In 1989, at Stockholm, the 18th Congress of the Socialist International adopted a Declaration of Principles, saying that Democratic socialism is an international movement for freedom, social justice, and solidarity. Its goal is to achieve a peaceful world where these basic values can be enhanced and where each individual can live a meaningful life with the full development of his or her personality and talents, and with the guarantee of human and civil rights in a democratic framework of society.

The objectives of the Party of European Socialists, the European Parliament's Socialist Bloc, are to pursue international aims in respect of the principles on which the European Union is based, namely principles of freedom, equality, solidarity, democracy, respect of Human Rights and Fundamental Freedoms, and respect for the Rule of Law. Today, the rallying cry of the French Revolution Equality, Liberty, and Fraternity now constitute essential socialist values''.

In 1995, the British Labour Party revised its political aims: The Labour Party is a democratic socialist party. It believes that, by the strength of our common endeavour we achieve more than we achieve alone, so as to create, for each of us, the means to realise our true potential, and, for all of us, a community in which power, wealth, and opportunity are in the hands of the many, not the few; famously, Cabinet minister Herbert Morrison said, Socialism is what the Labour Government does.

Socialism in the 21st century

In some Latin American countries, socialism has re-emerged in recent years, with an anti-imperialist stance, the rejection of the policies of neo-liberalism and the nationalisation or part nationalisation of oil production, land and other assets. Venezuelan President Hugo Chávez and Bolivian President Evo Morales, for instance, refer to their political programs as socialist. Chávez has coined the term "21st century socialism" (sometimes translated more literally as "Socialism of the 21st century"). After winning re-election in December 2006, President Chávez said, "Now more than ever, I am obliged to move Venezuela's path towards socialism.

In the developing world, some elected socialist parties and communist parties remain prominent, particularly in India and Nepal. The Communist Party of Nepal in particular calls for multi-party democracy, social equality, and economic prosperity. In China, the Chinese Communist Party has led a transition from the command economy of the Mao period to an economic program they term the socialist market economy or "socialism with Chinese characteristics." Under Deng Xiaoping, the leadership of China embarked upon a program of market-based reform that was more sweeping than had been Soviet leader Mikhail Gorbachev's perestroika program of the late 1980s. Deng's program, however, maintained state ownership rights over land, state or cooperative ownership of much of the heavy industrial and manufacturing sectors and state influence in the banking and financial sectors. In South Africa the ANC abandoned its partial socialist allegiances on taking power and followed a standard neo-liberal route. But from 2005 through to 2007 the country was wracked by many thousands of protests from poor communities. One of these gave rise to a mass movement of shack dwellers, Abahlali baseMjondolo that, despite major police suppression, continues to advocate for popular people's planning and against the marketization of land and housing. Communist candidate Dimitris Christofias won a crucial presidential runoff in Cyprus, defeating his conservative rival with a majority of 53%. The Left Party in Germany has also grown in popularity.

African socialism continues to be a major ideology around the continent.

Socialism as an economic system

Economically, socialism denotes an economic system of state ownership and / or worker ownership of the means of production and distribution. In the U.S.S.R., state ownership of the means of production was combined with central planning what goods and services to make and provide, how they were to be produced, the quantities, and the sale prices (cf. Economy of the Soviet Union). Soviet economic planning was an alternative to allowing the market (supply and demand) to determine prices and production. During the Great Depression, socialists considered Soviet-style planned economies the remedy to Capitalism's inherent flaws monopoly, business cycles, unemployment, unequally distributed wealth, and the economic exploitation of workers.

In the West, neoclassical liberal economists, e.g. Friedrich Hayek and Milton Friedman, said that socialist planned economies would fail, because planners could not have the business information inherent to a market economy (cf. economic calculation problem), nor would managers in Soviet-style socialist economies match the motivation of profit.

Consequent to Soviet economic stagnation in the 1970s and 1980s, socialists began to accept parts of their critique. Polish economist Oskar Lange, an early proponent of "market socialism", proposed a Central Planning Board establishing prices and controls of investment. The prices of producer goods would be determined through trial and error. The prices of consumer goods would be determined by supply and demand, with the supply coming from state-owned firms that would set their prices equal to the marginal cost, as in perfectly competitive markets. The Central Planning Board would distribute a "social dividend" to ensure reasonable income equality.

In Western Europe, particularly in the period after World War II, many socialist parties in government implemented what became known as mixed economies. These governments nationalised major and economically vital industries while permitting a free market to continue in the rest. These were most often monopolistic or infrastructural industries like mail, railways, power and other utilities. In some instances a number of small, competing and often relatively poorly financed companies in the same sector were nationalised to form one government monopoly for the purpose of competent management, of economic rescue (in the UK, British Leyland, Rolls Royce), or of competing on the world market. Typically, this was achieved through compulsory purchase of the industry (i.e. with compensation). For example in the UK the nationalization of the coal mines in 1947 created a coal board charged with running the coal industry commercially so as to be able to meet the interest payable on the bonds which the former mine owners' shares had been converted into.

These nationalized industries would frequently be combined with Keynesian economics and incomes policies in order to guide the entire economy (see indicative planning and dirigisme). Nevertheless, most economists, and many socialists, consider that these economies were (or are) capitalist economies, and the aspirations of those who believed the mixed economy would abolish boom and slump, mass unemployment, and industrial unrest, were disappointed with the onset of the first world wide recession of 1973–4, the oil crisis of this period, and the monetary instability which followed. Some far left socialists, as well as some workers in the nationalised industries, also criticised the nationalisations for not establishing workers' control of the nationalised industries, through elected representatives, and the amount of compensation paid to the previous owners.

Some socialists propose various decentralized, worker-managed economic systems. One such system is the "cooperative economy," a largely free market economy in which workers manage the firms and democratically determine remuneration levels and labor divisions. Productive resources would be legally owned by the cooperative and rented to the workers, who would enjoy usufruct rights. Another, more recent, variant is "participatory economics," wherein the economy is planned by decentralized councils of workers and consumers. Workers would be remunerated solely according to effort and sacrifice, so that those engaged in dangerous, uncomfortable, and strenuous work would receive the highest incomes and could thereby work less. Some Marxists and Anarcho-communists also propose a worker managed economy based on workers councils, however unlike participatory economics in Anarcho communism workers are remunerated according to their needs (which are largely self determined in an anarcho communist system). Recently socialists have also been working with the Technocracy movement to promote such concepts as Energy Accounting.

Socialism and social and political theory

Doctrinally, Marxist and non-Marxist social theorists agree that Socialism developed in reaction to modern industrial capitalism, but disagree on the nature of their relationship. Émile Durkheim posits that socialism is rooted in the desire to bring the State closer to the realm of individual activity, in countering the anomie of a Capitalist society. In socialism, Max Weber saw acceleration of the rationalization started in Capitalism. As critic of Socialism, he warned that placing the economy entirely in the State's bureaucratic control would result in an iron cage of future bondage.

In the middle of the twentieth century, Socialist intellectuals retained much influence in European philosophy; Eros and Civilization (1955), by Herbert Marcuse, explicitly attempts merging Marxism with Freudianism; and the social science of Structuralism much influenced the socialist New Left in the 1960s and the 1970s.

Criticisms of socialism

Criticisms of socialism range from claims that socialist economic and political models are inefficient or incompatible with civil liberties to condemnation of specific socialist states. There is much focus on the economic performance and human rights records of Communist states, although some proponents of socialism reject the categorization of such states as socialist.

In the economic calculation debate, classical liberal Friedrich Hayek argued that a socialist command economy could not adequately transmit information about prices and productive quotas due to the lack of a price mechanism, and as a result it could not make rational economic decisions. Ludwig von Mises argued that a socialist economy was not possible at all. Hayek further argued that the social control over distribution of wealth and private property advocated by socialists cannot be achieved without reduced prosperity for the general populace, and a loss of political and economic freedoms.

Hayek's views were echoed by Winston Churchill in an electoral broadcast prior to the British general election of 1945:

. . . a socialist policy is abhorrent to the British ideas of freedom. Socialism is inseparably interwoven with totalitarianism and the object worship of the state. It will prescribe for every one where they are to work, what they are to work at, where they may go and what they may say. Socialism is an attack on the right to breathe freely. No socialist system can be established without a political police. They would have to fall back on some form of Gestapo, no doubt very humanely directed in the first instance.

It has been suggested in "The Downing Street Years" that Margaret Thatcher believed that there was no fairer trial for socialism than in Britain in the mid-20th century, and it has been conclusively proved to be a failure.

See also


References and further reading

  • Guy Ankerl, Beyond Monopoly Capitalism and Monopoly Socialism, Cambridge MA: Schenkman, 1978.
  • Beckett, Francis, Clem Attlee, Politico's (2007) 978-1842751923
  • G.D.H. Cole, History of Socialist Thought, in 7 volumes, Macmillan and St. Martin's Press, 1965; Palgrave Macmillan, 2003 reprint; 7 volumes, hardcover, 3160 pages, ISBN 1-4039-0264-X.
  • Friedrich Engels, Socialism: Utopian and Scientific, Pathfinder; 2r.e. edition (December 1989) 978-0873485791
  • Friedrich Engels, The Origin of the Family, Private Property and the State, Zurich, 1884.
  • Albert Fried and Ronald Sanders, eds., Socialist Thought: A Documentary History, Garden City, NY: Doubleday Anchor, 1964. .
  • Phil Gasper, The Communist Manifesto: A Road Map to History's Most Important Political Document, Haymarket Books, paperback, 224 pages, 2005. ISBN 1-931859-25-6.
  • Élie Halévy, Histoire du Socialisme Européen. Paris, Gallimard, 1948.
  • Michael Harrington, Socialism, New York: Bantam, 1972. .
  • Jesús Huerta de Soto, Socialismo, cálculo económico y función empresarial (Socialism, Economic Calculation, and Entrepreneurship), Unión Editorial, 1992. ISBN 84-7209-420-0.
  • Makoto Itoh, Political Economy of Socialism. London: Macmillan, 1995. ISBN 0333553373.
  • Kitching, Gavin Rethinking Socialism. Meuthen. ISBN 0416358403.
  • Oskar Lange, On the Economic Theory of Socialism, Minneapolis, MN: University of Minnesota Press, 1938. .
  • Michael Lebowitz, Build It Now: Socialism for the 21st Century, Monthly Review Press, 2006. ISBN 1-58367-145-5.
  • Marx, Engels, The Communist Manifesto, Penguin Classics (2002) 978-0140447576
  • Marx, Engels, Selected works in one volume, Lawrence and Wishart (1968) 978-0853151814
  • Ludwig von Mises, Socialism: An Economic and Sociological Analysis , Liberty Fund, 1922. ISBN 0-913966-63-0.
  • Joshua Muravchik, Heaven on Earth: The Rise and Fall of Socialism, San Francisco: Encounter Books, 2002. ISBN 1-893554-45-7.
  • Michael Newman, Socialism: A Very Short Introduction, Oxford University Press, 2005. ISBN 0-19-280431-6.
  • Bertell Ollman, ed., Market Socialism: The Debate among Socialists, Routledge, 1998. ISBN 0-415-91967-3.
  • Leo Panitch, Renewing Socialism: Democracy, Strategy, and Imagination. ISBN 0-8133-9821-5.
  • Emile Perreau-Saussine, What remains of socialism ?, in Patrick Riordan (dir.), Values in Public life: aspects of common goods (Berlin, LIT Verlag, 2007), pp. 11–34
  • Richard Pipes, Property and Freedom, Vintage, 2000. ISBN 0-375-70447-7.
  • John Barkley Rosser and Marina V. Rosser, Comparative Economics in a Transforming World Economy. Cambridge, MA: MIT Press, 2004. ISBN 9780262182348.
  • Maximilien Rubel and John Crump, Non-Market Socialism in the Nineteenth and Twentieth Centuries. ISBN 0-312-00524-5.
  • David Selbourne, Against Socialist Illusion, London, 1985. ISBN 0-333-37095-3.
  • James Weinstein, Long Detour: The History and Future of the American Left, Westview Press, 2003, hardcover, 272 pages. ISBN 0-8133-4104-3.
  • Peter Wilberg, Deep Socialism: A New Manifesto of Marxist Ethics and Economics, 2003. ISBN 1-904519-02-4.
  • Edmund Wilson, To the Finland Station: A Study in the Writing and Acting of History, Garden City, NY: Doubleday, 1940. .

External links

Resources on socialism

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