from The Worldview Literacy Book   copyright 2009            back to worldview theme(s) #49

     Socialism can refer to 1) various economic and/or political theories, ideologies, and political movements, or 2) economic systems characterized by state ownership of the means of production and distribution.  In popular conceptions it refers to systems in which people work for the common good and cooperate rather than compete.  A socialist perspective sees labor as the source of wealth, and exploitation of workers and what they create as the chief cause of injustice and poverty.

     We have considered what some would call a decentralized form of market socialism in our previous discussion for "The Co-operative, Decentralized Society Advocate" (theme #48). China provides an example of a centralized form of market socialism; the old Soviet Union provided an example of centralized (non-market) socialism.  Some despise socialism. Americans invested in "Economic Individualism" (theme #19) and proudly identifying (theme #37A) with "the free enterprise system that has made America great," see it as the enemy. Libertarians (theme #50A) put it down by associating it with welfare and those, not wanting to work and productively contribute, seeking a free lunch.   Still, even the most ardently anti-socialist Americans generally accept without thinking  one socialist element in their economy: the postal service. 

     Others go far beyond merely tolerating socialist fixes— they long for real socialism.  American writer Jack London was one.  In his 1906 book The Iron Heel, he imagined a socialist brotherhood of man.  He did so after indicting society, charging "the capitalist class has...criminally and selfishly mismanaged."  He recognized the engines of capitalism held great potential and used this in characterizing socialism: "Let us not destroy those wonderful machines...Let us control them.  Let us profit by their efficiency and cheapness.  Let us run them for ourselves.  That, gentlemen, is socialism..."

#49A:  By the 1950s, Western economic thinkers were still reeling from 1) the mother of business cycle busts (the Great Depression), 2) ongoing labor vs. management battles that had seemingly been predicted by Marxist analysis of flaws in capitalism (Figure #49a), and 3) Soviet successes—in defeating the Nazis, technological feats (nuclear weapons, missiles, in space), etc.  Wishing to overcome both perceived  economic structural problems, and address social inequality,  to some extent postwar Western governments turned to central planning,  government ownership, and leveling mechanisms. This was accomplished by nationalization of key industries— notably in France and Britain, where mines, gas, coal, electricity, rail, steel, and banking were nationalized.  Social reform measures and wealth redistribution, through progressive taxation policies, were also enacted.  By 1956 in Britain, some 25% of industry had been nationalized, a public housing boom was on, and the National Health Service had been established, bringing free publicly funded healthcare.

     While building the social welfare state didn't progress as far or fast in the United States, its 1960s Great Society programs brought welfare assistance, food stamps, Medicare & Medicaid, increased federal aid to education, national broadcasting and rail systems, and regulations for consumer protection, environmental conserva- tion, etc.  Generally speaking, one can gauge the extent to which socialism advances and laissez faire capitalism recedes in Western societies by examining certain indicators of government involvement in a market economy.    

#49B: To Marx, socialism meant "From each according to his ability, to each according to his need."  Many in the West were scared by the Stalinist takeover that turned the Soviet experiment with centralized socialism into a totalitarian nightmare, and the Soviet/Cuba liaison (Figure #49b).  Still, one recognizes socialism can come in much smaller doses.  The collapse of centralized socialism in the Soviet Union in 1990 was seen by many as validation of the belief that free markets can efficiently create and distribute wealth, and central planning can't.  Others note the seemingly miraculous transformation of the Chinese economy in the last two decades suggests that a central planning and market combined system can also do this (Figure #49c).

     Critics charge both American and Chinese economies create inequality and dangerous gaps between rich and poor.  In the USA, by mid 2009, market corrections had made housing more affordable.  Soaring health care costs could bring socialist fixes. Continued Chinese growth, and profit-driven globalization may have unacceptable environmental consequences, many  fear.  Looking far ahead, some see the desired economy of the future as a blend of market socialism, environmental economics (theme #40), and  ethical globalization (theme #51).

Figure #49a

The Socialist International is a worldwide organization of social democratic, socialist and labor parties.  It brings together 159 political parties / organizations from all continents.  While its origins go back nearly to the beginning of the labor movement, it has existed in its present form since 1951, when it was re-established at the Frankfurt Congress.  From that meeting's Frankfurt Declaration:

"From the nineteenth century onwards, capitalism has developed immense productive forces.  It has done so at the cost of excluding the great majority of citizens from influence over production.  It put the rights of ownership before the rights of man.  It created a new class of wage-earners without property or social rights.  It sharpened the struggle between the classes.  Although the world contains resources which could be made to provide a decent life for everyone, capitalism has been incapable of satisfying the elementary needs of the world’s population. It proved unable to function without devastating crises and mass unemployment.  It produced social insecurity and glaring contrasts between rich and poor.  It resorted to imperialist expansion and colonial exploitation, thus making conflicts between nations and races more bitter."

Figure #49b

Figure #49c

China's Market Socialism

By 1991, China's central planners  knew their economy needed help. The  “socialist market economy” was instigated: "even if State property remains the main base of the national economy, all forms of property – State, collective and private – will have to be used in developing the economy...it is necessary to keep to the principle of combined development of multiple economic sectors in which public property maintains the dominant role; it is necessary to further transform managerial techniques in the state owned enterprises and set up a modern entrepreneurial system" (from 1993 CCP document)