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About Socialism and Socialists

Mises Daily: Friday, December 31, 2010 by

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"Since the individual does not wish to be "elevated," and lays claim to something called rights, the socialist undertakes to prove that the individual does not exist…"

[This article is excerpted from chapter 8 of Out of Step (1962). An MP3 audio file of this article, read by Ted Whelan, is available for download.]

I was a shaver of 10 or 12 when, on doing errands for my father, I ran into Grand Street. That was, and is, a thoroughfare in downtown New York, but in those days it was an institution, made so by a number of establishments along the street called "coffee saloons." These, I presume, served other foods, but when I patronized them in the afternoons they purveyed only mugs of coffee and hunks of cake. The customers, or habitués, seemed to be less interested in eating and drinking than in arguing the metaphysical notions of Karl Marx or Kropotkin.

Each of these establishments acquired a character of its own, deriving from the particular ideology advocated by its clientele, or from an interpretation of that ideology enunciated by some self-appointed pundit who had got a following. There was at least one "saloon" which only the true believers frequented, their principal pastime, aside from discussing moot questions in Marxist "science," being to castigate the revisionists, who held forth in another "saloon."

The latter, who called themselves social democrats, spent most of their time proving to one another the correctness of the reforms they had concocted; incidentally, they must have been right, for most of the reforms were later taken over by the Democrats and then by the Republicans. But, on the whole, these socialists were evolutionary, rather than revolutionary; they dreamed of the day when capitalism shall have decayed, from its internal deficiencies, when a mere push from the proletariat will topple it. They were willing to let the immutable forces of history do the job, and contented themselves with talking; there was little inclination to help the forces of history along. That was long before Lenin came along with his doctrine of dynamism.

There are very few of the Grand Street type of socialists around these days, either in this country or in Europe, except, perhaps, in the Kremlin. Gone are the doctrinaires, the "scientific" socialists, with whom I delighted to argue on the campus of Columbia College, or whom I heckled on the soapbox in Union Square, New York. They have disappeared not only because the measures they advocated have largely been accepted and have been institutionalized, but more so because their theoretical position has been undermined by experience.

There are therefore few to say a good word for the laboriously manufactured labor theory of value, or to give even lip service to the Marxist many-worded theory of surplus value, which was the keystone of his theory of exploitation, which in turn was the basis for his indictment of capitalism. The Russian "experiment" has shown that the state can be built on the bones of the proletariat, as well as on the bones of capitalists, and his "withering away of the state" theory has gone the way of all his notions. There is nobody to argue with, and all the hours I put into Das Kapital, for the purposes of dialectic, now seem to have been wasted. Too bad, for I did have a good time with these socialists.

But that is the way of empirical knowledge: it makes a mess of theories confidently advanced by long-winded economists and ivory-tower social scientists. Capitalism, without benefit of a theory, and operating solely on the mundane profit motive, has disproven Marx on every point. To be sure, the economists of the Austrian School had done in the labor theory of value — that the value of a thing is determined by the amount of labor put into producing it — by showing that value is entirely subjective and has no relation whatever to labor. But capitalists did it in their own way; when people wanted a thing and were willing to pay for it, the capitalists made it, and when there was no demand for a thing it simply was not made. That is to say, the consumer puts a value on what he wants.

The surplus-value theory had it that capitalists paid labor subsistence wages and retained as profits all that labor produced above this subsistence level; but capitalism proved that wages come out of production, and that the more capital is used in production the greater the output of labor and therefore the greater its rewards. Capitalism has raised wages, not lowered them, as Marx predicted. So much so, that the worker with a washing machine and an automobile has lost every vestige of "working class consciousness." He even plays golf.

"The fact of the matter is that the condition of the workers has so improved under a free economy that they do not relish any change, and the theoretical socialists, anxious for votes, have had to change their theory to suit their following."

It took capitalism almost a hundred years to demolish "scientific" socialism by the pragmatic method, but it did so thorough a job of it that Das Kapital has been laid to rest without a requiem. Even the nationalization of industry, once given the top priority of all socialistic programs, has lost its appeal.

In England, the labor unions, which furnish the bulk of the finances for the Labour Party, have given up on nationalization for two reasons: first, in a strike against a privately owned industry the government can be called in as a mediator, and the government can always, for political reasons, be counted on to favor the strikers, while a strike against a nationalized industry is in fact a strike against the government, or a revolution, with questionable results; secondly, the inefficiency of a bureaucratically controlled industry is too evident to warrant even discussion.

The German socialists, heretofore the most valiant of Marxist protagonists, have declared that nationalization is to be resorted to only if it advances "socialistic ends"; otherwise, industry can be left in private hands. The fact of the matter is that the condition of the workers has so improved under a free economy that they do not relish any change, and the theoretical socialists, anxious for votes, have had to change their theory to suit their following.

So, what is socialism without Marx? I put that question to an official of the French Socialistic Party and received this answer:

Marx could not have anticipated the great technological advances of the past century and, therefore, while his theories were correct in his day they do not apply to present conditions. Nevertheless, Marx did much for the working-class movement in his time and he still gives our movement direction and inspiration.

That is to say, there is no theoretical position for socialists, no postulates to guide them, and they must "play it by ear." As a matter of necessity they are reduced to expediencies and have therefore become mere politicians, not revolutionists. In every country the socialists have become office seekers, aiming to get hold of the reins of government by parliamentary methods, and for no other purpose than to enjoy the prerogatives and perquisites of office. Power for the sake of power is their current aim.

Well, how does one acquire power in a country ruled by popular suffrage? By promising the electorate all their hearts desire and by being more profligate with promises than the opposition. Thus, socialism has become mere welfarism, and with welfarism comes control of the national economy. But, while Marxism aimed to control the economy for the purpose of destroying capitalism, modern socialism seems bent on controlling the economy for the sake of control; even advocating something called a "mixed" economy, partly free and partly controlled.

In short, socialists everywhere have adopted the program of American "liberals." In Europe, those of the socialistic persuasion still maintain their allegiance to the name, since there the word "liberal" still retains its original meaning, as defining one who would remove laws, not proliferate them, while the socialistically minded in this country have perverted the word into its opposite meaning. But the European socialist and the American "liberal" are both energumens for government intervention in the affairs of men; both have an overpowering desire for power; and both offer to buy votes with tax money. The programs and the tactics of the two are identical. And neither has any theoretical position, any philosophy of either government or economics, by which they can be judged. Both are opportunistic.

Returning to Grand Street; at that age I could not follow the reasoning — if it can be called reasoning — of the various pundits who held forth in these "saloons," but I did acquire a dislike for socialists that has hung onto me ever since. A child is guided by his instincts, which are packaged in its little brain when he comes into this world. Just as his bundle of muscles may be developed along certain lines, or his senses sharpened by practice, so may his instincts (or temperament, if you wish) be refined or trained by education; but, trained or untrained, the original stock manifests itself in his reaction to his environment, and this reaction remains constant. That is why there are, in degree of devotion or adherence to doctrine, all kinds of Catholics or Jews, and all sorts of Democrats or Republicans. That is what we mean when we say that the boy is a "born" mathematician or a "born" politician. His instinct inclines him toward a given body of thought, and no amount of argument or education can wean him away from it. He will drift toward that body of thought no matter what influences are brought to bear upon him simply because of an intuitive, built-in inclination toward it.

Socialists are born, not made. (And so are individualists.) In a way, the basic urge toward socialism is in all of us, since every one of us is inclined to impose our set of values on others; we seek to "improve" the other fellow up to our own particular standards. But most of us will try to "elevate" the other fellow and, meeting resistance, will give it up as a hopeless job. The socialist, however, has an intuitive urgency for power, power over other people, and proceeds to bolster this urgency with an ethic: he seeks power for a humanitarian purpose. He would "elevate" all mankind to his ideal. Since the individual does not wish to be "elevated," and lays claim to something called rights, the socialist undertakes to prove that the individual does not exist, that an amorphous thing called "society" is the only fact of reality, and proceeds to impose his set of values on this thing. Having made this discovery — that society is something greater than the sum of its parts, with an intelligence and a spirit of its own — the socialist dons his shining armor and sets forth on a glorious adventure for its improvement. He works for the "social good" — which is what he wanted to do since first he became aware of his instinct.

"Since our educational system is largely dominated by government, and is therefore monopolistically controlled, it attracts those who favor that kind of control; that is, it has a lure for the socialistically minded."

I have never met a dedicated socialist who did not consider himself a leader — if not at the top of the revolution, then at least as commissar of toothpicks in the ninth ward. He is not a replaceable part of the thing called society but was destined, at birth, to be a regulator of this thing. This desire for power is quite common, even among nonsocialists, but while others seem willing to win their spurs according to the rules of the market place, the socialist claims the scepter because he has a mission. He is of the anointed.

In this respect, the socialist is no different from the millions of bureaucrats who now infest the social order; the bureaucrat is, like the socialist, a ruler by natural selection.

Environment or education have little to do with the making of a socialist. He may come from a wealthy home, where all his training should incline him toward capitalism, or he may come from the slums. In point of fact, many of the leaders among the socialists, those who do most to advance the cause, are inheritors of great fortunes accumulated under capitalism. It is sometimes claimed that their urgency to destroy the system stems from a sense of guilt; they feel, according to this theory, that they are not entitled to the riches they have inherited, that the riches stemmed from an iniquitous system, and are impelled by this sense of guilt to dedicate themselves to the destruction of the system. I do not hold with this theory, and I point to the fact that only a few of these scions of great wealth become socialists, while the great majority put their money to productive enterprise or consume it in luxurious living. These few were born with an innate compulsion to socialism. There is no other way to account for their idiosyncrasy.

Education merely supplies the words and ideas that fit in with the primordial inclination of the socialist. He will accept at face value all the theories, all the figures and charts supporting his preconceived notions, and will reject offhand any arguments or data that support the idea of individual freedom. You cannot teach anybody anything that he does not in a real sense already know. A class of freshmen can be subjected to all the litanies of the socialistic creed; the majority will take in what they are taught for the purpose of getting a passing grade, but a minority will thrill to the instruction, while a still smaller minority will in their hearts reject it. Those who respond favorably to the instruction came intuitively prepared to do so, while those who find it repulsive were likewise instinctively opposed to it.

On the other hand, give a course in classical economics, or teach a group the meaning of natural rights, and some, though they have absorbed all the words of freedom, will come away entirely unconvinced. Some emotional blocking prevents the ideas from taking root. And this is also true of all the collectivistic professors; they read all the books which the individualist holds most dear, but the reading leaves them cold to the ideas; they are collectivist because nature inclined them toward collectivism.

It is true that by far the majority of our educators are socialists. But this follows not from the fact that they were educated in the creed, but that most of those who go into the pedagogical business are by nature inclined toward it. Teaching is by general acclaim a noble profession, getting that reputation from the fact that its practitioners generously and without expectation of monetary rewards undertake to inculcate values in the young. But it is also a profession that is removed from the disciplines of the market place and as such appeals to those who find these disciplines distasteful; they have no liking for the higgling and haggling of the market place, no inclination to enter the competitive field. Since our educational system is largely dominated by government, and is therefore monopolistically controlled, it attracts those who favor that kind of control; that is, it has a lure for the socialistically minded.

"Taking a gift does not, however, entail acceptance of the donor's philosophy. Welfarism does not commit the welfaree to any ideology."

Our current crop of college professors was attracted to the profession during the New Deal. Then it was that President Roosevelt welcomed into the bureaucracy a host of professors bent on trying out, at the taxpayers' expense, some ideas on "social betterment" that they had whittled out of words, and the opportunity thus offered to "do something about it" attracted a number of young men and women (because they were inherently socialists) to teaching; it seemed the right way to get into the bureaucracy, where one could help fix up the world. That is really where they belong, in the bureaucracy, for that is where one gets clean away from the market place.

However, vast as is the bureaucracy there is not room in it for all the professors, and many do not have even the solace of temporary employment on government projects; most must remain on campuses for the rest of their lives, and they make the best of it by imposing on their students the values acquired during their own student days. They are still New Dealers; in fact, they inherited the instinct.

One more bit of evidence to support my thesis that socialism is intuitive, not acquired, is my experience with ex-socialists and ex-communists. I have known a number of them and, with one exception, though they had dropped theoretical socialism they were all for government intervention; even that one exception was for our undertaking a "preventive war" with Russia. All of them were intellectually honest men and rejected Marx on the basis of evidence and the dictates of logic; all of them were revolted by the immoralities of Sovietism. Yet they could not accept wholeheartedly the principals of laissez-faire economics, nor could they subscribe to the idea of negative government. They held to the notion that government ought to intervene in the market place, for the "social good," that political power could be exercised for the benefit of mankind. They were socialists in spite of themselves. They gave the impression that if only they were in command, socialism would work out all right. Other doxies were heterodox, but theirs was orthodox.

Since socialism is so well institutionalized, since it is the going order, introduced through democratic methods, it might be claimed that almost all, or at least the majority of the people, are socialists. That is not so. The average person is not the least bit interested in any ideology, being content to get along as best he can under any conditions imposed on him. To be sure, almost everybody is enticed by the prospect of something for nothing, and since that is what our socialists — calling themselves "liberals" — offer, almost everybody is willing to go along with their programs.

Taking a gift does not, however, entail acceptance of the donor's philosophy. The proletarian and the plutocrat will both accept a handout without regard to consequences, thinking only of immediate enjoyment and disregarding the motives of the donor; welfarism does not commit the welfaree to any ideology.

In point of fact, it is the human capacity for adjustment that the socialist counts on to advance his cause. He lures the unsuspecting public by his offer of something for nothing and when they become inured to its acceptance, so that they consider it a "right," he proceeds to burden them with additional gifts, the acceptance of which becomes easier with each new donation. His motive is to institute a regime of statism, in which a bureaucracy regulates the market, plans the economy, and regiments the people. But he gets there by degrees, basing his program on the capacity for adjustment, rather than on the conscious acceptance of his ideal.

That is how our "social-security" scheme has developed; starting in 1935 with old age "insurance" for a limited number of persons, it has widened its coverage, increased the emoluments, compelled others to come under its aegis, and, of course, increased taxes; it will shortly include medical services for oldsters, from which will come socialized medicine for all.

"A people can vote themselves into slavery, though they cannot vote themselves out of it."

I have seen welfarism introduced as a temporary measure, intended for relief of the masses during the Depression, and have watched it grow into a permanent policy of the nation, so much so that even to question it is to draw down on oneself the opprobrious name of reactionary. In 25 years it has come to pass that one out of every six Americans is the recipient of government handouts of some kind, and the number is growing. To be sure, the very beneficiaries of the system pay for what they are getting, in taxes and in inflation, and they pay in addition the cost of administrating the collection and distribution of the largess.

Of course, it has all been done by the democratic process, by voting into office men of a socialistic bent, and, democracy being what it is, the process of socializing the country cannot be stopped. A people can vote themselves into slavery, though they cannot vote themselves out of it.