So, what’s socialism, Bernie? Part 1

 

New voters are flocking to old-school anti-capitalists. But do they really know what they’re being asked to imbibe? And what the windbags demand they oppose? (And why does socialism appeal to so many?)

Explaining it to an Argentine audience in 1959, Ludwig Von Mises explained that the right way to understand capitalism versus socialism is to think about it as freedom versus slavery.

[Read also 'Socialism and the Battle of Ideas' from his book Socialism: An Economic and Sociological Analysis]

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… What does this system of economic freedom mean? The answer is simple: it is the market economy; it is the system in which the cooperation of individuals in the social division of labor is achieved by the market. This market is not a place; it is a process, it is the way in which, by selling and buying, by producing and consuming, the individuals contribute to the total workings of society.

In dealing with this system of economic organisation — the market economy — we employ the term “economic freedom.” Very often, people misunderstand what it means, believing that economic freedom is something quite apart from other freedoms, and that these other freedoms — which they hold to be more important — can be preserved even in the absence of economic freedom. The meaning of economic freedom is this: that the individual is in a position to choose the way in which he wants to integrate himself into the totality of society. The individual is able to choose his career; he is free to do what he wants to do.

This is of course not meant in any sense which so many people attach to the word freedom today; it is meant rather in the sense that, through economic freedom, man is freed from natural conditions. In nature, there is nothing that can be termed freedom; there is only the regularity of the laws of nature, which man must obey if he wants to attain something.

In using the term freedom as applied to human beings, we think only of freedom within society. Yet, today, social freedoms are considered by many people to be independent of one another. Those who call themselves “liberals” today are asking for policies which are precisely the opposite of those policies which the liberals of the 19th century advocated in their liberal programs. The so-called liberals of today have the very popular idea that freedom of speech, of thought of the press, freedom of religion, freedom from imprisonment without trial — that all these freedoms can be preserved in the absence of what is called economic freedom. They do not realise that, in a system where there is no market, where the government directs everything, all those other freedoms are illusory, even if they are made into laws and written up in constitutions.

If the government owns the internet, it will control what is accessed and what is hosted. If it mandates religion, it mandates morality. If it requires rationing and “redistribution” it must enforce it – by violence when necessary.

In a fully socialist society, where there is no market there are not even real career choices!

In a market economy, the individual has the freedom to choose whatever career he wishes to pursue, to choose his own way of integrating himself into society. But in a socialist system, that is not so: his career is decided by decree of the government. The government can order people whom it dislikes, whom it does not want to live in certain regions, to move into other regions and to other places. And the government is always in a position to justify and to explain such procedure by declaring that the governmental plan requires the presence of this eminent citizen 5,000 miles away from the place in which he could be disagreeable to those in power.

So what does freedom actually mean? It is not some illusory “freedom from reality” – the “freedom” to have your plate filled by others and have your every fantasy fulfilled. If it means anything at all it means to be free to pursue the means by which to fill your own plate – wiith the voluntary cooperation of others by all means, but free from their physical coercion.

Freedom in society means that a man depends as much upon other people as other people depend upon him. Society under the market economy, under the conditions of “economía libre,” means a state of affairs in which everybody serves his fellow citizens and is served by them in return. People believe that there are in the market economy bosses who are independent of the good will and support of other people. They believe that the captains of industry, the businessmen, the entrepreneurs are the real bosses in the economic system. But this is an illusion. The real bosses in the economic system are the consumers. And if the consumers stop patronising a branch of business, these businessmen are either forced to abandon their eminent position in the economic system or to adjust their actions to the wishes and to the orders of the consumers.

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In all economic problems, we must bear in mind the words of the great French economist Frédéric Bastiat, who titled one of his brilliant essays: “Ce qu’on voit et ce qu’on ne voit pas” (“That which is seen and that which is not seen”). In order to comprehend the operation of an economic system, we must deal not only with the things that can be seen, but we also have to give our attention to the things which cannot be perceived directly. For instance, an order issued by a boss to an office boy can be heard by everybody who is present in the room. What cannot be heard are the orders given to the boss by his customers.

The fact is that, under the capitalistic system, the ultimate bosses are the consumers. The sovereign is not the state, it is the people. And the proof that they are the sovereign is borne out by the fact that they have the right to be foolish. This is the privilege of the sovereign. He has the right to make mistakes, no one can prevent him from making them, but of course he has to pay for his mistakes. If we say the consumer is supreme or that the consumer is sovereign, we do not say that the consumer is free from faults, that the consumer is a man who always knows what would be best for him. The consumers very often buy things or consume things they ought not to buy or ought not to consume.

But the notion that a capitalist form of government can prevent people from hurting themselves by controlling their consumption is false. The idea of government as a paternal authority, as a guardian for everybody, is the idea of those who favour socialism.

In this form it is an idea that has grown since Mises’s time; from paternalism then to maternalism now; “wrap-around” nanny-state pampering virtually from cradle to graveyard.

Granted, that it is good to keep people from hurting themselves by drinking or smoking too much. But once you have admitted this, other people will say: Is the body everything? Is not the mind of man much more important? Is not the mind of man the real human endowment, the real human quality? If you give the government the right to determine the consumption of the human body, to determine whether one should smoke or not smoke, drink or not drink, there is no good reply you can give to people who say: “More important than the body is the mind and the soul, and man hurts himself much more by reading bad books, by listening to bad music and looking at bad movies. Therefore it is the duty of the government to prevent people from committing these faults.”

And, as you know, for many hundreds of years governments and authorities believed that this really was their duty. Nor did this happen in far distant ages only; not long ago, there was a government in Germany that considered it a governmental duty to distinguish between good and bad paintings — which of course meant good and bad from the point of view of a man who, in his youth, had failed the entrance examination at the Academy of Art in Vienna; good and bad from the point of view of a picture-postcard painter, Adolf Hitler. And it became illegal for people to utter other views about art and paintings than his, the Supreme Führer’s.

Once you begin to admit that it is the duty of the government to control your consumption of alcohol, what can you reply to those who say the control of books and ideas is much more important?

Freedom really means the freedom to make mistakes. This we have to realise. …

This is the difference between slavery and freedom. The slave must do what his superior orders him to do, but the free citizen — and this is what freedom means — is in a position to choose his own way of life. Certainly this capitalistic system can be abused, and is abused, by some people. It is certainly possible to do things which ought not to be done. But if these things are approved by a majority of the people, a disapproving person always has a way to attempt to change the minds of his fellow citizens. He can try to persuade them, to convince them, but he may not try to force them by the use of power, of governmental police power. . . .

(To be continued)

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