Against Utopianism

A common argument heard in favor of Socialism, uttered even by those who call themselves detractors of Socialism, is that Socialism works (or should work) in theory, but does not or cannot work in practice.

The reason advanced to explain the failure is that ‘human nature’ is insufficiently benevolent or wise or moral to practice the doctrines of Socialism.

Let us analyze and define this argument before criticizing it:

First, by ‘Socialism’ is meant state control of the means of production.

The means of production, also called goods of the second order, includes all goods and services intended by their owners for making other goods, rather than for consumption.  State control requires, at the least, wage and price controls, and therefore rationing, of all goods and services of the second order.

Second, an economic system is said to ‘work’ when it produces wealth and satisfaction, and to ‘fail’ when it produces want and misery.

The wealth and satisfaction are measured by the subjective preferences of the productive consumers; giving a man who wants bread, beads or beds or brooms instead, satisfies no wants of his, and therefore he is the poorer for it; and this is true whether or not some others appoint themselves his superiors, and disdain his preferences.  It does not make a poor man rich to berate him that he ‘should’ prefer paper to gold, sand to salt, or mass transit to private cars.

Third, what is meant by ‘sound’ and ‘unsound’ is this:

When a theory could not work under any conditions, it is essentially unsound in theory; when a theory fails to work in practice due to an accident, it may still be sound. For example, if, by the very nature of rational beings, no rational being could prosper under a socialist system, the theory is essentially unsound; whereas if the Russians failed to put Socialism into practice because they were unwilling to do something they could have done, the theory is not necessarily unsound.

Fourth, ‘human nature’ is used in two senses.

The first refers to the wisdom of cynical experience, which learns from history than men tend to be selfish, short-sighted, immoral.  These are accidental qualities, for not all men share them. The second refers to the essential nature of rational beings.  Human inability to foresee the future, or to be omniscient, in contrast, are essential qualities, for they are shared, not only by all men, but by all rational beings in creation, even theoretical or imaginary beings, such as Martians or mermaids, elves or angels.

The argument, then, put more precisely is this: State seizure and rationing of the means of production, in theory, satisfies more consumer wants more efficiently than without such a seizure, and could do so in practice, were it not for (and only were it not for) the weakness and immorality accidental to human nature.  Satisfaction here is measured by the personal and subjective valuations of the consumer.

Let us proceed to criticize it.

The argument is pernicious and weak and false.

First, it is pernicious because it concedes to the enemy the moral high ground, as well as conceding (without argument) the soundness of the theoretical groundwork of the Socialist argument.

It is doubly pernicious because the only grounds on which Capitalism can and ought to be defended are theoretical grounds, the very grounds which this argument dismisses. It is triply pernicious because the argument rests on the unfounded (and self-contradictory) assumption that a proposition can be sound in theory and false in fact; a doctrine pleasing only to those neurotically adverse to logic.

The assertion that theory is divorced from (or is, indeed, essentially contradictory to) fact, undercuts all counter-argument, since the counter-argument, no matter what its content, must rest on its own theoretical underpinnings.

Imagine, if you will, an Abolitionist telling a slaveowner in the antebellum South, “While slavery, in theory, is a good, wise and useful institution, the sad fact is that mere men are not morally upright enough to practice it without abuse.”  This is hardly enough to convince a man who believes his prestigue and economic well-being depend on slaveholding to divest himself.

Second, the argument is weak because it rests on an accidental rather than essential proposition, the degree of the weakness of mankind, which the Socialist need only deny to win the argument.

The Socialist says, “It may be true that, in the past, mankind was too weak and selfish to embrace Socialism, but this new generation is so benevolent, so pure, and so brave, that our hope for victory is strong!”

Since denying the immorality and infidelity of mankind is sure to win applause from those listeners thus flattered, the detractor is put into the awkward position of asserting his own (and his audience’s) dishonesty and malice as evidence of the impracticability of the Socialist program.

And, again, the argument is weak because the assumption that theoretically sound but seemingly impractical programs ought not be attempted does not necessarily follow.  A spirit of romantic zeal moves those who fight in lost causes, or in causes so moral and upright that their partisans are happy to devote themselves to the cause for its own sake, and not for the sake of any reward or result.

And finally, the proposition is false.

The proposition is false, first, because state seizure and rationing of the means of production do not in theory create greater satisfaction of productive consumers; and, second, because it is the essential nature of rational beings and the laws of economics, not because of any accidental immorality, that that is the case.  Even robots and angels, elves or Martians, or any creatures as high-minded and selfless as can be postulated, cannot make Socialism produce satisfaction.

Since the proposition takes for granted that socialism does not work in practice, we need not prove that here.   If there are other professed goals of socialism (social justice, racial harmony, the emancipation of women, etc.) not achieved in practice but sound in theory, frustrated by the limitations of human nature, which are non-economic goals, then the causes of their frustration lie outside of the sphere of economics, and, hence, are irrelevant to the present question.

Public seizure of the means of production is an economic measure: there is no reason to suppose that the public ownership of the means of production would or would not cause a society to achieve these non-economic goals.

The advocates of socialism may or not make this argument; but it is not the argument here addressed, any more than one who argued that the seizure of the means of production, while causing widespread economic harm, was good for some other transcendental reason (such as it taught society to be humble, or created sadistic joy in the ruling class, or was the will of God, etc.)

If a man seeking to increase factory production burns it down instead, and blames the limitations of human nature for the lack of factory production once the factory is ashes, his theory identifying the cause of the falling factory output is incorrect.

If he then says additionally that burning the factory accomplished some other good, creating a cheery warmth, or permitted the toasting of marshmallows, or some such, these additional comments are irrelevant to the discussion of whether or not the limitations of human nature (rather than arson) caused the fall in factory production, and need not be addressed by one who seeks to prove the arson caused the fall in production.

For the argument presently under discussion, it need only be shown that, on theoretical grounds, a Socialist commonwealth must suffer malinvestment, unemployment, loss of wealth, and, in a word, the frustration of productive consumer satisfaction, independent of the motivations or benevolence of the men involved.

Proofs follow:

First, granting the definition of ‘works’ to be the satisfaction of the rational wants of the consumer, as measured by the consumer himself, directly implies that anything which hinders that satisfaction, such as the State seizing his goods, does not ‘work.’

There are only two modes of achieving goods and services owned by others (1) trade and (2) expropriation.  The first mode exists when and only when a mutually satisfactory outcome is anticipated by all parties involved in the trade.  Each partner gives something he desires less in expectation of recieving in return something he desires more.  If no fraud or unexpected accident is involved, boths parties gain, neither suffers loss.

Expropriation requires a victim and a victor.  The victor gains, less the cost of bringing the force to bear; the victim  loses.  Both suffer loss; the victims loss is much greater. (The victor still may have net gain if the gains from the expropriation outweigh the costs and risks of bringing the threat of force to bear on the victim, and overcoming whatever resistance the victim might evince.)

While this satisfy the wants of the victor, it magnifies the wants of the victim.  The victor is liable to be the victim during the next round of expropriations: each victim minimizes productivity in so far as possible for him to enjoy gain without fear of expropriation.  Because each victor fears being a victim in the next round of expropriations, he has incentive to consume immediately whatever gains are his, not to invest, and not to produce.

The loss of production is the loss of the ability to satisfy wants.  Since an economic system is said to ‘work’ only when it satisfies wants, expropriations of goods and services does not ‘work.’

State seizure of goods and services are a specific case of expropriation (i.e. one sanctioned by law) and, a fortiori, what is true of the general case is true of the specific.

Calculations of the Utilitarian sort, holding some wants to be of greater significance or value than others are subjective, arbitrary, irrelevant.

Second, state seizure requires rationing. Rationing destroys all price structure (because prices are the ratios of trades, and, in a socialist system, there are no trades, only seizures and distributions.)  With price structure, production is prioritized by fiat, which has no necessary relation to the satisfaction of consumer wants.

In contrast, prices, as measures of trades between free people, therefore measure the degrees of want of consumers, and production is ordered accordingly.  In a socialist system, production either is arbitrary, in which case wants are poorly satisfied, or, by impossible coincidence, it just so happens to match the same outcome which would have been produced by a free market price, in which case is it is a costly and unnecessary exercise.

It follows directly from our definition that only a free market price system will ‘work’ because this system is the ratio and measurement of human satisfactions.

The balance of the Socialist argument can be dismissed readily.

The theoretical underpinnings of Socialism require, among other things, that actors in the marketplace operate without the knowledge of supply and demand which the pricing system gives to them.  It requires that they set prices without a pricing system, and even makes the claim that these prices will be better set without the pricing system.

It requires that a central manager, who knows less than the specific buyers and sellers about their specific needs, buy and sell for them, and yet claims their needs will be better met thereby.

Hence, Socialism claims, in effect, that those who produce more shall be punished, which must result in their lines of production being cut; and those who mal-invest shall be rewarded, which must result either in their savings being increased or their malinvestments increasing (depending on whether or not they reinvest.)

Please note that none of these considerations make mention of the greedy and bestial nature of man.  This is because no such note need be taken.  Like the propositions of geometry, the propositions of economics do not rely on a knowledge of the specific individuals involved for their persuasive force.

It does not matter whether a greedy, miserly, hatred-filled baker raises his price because of the joy he feels when he sees beggars starve, or whether a kindly, saintly, benevolent baker raises his price in order to give his miserable employees and poor millers an increase in wages. In both cases the raise in the price of bread will not be supported unless the market will bear it; otherwise both will lose business.

Likewise the saintly baker might lower his prices to feed the poor; the malicious baker might lower his prices in order to starve the farmer and the miller. However, the miller and the farmer will sell their grain and grinding-services at the price the market will bear, and will not patronize the baker who pays them too little, no matter what the reason for this penury.

It is their rational nature which impels the bakers to raise or lower their prices, based on the law of supply and demand; if they defy it, they go out of business. Their personal feelings never enter into the matter at all.

Hence the argument that if the personal sentiments of the capitalist and factory owner were finer and more benevolent, Socialism would work, is the same as to say the law of supply and demand will somehow magically be suspended, when, in fact, those sentiments, fine or coarse, angelic or bestial, are irrelevant.

Imagine a society of creatures as benevolent and selfless as angels.  Imagine whatever else you like about them.  Put them in a society run by rationing, that is, run without any price structure.  Productivity is not rewarded by any profit.  Unproductivity is not penalized by any loss of income.

Indeed, were it possible to ration the goods and services by any plan at all (and it is not) the productive enterprises would be penalized by shouldering additional burdens (from each according to his ability) and the unproductive would be rewarded (to each according to his needs.)

Hence, people would be removed from enterprises where they are most able to satisfy consumer wants, and placed in those where they are less able, or not able.  Each round of expropriations diminishes production.  There is no necessary reason for the process to be arrested at any point before the entire breakdown of specialization-of-labor society, or even then.  All production stops.

Even the most benevolent angel is now in a position where he can do nothing to satisfy the wants of his fellows.

No matter how enlightened or selfless any future generations of man or superman might be, socialism, being illogical, remains impossible always.

On a personal note, this writer finds the argument alleging fallen mankind to be insufficient to the delirious theory of a manmade utopia  to be a gross insult to all free men, defining their freedom as a hindrance to the alleged happiness promised by slavery. Such expressions are not a logical argument, but is mere petulance.

It is the whine of a daydreamer rudely wakened to find reality is not optional after all; who them indulges in blaming his intended victims for not being ready, willing, and able to enact his impossible figments.