From Socialism to Socialism: The Emergence of Liberal Socialism in Continental Europe

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A defining feature of the twentieth century was the struggle between capitalism and socialism. The fight against capitalism was waged by three major types of socialist doctrine: fascism, national-socialism, and communism. All three types of socialism shared the major premise that their respective visions of a "just" society should replace the spontaneous order of capitalism. This premise provided fascists, national-socialists and communists with political justification to replace the rule of law and individual liberties with the rule of men. Hence, all three types of socialism were equally unconstrained by law, customs, and morality. Communism was openly hostile to the right of ownership, whereas fascism and national-socialism settled for controlling and directing the use of resources nominally owned by individual citizens.

Two important lessons of all socialist experiments to date are: (1) socialism has repeatedly failed to duplicate the accomplishments of capitalism. Stalin's purges, Hitler's racism, Mussolini's corporate statism, self-management in Tito's Yugoslavia, the Red Guard in Mao's China, the Red Army's rape of Hungary and Czechoslovakia, Che's blood-letting in South America, Ho's terror in post-war Vietnam, and Castro's impoverishment of Cuba, were all high cost undertakings. The argument was that those costs were necessary in order to prove that the economic performance of socialism could be superior to capitalism. And all those costly attempts to denigrate capitalism failed to accomplish their objective. (2) Socialism refuses to die. Every time one type of socialism fails, there is no shortage of ideologues riding into the town to revive it or impose a new one.

In the twenty-first century, a new type of socialism is raising its ugly head in continental Europe. Western Europe is in the process of transitioning from social democracy to socialism. Socialist and pro-collectivist parties in Central and Eastern Europe are recovering after the collapse of communism. What in the early nineties was supposed to be the transition from socialism to capitalism is, at the dawn of the twenty-first century, slowly turning into the transition from socialism to socialism. The European Union is helping the transition to socialism via numerous regulations supportive of "fair trade," wealth redistribution, environmentalism, global warnings, multiculturalism and all other movements that require the expansion of government controls.

The purpose of this paper is to show why and how the emerging socialism in continental Europe--as I call it liberal socialism--is, like its predecessors, incapable of duplicating the accomplishments of capitalism. The paper has three sections. The first section identifies some basic characteristics of liberal socialism. The second section discusses the reappearance of socialism in Central and Eastern Europe. The last section explains the role of the European Union in promoting the transition from social democracy to liberal socialism.

As a footnote, let me say that liberal socialism might spread beyond the confines of continental Europe. Obama's policies in his first year are undermining the key institutions of American capitalism: the freedom of exchange and private property rights. Specifically, Obama has been arguing that the current crisis has proved that American capitalism does not work; and that, therefore, federalized education, socialized medicine and government-controlled energy policy are a must for economic recovery and future economic growth. Those proposals, supportive of huge transfers of resources from private to public sectors of the economy, are misleading and wrong. They are misleading because Obama has yet to name the economic system that has done better than American capitalism over a long-pull. Obama's proposals are wrong because American capitalism has created the economic machine never seen in human history without socialized medicine, federalized education and government-controlled energy policy. …