Why Socialism Is "Impossible"
Ebeling, Richard M., Freeman
In the nineteenth century, critics of socialism generally made two arguments against the establishment of a collectivist society. First, they warned that under a regime of comprehensive socialism the ordinary citizen would be confronted with the worst of all imaginable tyrannies. In a world in which all the means of production were concentrated in the hands of the government, the individual would be totally and inescapably dependent on the political authority for his very existence.
The socialist state would be the single monopoly provider of employment and all the essentials of life. Dissent from or disobedience to such an all-powerful state could mean material destitution for the critic or opponent of those in political authority. Furthermore, that same centralized control would mean the end to all independent intellectual and cultural pursuits. What would be printed and published, what forms of art and scientific research permitted would be completely at the discretion of those with the power to determine the allocation of society's resources. Man's mind and material well-being would be enslaved to the control and caprice of the central planners of the socialist state.1
Second, these nineteenth-century antisocialists argued that the socialization of the means of production would undermine and fundamentally weaken the close connection between work and reward that necessarily exists under a system of private property. What incentive does a man have to clear the field, plant the seed, and tend the ground until harvest time if he knows or fears that the product to which he devotes his mental and physical labor may be stolen from him at any time?2 Similarly, under socialism man would no longer see any direct benefit from greater effort, since what would be apportioned to him as his "fair share" by the state would not be related to his exertion, unlike the rewards in a market economy. Laziness and lack of interest would envelop the "new man" in the socialist society to come. Productivity, innovation, and creativity would be dramatically reduced in the future collectivist Utopia.3
The twentieth-century experiences with socialism, beginning with the communist revolution in Russia in 1917, proved these critics right. Personal freedom and virtually all traditional civil liberties were crushed under the centralized power of the Total State. Furthermore, the work ethic of man under socialism was captured in a phrase that became notoriously common throughout the Soviet Union: "They pretend to pay us, and we pretend to work."
The defenders of socialism responded by arguing that Lenin's and Stalin's Russia, Hitler's National Socialist Germany, and Mao's China were not "true" socialism. A true socialist society would mean more freedom not less, so it was unfair to judge socialism by these supposedly twisted experiments in creating a workers' paradise. Furthermore, under a true socialism, human nature would change and men would no longer be motivated by self-interest, but by a desire to selflessly advance the common good.
In the 1920s, 1930s, and 1940s, the Austrian economists, most notably Ludwig von Mises4 and Friedrich A. Hayek,5 advanced a uniquely different argument against a socialist society. They, Mises in particular, accepted for the sake of argument that the socialist society would be led by men who had no wish to abuse their power and crush or abrogate freedom, and further, that the same motives for work would prevail under socialism as under private property in the market economy.
Even with these assumptions, Mises and Hayek devastatingly demonstrated that comprehensive socialist central planning would create economic chaos.6 Well into the twentieth century, socialism had always meant the abolition of private property in the means of production, the end of market competition by private entrepreneurs for land, capital, and labor, and therefore the elimination of market-generated prices for finished goods and the factors of production, including the wages of labor. …