Self-Proclaimed Socialists Have No Idea What Socialism Is – Eccentric Economics


After a long day at work, you proceed to pick up your kids from school, and finally sit down to eat a delicious meal. When your belly is filled, you venture to your living room and find yourself relaxing on your comfortable couch with your mobile device in hand. As you are scrolling through your various social media timelines, you notice an old acquaintance from high school has found themselves indulged in left-wing politics, and has posted about cliché populist proposals such as free college, free healthcare, and so forth. Their caption reads, “Capitalism is greed. We need socialism now!”

As I find myself engaging in conversation with many of these so-called “socialists” and closely listen to their outlook on particular issues, I more often than not come to the conclusion that they have absolutely no idea what socialism is, nor the fundamentals that differentiate the philosophy from similar schools of thought. They have little knowledge on the writings of Marx, Engels or Fourier, and instead parrot the talking points of Bernie Sanders and Alexandria Ocasio-Cortez. A multitude of free programs and a welfare state do not equate to socialism. Better workplace conditions and a “living wage” do not equate to socialism. Most importantly, sharing and gifting others with goods or services without seeking profit does not equate to socialism.

Instead, the foundational principle and market condition that defines socialism is public or community ownership of the means of production. In a nutshell, this essentially translates to the absence of private property and capital, and it rather being socially or communally owned. In practice, this “public or community“ has amounted to the public in form of government control of the means of production and planning of the economy, failing to ever get past Marx’s proposed transitional government. For obvious reasons, when these “proletariats” obtain the great power of the state, they refuse to relinquish it.

In socialist theory, although one may retain personal property such as toothbrushes, individuals are not allowed to maintain privately-owned productive capital. For example, there is a small community that practices socialism called Marxville. Within this community, a man named John is a laborer who provides the community with lumber for building supplies. John is socioeconomically equal to the other laborers who conduct the same tasks, all of who are paid the same daily wage. One thing John maintains that others do not is knowledge. With this innovative intellect, John realizes that he can sharpen iron and place it at the end of a wooden stick, creating an ax, to more efficiently chop down trees. To accomplish this, John had to forgo his daily wages and instead of conducting his daily duties, he mixes his labor with land resources and produces what is called capital.

In this scenario, average workers can manage to collect one bundle of wood per day using their particular methods, while John, on the other hand, is able to gather five bundles per day. Due to John being more productive than the workers using his capital, should he not be compensated for his increased productivity? Should he not be remunerated for forgoing daily wages and instead investing into productive capital? In a socialist society, neither will manifest. The ax, which John produced by mixing his labor with natural resources, is not his, and the surplus wood John gathered does not belong to him. The capital and the fruit the capital bears do not belong to John, rather to the community as a whole. Frankly, John will not be rewarded for his innovation, rather punished.

One can own a computer in a socialist economy. But the moment you use that computer for graphic design, blogging for income, or selling your homemade soaps to make a profit, you are employing capital. The computer no longer belongs to you, rather to the community, and the profits you earn from the above-mentioned services or products are distributed amongst the populace. One can own a truck in a socialist community, but if you utilize that truck to conduct work-related activities to generate income, that truck is no longer yours. Rather yours and your neighbors’. How about a camera? You can own one of those in a socialist society. But the moment you utilize that camera to offer photography services, it is then transformed into capital. The camera and the compensation for services rendered no longer belong to you. Now, obviously, with this particular system that does not reward individuals for increased efficiency, there will be a destructive absence of incentives and one can imagine the decrease in economic activity.

That’s it.

This is the fundamental economic concept that makes socialism what it is. It is the absence of private property and the use of that property for profit-earning activities. It is not simply redistribution of wealth, community sharing, or expensive social programs. It is communal ownership of the means of production. The modern socialists on your Facebook timeline fail to realize this, and consistently conflate the term with a welfare state.

You have probably seen on more than one occasion them arguing for the “Nordic model” as a superior means of conducting economic policy. Ironically, they fail to realize a handful of these economies are ranked higher or very close to the United States in economic freedom. They boast greater respect for property rights, oversee freer markets, maintain fewer regulations, enact greater corporate autonomy, and have undertaken vast amounts of privatization; all concepts that modern “democratic” socialists are firmly against. The government of these welfare states then utilizes this efficient free enterprise system to fund its various social welfare programs through steep taxes. This is a very important reason for why the Nordic welfare state functions as intended, while actual socialist economies such as Venezuela fail, which I went over here. One maintains a free enterprise system, while the other is centralized and planned.

Better working conditions and higher wages are not socialist concepts. These factors are shared in many economic systems, including the capitalist and free market systems. Due to the competitive atmosphere of capitalism, it is in a company’s best interest to ensure the benefits it offers outweigh its competition in order to attract the economy’s best workers.  This is evident in many companies offering their employees generous benefits and pay. This competitive aspect forces companies to adopt better practice, or face labor losses to its competition, and this includes paying higher wages. It should also be noted, real average wages have always been higher than the federally-mandated minimum wage.

The most important misconception that must be addressed is the notion that socialism equates to being generous. It seems true at a quick glance, but there is a hidden factor that makes the idea misleading. It is not sharing in the voluntary sense; it is forced sharing. One has no choice but to share their private property and the fruit it bears with their community. Instead of an individual acting with genuine compassion, he is forced to give his productive earnings to others. Nevertheless, sharing and giving is not a notion that is exclusive to socialism. Like the aforementioned better working conditions, this is a concept that is shared with many economic systems.

Contrary to popular belief, capitalism is not strictly based on monetary profits and losses. There is an economic principle known as “psychic income.” This is nothing more than a non-monetary or immaterial satisfaction that accompanies economic activity. If I utilize my private property to produce an item that can alleviate the distress of others, and then gift it to them; this is capitalism. The gratification I get for helping others is income. If I use my tools and labor to build shelters for the homeless at no charge, this is also capitalism. Essentially, if one uses his private property and capital to produce a good or service and then offers this particular good or service for payment or gifting, it is capitalism.

It is painfully clear that the modern socialist has a great misunderstanding of what the principles of socialism encompas. They constantly conflate their proposals with other systems or concepts that are shared amongst many differing philosophies. Even worse, they have adopted this asinine term known as “democratic socialism.” It is nothing more than advocating a large bureaucratic government maintain oversight and control over all economic activity. They fail to realize they are asking for an even larger dose of state capitalism, which is nothing more than the preferred economic system for fascist governments. When will people realize that just because something is democratic, it is not all of a sudden just? Who is to say the majority cannot resort to tyrannical actions against the minority? Sound familiar?

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Logan Davies

Logan Davies is a Regional Manager in the Banking Services industry, and the director of the non-profit organization, Voluntaryism in Action. He graduated from Middle Georgia State University with a degree in Business Administration. He is the father of a loving son, an avid outdoorsman, firearm enthusiast, and unwavering supporter of liberty.