Why Almost Everyone Is Dead Wrong About Socialism

Richard Ebeling taught socialism inevitably leads to the worst of all imaginable tyrannies.

Socialists are not against property as such; they are generally hostile to private property, and they transfer all or most property rights to the state.

Rousas J. Rushdoony, Law and Liberty (1977)

19^th century critics warned that under a regime of comprehensive socialism the ordinary citizen would be confronted with the worst of all imaginable tyrannies.

Richard M. Ebeling, “Why Socialism Is Impossible” (1999)

The Problems with Socialism

Nearly twenty years ago, Richard M. Ebeling wrote “Why Socialism Is Impossible,”[1] a short article summing up three fatal flaws inherent in socialism.  The first two he pulled from the 19^thcentury critics of socialism. The third from the work of Ludwig von Mises.

The 19^thcritics argued, first, that socialism necessarily creates a centralized State. In essence, a dictatorship, that owns, controls, and directs all the means of production.  This dictatorship would demand total knowledge, power, and presence.  It would predestine and dictate the whole of man’s socio-economic environment.  It would of necessity shape the minds, imaginations, and emotional responses of it citizens.  The ordinary citizen then, “would be confronted with the worst of all imaginable tyrannies.”

Second, the older critics argued that placing the means of production in the hands of a socialist State would inevitable undermine the desire, will, and habit of the ordinary man to work.  Once the connection between labor and financial reward has been eliminated, a worker has no reason to exert himself further in his labors.  That’s because no matter how hard he works, he doesn’t see a corresponding and incremental reward.  And no matter how little he works, or how poorly, he doesn’t see a decrease in his pay.  Natural human laziness asserts itself. Creativity and innovation grind to a halt. Productivity stagnates.

Central Planners Can Never Predict What People Want Or Need

Ebeling’s main point, however, comes in his third criticism of socialism. This one is drawn from from the writings of Ludwig von Mises. It has to do with economic calculation.

Mises argued that placing total control in the hands of socialist planners (dictators) would necessarily eliminate a market-generated system of prices for goods and wages.  Without those market-produced prices, the planners would have no way of knowing the most economically efficient way of allocating resources.

In practical terms, the central planners can’t know or even predict what the people want or need.  Further, they can’t know how much of any particular product will meet their needs or desires of people.  Who could really figure out such a thing? How could planners know for example  what combination of goods and services in what proportions would best serve the  general population.  It’s always a disaster.  The quality of life the people would enjoy or endure would at best be irrational and ever fluctuating.  Ineveitably, over time, the entire economy becomes a ship crashed on the rocks.  The former Soviet Union is a great example. Central planners couldn’t even determine something as simple as the proper mixture of concrete. The result? A lot of rubble. As well as untold human misery.

It’s important to understand that Mises’s concern with economic calculation doesn’t depend on the previous two criticisms of socialism.  That is, even if the central planners are honorable, competent men, and even if everyone else works diligently at his job, Mises’s criticism still holds.  Men are finite.  They can never know enough to successfully play God.  Sadly, there are a lot of intelligent, educated people who don’t understand this.

What’s Wrong with Socialism?

Ebeling’s critiques of socialism are accurate as far as they go. Socialism produces depersonalizing and despotism.  It stifles labor, creativity, and production; and it turns a potentially rational market into chaos.  But in the end, these are superficial matters.  Their significance really hinges on religious presuppositions. Why?

There are many who believe that, in a just society, collective safety ought to trump personal freedom and individual choice.  There are many who think that social and economic equality are ethically far more important than anyone’s material prosperity, even their own.  And there are a great many who are ready to let someone else plan and direct, no matter the practical consequences, as long as their personal and emotional vision of equality, charity, and social justice are firmly in place.

The ethical presuppositions undergirding these attitudes are all rooted in what theologians would call “the natural man’s belief” that his own immediate happiness is the moral compass for the universe.  We should also consider that the natural man, in this sense,  believes that a vaguely defined freedom from want, fear, and moral criticism are more important than the freedom to bargain, risk, and lose within the framework of God’s law.  Lastly, the natural man doesn’t want to admit sin, let alone be affected by it.  He wants a lot of stuff, too, but not at the price of accountability God.  And so the socialist “Beast” is preferable to the laws of God.

No Other Gods . . . Including the State

Scripture addresses the root of socialism:  Man is not God.  God claims exclusive sovereignty over man’s affairs.  He tells us plainly that He is the only God there is or can be.  The law from Sinai begins with the words, “Thou shalt have no other gods before me” (Ex. 20:3).  The prophet Isaiah expands on this:

I am the LORD, and there isnone else, there is no God beside me:  I girded thee, though thou hast not known me:  that they may know from the rising of the sun, and from the west, that there is none beside me.  I am the LORD, and there is none else (Isa. 45:5-6).

For thus saith the LORD that created the heavens; God himself that formed the earth and made it; he hath established it, he created it not in vain, he formed it to be inhabited:  I am the LORD; and there is none else.   Look unto me, and be ye saved, all the ends of the earth: for I am God, and there is none else (Isa. 45:18, 22).

Remember the former things of old: for I am God, and there is none else; I am God, and there is none like me, declaring the end from the beginning, and from ancient times the things that are not yet done, saying, My counsel shall stand, and I will do all my pleasure (Isa. 46:10).

Christianity and Socialism Are Rival Faiths

God alone creates, predestinate, sustains, rules, and saves. As a result, He brooks no rivals.

Now, God has delegated authority and responsibility to men.  He has given us assets, property, areas of responsibility, to protect and develop.  Each of us must answer to God for his activities in this world; each man must give an account of his stewardship (Rom 14:10-12).  Therefore, God has said, “Thou shalt not steal” (Ex. 20:15).  God has established civil government to protect personal liberty and private property, to enforce the divine “thou shalt not steal” (Rom. 13:1-7).  This also means the State itself may not steal; that when it does so, it directly defies God’s word.

Here’s what I mean: God hasn’t given civil government the authority to regulate local or national economies or to confiscate the property of one for the convenience of all.  Further, God doesn’t give government the right to define the value of any economic good (including money); limit one man’s freedom to trade with another; and to prescribe how any man must use or dispose of his property; or to create money out of nothing.  God does however, give civil government the authority to enforce His law in particular and limited areas.  Beyond that, it has no lawful power.

Socialism Means Theft By Confiscation

At the end of the day, it really doesn’t matter that many find theft by socialist confiscation to be agreeable to their emotional sense of charity, equality, and social justice.  In fact, many find socialism ethically superior to free-enterprise, capitalism or to Christianity.  The problem is with autonomous moral sensibilities and humanistic ethical commitments… not with God or His commandments.

Bottom line here? Tyranny is wrong, not because it is restrictive or dehumanizing, but because it is an affront to God.  It is idolatry.  Socialism is wrong then, not because it saps man’s will to create and work, but because God has said, “Thou shalt not steal.”  A planned economy is evil, not because it results in economic chaos, but because the would-be planners pretend to possess omniscience, omnipresence, and omnipotence that belong exclusively to a creator God.

In short, socialism is wrong because it is a collective attack on God and His sovereignty.  And for that very reason, it will aways create massive human misery.  God will not be mocked.  It’s true that we can attempt to construct economic systems based on our short-term ideas of happiness and safety, but they will always be radically at odds with reality and God will always respond with a pain cosmic “smack-down.” Babylon will fall as it always has.

[1]The Freeman(September 1999).