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“Real Socialism” Has Been Tried – It’s Been a Total Disaster

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Last week, we ran an article highlighting the fact that Venezuelans are better off holding video game money than bolivars.

Whenever we publish an article like that criticizing socialism, we always get some people insisting, “That’s not real socialism.” In fact, they emphatically claim that socialism has never really been tried.

But as Ryan McMaken points out in an article published on the Mises Wire, “real socialism” has been tried – more than once. And it’s failed every single time. 

May 5th marks the 200th Anniversary of Karl Marx’s birth, and in spite of inspiring a wide variety of political movements that have caused countless human rights disasters, Marx continues to be an object of admiration among many intellectuals and artists. One such example can be seen in Raoul Peck’s new film The Young Karl Marx which portrays Marx is a principled radical with a laudable thirst for justice.

Fortunately for Marx the man and his reputation, he never personally gained control of the machinery of any state. Thus, the dirty work of actually implementing the necessary “dictatorship of the proletariat” was left up to others. And those who attempted to bring Marxism into the light of practical reality, quickly found that applied Marxism brings impoverishment and the destruction of human freedom. 

Nevertheless, after a century marked by brutal socialist regimes based on various interpretations of Marx’s ideas, Marx’s rehabilitation often rests on the idea that “real socialism” has “never been tried.” That is, a truly “pure” socialist experience — as Marx presumably wanted — has always been tainted by the presence of bourgeois ideas or lingering capitalistic habits present in the state apparatus.

A typical example of this sort of thinking can be found in Noam Chomsky’s insistence that the obviously socialist regime in Venezuela is really “quite remote from socialism.” And it’s also notable in philosopher Slavoj Zizek’s 2017 article ” The problem with Venezuela’s revolution is that it didn’t go far enough” at The Guardian. 

In Zizek’s view, it seems, socialism can work if the habits and customs of the status quo are destroyed utterly and replaced by entirely new ways of thinking. Or, as Zizek’s describes it, old proverbs (i.e., modes of thought) must be totally replaced by new proverbs. For example:

Radical revolutionaries like Robespierre fail because they just enact a break with the past without succeeding in their effort to enforce a new set of customs (recall the utmost failure of Robespierre’s idea to replace religion with the new cult of a Supreme Being). The leaders like Lenin and Mao succeeded (for some time, at least) because they invented new proverbs, which means that they imposed new customs that regulated daily lives.

Thus, the problem in Venezuela is not that countless private business have been seized, property rights been destroyed, and countless citizens deprived of basic freedoms. No, the problem is that the Venezuelan regime was too conservative and failed to implement a total break with the past.

But how is that break from the past to be brought about? The truth lies in the language used by Zizek himself. It involves “enforc[ing] a set of customs” and “impos[ing] new customs.” This, of course, is the language of coercion and violence. These new “customs” wouldn’t have to be imposed, of course, if people wanted to adopt them voluntarily.

From the point of view of the socialist purist, if only a new Lenin or a new Mao were to come along and try harder, well, then socialism might finally succeed. After all, as the satirical publication The Onion recently suggested, “Stalin Was Just One Great Purge Away From Creating Communist Utopia.”

As hyperbolic as such a statement may seem, this idea nevertheless fundamentally describes the mindset of those who claim “socialism has never really been tried”; if socialism is to be implemented, something must be done to relieve people of their attachment to private property and all the other customs and ideas that get in the way of utopia.

In practice, this has always meant using the power of the state to force a new way of life on people. Moreover, thanks to economic realities, it has also meant that the more socialism is applied, the lower the standard of living sinks. But — the thinking goes — so long as the socialist planners keep forging ahead, and refuse to be sabotaged by capitalist thought, then utopia can be reached. Yes, there will be a lot of suffering in the interim, but the ultimate payoff will be incalculably great.

Represented graphically, the idea looks like this:

Both Marx and Stalin admitted this unfortunate “interim stage” was a problem. As Ludwig von Mises notes, Marx even had to invent a two-tiered evolution of socialism:

In a letter, Karl Marx distinguished between two stages of socialism — the lower preliminary stage and the higher stage. But Marx didn’t give different names to these two stages. At the higher stage, he said, there will be such an abundance of everything that it will be possible to establish the principle “to everybody according to his needs.” Because foreign critics noticed differences in the standards of living of various members of the Russian Soviets, Stalin made a distinction. At the end of the 1920s he declared that the lower stage was “socialism” and the higher stage was “communism.” The difference was that at the lower socialist stage there was inequality in the rations of the various members of the Russian Soviets; equality will be attained only in the later, communist, stage.

Partial Capitalism Works Better Than Partial Socialism

Note, however, that capitalism doesn’t suffer from this problem. If we take a middle-of-the-road interventionist economy and start introducing partial, half-way free-market liberal reforms, does this cause the economy to collapse?

Certainly not. Indeed, everywhere we look and find a relatively less socialistic economy, the less poverty and more prosperity we find. 

Historically, this is obvious. The countries that embraced free trade, industrialization, and the trappings of market economies early on are the wealthiest economies today. We also find this to be the case in post-war Europe where the relatively pro-market economies such as those in Germany and the UK are wealthier and have higher standards of living than the more socialistic economies of southern Europe — such as Greece and Spain. This is even true of the Scandinavian countries like Sweden, which, as Per Bylund has noted, historically built its wealth with a relatively laissez-faire regime.

We see this phenomenon at work in comparisons between West Germany and East Germany. In West Germany after World War II ,pro-market reforms helped usher in a period of immense economic growth — with only half-way reforms. By abolishing price controls and other government-imposed restraints on the economy, the Germany economy took off while more socialistic economies — like that found in the UK at the time — were more stagnant.

Obviously, in the case of Germany, the West German state did not adopt “pure” capitalism. They merely adopted relatively more laissez-faire. And the economy expanded. In fact, according to Hans Sennholz, the West German state rather accidentally stumbled upon its free market reforms. And yet, we call the results “the German economic miracle.”

Other examples can be found across Eastern Europe and Latin America. Where markets are more relatively free, the higher the standard of living, and the greater the economic growth. Capitalists aren’t forced to make excuses about how “real capitalism has never been tried” — even though purely free markets have never existed anywhere.

Two-hundred years after Marx, though, every new Marx-inspired failure causes his defenders to resort to this same excuse again and again. One can only hope that 200 years from now, they’ve given up.

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