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Bernie and Neo-Socialism

The socialism of today is not the Old Socialism of orthodox Marxism. Bernie and the New Socialism represent a renewed Left-Interventionist spirit.

"I endorse Austro Libertarian Magazine 100%" —Tom Woods

Bernie and Neo-Socialism

The socialism of today is not the Old Socialism of orthodox Marxism. Bernie and the New Socialism represent a renewed Left-Interventionist spirit.
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It’s always important to remember that the socialism of today is not the socialism of a hundred years ago. It’s easy– and libertarians often fall into this trap– to dismiss Bernie and other self-described socialists as reminiscent of the totalitarian socialists of the Soviet era. This of course is not a claim that modern, Berniesque socialism “is not as bad,” or that it could never morph into the dictatorships of old; but socialism itself largely operates under a different definition in the modern era.

Part of the reason for this is because to the magnificent extent to which Old Socialism failed. It really was considered such a radical and embarrassing failure that very few people take it seriously anymore. Instead, they use the same socialist label to express a different set of policies. They are good marketers.

Old Socialism is defined as the public ownership of the means of production. All the factors of production, all the capital goods that come together and are mixed with labor to eventually make consumption goods– all these are to be owned by the “society” as a whole. Most commonly, though there are a few exceptions, the society which owns the means of production is represented by the government, which allocates the resources in accordance with its own plans.

New Socialism does not seek to socialize the ownership of the means of production, at least directly. Whether this is their ultimate end depends on the person in question– with many self-described socialists, such as Alexandria Ocasio-Cortez, as probably not even being aware of what that actually means.

During the Bolshevik era, Old Socialism was split into two camps: the orthodox marxists and the reformists. The orthodox marxists wanted to employ revolutionary and violent means to completely eradicate, full stop, the “capitalist” structure of the socio-economic system. The reformists wanted to get elected into the government as it was and adopt policies toward the eventual goal of social ownership of the means of production. The orthodox considered the reformists as betrayers of the marxist creed; the reformists considered the orthodox as unrealistic, not taking the reality of things into account.

The reformers lost that battle, and the reformist model of infiltrating the institutions spread west and was eventually adopted by groups such as the Fabian socialists of Britain. But once socialism fell, the west completely closed up to the hope of socialism. Instead, those who wanted to improve life for the proletariate and undermine what they perceived to be a capitalist-dominated society, opted for what we, in the tradition of Ludwig von Mises, might call Left-Interventionism: a government that interferes here and there– perhaps everywhere– to protect people from the ravages of unfettered capitalism.

The New Socialists do not seem to seek the public ownership of the means of production, but instead merely want to distribute the results of production “fairly” and equitably. They want those at the top to pay much more in taxes, and those at the bottom to pay nothing. They want those who are very wealthy to subsidize the life and wants of those who do not have much. They want guarantees for those “at the bottom” and they want to use the State to enforce and provide these guarantees. They want to enable the state to use the funds it has acquired from the wealthy to pay for those programs it considers most desirable: free education, free health care, free food and shelter, etc.

This is economically dangerous and ethically unjust, of course. But this redistributive model is an extreme version of left-interventionism– not traditional or orthodox socialism. We ought to oppose it root and branch. The Bernieite movement is not an innocent sheep– it is, as all pro-statist movements, a wolf that devours. But our arguments against these types of policies are categorically the same types of arguments that Mises made against the Interventionists, not merely the arguments he made against Old Socialism.

Remember, the Old Socialists were against the Left Interventionists. A true Marxist of the Old Days would be opposed to Bernie Sanders because Bernie is a left-interventionist. As Mises notes:

Marxians do not support interventionism. They recognize the correctness of the teachings of economics concerning the frustration of interventionist measures. In so far as some Marxian doctrinaires have recommended interventionism they have done so because they consider it an instrument for paralyzing and destroying the capitalist economy, and hope thereby to accelerate the coming of socialism. But the consistent orthodox Marxians scorn interventionism as idle reformism detrimental to the interests of the proletarians.

For his part, George Reisman, thinks that these social democrats ought to not use the word socialist:

When they come to power, the social democrats retain capitalism as the economic system, though they may further hamper its operation with additional taxes and regulations. Sweden, Norway, France, et al. are capitalist countries, not socialist countries, despite the fact that they are typically described as socialist and their ruling parties are typically known as socialist parties. The truth is that the means of production in these countries are privately owned to more or less the same extent as they are in the United States, and they are employed by their owners in order “to make profits and avoid losses,” as von Mises put it. This is not socialism, but capitalism, even if badly hampered capitalism.

This is why, in response to Bernie’s candidacy announcement today, the World Socialist Twitter account blasted out the following:

My goal is not to defend their dogmatic use of the term, only to explain it.

The point here is simple: socialism carries a different meaning today. And in opposing it, in arguing against Bernie and AOC and all the rest of them, I think it is imperative that we libertarians at least recognize this so that we can properly engage. The problem with a socialist system, at its core, is that because all the factors of production are owned by one entity (the state, or the “people” represented by the state), there is no exchange of capital resources. And since there is no exchange, there are no development of prices. And since there are no development of prices, the decision makers do not have any objective criteria by which to make their allocation decisions. And since they do not have this criteria, they make their decisions blindly. And thus, economic chaos.

But if exchanges are still allowed in the higher stages of production, even if hampered by regulation, subsidization, and so on, then this describes an interventionist economy, not a socialist one in the old sense.

But socialism today does not refer to the Old Socialism of single-entity ownership of the means of production. I don’t think it is possible to expect the rising far left to be transparent and listen to people like Reisman and drop the socialist label. It’s far too marketable and provocative for them to do so. We merely have to understand what happened, and build up renewed intellectual arguments against Left-Interventionism as it now operates under the socialist label– more Austro-Libertarians ought to read and understand the Misesian case against interventionism; for the tools that we need have already been developed!

The New Socialism rises in the west, and we must be there to push back intellectually.

Austrian Economics | Property-Rights | Paleo-Culture

Austrian Economics | Property-Rights | Paleo-Culture

Essays on Economic, Political, and Social Theory

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CJay Engel

Creator and Editor of Austro Libertarian. Lives in Northern CA, runs several businesses, spends time with his family, and reads as much economics and political theory as possible.

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