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Socialism: Clarifications and Elaborations

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

Socialism: Clarifications and Elaborations

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As recently explained in numerous posts, socialism is best defined as the public ownership of the means of production (that is to say, social democrats are not socialists). A prerequisite aspect of a system that wants to be accurately characterized as socialist, is that it must first figure out a way to transition from private ownership of these production factors to public ownership.

In order to expand this idea, I will first elaborate on something I wrote in a recent article on Hans Hoppe and libertarian strategy:

[Hoppean radicalism] aims at private property in the absolute, but with its endorsement of private ownership, comes a component of the definition of ownership that is far too often neglected: the exclusive right to control. In this way, the Hoppean understanding of a true system of private property lays waste to the alleged historical presence of “private ownership of the means of production” as characterized by the Orthodox Marxists when they critique the Soviet Union, North Korea, etc.

For so many political ideologies that have swept the world, ownership simply meant to hold the property title. But Hoppean thought (relying on the Rothbardian School) is more precise and fleshes out the internal contradiction of a system of interventionism, as well as German-style socialism: namely, in both of these systems, private ownership is only present nominally, but since a non-owner (the state) is the ultimate permission-giver or determining party of what the “owner” can and cannot do with his property, private ownership is both undermined and incomplete.

It is for this reason that, in the context of so-called “War Socialism,” Mises, in Nation, State, and Economy wrote:

What counts is not the letter of the law but the substantive content of the legal norm.

If we keep all this in mind, then it is not hard to recognize that the measures of war socialism amounted to putting the economy on a socialistic basis. The right of ownership remained formally unimpaired. By the letter of the law the owner still continued to be the owner of the means of production. Yet the power of disposal over the enterprise was taken away from him.

It was no longer up to him to determine what should be produced, to acquire raw materials, to recruit workers, and finally to sell the product. The goal of production was prescribed to him, the raw materials were delivered to him at definite prices, the workers were assigned to him and had to be paid by him at rates on whose determination he had no direct influence. The product, furthermore, was taken from him at a definite price, if he was not actually carrying out all the production as a mere manager.

The main thrust is this: government ownership of the means of production, as a meaningful, economically aware phrase, includes those situations in which the government, while not the formal and nominal property title holder, is the decision maker over the use and employment of those means. Thus, Mises could distinguish between two styles of socialism: Russian-style socialism, in which the government was the property title holder; and German-style, in which private parties were the property title holders while government remained the decision maker over the use of the property (and therefore determine the allocation of resources, the prices, the wages, and the terms and conditions of contracts).

Now, “public ownership of the means of production” itself is broad enough that there is allowed several interpretations of this, depending on the socio-political context. In the minds of the leaders of the Soviet Union, for instance, the state was the embodiment of the will of the people. The people, everyone, were the “public” and the government and its decision makers acted on the people’s behalf– in the best interest of the masses. Therefore, by way of analogy, the public “held the title to the property” in a sense, but the government determined the use and employment of the means of production in accordance with their plans. 

However, the reason why I have emphasized that modern proponents of what I call Orthodox or Purist Marxism are critical of the Soviet Union, is because they believe the leaders of the New Regime in Russia, after the Bolshevik Revolution, abandoned True Socialism. While the Soviet Leaders alleged that the people were the true owners, the Purists today distinguish between the people being the decision makers and the Soviet politicians being the decision makers. Therefore, the “true meaning” of public ownership of the means of production, to the Purist Marxists, undermines the Soviet version of it, at least as it was practiced during the Stalinist/Leninist years. 

Therefore, “public ownership of the means of production” can mean anything from among the following:

  • German-style: nominally, the ownership titles belong to private parties, but the government is the true owner in an economic sense since it is the final determiner of the use of this property.
  • Soviet-style: formally, the ownership titles belong to the government (under Soviet style socialism, there are no actual titles, this is just analogy), which determines the use of the property in accordance with its own will (but propaganda alleged that it used them for the benefit of the people).
  • Purist Marxist, anti-Soviet regime-style: ownership is held in common and the use of resources and the means of production are determined by direct democracy– there is perhaps an agency to make good on the democratic will of the people, but it is to always act in accordance with the democratic expression.

The modern group that most vocally adopts this latter, anti-Leninist, version of socialism is called the “World Socialist Movement” (their website is currently down, from an attack– a Capitalist conspiracy, most likely).

Now, the topic of what socialism ought to look like is distinct from the topic of strategy, that is, how a society is to get from A to Z. Just as libertarian theorists distinguish between the theory or doctrine itself and the path forward, so the socialist must engage in this issue. The above categorization of socialism is the framework of social organization, but it is not strategy.

There are basically two types of strategy for socialists: revolution (immediate) and reform (gradualist). Libertarians too, more or less, adopt either one of these strategies, though what follows shouldn’t be considered applicable to libertarians, because their flavors of these types are different (after all, the end game for public-property socialists and private-property rights libertarians are polar opposites).

  • German style socialism adopted a revolutionary strategy in order to achieve their goals. However, this revolution was done via political coup, not physical revolution from the masses.
  • Soviet style socialism adopted a revolutionary strategy via revolution of the proletariat.
  • Other soviet-era socialists advocated a non-revolutionary strategy called Reformism– working within the system to achieve their pure marxist ends over time.
  • The Orthodox Marxists of today (seeing the horrific experience of social upheaval) purport to support neither revolution (they are anti-Lenin) or Reform (how, they ask, can we achieve our ends if we work within the very capitalistic framework that is fixed against us?). Rather, curiously for us Hoppeans, they adopt a long term educational strategy: always be there to awaken the people to the truth, always be there to call out the capitalist system for its lies, and so on. Only when the majority of people in society come to realization about the Hope and Promise of a socialist economic order will prosperity and peace come to pass.

In the next article, I am going to elaborate on how the British socialist movement, most powerfully represented by the Fabian Socialists and their close friends on the American side of the Atlantic, worked to achieve their ends via the non-revolutionary reformism mentioned above. The great debate in the Soviet-era socialist movements was whether Reform or Revolution was the Way Forward. The Revolutionaries overcame the Reformists. But this was only in Russia. In the west, Reformism became the answer.

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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