You don’t have to be a student of ancient history to know socialism doesn’t work. The collapse of the Soviet Union in 1989 was an unequivocal demonstration of the moral and economic superiority of capitalism. The misery caused by socialism is unfolding today in Venezuela. Since Venezuela embraced socialism in 1999, poverty, crime and corruption have all increased. Grocery shelves are empty and the annual inflation rate is estimated to be as high as 200 percent.
For the left, the poster children for socialism would not be the Soviet Union or Venezuela. Instead, think of Sweden or Denmark. But one can argue that those are welfare states, not socialist states in the sense of government ownership of the means of production. But consider Singapore:
A majority of the top dividend-paying stocks on the Straits Times Index are government-linked
That is according to Andy Mukherjee. Pointer from Tyler Cowen.
I would suggest focusing on the relationship between knowledge and power. In small states, like Singapore, Sweden, and Denmark, there is relatively little discrepancy between knowledge and power. It is possible for government officials to know more of what they need to know to carry out policy effectively.
Large states are harder for a central government to manage. Decentralized institutions, including markets, do a better job of aligning knowledge with decision-making power.
See my essay on the recipe for good government.
” the left, the poster children for socialism would not be the Soviet Union or Venezuela. Instead, think of Sweden or Denmark. But one can argue that those are welfare states, not socialist states in the sense of government ownership of the means of production.”
Well, every time someone proposes to make the USA more like the Scandinavian countries (and it doesn’t matter to this conversation if it is a good idea or not), we hear loud denunciations of anti-American Socialism from the right and angry rants about the state giving the hard-earned money of the makers to the takers (anyway, one may wonder if state control of the means of production means is really necessary for Socialism if the government can just take what it needs to fund its policies and maybe even destroy enterprises it doesn’t like– “the power to tax is the power to destroy”, etc.). And Venezuela, where the oil wealth has been controlled by the state for decades, is no more Socialist, with its price controls and regulations, than Brazil was in the 1980s or the USA in the 1970s or Sweden is today– and, yeah, all of them are/were different animals.
“I would suggest focusing on the relationship between knowledge and power. In small states, like Singapore, Sweden, and Denmark, there is relatively little discrepancy between knowledge and power. It is possible for government officials to know more of what they need to know to carry out policy effectively.”
It still doesn’t explain why high taxes and welfare, meddling with incentives, and bureaucrats pursuing long term policies and goals the markets would not care about, distorting prices, didn’t destroy those countries the way the true-believer free market Gospel says it should. After all, Cuba, Venezuela, Benin, Mongolia, Uruguay (pre-1973), Angola and many other sceneries of cautionary stories of Socialism/Welfare crippling countries are/were not that big either.
I think Galbraith pointed out in the 70s that Singapore was a lot more “socialist” than its admirers seemed to think.
Singapore is a genuinely intruiging country – with something for each of the 3 axes to like:
1) Progressives as Arnold says. There’s lots of government going on there. It’s definitely not Laissez-Faire – look at the way they do housing.
2) Conservatives can like the spotless, crime-free streets and quite paternalistic approach.
3) Libertarians can like the low taxes ,ease of business, and perhaps crucially the sense that the government works for the citizenry rather than the other way round.
A fourth category of non-partisan liberals can like the way that racism is non-existent and real racial/ethnic harmony exists – also related to their housing policies.
And everyone can like the fact that the trains run on time.
I don’t consider Singapore to be perfect but it’s certainly has some interesting ideas.
Lee Kuan Yew was probably the most famous and outspoken advocate of racism in the world. He did interviews in the west and gave speeches about how genetics was destiny, people were born un-equal, and he didn’t want NAMs in his country.
https://www.youtube.com/watch?v=e8rPofi-AUw
Anyway, the question is whether these smaller nations can exist without larger nations. If your country is prosperous because its a tax haven for a larger country, it relies on that larger country so that it can specialize in finance/tax dodging.
Then there is the issue of defense. All these small nations rely on the protection of the super powers. Without it they would be easy pickings for their neighbors.
Finally, in the case of tiny urbanized countries many appear to be IQ sinks. Singapore has notoriously bad TFR, especially among the more intelligent. It relies on importing high IQ people produced abroad to keep the system running. It’s like a giant gene shredder. Maybe its not their fault, urbanization and being a rich Asian both appear to be really bad for TFR outside of Singapore too, but its still not a self sustaining society.
Small states? Population:
Singapore: 5.4 million
Denmark 5.6 million
Sweden: 9.6 million
That’s a lot of people and knowledge. Only ten US states are more populous than Sweden. Is there some point past 10 million but before 300 million where knowledge cannot stay coupled with power? Where does this number come from and what affects it?
Welfare states may not have significant state ownership of the means of production, but they do have a significant and priority claim on all surplus earned by production and exercise significant control of production via interventionism. But defining ownership simply as who holds the title to the property is very simplistic when the right to control and the right to earnings is considered.
“The bureaucratization of privately owned enterprises that we see going on about us everywhere today is purely the result of interventionism, which forces them to take into account factors that, if they were free to determine their policies for themselves, would be far from playing any role whatsoever in the conduct of their business. When a concern must pay heed to political prejudices and sensibilities of all kinds in order to avoid being continually harassed by various organs of the state, it soon finds that it is no longer in a position to base its calculations on the solid ground of profit and loss.”
–Mises, Ludwig von (2010-12-10). Liberalism (p. 103). Ludwig von Mises Institute. Kindle Edition.
If all the modern socialists (Bernie Sanders) want is to be more like Singapore, I am OK with that. I think Singapore is not what they want.
It’s pretty clear that no one, not even the left, supports socialism in its traditional definition anymore. Bernie calls himself a socialist, but he doesn’t promote public ownership of the means of production (well, except maybe healthcare). Modern socialism simply seems to be “regulatory state + redistribution”, which is basically what both Sweden and the US are, just of differing degrees.
Late, I know; but perhaps we might also examine how the oligarchies in each culture are formed (come into existence) and structured – that is does a core form and build a circle or perimeter around it; or does the broader group form “loosely” and then generate a core that holds it together?
We might go back to Gaetano Mosca’s observations and bring his thesis forward.
And there is that other strange (almost unmeasurable – but testable) element of how the individuals in the society look upon and regard one another.