Is socialism obsolete?

Wandering through the city’s bookshops yesterday I came across this: Is Capitalism Obsolete? with the subtitle, “A Journey through Alternative Economic Systems”. I live in hope that there will be at least one volume somewhere that has no for an answer. Haven’t seen anything in years. The above is my picture of the back cover. If you read how they advertise the book, you will find the least unexpected turn in the history of modern publishing.

After communism collapsed in the former Soviet Union, capitalism seemed to many observers like the only game in town, and questioning it became taboo for academic economists. But the financial crisis, chronic unemployment, and the inexorable rise of inequality have resurrected the question of whether there is a feasible and desirable alternative to capitalism. Against this backdrop of growing disenchantment, Giacomo Corneo presents a refreshingly antidogmatic review of economic systems, taking as his launching point a fictional argument between a daughter indignant about economic injustice and her father, a professor of economics.

Is Capitalism Obsolete? begins when the daughter’s angry complaints prompt her father to reply that capitalism cannot responsibly be abolished without an alternative in mind. He invites her on a tour of tried and proposed economic systems in which production and consumption obey noncapitalistic rules. These range from Plato’s Republic to diverse modern models, including anarchic communism, central planning, and a stakeholder society. Some of these alternatives have considerable strengths. But daunting problems arise when the basic institutions of capitalism—markets and private property—are suppressed. Ultimately, the father argues, all serious counterproposals to capitalism fail to pass the test of economic feasibility. Then the story takes an unexpected turn. Father and daughter jointly come up with a proposal to gradually transform the current economic system so as to share prosperity and foster democratic participation.

Capitalism is a system of production in which the ownership of firms is in the hands of private individuals who use the capital they buy, rent or own, while directing the employees they hire, to produce goods and services in a lawful way to sell what they have produced to others in order to earn a profit for themselves. There are lots of variations on the theme but that is essentially it. Nothing else has ever worked. Nothing else will ever work, however many fools with their fictional daughters there may be who think they have come up with something else.

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31 Responses to Is socialism obsolete?

  1. Roger

    Then the story takes an unexpected turn. Father and daughter jointly come up with a proposal to gradually transform the current economic system so as to share prosperity and foster democratic participation.

    Does the story end in Venezuela?

  2. Sir Jethro de Bodine

    The last couple of popes have posited the existence of a “third way’. The Blairites took a similar line. But, there is freedom (capitalism) and there are controls (socialism). Between the two poles lie the range of extremes we call the mixed economy. And everyone knows the dangers of standing with a foot either side of the barbed wire fence.

  3. manalive

    Then the story takes an unexpected turn. Father and daughter jointly come up with a proposal to gradually transform the current economic system so as to share prosperity and foster democratic participation …

    Sounds awfully like communism.

  4. Trax

    I see it this way – no matter what form of government everyone lives under the rules of capital. That is the only thing that really matters is capital, scarce resources, preservation of capital, return on capital etc. All other forms of government pretend those things don’t matter until of course they collapse whereupon they blame something else.
    So the only question is how do you get the best return on scarce resources to build the capital of the country.

    It is pretty clear that any system that creates inefficient, idle or misdirected resources will therefore lead to a lower standard of living – socialism, communism, distorted/manipulated markets, state controlled.
    I would include excessive debt for consumption with that which is supposedly a problem of capitalism.

  5. DM OF WA

    Despite the occasional lip service paid to free markets the politicians’ dream of “managing” the economy never really goes away. They never understand that their only power is to destroy it.

  6. duncanm

    What I love about these social engineering propositions, is that they assume that we should basically halt development of technology, lifespan, quality of living &etc.

    Adaption of socialism of any form will do just that – until it gets to a point where its regressing society back to the masses eating pigeons and rats, while the ruling elite feast (Venezuela).

    This is stupidly naive, an example of the historical ignorance of these idiots, and points to their general negative view of the world ad its population; “We’ll all be rooned, ozone depletion, co2, forests, water, war, famine, meat eating, ..” you get the idea.

    They don’t stop to think if the world universally adopted socialism in the revolutions of the early 20th century (as Russia did), then we’d all be lining up in queues for bread and tootling around in badly manufactured horse-drawn carriages talking to each other long distance with pen and paper (or if we’re one of the elite, maybe telegrams) . Life expectancy would be about 40-50 years, famines and disease would be widespread, and life would look pretty sucky from out current viewpoint.

    What will capitalism give us in 100 years? Whatever it is, it’ll be amazing.

  7. duncanm

    Then the story takes an unexpected turn. Father and daughter jointly come up with a proposal to gradually transform the current economic system so as to share prosperity and foster democratic participation

    so basically the father made the wealth and the daughter schemes to steal it ?

  8. Speedbox

    This is stupidly naive, an example of the historical ignorance of these idiots, and points to their general negative view of the world ad its population; “We’ll all be rooned, ozone depletion, co2, forests, water, war, famine, meat eating, ..” you get the idea.

    They don’t stop to think if the world universally adopted socialism in the revolutions of the early 20th century (as Russia did), then we’d all be lining up in queues for bread and tootling around in badly manufactured horse-drawn carriages talking to each other long distance with pen and paper (or if we’re one of the elite, maybe telegrams) . Life expectancy would be about 40-50 years, famines and disease would be widespread, and life would look pretty sucky from out current viewpoint.

    Spot on.

  9. struth

    Where is capitalism not working?

    The left don’t know what capitalism is.
    They think it is a fat white guy in a suit smoking a cigar and screwing everybody.

    The plane truth here is this is Alinsky and Marxism 101.
    Turn the capitalist country into a shit hole by marching through the institutions until it becomes socialist in all but name and then scream look, Capitalism isn’t working.

    Australia is a socialist shithole in all but name.
    Yet they would point at it and call it capitalism.

    They are lying, devious arseholes and the ones writing these books know exactly what they are doing.

  10. struth

    This is stupidly naive

    This is cunning, political propaganda from communist activists.

  11. struth

    The plain truth………………………….in a hurry , please forgive.

  12. Dave in Marybrook

    The eternal capitalist desire to sell things for money has led another academic to present some big book that is “innovative” and “fresh” and “antidogmatic” (that last one is a genuine innovation, I’ll grant him that). While posing as Santa Socialism. What’s the price, Kates? I’m guessing north of $45?

    On the plus side, we’ve all forgotten about that stinky brick of a book from Thomas Piketty that was apparently the second coming.

  13. Mother Lode

    So, once they devise this better society they will have to devise a means to prevent the resurgence of capitalistic tendencies – which are pretty hard to put down since at bottom is the individual taking a risk to benefit themselves by offering to others something that benefits them – a kind of cooperation to mutually beneficial outcomes.

    These are always possibilities, so they will need some kind of institutional apparatus to impose an artificial way of thinking and relationship between individuals.

  14. duncanm

    Academics need to dig into a bit of history as to their predicament in typical socialist states.

    Stalin’s purges of the 1930’s come to mind.

  15. These “thinkers”, socialist dreamers should be taken of the substance they are taking, put in rehabilitation and given some simple manual work to do where they can’t injure themselves or others.

  16. Ooh Honey Honey

    Comparing Socialism to “Capitalism” is like comparing a fish to the ocean.

  17. Jack Lacton

    I’ve stopped using the word ‘socialist’ and have substituted it with the word ‘progressive’.

    It makes for much head-exploding when arguing with the left about Venezuela’s predicament. Younger progressives truly do not understand what socialism is and its sordid, murderous history. When they see people refer to socialist policies in Venezuela as being the problem they simply don’t relate to it. When I point out that socialism is basically a historical name for progressivism they mostly go into a meltdown. It’s really a lot of fun. And has the advantage of being true, too.

  18. Tel

    When I point out that socialism is basically a historical name for progressivism they mostly go into a meltdown.

    I prefer to use a capital P and quotes for “Progressives” in order to avoid confusion with the notion of progress in the common sense, and thus discourage further hijacking of the language.

  19. Up The Workers!

    “Is socialism obsolete?”

    Those famous paleontological specimens, “Wee Doogie” Cameron, Lee Rhiannon, Sarah Halfwit-Bung, Bull Shitten, Juliar Gillard and numerous other such strictly preserved exhibits – both those currently in Parliament House or Prison House, and those recently released – certainly don’t think so.

    They owe their present existence to such robust SOCIALIST institutions as the Nationalist SOCIALIST German Workers’ Party and the Union of Soviet SOCIALIST Republics, who between them presided over the extermination of some 80 million human beings, seven or eight decades ago, though the actual killings were no doubt carried out at that time by numerous “Lone Wolf individuals with an ice-habit and a mental health plan”, as they are fond of saying in the Socialist Peoples Republic of Mogadishu-by-the-Yarra.

    The tradition is carried on today by the A.L.P.-sponsored members of those industrious Apex and M.T.S. gangs, who take the good SOCIALIST attitude: “What’s your car, is MY car, and what’s your home is MY home!”.

    SOCIALISM means never having to say: “Please”.

  20. Fess

    The world is full of critics. They’ve never made or done anything of consequence, but are convinced they could do better than the people who are making and doing things. Crapping on everyone else’s efforts makes them feel superior.

  21. egg_

    to share prosperity

    Like how the Animal Farm pigs shared with the draught horse?

  22. Habib

    1/. Collect underpants.
    2/. ?
    3/. Profit!!

  23. IainC

    “Is Capitalism Obsolete?” The Chinese Communist Party certainly doesn’t think so, observing that in the first 30 years of socialist economics, the country starved and hundreds of millions were in abject poverty, and in the second thirty years of capitalist economics, hundreds of millions were raised out of poverty to the middle class. Like North Korea, a perfect experiment in socialism versus capitalism – same country, same race, same culture, same history, just a different economic system. How is this not Settled Science?

  24. Mak Siccar

    To my (limited) knowledge, Capitalism is the best system in which the individual has an incentive to better his/herself. Call it ‘self interest’. This is, by and large, realised by providing goods and/or services that other people want and will pay a fair price for. This price includes a reasonable profit for the provider which is the basis of the incentive. (Greed is, hopefully, moderated by other forces.). If the service or goods are inferior, then the punishment is felt in the hip pocket. When such individual incentive is absent, as I saw in the Slovak republic soon after communism collapsed, nobody really gives a shit about anything because, whether or not they did a good or a bad job, they still got the same pay. With appropriate controls, the best system is the one that maximises the incentive of the individual to have a better quality of life. (Not one apostrophe was hurt in the production of this diatribe.)

  25. Justme

    Off topic, but in Sinclair’s space, can we have some comment on Sth Korea and crypto?

  26. Gavin R Putland

    The trouble with capitalism is that nobody wants to be a capitalist. All capitalists want some sort of protection from competition, either through regulation or through acquisition of assets which by their very nature cannot be reproduced by competitors. As soon as they get that protection, they cease to be primarily capitalists and become primarily rentiers. Then they use their non-capitalist gains to finance pseudo-capitalist think-tanks that portray their non-capitalist wealth-extraction as capitalist wealth-creation.

  27. There are various versions of capitalism, one which seems to thrive even under a communist or fascist dictatorship.

    Free market capitalism is the model I prefer, but it seems to have almost died. Large corporations operate in cartels controlling the great majority of the market. Competition is a theory. Government regulations ensure that small players are not viable and market entry is only to established capital.

    In the USA corporations such as Google or Facebook would have once attracted the attention of the anti trust prosecutors. They control much of the flow of information and are defining “truth” to suit their progressive commitments. Shareholders and Consumers are to be controlled and educated to comply.

    Capitalism aint dead, its everywhere and most of its mutations are closer to monopoly than they should be.

  28. Paul

    Don’t forget communist China has adopted capitalism, it is the only way to lift millions out of poverty.
    Socialism and communism are the great equalizer, making every one equally poor, that is except for the bougouisie party followers.

  29. 2dogs

    I have never heard a Socialist come up with any rational response to Milton Friedman’s argument that it requires “angels”.

    The only response I have been able to find is basically “trust us, once equality exists people will be philanthropic”. 100 million deaths? No, I don’t trust you.

    They have no way of getting there. The socialist textbook calls for “a dictatorship of the proletariat”, but the empirical evidence of the past communist regimes proves that doesn’t work. If I allow that these weren’t, somehow, “true socialism”, then I must come to the conclusion that “true socialism” is not implementable, or, at least, not implementable by those that call themselves socialists.

    If they want another chance, it is on them to author the proposed national constitution which would find these angels and produce socialism (which is obviously not a dictatorship of the proletariat). I am prepared to listen to any such proposal they come up with. But of they can’t come up with such a constitution, they must accept that their utopia is not implementable.

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