Are there degrees of ‘socialism’?

I had a brief query from a friend the other day:

This is probably a red-herring but I did wonder if there are degrees of ‘socialism’ in which some degree of government ownership and control of the means of production is acceptable but with private sector ownership and incentives the dominant force. I’m thinking of the so-called ‘mixed’ economy concept.

Here in NZ we are having a debate about how we should frame objectives for the economy, with a shift away from a predominant focus on growth (in GDP) towards a ‘well-being’ framework (currently being developed by the NZ Treasury. I don’t think most economists are persuaded by this but it’s politically appealing because it appears to offer more emphasis on distributional fairness and the environment.

Well, I do go on a bit, but the question is an interesting one and important. My reply, off the top of my head, but more consideration still needed.

Interesting issue since everyone who now declares themselves a socialist doesn’t define socialism in the same way. There are plenty of “socialists” who think socialism is a heavy duty form of the welfare state. It’s fantastically costly, and in rich economies like ours, we typically allow plenty of free riding which will eventually have to be paid for one way or another. We are ruining ourselves because we think we are richer than we are, to subsidise plenty of people who ought to be contributing to their own upkeep. But once you get into the various forms of attempting to create greater equality, you are in an endless spiral since you can never create enough of it since there are always going to be income differences, many of which have no cosmic justification but just are what they are.

We already do an incredible amount of redistribution from those with high incomes to those with lower incomes. But if you take from some who earn high incomes they will provide less output to the common pool. And funny enough, if you give to people with lower incomes, they too will provide less to the common pool. Very destructive of an economy based on personal incomes related to one’s own contribution to the total. In a bygone era, most individuals felt a responsibility to remain as productive as possible for as long as possible, so we invented a system of welfare to assist those who fell by the wayside. Now there are so many who sit by the wayside picking up whatever they can, and this is now made much much worse by the increasing numbers who never intend to contribute anything but intend to be subsidised merely for existing. You can call that socialism if you like. It is immensely destructive, but since we have so much productive capital to run through it may take a while before we really notice. By then, alas, it will be too late. An inbred lack of industriousness in the midst of a crumbling economic structure is what you have right now in California which has more people on welfare proportionately than any other American state. And as rich as they are, it will not survive another decade before some kind of collapse overtakes them. Already the productive are escaping to other states. Unfortunately they are taking their welfare mentality with them.

As for the more traditional forms of socialism, virtually no government now seeks to take over the commanding heights of the economy, other than idiots like in Venezuela. There it took around a decade for the full horror to manifest itself, but now that it has, everyone has backed off from that version, at least for the time being. The version we are in the midst of is what I think of as the “crony capitalist” version, which is based on governments squeezing the last dollar of tax revenue, plus whatever they can extort from their central bank money creation process, to direct spending in a politically advantageous direction. Australia is at the start of a fall in living standards that is in large part based on the notion that all public spending adds to demand and therefore is positive. Which is augmented here by a superstitious belief that bringing in many many migrants makes the economy rich because we have to build infrastructure and housing for them to live in. Quite insane, but if you really think economies are driven by C+I+G, you cannot see the problem until the economy finally does fall apart and even then won’t understand the problem although it will be right before their eyes. The RBA and Treasury keep expecting the economy to turn around, and are ever-amazed when it does not.

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10 Responses to Are there degrees of ‘socialism’?

  1. MPH

    Amazing that anyone could contemplate continuing as we are let alone expanding the system – clearly the government’s dodgy accounting sand people’s ignorance of government debt continue to adequately clothe the emperor…

  2. 2dogs

    towards a ‘well-being’ framework

    This would be great so long as it is things like individual freedom and autonomy being included in well-being.

    But instead it will include those things that the framers will want to foist upon us, regardless of how unhappy they make us.

    We are to not only have the jackboot stomping on our face, we will be expected to be damn happy about it, because the jackboot wearer needs their ego boosted.

  3. Behind Enemy Lines

    Are there degrees of ‘socialism’?
    Posted on 9:22 pm, March 6, 2019 by Steve Kates

    Of course there are degrees of socialism.

    Trouble is, each one leads inexorably to the next. Straight on to the inevitable dysfunctional communist outcome.

  4. Colonel Crispin Berka, King's Fusiliers Corps.

    That up-coming Democrats POTUS 2020 candidate Andrew Yang (who I tip will overtake AOC in the next 12 months) was saying a very similar thing on Fox Business earlier in the week.
    Quite possibly this is a co-ordinated attempt by Progressives internationally to concede a mile of Socialism while capturing a few dozen yards of state welfare. Continue the pro-worker Leftist interventionist policies of Trump and combine it with some more welfare state leeching and SJW nonsense. A mixed economy, running essentially on caged capitalism and parasitised by social justice. It’s not Socialism, but it is rather socialist, and it takes the beacon of liberty one step closer to darkness.
    There’s a good chance they’ll succeed in the USA on that campaign because, basically, it describes the Australia of the present, where Progressives don’t see a problem.

    As the voting public’s majority was not enough to get the Democrats candidate elected last time, it’s still possible they’ll be thwarted in the Electoral College again.

  5. Beachcomber

    Of course there are degrees of socialism.

    Trouble is, each one leads inexorably to the next. Straight on to the inevitable dysfunctional communist outcome.

    +100!

  6. Elizabeth (Lizzie) Beare

    Whatever happened to the pursuit of happiness and people making their own well-being?

  7. Adelagado

    Steve Kates said ” we typically allow plenty of free riding … we are subsidise plenty of people who ought to be contributing to their own upkeep. “

    Personally I think a bigger problem is that we vastly overpay too many people who, at best, contribute nothing or, at worst, actually hinder growth. Most of the public service for example.

  8. The clue is in the name socialism, as opposed to individualism (just like social justice as opposed to individual justice).
    The moment we redistribute the first dollar, we have a degree of socialism. It’s then just a matter of degrees, as the principle of socialism has been accepted.

    When 50% of the population has had redistribution hard wired into their DNA since the dawn of time, and we encourage/allow that 50% into positions of authority and power, we will always, but always lurch towards socialism.
    This is inevitable and unavoidable.

  9. Leo G

    Of course there are degrees of socialism.
    Trouble is, each one leads inexorably to the next. Straight on to the inevitable dysfunctional communist outcome.

    Like climbing Mount Purgatory from the top down, but with Marx- and not Virgil- as a guide.

  10. Overburdened

    Oz is the beacon of socialism i f putting disengaged cradle to grave welfare recipients into a situation where there is no incentive to take risk is a KPI.
    To be fair all except the minority who get no free rides are indulging in the benefits of the welfare state.
    Humans are affluent by nature, and are also avaricious.
    So these said recipients will live to and beyond their limits, and they are enabled by a morally neutral financial system, which at its best is all about capacity to repay.
    On a personal note l have a credit card that l reduce to zero routinely once a fortnight.
    I do not understand how anyone regardless of income would have multiple cards to juggle the finances.
    Naturally when eventually critical mass is surpassed Oz will be another socialist shit hole, by the current definition.
    It will be as sudden and as brutal as what has happened in all the current shit holes.

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