What is Socialism?
Socialism is not synonymous with statism. A socialism worth defending must be about radically transferring ownership, power and control to the people
What comes to mind when you think of the word ‘socialism’?
I ask because I think that many people associate socialism with one of two things: They either think about the totalitarian state socialism enacted under Stalin in the USSR or they think about European social democracy, which entailed, in the immediate post-war period, nationalisation, redistribution, Keynesianism and welfarism.
In and of itself, there is nothing wrong with these mental associations: Social democracy and Stalinism are both different forms of socialism that existed in the 20th Century and, for many people, they serve as a model of what socialism was and may even guide what they think socialism ought to be in the future.
The problem is that both of these forms of socialism are what Hal Draper would have called ‘socialism from above,’ because both of these forms of socialism involve centralising power in the hands of the state.
I would argue that we need to reject these forms of socialism, because transferring power, control and ownership of the economy to the state does nothing to restructure society so as to empower working people. To given an example: Attlee’s post-war Labour government nationalised about 20% of the economy between 1945–51, but the industries they nationalised were generally those that were loss-making or struggling and they left existing management structures in place. For the average worker in these industries, nothing much had changed. In fact, some argue that the nationalisation programme helped to shore up capitalism by propping up the less competitive sectors of the industrial base. In addition to this, by leaving power and control of the industries with the existing managers and shop stewards, the dynamism that could have been unleashed by a more radical transfer of ownership, power and control was lost, helping to discredit socialism in the medium-term as Thatcher pointed to the inefficiency and sclerosis of the nationalised industries as a reason for privatisation in the 1980s.
This association between socialism and statism is unhelpful for another reason. It allows right-wing critics of socialism to argue that socialism and freedom are opposed to one another, because a statist model of socialism necessarily involves transferring power away from people and towards the state. As Hayek warned in the The Road to Serfdom, forms of socialism that operate in this way can lead to the state intruding in other areas of our lives. Hayek’s view was that socialism necessarily led to totalitarianism, because — for him — socialism and statism were synonymous.
Hayek also pointed out that state control of the economy requires a vast bureaucracy of central planners to manage and control the production and distribution of resources, which he argued was extremely wasteful and inefficient compared to the automatic process of distribution enabled by a market mechanism. In short: he argued that the market is better at efficiently distributing resources as it acts like a nervous system, with the price mechanism acting as a signal, motivating firms to increase and decrease production in light of fluctuations in demand — all achieved without the need for a single beaurocrat in the central government.
My own view is that statism, far from being synonymous with socialism, is counter-productive to socialist goals. This is because the central problem for which socialism is supposed to be the cure is that ownership, power and control of economic resources are concentrated in the hands of a small elite. In principle, nationalisation could be the first step in a process that leads to a programme of redistribution, but it is neither a necessary nor a sufficient condition for this process.
Instead, socialism must be about empowering communities, democratising workplaces, redistributing wealth and encouraging cooperative models of ownership. This means setting up structures that facilitate and empower people to take control over their own lives, rather than imposing a top-down centralising version of ‘socialism from above.’
For me, the the appeal of this model of socialism is that it is radically empowering and, far from threatening to erode freedom and autonomy as Hayek argued, it is essential to it.