Minnesota Governor Tim Walz, the Democratic vice presidential candidate, recently urged his supporters to “not shy away from our progressive values.” One person’s socialism is another’s neighborliness.” Socialism shares a cup of sugar with the family across the street, and who can object to that?
Walz’s identification of socialism with neighborliness is reminiscent of Bernie Sanders’s remark that, “tAs far as I am concerned, socialism does not mean state ownership of everything, it does not in any way mean creating a nation and a world in which all people have a decent standard of living.” Here, Sanders does not equate socialism with a particular set of economic institutions, but rather with the uncontroversial idea that we should create a world in which everyone has a decent standard of living.
Even socialist philosophers and writers are guilty of these kinds of rhetorical tricks. GA Cohen once argued That voluntarily sharing food and equipment with your friends on a camping trip is an embodiment of socialist principles. And according to George Orwellsocialism is the idea that “everyone does their fair share of the work and gets their fair share of benefits;” he says that the merits of socialism thus defined are “obvious.”
I agree with Orwell – to a point. It is clearly that we should do that want an economic system that distributes burdens and benefits fairly. But it is not clear that socialism is this system. Merely identifying socialism with a fair economic system is no more a convincing defense of socialism than merely identifying capitalism with a fair economic system is a convincing defense of capitalism. This is a bit like someone claiming that the paleo diet is the healthiest diet, because they simply label the foods that appear to be the healthiest as “paleo.” To fruitfully compare capitalism and socialism, we need to understand the specific economic institutions that characterize socialism and capitalism.
At the most general level, socialist economies are those that mandate the collectivization of productive property. That is, they give you the opportunity to privately own “personal property” like your shoes, but not “productive property” like a shoe factory. Collectivization can be institutionalized in various ways. Old-fashioned socialists, for example, would be in favor of state ownership of the shoe factory. But this style of socialist economics is less popular today, given the overwhelming evidence that it is not prosperous, friendly or fair.see Venezuela for a recent example).
Contemporary socialists have therefore begun to advocate democracy in the workplace: workers collectively own companies and make decisions democratically. This arrangement allows for market competition—employee-owned companies can openly compete with each other—and thus avoids some of the traditional Hayekian criticisms of socialism.
Yet it is not clear to me that this style of socialism is so friendly. Sure, some people might prefer to become employee-owners of a democratically run company, just as some people might prefer to work remotely rather than in the office. But others may prefer a capitalist company – and that one people are unlucky under socialism. Like the philosopher Robert Nozick points outCapitalism allows socialist-minded people to pool their resources to create democratic worker cooperatives if they wish, but socialism does. not allowing capitalist-minded people to create capitalist businesses.
And there are plenty of good reasons why people might prefer capitalist companies. For example as Don Lavoie notesemployees “may not want to take on the risks, costs and responsibility that come with running a business.” He continues: “There are potentially several benefits for workers who choose to specialize in earning wage income in order to be protected from the vicissitudes of market competition. There is often an advantage to letting someone else be in charge and thereby limiting concerns to the fulfillment of a wage contract, leaving management concerned about the company’s profit and loss accounts.”
To illustrate, suppose Lance wants to start his own landscaping business and needs to hire an employee. Moe just wants stable employment and a steady wage; he doesn’t want to be part of the case and the headaches that come with it. So Lance hires Moe to mow some clients’ lawns.
As a result of the pay contract, both Lance and Moe get what they want. Yet this is, as Nozick would say, one of many “capitalist acts between consenting adults” that must be banned by a socialist regime if it is to remain socialist. A socialist regime would force Lance to give Moe a share of the company if he were hired, even though it would leave both parties worse off. But forcing people into workplace arrangements they would rather avoid is not kind or friendly; on the contrary, it sounds downright selfless.
Christopher Freiman is Professor of General Business Administration at the John Chambers College of Business and Economics at West Virginia University.