The word socialism
first appeared in 1827. Robert Owen defined socialism as “the abolition of private property”. Karl Marx took a
similar line, and extended the idea of common ownership to the national economy.
At least at that time, socialism and communism were virtually synonymous, especially in terms
of their shared vision of the final goal. They both meant the common ownership
of the means of production, and the end of markets and competition.
This view persisted throughout the twentieth century, including within the UK Labour Party. George Bernard Shaw wrote with approval: “Socialists are trying to have the land and machinery ‘socialised,’ or made the property of the whole people”. In 1908 the Labour Party Conference passed a resolution, adopting the aim of “the socialization of the means of production, distribution and exchange to be controlled by a democratic state”. In 1924 Sidney Webb summarized his view of socialism as involving “(1) Collective Ownership; (2) Collective Regulation; (3) Collective Taxation; and (4) Collective Provision”.
Similar views were found among Labour
Prime Ministers. J. Ramsay MacDonald saw socialism as “a movement to supplant
Capitalism altogether, by organising communally the services which Capitalism
performs or ought to perform.” In 1937 Clement Attlee wrote of the “evils” of
capitalism: their “cause is the private ownership of the means of
life; the remedy is public ownership.” Attlee then approvingly quoted the words
of Bertrand Russell: “Socialism means the common ownership of land and capital
together with a democratic form of government.”
In my book Is Socialism Feasible?I show the persistence of this view of socialism. I also discuss several attempts to change its meaning, including by Douglas Jay, Anthony Crosland, Deng Xiaoping and Tony Blair. Blair tried to shift the meaning to social-ism, by replacing the goal of common ownership by vaguely-specified “ethical values” and a recognition that individuals are socially interdependent. This attempt to revise the meaning has not made much of a mark.
Deng Xiaoping faced the
problem of persuading the Chinese Communist Party to support his enormously
successful market reforms. Deng declared:
“The essence of socialism is liberation and development of the productive forces, elimination of exploitation and polarization, and the ultimate achievement of prosperity for all … common prosperity is the essence of socialism.”
Note the subtle shift from property to prosperity. If that is socialism, then few people are not socialists.
But the original meaning endures. The Merriam-Webster
Dictionary defines socialism as “a system of society or group living in which
there is no private property” or “a system or condition of society in which the
means of production are owned and controlled by the state.” This is remarkably
similar to the original definitions of Owen and Marx.
moderates help Corbyn, and socialists help Trump
Among prominent living politicians today, including
Jeremy Corbyn, Bernie
Sanders and Jean-Luc Mélenchon, Socialism has retained its original meaning,
of widespread common ownership, or at least they have not renounced that original
At the same time, leading Labour Party moderates
who support a mixed economy continue to support “democratic socialism”. By
doing so they give succour to the full-blooded socialist left, who are much
closer to the enduring traditional view of socialism than the moderates themselves.
We can pretend that the word socialism has
shifted in meaning, but there is little evidence of a major and widely accepted
Moderate or otherwise, those using the “democratic
socialism” label help to sustain the mistaken idea that socialism (in its enduring
and prevalent sense) is compatible with democracy. History and theory both show
that a totalitarian concentration of political power flows inevitably from the unmitigated
concentration of economic power in the hands of the state that is associated
with large-scale socialism.
A similar problem exists in the US, particularly
after the recent election of a young group of socialists to congress, including
the impassioned and eloquent Alexandria Ocasio-Cortez. Along with Sanders, they
are members of the Democratic Socialist Alliance (DSA) within the US Democratic
The DSA argues for “a vision
of a humane international social order based both on democratic planning and
market mechanisms”. They also argued that “widespread worker and public ownership will greatly lessen
the corrosive effect of capitalists [sic] markets on people’s lives”. While, unlike many other socialists, the
DSA notably accepts an enduring role for markets, its agoraphobic bias is
revealed by the failure to mention the corrosive effects of bureaucracy on
statements, leading DSA politicians seem to favour Nordic-style, welfare state
capitalism. But they have not made it clear that they support the large private
sectors and financial markets that are prominent in all the Nordic countries. Instead,
they go along with the abolition of capitalism. They distance themselves from
the Communist regimes of the past. But while the experiment with socialism in
Venezuela has led to a catastrophic human disaster, they
fail to come out in full condemnation of that regime.
Trump. Not only does he mobilise racist prejudices, he also uses their
self-declared socialism to describe
them as communist. Given that socialism and communism were (at
least originally) virtual synonyms, this ammunition is handed to Trump by his
most fervent opponents.
meaning of social democracy
When Social Democratic parties were first formed
in Europe in the nineteenth century, most were strongly influenced by Marxism.
They were fully socialist in its original sense.
Some separation of meaning between socialism and
social democracy occurred beforehand, but it was brought to a head by the onset
of the Cold War in 1948. Europe as a whole, and Germany in particular, were
divided between the Eastern and Western Blocs.
All socialist and communist parties had to
choose – the East, the West, or a plague
on both? With Moscow ties in many cases, almost all Communist parties chose the
East. Many moderate Socialist, Social-Democratic or Labour parties chose the West.
At its Bad Godesberg Congress in 1959, the
German Social Democratic Party (SPD) made fundamental changes to its aims. It
dropped its opposition to capitalism, and it abandoned the Marxist analysis of
class struggle. The
“The Social Democratic Party therefore favours a free market wherever free competition really exists. Where a market is dominated by individuals or groups, however, all manner of steps must be taken to protect freedom in the economic sphere. As much competition as possible – as much planning as necessary.”
The crucial point here is that the
SPD moved from (temporary or permanent) toleration
of markets and competition, to accepting
markets and competition as desirable, alongside strong public enterprise
and state regulation where necessary.
This explicit and fundamental change in
aims in the world’s largest and most influential Social Democratic Party led to
a separation of meanings of the terms social
democracy and socialism. But it
must be acknowledged that strong residues of old-style thinking persisted, in
the SPD and in social-democratic parties in other countries.
There is a simple test to distinguish a socialist from a social democrat, according to currently prevalent meanings of those
To be a social democrat it is not enough to accept
markets and a mixed economy, as Jeremy Corbyn, John McDonnell and the Democratic
Socialists of America have done. After all, a mixed economy could be accepted
as a temporary staging post in the transition to full-blooded socialism, as Vladimir
Lenin did with his New Economic Policy in 1921.
A modern social democrat must go further. He
or she must make a clear and positive case why markets, competition and a private
sector are more than a temporary expedient. It
must be argued that these things are indispensable, both for economic efficiency
and the preservation of freedom. This is the acid test. The SPD in 1959 understood
this point and it passed the test.
As far as I am aware, neither Corbyn, McDonnell, Sanders nor Ocasio-Cortez have made such a positive case for a permanent private sector. If I am right, then they are socialists, not social democrats. Despite their protestations, they are closer to traditional communism than to modern social democracy, as practiced in the Nordic countries and elsewhere. I would be delighted if they can prove me wrong.
Large-scale socialism is outdated, extreme and
demonstrably incompatible with democracy. At least if these declared socialists
want to win parliamentary majorities and form governments, then they have to
change their terminology, and dispose with outdated and unfeasible ideas.
But while Nordic social democracy remains remarkably successful (as I show in my book Is Socialism Feasible?) the social-democratic brand throughout Europe has declined in electoral support. Although re-naming is necessary, much more than renaming is required. The abandonment of the socialist label is but a first step. But that is another story.
17 July 2019
Attlee, Clement R. (1937) The
Labour Party in Perspective (London: Gollancz).
Blair, Tony (1994) Socialism,
Fabian Pamphlet 565 (London: Fabian Society).
Crosland, C. Anthony R. (1956) The Future of Socialism (London: Jonathan Cape).
Democratic Socialists of America (1995) ‘Where We Stand: Building the Next Left’, DSA: Democratic Socialists of America. https://www.dsausa.org/where_we_stand.
Griffiths, Dan (ed.) (1924) What is Socialism? A Symposium
Jay, Douglas (1937) The
Socialist Case, 1st edn. (London: Faber and Faber).
Stiglitz is wrong.
The persistent vagueness and misuse of such words sows confusion. In fact, socialism
has an enduring meaning that is virtually identical to that of communism. In
this blog I explain why.
The origins of the words socialism and communism
The word socialism appeared in November 1827 in
the Co-operative Magazine, published by
followers of Robert Owen, where a writer referred to “Communionists or
Socialists”. It was used in the Poor
Man’s Guardian in 1833 and moved into more frequent usage thereafter. As J.
F. C. Harrison noted: “By 1840 socialism was virtually synonymous with Owenism”.
For Owen and his
followers, socialism meant the abolition of private property. It also acquired
the broader ideological connotation of cooperation, in opposition to selfish or
competitive individualism. Communal property was seen as its defining institutional
foundation. As Owen argued in 1840, “virtue and happiness could never be
attained’ in “any system in which private property was admitted”. He aimed to
secure “an equality of wealth and rank, by merging all private into public
In 1840 in Paris,
the word communiste appeared in an
article by Étienne Cabet and in a pamphlet by Théodore Dezamy and Jean-Jacques
Pillot. Influenced by Owen, Cabet was a Christian advocate of utopian communist
letter of introduction from Owen, John Goodwyn Barmby went to Paris in 1840 to
meet the advocates of le communisme. On
his return, Barmby founded the London Communist Propaganda Society in 1841 and established
the Communist Chronicle newspaper. Despite
his close working links with the Owenites, Barmby criticised socialism because “it
wants religious faith, it is too commercial, too full of the spirit of this
world, and therefore is rightly damned”. Communism for him was less
materialistic and more divine.
investment of these idiosyncratic spiritual connotations, Barmby imported the
word communism into English. It
spread in the UK and the US, where the term socialist
was already prominent. The word Kommunist
had appeared in German by 1842, when Marx noted its usage.
1843 Engels reported to the Owenite journal The
New Moral World that there were “more than half a million Communists in
France” and that “Communist associations” and individuals describing themselves
as communists were plentiful in Germany, Italy, Switzerland and elsewhere.
Engels addressed his Owenite readers as “English socialists” and saw them as
having very similar aims to the Continental communists.
the second (1849) and later editions of his Principles
of Political Economy, John Stuart Mill noted another early difference of
meaning between socialism and communism. For followers of Saint-Simon
or of Fourier in France, communism meant
“the entire abolition of private property”, whereas socialism was “any system which requires that the land and the
instruments of production should be property, not of individuals, but of
communities or associations, or of the government.” Unlike communism, this meaning of socialism
would allow for individual ownership of personal possessions. Hence Mill
described Owenism as communism, because
it upheld the abolition of all private property. But this particular
distinction in meaning between the two words was forgotten after the Owenite and
other utopian experiments faltered.
more influentially, the 1848 edition of Webster’s American Dictionary defined socialism
as a “social state in which there is a community of property among all the
citizens”, and defined communism as “a
new French word, nearly synonymous with … socialism”.
both socialism and communism referred to the abolition of
(most or all) private property and the establishment of common ownership of the
means of production. Henceforth the two terms became entwined within Marxism, there
to perform an entirely different dance of meaning.
Marxism, communism and socialism
and Engels often treated the terms socialism
and communism as interchangeable.
But occasionally they gave them different nuances. In 1845 they adopted
the new word communism as their label
for their movement: “Communism is not for us a state of affairs which is to be established, an ideal to which reality [will] have to
adjust itself. We call communism the real
movement which abolishes the present state of things.” When they henceforth
started setting up political organizations they adopted and promoted the term communist rather than socialist. But their ultimate goals were
the same as most socialists at the time.
1888 Engels explained why he and Marx had chosen the word Communist for theirfamous
Manifesto of 1848. Engels claimed
that the word socialism was then too
‘respectable’ and too ‘middle class’. He wrote:
“Yet, when it was written, we could not have called it a ‘Socialist’ manifesto. By ‘socialists’, in 1847, were understood, on the one hand, the adherents of the various utopian systems: Owenites in England, Fourierists in France, both of them already reduced to the position of mere sects, and gradually dying out; on the other hand, the most multifarious social quacks … in both cases men outside the working-class movement … Whatever portion of the working class had … proclaimed the necessity of a total change, that portion then called itself communist. … Thus, socialism was, in 1847 a middle-class movement, communism a working-class movement.”
Engels omitted to
note that the self-described communists
in the 1840s also had more than their fair share of middle-class devotees, quacks,
bizarre utopians and radical clerics.
It is possible
that Marx and Engels adopted the term communist
partly because it had become more popular in a Continental Europe on the
eve of the 1848 revolutions. While socialism
remained more widespread in Britain, the Owenite movement, with which it
was largely associated, had already passed its peak by 1847. While the younger
term communism had already attracted several
oddballs in the seven years of its use, socialism
had the additional negative legacy of numerous failed utopian experiments in
the 1820s and 1830s, in the UK and the US.
Instead of small-scale
utopian experiments, Marx and Engels favoured a global insurrectionary strategy.
As Engels observed in 1843, the French communists understood the need for “meeting
force by force … having at present no other means”. Marx and Engels chose the
word communism in the 1840s, not
because their goal was different from socialism, but partly because many
self-described communists in
Continental Europe promoted armed insurrection. The penultimate section of the Communist Manifesto attacks various
strands of socialism, not for their collectivist goals, but for their impractical
strategies and their failure to countenance the use of force. The final
paragraph of the whole work drives the point home: “The Communists … openly
declare that their ends can only be attained by the forceful overthrow of all
a few decades later, the word socialism was
again in the ascendant. In 1880 Engels published Socialisme utopique et socialisme scientifiquein the French Revue
socialiste: notably he put socialisme
rather than communisme in the title.
By 1890 a number of parties describing themselves as socialist or
social-democratic had taken root in Germany, France and elsewhere. In 1895,
Engels wrote approvingly of “the one great international army of Socialists, marching
irresistibly on and growing daily in number”. The earlier emphasis on physical
force was also reduced: the possibility of achieving their goal by democratic
means, rather than by insurrection, seemed greater than before. One of the
major reasons for using the term communism
rather than socialism had disappeared.
William Morris was an artist, craftsman and writer, and one
of the first English intellectuals to embrace Marxism. Writing in a 1903 Fabian
Tract, he saw socialism and communism as virtual synonyms: “between
complete Socialism and Communism there is no difference whatever in my mind”.
They assert that the means of production and the resources of nature “should
not be owned in severalty, but by the whole community”.
used the term socialism or capitalism, their fundamental aim was
clear. In the Communist Manifesto,
Marx and Engels echoed Owen and called for the “abolition of private property.”
They proclaimed an economic order in which “capital is converted into common
property, into the property of all members of society.” Engels repeated in
1847: “The abolition of private ownership is the most succinct and
characteristic summary of the transformation of the entire social system … and
… is rightly put forward by the Communists are their main demand.” In 1850 Marx
and Engels again declared: “Our concern cannot simply be to modify private
property, but to abolish it”.
This meant the
complete abolition of markets. They wanted an end to the “free selling and
buying” of commodities. As Marx wrote in 1875: “Within the cooperative society
based on common ownership of the means of production, the producers do not
exchange their products”. Engels argued in 1884 that “no society can
permanently retain the mastery of its own production … unless it abolishes
exchange between individuals.” The abolition of markets was seen as necessary
for social control.
national ownership, Marx and Engels went much further than Owen and most other
early socialists or communists. Marx and Engels welcomed efforts “to centralize
all instruments of production in the hands of the state” and looked forward to
a time when “all production has been concentrated in the hands of a vast
association of the whole nation”. Described as either communism
or socialism, this utopia of national
ownership and “social” control persisted in their writings.
Phases of communism
In his Critique of the Gotha Programme of 1875,
Marx used the term communism to
describe his goal. He considered “the first phase of communist society as it is when it has just emerged
after prolonged birth pangs from capitalist society.” Eventually a new order
“In a more advanced phase of communist society, when the enslaving subjugation of individuals to the division of labour, … when the all-around development of individuals has also increased their productive powers and all the springs of cooperative wealth flow more abundantly – only then can society … inscribe on its banner: From each according to his abilities, to each according to his needs!”
Hence Marx considered
a “first phase” and then a “more advanced phase” of communism. Writing in his State and Revolution in August 1917,
Lenin referred to this passage from Marx’s Critique
of the Gotha Programme but introduced a different usage. He wanted to defend the planned Bolshevik seizure of power
against the criticism that Russia was insufficiently developed economically for
a radical Marxist revolution.
the Marxist dictionary and renamed Marx’s “first phase of communist society” as
socialism. Under this socialism the means of production would
be in public ownership but there would still be a struggle against bourgeois
ideas and material shortages. When that struggle was completed, and after the
subjugation of ‘capitalist habits’, full communism
would be established. “The whole of society will have become a single
office and a single factory with equality of labour and pay.”
In contrast, Marx
and Engels never distinguished the terms socialism
and communism in this way. For them, socialism and communism both meant the abolition of the private ownership of the
means of production. They wrote of lower and higher “phases” but did not use
different nouns to distinguish them.
International (also known as the Second International) was a global association
of socialist parties, formed in 1889. In 1919, Lenin and the Bolsheviks broke
from the Socialist International and formed the Communist International (also
known as the Third International). The difference between the Communist and
Socialist Internationals was not stated in terms of ultimate objectives.
Instead the Communist International was formed because several parties in the
Socialist International had supported their national governments in the First
World War. There was no declared amendment of final goals, although leaders of
the Second International were accused of de
facto abandoning socialism.
As I show in my
book Is Socialism Feasible? the original
meaning of socialism persisted even
in the relatively moderate UK Labour Party. It was endorsed by leading members such
as Sidney Webb, Beatrice Webb, George Bernard Shaw, Clement Attlee and Aneurin
The failure of revisionism
the Second World War, there have been a number of attempts to change the meaning
of socialism, including by Tony Crosland and Tony Blair. But the resilience of
the original meaning is testified by the endurance of the UK Labour Party’s original
version of Clause Four from 1918 to 1995. This original version calls for complete
“common ownership of the means of production, distribution and exchange” and offers
no defence of markets or a private sector. Labour leader Jeremy
Corbyn is among those that would like to return to the 1918 formulation.
obfuscate the issues, but the undying commitment on the left to common
ownership and the left’s widespread agoraphobia (fear of markets) testify that socialism
has not changed much in meaning. Although some communists may differ from some socialists
in terms of strategy, in general there is little if any difference in terms of
contrast, the term social democracy
has successfully changed its meaning. It now contrasts with socialism, especially in terms of its
advocacy of a mixed, market economy. In 1959 the (West) German Social Democratic
Party committed itself to a “social market economy”
involving “as much competition as possible – as much planning as necessary.”
This was very different from the enduring meanings of the words socialism and communism. Politicians like Sanders need to make clear where they
20 April 2019
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Ideas, 9(3), June, pp. 259-302.
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Socialism? A Symposium (London, Richards).
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Owen and the Owenites in Britain and America (London: Routledge and Kegan
Hodgson, Geoffrey M. (2018) Wrong Turnings: How the Left got Lost (Chicago:
University of Chicago Press).
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and Northampton MA: Edward Elgar), forthcoming.
Lenin, Vladimir Ilyich (1967) Selected Works in Three Volumes (London: Lawrence and Wishart).
Marx, Karl (1973) The Revolutions
of 1848: Political Writings – Volume 1 (Harmondsworth: Penguin).
Marx, Karl (1974) The
First International and After: Political Writings – Volume 3
Marx, Karl (1976) ‘Marginal Notes on Wagner’, in Albert
Dragstedt (ed.) (1976) Value: Studies by
Marx (London: New Park), pp. 195-229.
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Engels: 1843-1844 (London: Lawrence and Wishart).
Mill, John Stuart (1909) Principles
of Political Economy with Some of their Applications to Social Philosophy,
7th edn. (London: Longman, Green, Reader and Dyer).
Morris, William (1973) Political
Writings of William Morris (London: Lawrence and Wishart).
Owen, Robert (1991) A
New View of Society and Other Writings, edited with an introduction by
Gregory Claeys (Harmondsworth: Penguin).
When it was used by Robert Owen and his followers from the 1830s, the word socialism meant “the abolition of private property” and the adoption of widespread common ownership. That same meaning was accepted by Karl Marx and Frederick Engels. It was used in the twentieth century to describe Marxist regimes in Russia, China, Cuba and elsewhere. The goal of widespread common ownership was inscribed in the aims and values of the UK Labour Party from 1918 to 1995.
The socialist algorithm has eight steps, arranged in a loop:
Step 1: Critique. Point to all the dreadful things that have happened under capitalism, including war, famine, oppression, exploitation, economic inequality and environmental degradation.
Step 2: Dream. Propose a non-existent, imaginary socialism that is highly democratic, peaceful, egalitarian and non-discriminatory. Say that it includes widespread state ownership but avoid going into details on how a large-scale complex system would work, or about the institutional and administrative mechanisms involved, or how ultra-democracy would operate in practice.
Step 3: Ignore. Discount claims by leading economists, political scientists and historians that such a system could not work fairly and humanely, at least unless major roles were retained within the system for markets and private property. Press on regardless to the next step.
Step 4: Solidarise. Choose some regimes in the past that started on the socialist road, such as Russia, China or Cuba. If a new explicitly socialist regime – Venezuela for example – pops up and carries out some policies you like, such as reducing poverty and illiteracy, then give it your support for a while.
Step 5: Blame. When things go wrong with the nominated socialist regimes in Step 4 – including war, famine, oppression, exploitation, economic inequality or environmental degradation – blame foreign intervention, sanctions by capitalist countries or internal counter-revolutionaries. Don’t blame the issues ignored in Step 3.
Step 6: Deny. When it proves difficult to blame everything that goes wrong on foreign intervention, sanctions by capitalist countries or internal counter-revolutionaries, then deny the scale or even the existence of the problems.
Step 7: Rename. At the point where the socialist regimes nominated in Step 4 become so dreadful – with war, famine, oppression, exploitation, economic inequality or environmental degradation – to the point where blame or denial (Steps 5 and 6) are no longer plausible, then declare that these regimes were not, or are no longer, socialist.
Step 8: Return. Collect £200 and go back to Step 1.
This algorithm has variant criteria, particularly over those used to decide what regimes are described as socialist under Step 4. This leads to endless controversies among socialists over the criteria and outcomes of such choices.
The personal determination to deny facts in Step 6 may also waver among some less-hardened comrades.
Further controversy exists among socialists on the criteria deployed in step 7, which trigger the abandonment of the socialist label in particular cases.
The Russian Revolution
The Russian Revolution instigated the socialist algorithm and led to countless runs of the program. It has also illustrated numerous variants.
Some say that it never was “proper socialism” in the first place, for some reason, such as the failure to establish worker control of the factories, or the dissolution of democratic government. These purists move rapidly to Step 7, collect their £200, and move back to Step 1.
Bertrand Russell quickly collected his £200. He visited Russia in 1920 in a Labour Party delegation, where among others he met Lenin. Russell wrote in 1924: “Socialism … means the common ownership of land and capital, together with a democratic form of government.”
Hence, for him, Bolshevik Russia was never socialist. But Russell did not consider the possibility that any concentration of ownership and economic power in the hands of the state would always undermine political democracy. (Step 3.)
Or you may say that the Bolshevik regime was socialist up to the restoration of some private ownership and markets with the New Economic Policy in 1921. Or you could say that socialism ended in Russia with Stalin’s consolidation of power in 1928. Die-hard forgivers of Stalinism would say that it ended in 1991.
To survive, the die-hards need a good dose of denial (Step 6). For example, in 1990 Corbyn’s future aide Seumas Milne suggested that estimates of deaths under Stalin by Robert Conquest and others were too high. This was quickly contradicted when more evidence became available in 1991 showing that earlier estimates, particularly by Conquest, were in the right ball park.
Imagine the consternation and debate caused in Marxist circles over these problems. The neatest solution is to avoid any proclamation of socialism and describe all Soviet-style regimes as “state capitalist”. This is the ingenious solution of Tony Cliff and others. Cliff was the founder of what eventually became the Socialist Workers Party.
The trouble with this solution is that the definition of capitalism becomes so flattened and widened that it bears less resemblance to Marx’s analysis in Capital. This disparity becomes more severe when the importance for capitalism of financial markets is taken into account, as highlighted by Joseph Schumpeter and others. Competitive financial markets played no more than a marginal role in Russia from 1917 to 1991.
Leon Trotsky was more subtle. He introduced the concept of “degenerated workers state”. This term signalled that the working class had gained power, but the system had become corrupted by an over-bearing bureaucracy. For Trotsky, Soviet Russia was neither capitalist nor socialist.
But true to his Marxist credentials, Trotsky had to argue that a system where a rising class was neither in nor out of power had to be unstable – it could only last a few years.
Trotsky was murdered in 1940, so he left that problem to his followers. This unstable “transitional” regime lasted for well over half a century, defying Trotsky’s analysis.
And so it goes on. There are numerous variants, and many moves on the socialist scrabble board – playing with labels or names.
The drama in Venezuela is playing out before us. Many – but not all – socialists hailed the election the radical socialist Hugo Chávez in 1998.
In 2004 a number of intellectuals and politicians signed a “manifesto” declaring that they would vote for Chávez if they were Venezuelans. The signatories included Tariq Ali, Perry Anderson, Tony Benn, George Galloway, Eric Hobsbawm, Ken Livingstone, Naomi Klein, Ken Loach, John Pilger and Harold Pinter.
As the problems with the regime of Chávez grew in intensity, Step 5 (Blame) came into force. There may have been involvement by the CIA, particularly in the brief coup that overthrew Chávez for a few days in 2002. But hostilities from outside were relatively mild, particularly compared with Civil War that followed the Bolshevik Revolution in 1917. Venezuela continues to sell oil to the US and several other countries. Venezuela buys arms and military equipment from the UK, as well as from Russia and China.
Neither external nor internal opposition can adequately explain the unfolding catastrophe in Venezuela. In fact, the problems started the beginning. Chávez manipulated electoral mandates to undermine democratic checks and balances, to increase executive power, to neuter the Supreme Court, to make criticism of his government illegal and to increase censorship.
The outcome after 2013 was the disastrous regime of Nicolás Maduro. Venezuela saw famine, oppression, exploitation, economic inequality and environmental degradation.
By 2018 there was hyper-inflation of around a million per cent per annum, and about three million Venezuelans – about 10 per cent of the population – had emigrated.
Despite his 2014 declaration of support quoted above, John McDonnell has now moved to Step 7, helped by a little more denial on the way. On 20 May 2018 he declared “I don’t think it [Venezuela] was a socialist country”. McDonnell has collected his £200 and returned to Step 1.
Conclusion: back to the beginning
Obviously, it all starts with Step 1. Let us pause here for a while. There is a lot wrong with capitalism. But let us distinguish between capitalist democracies and autocracies.
Democracy is a key variable. The Biblical Four Horsemen of the Apocalypse are conflict, war, famine and death. As I have outlined in my book Wrong Turnings, from historical experience the antidote is clear: the chances of war, famine and premature death can be greatly diminished through a society with democratic institutions that defends +universal human rights.
Many of the horrors of capitalism occurred under undemocratic regimes. Wars between democracies are relatively rare. Famines are much less common under capitalist democracies. Consequently, the reduction of death and misery from famine and war is best pursued by opposition to all forms of despotism, whether capitalist or Communist.
This does not mean that capitalist democracies are always peaceful and unoppressive. Far from it. What it means is that there is plentiful evidence that democracy reduces the chances of famine, environmental degradation, premature death and war. And, for explicable reasons, no socialist country has lasted as a democracy.
Dreaming (Step 2) is fine. But we have to practical and realistic. Rather than ignoring in Step 3, we need to understand. One of the major problems with socialism – at least in its statist and non-market versions – is that a concentration of economic power in the hands of the state leads unavoidably to a dangerous and undemocratic concentration of political power.
“There’s no food”
In the Venezuelan case, the concentration of political power, which was designed to achieve statist control of the economy, had adverse effects well before wholesale public ownership was achieved.
Either way, attempts to move toward socialism weaken the economic sources of countervailing power and undermine the socio-economic foundations of democracy. Despite pronouncements to the contrary, the centralizing mission of statist socialism always leads to the destruction of necessary checks and balances.
In history there has been no exception to this outcome. We may dream of socialist democracy, but in the end we must learn from history and from analysts who show the dangers or impracticalities of socialist solutions to the problems in the world. In short, statist socialism cannot co-exist with democracy and with the protection of human rights.
Karl Marx was born on 5 May 1818. He was one of the greatest social scientists in human history. The intellectual structure of his thought has affected our understanding of history, of economic development and of political power. All modern scholars of significance have to define their position in relation to Marx’s monumental achievement.
Many of Marx’s predictions were wrong. He was mistaken, for example, about the general deskilling of the working class. On the contrary, although many remain unskilled, average skill levels have increased. Furthermore, although many remain desperately poor, the average standard of living of the working class has vastly increased since his time.
On the other hand, some of Marx’s predictions have been vindicated. He characterized the nature of the capitalist system more acutely than any of his predecessors and he predicted its spread over the entire world. He saw capitalism a dynamic system that broke down archaic institutions and barriers to trade.
Marx also focused on the generation of inequality under capitalism, which has increased and is recognized as a serious problem.
Marx got some forecasts wrong and some right. Prediction is far from everything in social science. What towers above all is his contribution to our understanding of the inner dynamics of capitalism. With all its shortcomings and theoretical flaws, it remains a huge achievement.
Was Marx the author of the Marxist tragedy?
Let us turn from Marx the social scientist to Marx the politician. Remarkably, from 1917 to the present day, a number of regimes have been set up by revolutionary activists who have claimed to be Marxists. All of these turned sour: these totalitarian regimes led to millions of deaths. Estimates vary. 90 million is on the conservative side, with about 65 million in Mao’s China alone.
Marxism has various ideological immune systems to deal with these brutal facts. One gambit is to blame it on the hostile interventions of foreign powers. But it is implausible that these alone are responsible for the outcomes. No foreign intervention prompted Mao’s Great Leap Forward of his Cultural Revolution, for example, which together led to about 40 million deaths.
Another argument – due to Leon Trotsky – is to blame it on the creation by tyrannical leaders such as Stalin of a bureaucratic caste that denied the working class any democratic power. But this implausibly assumes that a huge nationwide bureaucracy can somehow be run on the basis of meaningful votes on every important decision. No-one with any practical experience of a large organization would entertain such a fantasy.
A more colourful recent excuse is due to Yanis Varoufakis, the influential Greek academic and politician. He argued that the Marxist texts were too powerful. As a result they attracted devious opportunists who rode the Marxist rhetoric for “their own advantage.”
The problem, it seems, was that Karl Marx and Frederick Engels were too powerful with their prose. If only they had written more turgid texts – then millions would have been saved from the famines and the Gulags.
Marx bears some responsibility for the murdered millions
At least two major aspects of Marx’s thought removed protections of human rights and paved the way for brutal totalitarianism.
The first was his doctrine of class struggle. Analytically, this may have some value and it is subject to academic debate. But it was also a normative doctrine, about the working class seizing power and ending the rule of the capitalists.
Marx and Engels argued that the current aims and desires of the proletariat were less important than its historical destiny to abolish capitalism and become the ruling class. They wrote:
This is the first totalitarian impulse. Marxist revolutionaries are deemed to know better what is in the interests of the working class than the working class itself. Democracy becomes an impediment to the realization of those true interests, about which the masses are not fully aware.
Their normative arguments in favour of socialism are not based on any alleged rights. Instead, socialism is seen as historic destiny. Marx tried to show that crises within capitalism are recurrent and inevitable, and that capitalism digs its own grave by enlarging and empowering the working class.
The consequence of this class deprivation of human rights was enshrined in law under Marxist-socialist regimes. The 1918 Constitution of the young Soviet regime distinguished between the rights of the workers and the rights of others. The Soviet state also announced that it
A major problem here was that the criteria used to decide what was detrimental were unspecified, opening the door to arbitrary repression by the authorities. This is exactly what happened.
A regime that denies rights to some, especially with malleable criteria concerning who is denied those rights, ends up denying rights to everyone. These are the consequences of Marx’s “dictatorship of the proletariat”.
A full concentration of economic power leads to totalitarianism
A second aspect of Marx’s thought that promoted totalitarianism concerns the economy.
But as subsequent experiences from Russia to Venezuela illustrate, such a massive concentration of economic power requires for its enforcement, and sustains as an outcome, a massive concentration of political power that is intolerant of democracy. The good intentions or democratic inclinations of leaders are not enough. Those most hungry for power, and least affected by moral qualms in exercising it, will eventually rise to the top.
There is a widespread opinion among non-Marxist social scientists (including Barrington Moore, Douglass North and Francis Fukuyama) that democracy requires countervailing political and economic power to have a chance of survival. In Marxist terms, if the economic “base” determines the “superstructure”, then a pluralist polity requires a pluralist (or mixed) economy, not one that is overshadowed by a massive state.
A complete concentration of political and economic power in the hands of the state, which Marx and Engels advocated with enthusiasm as well as eloquence, always requires and enables a despotic political regime. There are no exceptions.
Over forty years ago, Leszek Kolakowski was an Eastern European dissident and a perceptive critic of Marxism. He wrote:
“My suspicion is that this was both Marx’s anticipation of perfect unity of mankind and his mythology of the historically privileged proletarian consciousness which were responsible for his theory being eventually turned into an ideology of the totalitarian movement: not because he conceived of it in such terms, but because its basic values could hardly be materialized otherwise.”
Kolakowski was right. Many have still to learn the tragic lessons of Marxist failure in practice, as well as of its partial but flawed analytical success.
Critics will say that giving Marx some blame for the atrocities of the twentieth century is like trying to blame Jesus for the atrocities of the Spanish Inquisition. They are wrong, Jesus never advocated class war or a concentration of economic power in the hands of the state, both of which create the conditions for tyranny.
5 May 2018
Minor edits – 6 May 2018
This book elaborates on the issues raised in this blog:
Published by University of Chicago Press in January 2018
Courtois, Stéphane, Werth, Nicolas, Panné, Jean-Louis, Packowski, Andrzej, Bartošek, and Margolin, Jean-Louis (1999) The Black Book of Communism: Crimes, Terror, Repression (Cambridge MA: Harvard University Press).
Fukuyama, Francis (2011) The Origins of Political Order: From Prehuman Times to the French Revolution (London and New York: Profile Books and Farrar, Straus and Giroux).
Kolakowski, Leszek (1977) ‘Marxist Roots of Stalinism’, in Robert C. Tucker (ed.) (1977) Stalinism: Essays in Historical Interpretation (New York: Norton), pp. 283-98.
Moore, Barrington, Jr (1966) Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World (London: Allen Lane).
North, Douglass C., Wallis, John Joseph and Weingast, Barry R. (2009) Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History (Cambridge and New York: Cambridge University Press).
Bernie Sanders campaigned for the Democratic presidential nomination in the US in 2015-2016. In the primary elections he received over thirteen million votes. He won 23 primaries and caucuses and approximately 43 per cent of pledged delegates, compared to 55 per cent for Hillary Clinton.
Sanders is a long-avowed “socialist”. What does he mean by this term? This is not an attack on the personality of Sanders, nor an attempt to smear him. Instead it is a search for the truth. What does he mean by “socialism” and what are his intellectual roots?
Does democracy imply socialism?
This is not a story about Russian spies. It is about Russian dolls. Sanders is the outer form of a Russian doll, with the slogan of Democracy across his chest. This slogan is used to promote socialism, typically with some vagueness about its meaning.
For Sanders, democracy implied socialism and substantial public ownership. In a 1987 interview he explained:
“Democracy means public ownership of the major means of production, it means decentralization, it means involving people in their work. Rather than having bosses and workers it means having democratic control over the factories and shops to as great a degree as you can.”
“[The] government has got to play a very important role in making sure that as a right of citizenship, all of our people have health care; that as a right, all of our kids, regardless of income, have quality child care, are able to go to college without going deeply into debt; that it means we do not allow large corporations and moneyed interests to destroy our environment; that we create a government in which it is not dominated by big money interest. I mean, to me, it means democracy, frankly.”
Given his rising prominence in the US, among a population that has not normally been sympathetic to socialist ideas, it is understandable that Sanders played up democracy and played down public ownership. But there is no evidence that he has abandoned his support for widespread common ownership.
Sanders is not alone in sometimes hiding his socialism behind the word democracy. Michael Moore did it in his ironically-titled 2009 film Capitalism: A Love Story, where he argued that
“capitalism is an evil, and you cannot regulate evil. You have to eliminate it and replace it with something that is good for all people, and that something is democracy.”
But democracy is a system of government, and it is not in itself a type of economy.
Like Moore, Sanders in recent years has been economical with the truth. As we have entered the new millennium he has left the details of his socialism vague. He grants his audience the freedom to choose its meaning.
Socialism: A love story
They may impute its original radical meaning of widespread common ownership. Or they can infer that Sanders is promoting a version of social democracy, as found in Denmark, Norway or Sweden. Sanders said in 2015 that
“we should look to countries like Denmark, like Sweden and Norway, and learn from what they have accomplished for their working people.”
“I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy.”
The Nordic countries mentioned by Sanders have relatively high levels of taxation and relatively low levels of economic inequality. They have strong welfare states. But they have not achieved anything close to socialism in its original sense. The private sector is still dominant. But by giving little guidance about what he means by socialism, Sanders can please a wider audience.
In a country where even minimal government involvement in the economy is habitually described by its opponents as socialist, Sanders has been opportunist. As he has come closer to power he has accepted the socialist label without much further explanation, knowing that for millions of Americans this is taken to mean even the mildest level of government economic intervention.
Sanders has allowed this inaccuracy to prevail, thus establishing a wide following among liberals, social democrats and radical socialists. He may have told the truth, but not the whole truth.
But crucially, neither Corbyn nor Sanders have elaborated a positive defence of the private sector.
Genuine advocacy of a mixture requires making the case for more than one type of ingredient. As well as their support for the public sector, they could have argued, for instance, that a substantial private sector is necessary for a viable civil society, to reap the benefits of competition, and to help sustain innovation and technological advance. Sanders and Corbyn have failed to make such arguments.
These arguments are rare among traditional socialists. The widespread absence of a defence of the private sector speaks as loudly as their calls for government intervention or common ownership. It suggests that a private sector is being reluctantly tolerated, and it would all be swept up into public territory if the opportunity arose. A mixed economy is to be accepted for now, as the system makes its transition toward full-blooded socialism and the abolition of all private enterprise.
Democratic socialism would take too many meetings
There is a further problem with the notion of democratic socialism that is adopted by Sanders and Corbyn. They promote a vague vision of extensive democratic control in the economy. Neither of them explain in detail how this extensive democratic decision-making is going to work. Would employees and consumers have a say on everything? How would they decide? How would the hierarchy of decision-making be structured?
The adjective democratic is kept as vague as the noun socialism. The details and feasibility of any such arrangement are simply ignored. If votes were held on every important question then the population would be overburdened with a myriad of decisions. Our lives would be taken up with meetings and voting.
It is impossible for anyone to gain expert knowledge on anything but a small number of technical and scientific issues. It would be counter-productive to put these technical issues to the vote. While many socialists have paid homage to some vague notion of “democratic control”, no-one has shown in theory or in practice how it would function in detail.
More Russian dolls inside
Let us go further into Sanders’ past. In the 1980s, when he was mayor of Burlington in Vermont, Sanders promoted a twinning programme with Yarolslavl in the USSR. He and his wife spent their honeymoon in the USSR in 1988.
This may be excused as an attempt to develop international understanding between varied communities, but this visit by an enduring, self-declared “socialist” to a “socialist” country under Communist Party rule would have been used to damage his presidential campaign in 2016, if he had won the nomination.
Going further back, as a young man in Chicago in the 1960s, Sanders was a member of the Young People’s Socialist League, which was the youth wing of the Socialist Party of America.
Founded in 1901, this party went through several splits and ruptures, but it was generally clear what it meant by socialism.
“[The] Socialist Party is to bring about the social ownership and democratic control of all the necessary means of production – to eliminate profit, rent, and interest, and make it impossible for any to share the product without sharing the burden of labor – to change our class society into a society of equals, in which the interest of one will be the interest of all.”
This formulation – involving widespread common ownership of the means of production – is in line with the original vision of socialism, as promoted by Robert Owen, Karl Marx, Vladimir Lenin, Leon Trotsky and numerous other socialists.
Finding Lenin and Trotsky
Eugene V. Debs (1855-1926) was the most famous leader of the Socialist Party of America and four times its presidential candidate, peaking at 913,693 votes in his 1920 campaign. Adopting the Marxist language of militant class struggle, Debs supported the 1917 Bolshevik Revolution in Russia. He also praised the attempted 1919 armed insurrection led by Karl Liebknecht and Rosa Luxemburg against the new-born German Republic.
In 1977 Sanders made a 30-minute documentary about Debs and his ideas. Sanders never recanted the version of socialism promoted by Debs and the Socialist Party of America.
In 1980 Sanders served as an elector for the Socialist Workers’ Party (USA), in an attempt to put this Trotskyist group on the presidential ballot, although Sanders was never a member of that organization.
Sanders is too vague about his socialism and his links with past radical socialists to draw too many definite conclusions. But the links are there, all the way back to Trotskyism and Leninism. It is ironic to compare how Sanders tries to champion democracy today, with the treatment of democracy by his Leninist antecedents.
In August 1917 Lenin explained in his State and Revolution that the forthcoming seizure of power would be highly democratic for the working class.
In November 1917 the Bolsheviks overthrew the liberal-socialist government of Alexander Kerensky. By the end of 1918, in the midst of a vicious civil war, all parties except the Bolsheviks were banned, and Russia had become a one-party state.
The “immense expansion of democracy” that Lenin had promised in his State and Revolution was not delivered. It would not have been feasible, even under the most conducive of circumstances.
As it turned out in Russia, there was no possibility of organizing a political force to counter, criticize or modify Bolshevik policy. Without organized alternatives to the ruling elite, democracy becomes a sham.
When the exiled Kerensky spoke at a London meeting in 1921, someone there claimed that the Bolsheviks were democrats. Kerensky responded:
“If it is democracy to banish your opponents, to suppress all meetings and newspapers, and to lock up people who disagree with you without trial, by what signs do you ask me to recognise tyranny?”
Let’s be honest about socialism
Sanders has tapped into legitimate discontent about inequality and poverty in the US, but has failed to explain how his version of socialism will work. He has kept the meaning of the s-word vague, thus providing himself with radical appeal with limited long-term practical substance, other than the adoption of some measures of reform within a capitalist economy.
From its inception in 1827 and for much of the twentieth century, socialism had the radical meaning of widespread common ownership that both Sanders and Corbyn originally promoted. Subsequently, some thinkers tried to shift its meaning, but no consensus emerged on its new substance.
Socialists should stop hiding their socialism behind the word democracy. Many socialists believe in democracy, but democracy and socialism are not the same thing.
Real-world socialism has failed to sustain democracy. This is a problem for socialism and it should not be ignored.
The connection between claimed “democratic socialism” and socialism in its totalitarian incarnations is avoided by Sanders and Corbyn by comparing the ills of real-world capitalism with an imaginary, idealized socialism that is unfeasible as it is invisible.
Sanders and Corbyn do not compare the ills of real-world capitalism with the ills of real-world socialism. If they did this honestly, then they might reach different conclusions. Instead of chasing socialist unicorns they might seek for the best within capitalism and then try to improve it further.
Despite the disastrous record of self-described “socialist” regimes, socialism (whatever it means) is remarkably popular.
According to a 2017 survey of American adults, 37 per cent preferred (what they described as) socialism to capitalism. Among millennials (meaning those reaching adulthood in the early twenty-first century), 44 per cent preferred socialism over capitalism. This survey broadly confirmed previous American polls from about 2015, which showed a surge of support for socialism, especially among younger people.
Polling in the UK found that 39 per cent of adults have an unfavourable view of capitalism, while 33 per cent were favourable. Also in the UK, 36 per cent viewed socialism favourably, compared to 32 per cent negatively. Germans were reported as even more positive about socialism, with 45 per cent being favourable and 26 per cent unfavourable.
These polling figures are remarkable, especially when we take into account that regimes describing themselves as socialist led to over 90 million deaths in the twentieth century. Socialism has captured the ethical high ground, despite the poor record of socialist regimes in terms of human rights.
Somehow today’s socialists evade this legacy. They argue that these regimes were not really socialist. Or they were corrupted by bad leaders. Or they suffered largely because of antagonism from the capitalist West. All these arguments assume that a humane socialism is feasible and that there are not congenital flaws in socialism that lead it to dictatorship.
Mainstream Economists are tainted too: they often favour markets and assume individual self-interest as an axiom. Socialism will subdue markets, private profits and other spurs to greed, and through common ownership create a system that encourages people to cooperate together and act unselfishly.
So the argument goes. But the evidence tells a different story. The socialists, the “greed is good” defenders of capitalism, and believers in our total selfishness are all wrong.
Theory and evidence, from Darwin onwards, show that evolution has provided humans with a mixture of selfish, cooperative and moral capacities, which can be stunted or developed according to different cultural and institutional settings.
There is also strong evidence that market or trading relationships can enhance sentiments of fairness and reciprocity. The notion that markets always make people greedy, selfish and amoral has been refuted. The moral high ground claimed by socialism is challenged not simply by the misdeeds of socialist dictators, but also by extensive evidence about human nature and how it is affected by markets or other institutional circumstances.
Small-scale societies have relied on sentiments of cooperation and moral solidarity that have evolved within groups over millions of years. Solidarity within tribes or bands helped them survive in competition over resources with their rivals. But unfortunately evolution has not disposed us to be nice to outsiders.
The modern world has built up citizen loyalty to nation states, but the downsides have been hostility to foreigners and belligerent nationalism. In the modern world, institutions are needed to encourage mutual understanding and reciprocity on a global scale.
One of these institutions is the market. There is impressive evidence that, on balance, international free trade can reduce the risks of war between nations. In larger-scale systems, despite market competition, trade can build bonds and reduce conflict.
While the complete commercialisation of family and community life could undermine trust and altruism, wider trade on a larger scale increases mutual interdependence. As Thomas Paine, Richard Cobden, John Hobson and several others argued, markets can help to build solidarity within and between nations.
If socialism is “obvious”, then how do we explain the failure of other intelligent people to get on board? If they are not stupid, then they must be acting out of personal malice or greed. They must have sold out their principles in some way. Or they are just plain nasty.
When socialism is seen as “obvious”, its opponents are regarded as stupid or evil. Because the solution is “obvious” there can be no doubt. There is no need to look at evidence, to experiment, to seek wise counsel, or to listen to critics. Those that deny the obvious are deluded, corrupt, or in the pay of those that gain from the existing system.
Hence the claim that “socialism is obvious” encourages a remarkable intolerance of those that take a different view.
Modern economies are highly complex, and to pose any system or solution as “obvious” is a dangerous populist naivety. Precisely because something called socialism has now become popular, we are entitled to ask more precisely what it means.
Socialists compare an imaginary “obvious” world with the real world, with all its poverty, inequality and other problems. They simply assume that their imaginary world of love and cooperation will work. They assume that much can be decided democratically, ignoring the fact that it is impossible to make more than a small fraction of day-to-day decisions democratic. They ignore the problems of incentivizing work and innovation, and of ensuring functional autonomy without private property. All these problems became apparent in real-world socialist experiments in the past.
Socialism and dictatorship
A major problem with large-scale socialism is that a large concentration of political and economic power in the hands of the state undermines the economic foundations of countervailing power and empowers totalitarian forces and outcomes. These problems are illustrated by developments in Russia, China and Venezuela.
Such a centralization of economic power requires and promotes a strong executive, unburdened by checks and balances. When this concentration of economic power is achieved, it reinforces political centralization in the absence of countervailing interests and powers.
The argument that “good” leaders will avoid these pitfalls is spurious. Without checks and balances there are strong temptations to cut constitutional corners. Eventually a “good” leader will be succeeded by someone worse, who will have less scruples about abusing executive power.
The conclusion is that democracy and human rights require countervailing power and a market economy with a much smaller public sector. Countervailing interest groups, with their own access to resources and an ability to check or influence the state, are necessary to prevent democratic abuses and over-centralization.
Ignoring this powerful argument, in the face of extensive historical evidence in its support, is morally reprehensible. It betokens a moral irresponsibility in the light of ample evidence to the contrary. The socialist tenure of the moral high ground is illegitimate.
Instead, the moral high ground should be conceded to those who understand that:
– modern economic systems are highly complex and cannot be largely planned from the centre
– genuine autonomy requires rights to private ownership
– the existence of democracy and the protection of human rights require countervailing politico-economic power
– mixed economies have the best economic performance
– a welfare state is necessary to protect the poor and needy
– instead of chasing unicorns, we should follow the example of those capitalist countries that have the lowest levels of inequality.
18 February 2018
Published January 2018
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Darwin, Charles R. (1871) The Descent of Man, and Selection in Relation to Sex, 2 vols (London: Murray and New York: Hill).
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Haidt, Jonathan (2012) The Righteous Mind: Why Good People are Divided by Politics and Religion (London: Penguin).
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Henrich, Joseph, Jean Ensminger, Richard McElreath, Abigail Barr, Clark Barrett, Alexander Bolyanatz, Juan Camilo Cardenas, Michael Gurven, Edwins Gwako, Natalie Henrich, Carolyn Lesorogol, Frank Marlowe, David Tracer, and John Ziker, (2010) ‘Markets, Religion, Community Size, and the Evolution of Fairness and Punishment’, Science, 327 (5972), pp. 1480-84.
Hirschman, Albert O. (1982) ‘Rival Interpretations of Market Society: Civilizing, Destructive, or Feeble?’ Journal of Economic Literature, 20(4), December, pp. 1463-84.
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Hodgson, Geoffrey M. (2015) Conceptualizing Capitalism: Institutions, Evolution, Future (Chicago: University of Chicago Press).
Although education is not a public good, there are good reasons why the state should support education services.
As leader of the UK Labour Party, Jeremy Corbyn has opined that “education is a public good” and drawn the conclusion that it should all be provided by government and funded by taxation.
All three leaders of the UK Green Party since 2012 – Nathalie Bennett, Caroline Lucas and Jonathan Bartley – have repeated the phrase “education is a public good”. They too implied that all education should be free of charge to the user and paid for out of taxation.
Jeremy Corbyn and Caroline Lucas
Similarly, Shakira Martin, who was elected President of the UK National Union of Students in 2017, remarked: “Education is a public good and should be paid for through taxation.” These influential organizations are led by people who have not learned the lessons of Econ 101.
In addition, this inaccurate rendition of the meaning of public good is common among journalists, who also have a moral responsibility to use terms accurately.
What is a public good?
The economist and Nobel Laureate Paul Samuelson established the concept of a public good in an academic paper in 1954, although some of the basic ideas involved had been formulated previously by others.
John Stuart Mill, for example, had argued in his Principles of Political Economy that lighthouses should be built and financed by governments, because their widespread benefits could not readily be financed by passing ships, and no individual had the pecuniary incentive to construct them.
The established technical definition of a public good is a good or service that is non-rivalrous and non-excludable. Non-rivalrous means that its use or consumption by any actor does not significantly reduce the amount available for others.
Non-excludable means that potential users cannot practically be excluded from the use of the good or service. This definition can be confirmed by reading any reputable economics textbook.
Consider the example of street lighting. If a town council uses local tax revenues to set up and maintain lighting on its streets, then there are widespread benefits for everyone. But it is not possible to charge people individually, according to whether they benefit from the illumination.
So when elections to the town council occur, self-interested citizens will vote for candidates proposing lower taxes, assuming that they will benefit anyway from any public good provision. Why pay more taxes when the lighting is free at the point of use? Self-interested consumers will try to hitch a free-ride. The outcome is that the street lighting will be underfunded, while everyone would prefer streets that are well-lit.
Samuelson’s argument was popularized by John Kenneth Galbraith in his 1958 book The Affluent Society. Therein Galbraith argued that vital public goods would be under-provided in a market system: there could be the coexistence of “private opulence and public squalor”. The combined efforts of a revered mainstream economic theoretician and of an astute and inventive populariser of economic wisdom helped to pave the way for a wave of interventionist policies in the US and other developed economies.
Do public goods necessitate public provision?
After this action came the reaction. In a 1974 article Ronald Coase (another Nobel Laureate) argued that many early lighthouses in England were privately constructed and financed by tolls at the ports. In fact, an emblematic example of a public good had often been financed privately. Hence “economists should not use the lighthouse as an example of a service which could only be provided by government”.
This and other interventions led to a widespread reaction against the Samuelson-Galbraith view that public goods necessarily require public provision or public financing.
It has been pointed out that radio and TV broadcasts and open-source computer software are also public goods. Yet both are often provided by private companies. Private radio and TV broadcasters finance their broadcasts by advertising.
Computer companies sometimes make software readily available to encourage use of their computers, for which the software was designed. The software is given away to help sell the hardware, or there is a charge for support services for software users.
Whether they are desirable or not, in principle there are many possibilities for private provision of public goods. In reality there are numerous cases where the state franchises out the provision of goods or services to private contractors. Such provision could include public goods. In these cases, public financing remains, but provision is private.
The claimed advantages of private franchising would include the introduction of an element of competition between potential franchisees, and the possibilities of efficiency gains through well-focused, relatively autonomous private providers. But here again the proof of the pudding is in the eating. Many public franchising operations have failed to deliver the promised gains. Others have been more successful.
Accordingly, we end up with a pragmatic rather than a doctrinaire conclusion. Economic systems are complex, with varied, interconnected components. Theory simplifies, and does not catch all the interactive effects. Theory has continuously to be appraised in the light of empirical experience. So far it is clear than the existence of a public good does not necessarily imply that it has to be provided by government, just as there is no compelling case that its private provision will also be superior.
Misunderstanding the meaning of a public good
Careful, rational discussion of the issues surrounding vital debates over public and private provision is not simply impeded by the prevalence of opposing ideological extremes. There is also a growing and prominent disrespect for the careful use of the terms that have been established by scholars in this area.
Combinations of sloppiness and ignorance threaten the utility of key terms. They engender ambiguity, degradation and ultimate uselessness. This has already happened with swear-words such as neoliberalism. It is hoped that it does not happen with cheer-words such as public good.
A prominent misunderstanding of “public good”, is that it means “a good that can only, or should only, be provided by government”. But this conflation of public good with public provision is mistaken.
Another, even cruder, misunderstanding is that “public good” means “good for the public”. While anyone who has taken Econ 101 should spot this error, it is nevertheless widespread. Speakers sometimes give their error away when they give relative stress the “good” in the phrase, as if “good” had the meaning of virtuous or worthwhile.
Yet in the correct definition of “public good” the second word takes another commonplace meaning, denoting a possession, or an item of commerce. This second meaning is found in the pledge “with all my worldly goods I thee endow” in the Book of Common Prayer or in “the goods train went through the station”. Bad things, like tobacco, heroin, cocaine, nuclear bombs and personnel mines, are also goods in this sense.
Is education a public good?
First assume that the claims of Corbyn, Lucas and others were true: education is “good for the public” and it should be funded out of taxation, and maybe even provided by a publicly-owned enterprise.
Many additional things are “good for the public”, including clothing, food and housing. By the same logic, these “goods” should all be funded out of general taxation as well, and distributed without further charge to their users. Influential politicians thus suggest that everything that serves basic needs should be financed, and possibly distributed, by the state. The market would simply be left for luxuries. Their logic implies a state-run economy of which Stalin and Mao would be envious.
Second, even if education were a public good (by the Econ 101 definition) then this would not imply that it should be paid for out of taxation. As noted above, free radio and TV broadcasting is generally a public good, but little of it is paid out of taxation, and it would be difficult to make the case that it should be (unless we fancy a totalitarian state that does all the broadcasting and curtails all private radio and TV stations).
Third, while observing the Econ 101 definition of a public good, note that education is generally a rivalrous rather than a non-rivalrous service. Education services require resources, including buildings, infrastructure, equipment and trained teachers. Additional students generally require additional resources. (Although in some cases the marginal cost is low, such as with mass-distributed online courses.) Consequently, education provision is generally rivalrous.
Fourth, again with an eye on the Econ 101 definition, note that education services are mostly (but not entirely) excludable. Schools and universities can readily prevent other people from attending, while it is much more difficult to prevent any passing mariner from observing the light from a lighthouse.
Technically, by the standard definition, most education services are private goods, because their provision is both excludable and rivalrous. But there is no necessary reason why all private goods should be privately provided. The Econ 101 distinction between public and private goods does not readily or directly correspond with public and private provision respectively.
The parts of an education system that are actually or virtually non-rivalrous, such as massive online courses, are technically club goods. Like radio and TV broadcasting they can be provided publicly or privately.
Positive externalities in education
When students receive their qualifications, they often have advantages over others on the jobs market. Hence they reap benefits. Nevertheless, with education there are strong positive spill-over effects.
Educated people help to raise the levels of public culture and discourse, and can pass on some of their skills to others. Educated people are also vital for a healthy democracy. But none of this undermines the general excludability of education services.
The spill-over effects are important, and relate to the question of public versus private provision. Another word for a spill-over is an externality: this is a cost or benefit that affects someone who did not choose to incur that cost or benefit.
Externalities can be positive or negative. Examples of negative externalities are pollution or congestion caused by motor cars. Because a driver will suffer only a fraction of the overall pollution and congestion costs of making a car journey, negative externalities impose costs on others without penalty for the car user. By standard assumptions, unless compensatory measures are taken, car use will be excessive and suboptimal.
The theory of externalities was developed by Arthur Pigou, who argued that in the presence of negative externalities some public authority should intervene to impose taxes or subsidize superior alternatives. By such measures, motor car traffic could be reduced and pollution reduced. Inversely, services such as education with positive externalities should receive subsidies or be provided free, to encourage more extensive participation in these activities.
In a famous 1960 paper, Coase dramatically changed the terms of debate with his argument that if transaction costs were zero, then all the extra costs or benefits could be subject to contractual arrangements and the externalities would disappear. For example, if the owner of every dwelling near a road had property rights in the surrounding segment of the atmosphere, then the driver of a passing and polluting car could be sued for degradation of that property. The pollution externality would be internalized.
Coase’s intention was to underline the implications of transaction costs: the existence of externalities is dependent on positive transaction costs. Coase accepted that in many cases it would be impossible to avoid the transaction burden. For example, enforcing rights in the surrounding atmosphere to curb pollution may be too expensive.
Many pro-market zealots ignored or underestimated the transaction-cost aspect of Coase’s argument. Instead, their foremost claim was that Coase had undermined the case of public intervention based on externalities.
Consider the positive externalities of education. It would be impossible or socially destructive for every educated person to charge a fee to participants in an intellectual dinner conversation, or to invoice the government for making a well-informed choice when casting his or her vote in the ballot box. The internalization of these positive externalities by such means is impossible or undesirable.
The issue of missing markets is relevant here, as I discuss in my book Conceptualizing Capitalism. There are missing markets for future employment because to introduce such complete markets would be tantamount to slavery. The prohibition of slavery means that we cannot have complete futures markets for labour. This means not simply the existence of transaction costs but the enforced absence of transactions, which would be equivalent to making the transaction costs infinite.
Consequently, because of these missing markets, education and training will be undersupplied through markets under capitalism. There is a rationale for some kind of public intervention. Of course, government intervention has its problems too. We must experiment, and compare real-world cases, not idealized models.
Mixtures of public and private provision
There are mixtures of public and private provision of education in most countries. The majority of schools in most countries are run by local government. At the other extreme, most on-the-job training is done by private companies.
The US has a mixture of private and state universities, although both types receive substantial public funds. In the UK most universities receive public money for teaching and research, and in return they are obliged to conform to a myriad of government regulations. They also receive student fees and research grants from the private sector.
Technically all UK universities are private (corporate) entities: they have a legal status equivalent to charities (which are also not-for-profit private corporations). By contrast, in several major countries in Continental Europe and elsewhere, most universities are integrated into the state machinery and all their employees are civil servants. This is not the case in the US or the UK. This international diversity of models provides the opportunity to compare different systems and determine what works best, taking account of the different contexts in which they operate.
This growing disrespect for science and expertise is moving democracies toward an extremely dangerous place, where the general public have increasing difficulty segregating lies from truth. This danger could be called Trumpism.
I do not put Jeremy Corbyn or Caroline Lucas in the same box as Trump. Far from it. For example, they share none of his obnoxious racism and sexism. But Corbyn and Lucas are disrespecting experts and ignoring bits of science nevertheless.
We need a well-informed public conversation concerning the best arrangements for the (public or private) provision of basic needs and services, including education, health, housing and transport. Such a debate is much more difficult if leading public figures, including the leaders of major political parties, promote incorrect and misleading versions of highly relevant analytical terms.
Donc, je les accuse – of abetting the Trumpist degeneration of public discourse with their false claim that “education is a public good”. They should acknowledge the error and make a correction.
11 January 2018
Minor edits: 12-13 January 2018
Published January 2018
Note 1: As with many such definitions, there are few, if any, pure cases. So a public good refers to a good or service where consumption by one person does not significantly reduce the amount available for others, and where potential users cannot practically or generally be excluded from the use of the good or service.
Note 2: There is a widespread assumption that actors act wholly out of self-interest. But from evidence with humans in laboratory experiments and elsewhere, we know now that this is untrue. People will often agree to pay for public goods, even if they know that they have the alternative of free-riding on the contributions of others. One can conjecture, however, that numbers of people are important. We know from the work of Nobel Laureate Elinor Ostrom (1990) and others that cooperation is possible over the use of non-excludable resources, even when usage is rivalrous and it can degrade the resource. (Non-excludable resources that have rivalrous usage are defined as common-pool resources: they are not public goods.) But Ostrom’s examples highlight the role of face-to-face interaction and the building of trust. But it is doubtful that these mechanisms can be expanded to large-scale societies, at least without additional systems of control and enforcement.
Samuelson, Paul A. (1954) “The Pure Theory of Public Expenditure”, Review of Economics and Statistics. 36(4), pp. 387-9.
Stretton, Hugh and Orchard, Lionel (1994) Public Goods, Public Enterprise, Public Choice: Theoretical Foundations of the Contemporary Attack on Government (London and New York: Macmillan and St Martin’s Press).
If you wish to cultivate an image of being principled and politically pure, then avoidance of policy details, plus a good dose of historical ignorance, can be very useful. You may conjure up figures from past history and recruit them to the cause of your choice.
Perhaps unwittingly, Jeremy Corbyn acquired these methods from his mentor Tony Benn. Their shared cause, or course, is socialism. But its details must be kept vague and the statist pill must be sugared with ample use of the word “democratic”. Not too much thought must be applied to how the “democratic” bit works in practice.
Tony Benn and Jeremy Corbyn
Ignorance of history is an asset. You find some radical heroes who have opposed injustice, inequality, and the status quo. Don’t go into too many details. It might prove embarrassing. Simply suggest that because of their radical energy these radicals must have been, or they were on the way to becoming, “democratic socialists”.
After all, if they were true and principled radicals, then they must have been moving in that direction. Socialism is obvious. Isn’t it?
The English Civil War
The English Civil War of the 1640s is a good hunting ground for your heroes. In a book published in 1980, the veteran Labour Party MP Fenner Brockway declared the seventeenth-century Levellers and Diggers as Britain’s First Socialists. His friend Tony Benn had already located them there. Jeremy Corbyn followed their cue.
The English Civil War erupted in 1642, as a conflict of authority between the King and Parliament. King Charles I claimed to rule by divine right, deriving his sovereignty from religion. By contrast, Parliament professed to represent the will of the people. But only a small minority of males had the right to vote in parliamentary elections. Women had no vote.
Parliamentarians and Royalists warred throughout Britain until the defeat and execution of Charles I in 1649 and the installation of a republic under Oliver Cromwell.
The Civil War stimulated seminal debates concerning power and authority. There was a growth of dissident Protestant groups, who saw the established Protestant Church of England as too hierarchical and conservative.
These widening schisms forced the question of the legitimation of government authority onto the immediate agenda.
Political ideas of the Levellers
Prompted by debates over what to do with the monarchy and the King after his defeat, a major political movement developed within the Parliamentarian army. They were called Levellers.
Participants in the earlier anti-enclosure uprising in the Midlands in 1607 had been called “levellers” because they levelled hedges and fences.
The Levellers of the 1640s were given this nickname by their enemies, and they repeatedly repudiated the description. They often protested that they were not promoting the “levelling” of landed estates or any general redistribution of property.
The Levellers emphasized popular sovereignty, an extended male franchise, equality before the law, and religious tolerance. They believed in natural and inalienable rights, bestowed by God.
The inalienability of these rights put limits on the powers of any majority in Parliament, because democracy cannot stifle inalienable rights. But otherwise they were strong supporters of democracy.
While they defended private property, they railed against undemocratic tyranny. Hence their position was different from some modern libertarians who, while generally supporting liberty, argued on occasions that if private property rights were threatened, then democracy might justifiably be replaced by temporary dictatorship.
From 1647 to 1649 the Levellers published a series of manifestos entitled The Agreement of the People. The Levellers were the first political movement in Europe to call for the separation of church and state and for a secular republic.
Authority would be vested in the House of Commons rather than in the King or the House of Lords. Specified “native rights” were declared sacrosanct for all Englishmen: freedom of conscience, freedom of worship, freedom from impressment into the armed forces, and equality before the law.
The Levellers argued for a constitution based upon an extended manhood suffrage and biennial Parliaments. But they did not advocate female suffrage. And as C. B. Macpherson noted:
“the Levellers consistently excluded from their franchise proposals two substantial categories of men, namely, servants or wage-earners, and those in receipt of alms or beggars.”
Oliver Cromwell and the Levellers
The Levellers were influential in Cromwell’s army. At a rendezvous near Ware in Hertfordshire on 15 November 1647, two regiments carried copies of the Agreement of the People and stuck pieces of paper in their hat-bands with the Leveller slogan “England’s Freedom, Soldiers’ Rights”.
With swords drawn, Cromwell and some of his officers rode into their ranks and ordered them to take the papers from their hats. One of the soldiers was swiftly executed for mutiny.
Putney Debates 1647
Siding with the Levellers in the Putney Debates of 1647, the parliamentarian Colonel Thomas Rainsborough argued that both the rich and poor had a right to a decent life, and that “every man that is to live under a government ought first by his own consent to put himself under that government”.
Burford Churchyard Memorial
But in 1649, Rainsborough was killed, Leveller-led army mutinies in London and Oxfordshire were crushed, and Cromwell effectively destroyed the Levellers as a political force.
John Lilburne, the Leveller leader, came from County Durham. He was originally a Puritan and he later converted to Quakerism. Arrested in 1637 for circulating unlicensed pamphlets, he was fined £500, whipped, pilloried, and imprisoned.
During the Civil War, Lilburne served as an officer in the Parliamentarian army. For his agitation against the Cromwellian authorities he spent several more years in prison.
Lilburne coined the term “freeborn rights”, defining them as rights with which every human being is born, as opposed to rights bestowed by government or by its laws. He advocated an extended male suffrage, equality under the law and religious tolerance.
Lilburne explained in 1647 that the term “Leveller” applied to him and his party, only in the sense of equality under the law, namely their “desire that all alike may be levelled to, and bound by the Law”.
But much later their socialist admirers assumed that they wished to “level” all property as well. There is no basis for this supposition in Leveller writings.
The Levellers and common ownership
The Levellers declared that rights to liberty and property were innate to every person. Individuals had rights over their thoughts and bodies, without molestation or coercion, and everyone had the natural right to own private property. The Levellers did not promote common ownership, except when it resulted from the voluntary pooling of the property of everyone involved.
Generally the Leveller leaders did not campaign against the enclosure of common lands. Instead they upheld legally-acquired rights of property. The Marxist historian Christopher Hill pointed out that the Levellers “sharply differentiated themselves from the Diggers who advocated a communist programme”.
A defence of private property and a rebuttal of “levelling” appears in the final, May 1649 version of the Leveller Agreement of the People, in a passage addressed to Members of Parliament:
“We therefore agree and declare, That it shall not be in the power of any Representative … [to] level men’s Estates, destroy Propriety, or make all things Common.”
Even if representatives in the legislature were democratically elected, they did not have the right to overturn individual rights to property.
Lilburne’s arguments against common ownership
Likewise, Lilburne was repeatedly obliged to rebut the charge that the Levellers desired to “level” all property. He wrote in 1652:
“In my opinion and judgment, this Conceit of Levelling of property … is so ridiculous and foolish an opinion, as no man of brains, reason, or ingenuity, can be imagined such a sot as to maintain such a principle, because it would, if practised destroy not only any industry in the world, but raze the very foundation of generation, and of subsistence or being of one man by another.”
Lilburne then explained why this was so:
“For as industry and valour by which the societies of mankind are maintained and preserved, who will take the pains for that which when he hath gotten is not his own, but must be equally shared in, by every lazy, simple, dronish sot? Or who will fight for that, wherein he hath no interest, but such as must be subject to the will and pleasure of another, yea of every coward and base low-spirited fellow, that in his sitting still must share in common with a valiant man in all his brave noble achievement?”
“… those men in England, that are most branded with the name of Levellers, are of all in that Nation, most free from any design of Levelling, in the sense we have spoken of.”
As well as rebutting the charge of “levelling”, Lilburne here defended the institution of private property in terms of its incentives for “industry” and maintaining “subsistence”. If everything were “equally shared”, then the “lazy” would benefit as much as those “who will take the pains”, thus diminishing incentives for individual effort. Incentives to work hard would be lessened.
The 1/n problem
With the above words, Lilburne pointed to the crucial problem of scale in all communistic ventures.
It is a version of what economists call “the free-rider problem”. As the size of the community increases, the free-rider problem can be exacerbated. If the number of people in a working community that shares its income is n, then individual incentives to contribute to community output are very roughly in proportion to 1/n.
As n increases, the extra effort of any single individual is rewarded less, because the output from extra effort is shared between n people. We may call this the 1/n problem. As far as I am aware, Lilburne was the first person to identify it.
Crucially, at low values of n, such as in a family or in a small cooperative, incentives to work hard can be enhanced by face-to-face mechanisms involving reciprocity, trust, commendation, satisfaction, shame, scorn or punishment.
These social mechanisms are effective because they have evolved in human tribes over millions of years. Elinor Ostrom’s case studies of the community management of common pool resources show what is feasible in more recent settings.
Hence some form of socialism may work on a small scale. But at higher levels of n these interpersonal mechanisms become relatively less effective. Other incentives, involving money and property, are required.
The Levellers on free trade and (state) monopolies
The Levellers advocated free trade. For them, the basic division in society was not between workers and owners of property: it was between the rich and influential – who profited from (state and other) monopolies and government favours – and the rest of the people. A clause in the May 1649 version of The Agreement of the People tells Parliament:
“That it shall not be in their power to continue or make any Laws to abridge or hinder any person or persons, from trading or merchandizing into any place beyond the Seas, where any of this Nation are free to trade.”
Leveller leaders Lilburne, Richard Overton and William Walwyn attributed the existence of low wages to monopolies, restrictions on trade, and excise taxes.
In 1652 Walwyn presented to the Parliamentary Committee for Trade and Foreign Affairs a defence of free trade against the Levant Company, urging the abolition of monopolies and trade restrictions. Walwyn saw free trade as a common right, conducive to common good.
The Levellers and Diggers contrasted
Yet the myth that the Levellers promoted common ownership persists. Tony Benn often mentioned the Levellers favourably, but he ignored their strong commitment to private ownership, and instead suggested that their arguments pointed to “common ownership and a classless society”.
An entertaining four-part television series set during the English Civil War entitled The Devil’s Whore (released in North America as The Devil’s Mistress) has Rainsborough speaking in favour of common ownership, without any objection from Lilburne.
There is no historical evidence to sustain such depictions. They are fantasies promoted by Benn, Brockway, Corbyn and others.
By contrast, the Diggers opposed private property. From 1649-1650 groups of Diggers squatted on several stretches of common land in southern England. They set up communes whose members worked together on the soil and shared its produce. The Digger leader Gerrard Winstanley published a series of pamphlets advocating common ownership of land.
Winstanley regarded the institution of property as a limitation of the freedom of others. Land was bestowed to all by God. Unlike the Levellers, Winstanley criticized trade, because it led to cheating and discontent. He envisioned an agrarian society, in which all goods would be communally owned, and all commerce and wage labour would be outlawed.
Hence the Levellers and Diggers had very different ideological positions. The Levellers advocated individual autonomy, private ownership and free trade. Although they appealed to religion, they saw democratic legitimation as the source of government authority. By contrast, the Diggers proposed a rigid, small-scale, religiously-inspired, agrarian communism.
The Levellers were political theorists as well as activists. They helped to develop the intellectual foundations of Enlightenment liberalism.
Unlike later liberals such as Thomas Paine, they did not advocate a welfare state. Unlike John Stuart Mill they did not call for female suffrage. Unlike twentieth century liberals such as John A. Hobson, John Maynard Keynes and William Beveridge they did not advocate substantial state regulation in a mixed capitalist economy.
But the Levellers were liberals and democrats nevertheless. Their arguments against large-scale socialism remain pertinent today.
11 October 2017
This book elaborates on some of the political issues raised in this blog:
Published by University of Chicago Press in January 2018
Benn, Tony (1976) ‘What would the Levellers do Today?’ 15 May. https://seagreensociety.wordpress.com/tag/levellers-day/.
Brailsford, H. N. (1961) The Levellers and the English Revolution (London: Cresset Press).
Brockway, Fenner (1980) Britain’s First Socialists: The Levellers, Agitators and Diggers of the English Revolution (London: Quartet).
Hampton, Christopher (ed.) (1984) A Radical Reader: The Struggle for Change in England, 1381-1914 (Harmondsworth: Penguin).
Hill, Christopher (1975) The World Turned Upside Down: Radical Ideas During the English Revolution (Harmondsworth: Penguin).
Ken Loach was a prominent celebrity at the 2017 Labour Party conference, being photographed in the main conference hall and elsewhere in close proximity to Jeremy Corbyn. But it seems that Loach was not then a member of the Labour Party. Instead he was a recent founder of a rival political party – Left Unity – which was set up to oppose Labour.
This is not a personal attack on Loach. Generally, he is a dignified and caring person. He is entitled to his views, but they are dogmatic and impractical. The question is why Labour now welcomes with open arms a member of a rival political party, with views far more extreme than those that Labour has traditionally professed.
What does Loach’s invitation tell us about the state of the Labour Party today? We need to look at his political views. We need to understand the politics of a celebrity that Labour now chooses to put on public display.
Ken Loach’s contributions to film and to public debate
Loach is a brilliant film director and his work has rightly received global recognition. Two of his films received the Palme d’Or at the Cannes Film Festival. He has also received BAFTA awards.
His best work shows us in moving, dramatic detail how working class people can be trapped by the system, suffering poverty and the tragic loss of their human potential. Such were the personal and emotional stories in Cathy Come Home (1966), Poor Cow (1967), Kes (1969), Raining Stones (1993) I, Daniel Blake (2016) and other great films. Loach, with his gritty, realist style has awakened and re-awakened us over decades to the shamefully enduring problems of poverty, inequality, discrimination and exploitation.
Other projects by Loach are different in style. He was to direct Jim Allen’s controversial stage play, Perdition. Allen was a Trotskyist and a close friend of Loach, until his death in 1999. Presented as a courtroom drama, the play dealt with an allegation of collaboration between Hungarian Zionists and the Nazis during the Holocaust. This allegation has been strongly contested by historians.
In contrast to the gritty realism of his working class dramas, Loach takes a less realistic line when it comes to history.
For example, Land and Freedom (1995) is set in the Spanish Civil War. The script was written by Allen. Scenes in Land and Freedom depict an ideological battle within the Republican camp. The Communist Party opposes others on the left, including anarchists and revolutionary socialists.
Against the Communist Party, Allen and Loach took the side of the revolutionary socialists calling for a socialist revolution and for the seizure of the land by the peasants. This unrealistic ultra-leftism mars the film. It brushes aside the argument that General Franco’s insurrectionary fascism would have been best fought by the broadest possible popular front, from liberals to communists.
A similar unrealism appears in The Wind That Shakes the Barley (2006). The script was written by Paul Laverty. The film is set in Ireland in the period 1919-1923. It depicts the struggle for independence and the subsequent civil war.
Again there is a sequence where key characters discuss their strategic options. Again full-blooded socialism is mooted as the only way of liberating the country, from poverty and from British tyranny.
But a socialist revolution in Ireland in 1919-23 was even less likely than one in the 1930s in Spain. Ireland was a country of small tenant farmers. It had little urban concentration or industrial development. The small urban working class was not as well organised as in Britain. Socialism had a tiny following.
A socialist revolution in these circumstances was a fantasy of the film’s director and its script writer. Again the insertion of unrealistic revolutionary socialist preaching spoils the film.
Left Unity founded in 2013 when film director Loach appealed for a new party to replace the Labour Party. In March 2014 Loach condemned Labour for following other parties by upholding “the importance of the market economy”. Like other governments, Labour “cuts back on public enterprise and prioritises the interests of big corporations and private companies”. Loach continued:
Loach called on true socialists to abandon Labour and join Left Unity. More than 10,000 people supported Loach’s appeal. In 2014, the party had 2,000 members and 70 branches across Britain.
Left Unity put up ten candidates in the 2015 general election, to stand against prominent Labour figures including Andy Burnham and Harriet Harman. Left Unity also contested some local elections. There is an unintentional irony in the u-word in its name.
Loach decisively rejected social democracy. Referring to Labour and other similar parties, he said that “they’re mainly social democrat parties that think you can manipulate the markets to the advantage of ordinary people”.
For Loach, such manipulation is impossible: “The market demands cheap labour, it demands labour that can be turned on and off like a tap, zero-hours contracts, short-term contracts, agency work.” For him, the market offers us no other option. Hence social-democratic reformism and Keynesian intervention are both fatally flawed.
Nationalising the supermarkets
The 2014 Constitution of Left Unity supported a mixed economy, as a transitional arrangement within an over-arching national plan. But in its 2015 General Election Manifesto, Left Unity took a much more extreme line, reflecting Loach’s absolutist anti-market views:
But Marx might have criticised the Labour Unity Manifesto’s conflation of long and short-term aims. In his Critique of the Gotha Programme, Marx wrote that “from each according to his ability, to each according to his needs” could apply only in
By contrast, Loach and Left and Unity put “to each according to their needs” alongside immediate aims in an election manifesto. It seems that they wanted to leap to “a higher phase of communism” right away.
Loach and Left Unity now want to abolish all markets and all private ownership of the means of production. This went much further than Corbyn and his team, who have argued for a “mixed economy”. But Corbyn’s embrace of Loach and his views might suggest that they share the long-term view that all markets and private enterprise should be abolished.
Even in Marxist terms, the position of Loach and Left Unity on markets is rather crude. Markets have existed for thousands of years. Marx never saw them as the key defining feature of capitalism – instead, for him, it was the system of wage labour. Following Joseph Schumpeter, I would also stress the role of finance.
Resemblances with pro-market economics
But remarkably, the views of Loach and Left Unity replicate some arguments by extreme pro-market economists. Against a majority view, economists such as Ludwig von Mises and Friedrich Hayek argued that a mixed economy cannot work. As von Mises put it in 1949:
Left Unity seems to follow the same logic as these uncompromising, pro-market economists. By contrast, many economists accept that there is a case for some judicious state regulation and intervention in a market economy, to deal with problems such as externalities and market instability.
In my book Conceptualizing Capitalism I go further, to argue that the state is necessary to part-constitute the legal framework of a capitalist economy. Hence some state intervention in a market economy is unavoidable. Given this, the practical question for progressives is where and how it should intervene. The literature on varieties of capitalism shows that many different outcomes are possible within capitalism, and defects such as inequality can be significantly diminished.
In particular, Loach and Left Unity overlook the successes of social democracy, particularly in Northern Europe. During the twentieth century they have built up strong welfare states, redistributed some wealth and regulated markets.
Of course, there have been strong and sustained attempts to reverse these achievements. But it is much more realistic to defend social-democratic gains against the free-marketeers than to urge a quick leap to the higher phase of communism.
Against NATO – for a boycott of Israel
The foreign policy of Left Unity is “anti-imperialist”. Like Corbyn, it calls for Britain to quit NATO. But unlike Corbyn, Left Unity does not support Brexit.
Another remarkable incident tells us not so much about Loach, but about some of the people who join Left Unity.
In a 2014 conference of Left Unity, a minority proposed support for the so-called Islamic State in Iraq and Syria (ISIS). True to their Leninist credentials, they argued that the left “has to acknowledge and accept the widespread call for a Caliphate among Muslims as valid and an authentic expression of their emancipatory, anti-imperialist aspirations.” They supported ISIS as a “stabilising force” with “progressive potential”.
In the 2015 General Election, Left Unity’s parliamentary candidates received a pitiful average of 288 votes – all losing their deposits. Later that year, after Corbyn’s election as Labour leader, Left Unity voted against affiliation to the Labour Party but resolved not to put up any more candidates against Labour.
Because of Corbyn’s leadership victory, several hundred members resigned from Left Unity and joined Labour. Left Unity is now a depleted party, without a viable independent strategy.
It seems that Labour is now welcoming their members, ignoring their extremist and unrealistic views and their fervent opposition to social-democratic reform. This is a suspicious unity of a dubious left.
1 October 2017
Minor edits – 3, 5 Oct 2017
This book elaborates on some of the political issues raised in this blog:
Published by University of Chicago Press in January 2018
Cohen, Nick (2007) What’s Left? How the Left Lost its Way (London and New York: Harper).
Hodgson, Geoffrey M. (2015) Conceptualizing Capitalism: Institutions, Evolution, Future (Chicago: University of Chicago Press).
I was born in 1946. I lived in a council house until I was 16. My family were Labour. My privilege was not money, but that my parents and grandparents all valued education and culture. But none of them obtained a university degree, because they were less accessible at the time.
I became involved in the Labour Party in 1964 and then saw myself as a Tribune socialist following the steps of great radicals such as Michael Foot. After welcoming Harold Wilson’s election victory in 1964, I became critical of the new Prime Minister because of his nominal support for the US in the Vietnam War.
Vietnam and Marxism
For my baby-boom generation, the Vietnam War was a great generator of radicalism. Like many of my university friends, I became a Marxist in 1966. We were drawn into a turbulent and exciting world that combined activism with ideas and debate. I saw myself as a Marxist until about 1980.
I studied mathematics and philosophy from 1965 to 1968 and economics from 1972 to 1974. Both periods were at the University of Manchester. In the intervening years I taught myself Marxist economics. My knowledge of economics became enduringly significant in my political evolution.
I was at the LSE student occupation in 1967 and one of the Grosvenor Square demonstrations in 1968. In that year I copied Bertrand Russell and tore up my Labour Party membership card in protest against US aggression in Vietnam.
Marxists dominated the activists on the university campuses. The left was divided and fractious. There were Soviet Bloc loyalists in the Communist Party of Great Britain. There were lovers of Mao Zedong and several rival Trotskyist sects. I could not bring myself to support any totalitarian regime – East or West – so I joined the forerunner of what is now the Socialist Workers’ Party, which saw everything existing as “capitalist”.
My departure from the SWP came in 1971 when they expelled a dissident faction with which I sympathised. (That critical faction eventually became the Alliance for Workers’ Liberty, of Momentum fame in the Corbyn Era.)
I flirted briefly with the International Marxist Group, which included glamorous figures such as Tariq Ali, and Robin Blackburn of the New Left Review. The IMG was stronger in its support for the women’s movement and for gay rights.
After a few years among the sects I could see that something was wrong. These groups were aiming to help create a much better society, but they were generally dogmatic and intolerant. Some were ruthless, pugnacious and fanatical. I did not want to see any social system facilitated or run by these people.
But on the other hand I then accepted the Marxist view that capitalism was exploitative and frequently led to oppression and war. The evidence of this was seemingly before our eyes.
Re-joining Labour and changing strategy
After Labour’s electoral defeat in 1970, there was a strong and growing left in the Labour Party and that seemed the best hope for socialists. Against the advice of Ralph Miliband (whom I knew personally) and others, I re-joined Labour in 1974.
In 1975 I published a pamphlet entitled Trotsky and Fatalistic Marxism. This tried to explain the fanaticism and intolerance of many Marxists in terms of their belief in the imminent decay and collapse of capitalist democracies. Trotskyists had failed to appreciate the enormous expansion and dynamism of capitalism after 1945. Their explanations of the survival of capitalism were weak.
Published in 1977, a longer work entitled Socialism and Parliamentary Democracy elaborated more of my thinking. Marxist-Leninists believed that parliament and the capitalist state should be “smashed”. Influenced by Max Weber and others, I argued that in modern democracies, government drew their perceived legitimacy from parliamentary elections. If socialism became a majority view, then socialists could and should gain a majority in parliament.
In the book I criticised the 1968 revolutionary movement in France for boycotting the elections called by President Charles de Gaulle in that year. Victory in the elections gave de Gaulle legitimacy. The huge movement of students and workers was crushed.
Paris – May 1968
As I had anticipated, my heresies were dismissed out of hand by the far left sects. But the book proved to be rather influential in the UK and internationally. It received a strongly sympathetic hearing on the Labour left. It was translated into Italian, Japanese, Spanish and Turkish. It persuaded a leading member of the violent Basque separatist group ETA to abandon terrorism.
I don’t know if he read my book, but Daniel Cohn-Bendit, the leader of the revolutionary movement in France in May 1968, later argued that it had been a mistake to boycott the French parliamentary elections.
Labour had been reconciled to the parliamentary road to socialism since its formation. The sects argued that it wouldn’t work. My response was that insurrection would not work either. In democracies we needed a combination of parliamentary and extra-parliamentary action.
Questioning ends as well as means
The killing fields in Cambodia affected me deeply. After seizing power in 1975 the Khmer Rouge forced everyone into the countryside and obliterated about two million people – a quarter of the Cambodian population – in the pursuit of their communist utopia.
I could not dismiss this as an aberration. After all, the Khmer Rouge aims, which included the abolition of money, private property and markets, were central to the Communist Manifesto by Karl Marx and Frederick Engels.
Khmer Rouge Killing Fields
The far left were able to publish papers and debate ideas because they lived in a democracy that tolerated freedom of expression. But the ideas and actions of the sects, if they gained influence or power, would curtail these very liberties upon which they had depended.
Crucially, I was not naïve enough to believe that freedom and political pluralism could be guaranteed simply by the goodwill of a more enlightened Marxist leadership, who valued these things more than the Khmer Rouge. Good intentions were not enough.
I had retained a good lesson from Marxism. Effective ideas and practices draw their strength from agglomerations of power sustained by the structures of the politico-economic system. Hence a genuinely pluralist and tolerant political sphere depended on pluralism and decentralisation in the economic domain. A pluralist polity requires a pluralist economy.
Beatrice & Sidney Webb
Prominent Labour thinkers such as Beatrice Webb, Sidney Webb and G. D. H. Cole had all argued for a decentralised socialist system. But they still sought the abolition of private property and markets. The state would ultimately own everything. So what institutional, legal or other politico-economic forces could stop it retrieving all delegated powers to the centre, when deemed required, or when goodwill wore thin?
Any viable socialism always needs markets
I came to the view that genuine and lasting decentralisation would depend on the existence of organisations with some genuine autonomy and legal independence, providing powers to own property and trade with other organisations. Any viable socialism would always need markets – it was not simply a matter of tolerating or compromising with them.
This crucial transition of my thinking occurred between 1977 and 1980. I cannot recall the detailed influences. But I am sure that the initial impetus did not come from Ludwig von Mises or Friedrich Hayek. I did not delve deeply into their works until the early 1980s.
There had been several socialist proposals to nationalise the sector producing capital goods but retain competition and markets for consumer goods. I was more attracted by the Hungarian economist János Kornai’s more sophisticated proposal (originally published in 1965) to use a dynamic combination of markets and planning, where planning provided strategic impetus, and markets signalled information and gave scope for innovation and planning adjustment.
Over the new year of 1979-1980 I went on a short tourist group visit to the Soviet Union. Some of my companions were dewy-eyed admirers of the system, but I was prepared for its flaws, including the ubiquitous black markets and corruption.
I had been given the address in Moscow of an Englishman married to a Russian. As a former Communist, he explained in detail in his apartment how and why his views had quickly changed: “I challenge any supporter of the Soviet Union to live here just for six months.”
When Alec Nove published a classic article on feasible socialism in New Left Review in early 1980 I was ready for it. Nove also argued that markets were essential to any viable socialism. He realised that he was attacking deeply-ingrained orthodoxy on the left.
(Later I had the pleasure of meeting both Kornai and Nove several times. Nove died in 1994 but Kornai is still alive. I am delighted to be invited as a keynote speaker at a conference in his honour in Budapest in 2018.)
Labouring as a revisionist
Any acceptance of markets was an anathema to followers of both Karl Marx and Tony Benn. Benn distanced himself from those who supported the persistence of markets.
But I found common ground with Benn and others over what was called “the alternative economic strategy”. I outlined my positive views on this in a pamphlet entitled Socialist Economic Strategy in 1979. It was published by Independent Labour Publications.
Independent Labour Publications was the residue of the old Independent Labour Party, which had played a central role in Labour history from the 1890s to the 1940s. The Independent Labour Party split from the Labour Party in 1931. But in 1975 it formally dissolved as a party and rejoined Labour as Independent Labour Publications.
I was involved in this organisation briefly. Despite outward appearances they turned out to be another sect, lacking any vision of a workable socialism. They too were uneasy about my revisionism. Although my Socialist Economic Strategy was a bestseller by their standards, they refused to reprint it. We parted company in 1981.
Geoff Hodgson, Jean Shepherd & John Maguire in 1979
In 1979 I was the unsuccessful Labour Parliamentary Candidate for Manchester Withington. The seat became Labour in 1987.
I met Benn a few times and supported him in the 1981 deputy leadership election. This alignment was marked in my book Labour at the Crossroads, published in that year. Therein I again supported the alternative economic strategy. But against Benn himself, I argued in that book that in some sectors of the economy “there is no substitute for competition and a market” (p. 206).
(In his important book on The Labour Party’s Political Thought, Geoffrey Foote quotes me (pp. 320, 347) as a “Bennite”. But because of my explicit acceptance of markets, I was unrepresentative of the Bennite stream of thought.)
While Benn’s “alternative economic strategy” accepted markets and a private sector for the present, it seemed to me that he wanted to move eventually toward a socialist economy without any markets at all. It was no accident that Benn and his followers defended the Trotskyist sect Militant when they were pushed out of the party from 1985 to 1992.
In 1984 I published my book on The Democratic Economy, where I set out my view on the importance and complementarity of both markets and planning. My argument was framed in socialist language but therein I distanced myself from Marxism. The book received a critical response from many on both the soft and hard left.
The Labour Coordinating Committee
Margaret Thatcher came to power in 1979. One of Thatcher’s most popular policies was to promote the sale of council-owned housing to the tenants. Labour had opposed this policy. The disastrous 1983 defeat of Labour on a Bennite manifesto prompted a rethink, on this and several other issues.
For some of us, this rethink amounted to more than expedient doctrinal trimming. Encouraging home ownership was really a good idea: why should all property be owned by the rich? But while supporting home ownership, we argued that the government should also build more social housing and enlarge the stock available for rent by low-income families.
But these ideas met stiff resistance in the Labour Party ranks, and not simply from Trotskyist entryists such as Militant. The resistance from Benn and his supporters was substantial and even more enduring. It was clear that old-fashioned socialist ideas still had a tenacious appeal among Labour’s membership.
The Labour Coordinating Committee (LCC) became one of the primary modernising forces within Labour. Its leadership included Hilary Benn, Cherie Blair, Mike Gapes, Peter Hain, Harriet Harman, Kate Hoey (the Brexiteer) and others of enduring fame. I was elected to the LCC executive committee. We worked closely with the new leader Neil Kinnock, and with members of his shadow cabinet, including Robin Cook.
Although some Labour Party thinkers began to entertain the possibility of some private enterprise, many party members remained resolutely in support of widespread common ownership.
Against my efforts, the 1983 AGM of the Labour Coordinating Committee defeated the proposal that Clause Four should be rewritten. This was out of fear of antagonising the Benn wing. Instead, the LCC resolved that Clause Four should be “clarified”.
But a resolution on long-term aims, which I had helped to draft, was passed by a large majority. The resolution called for the Labour Party to draft a new statement of aims, upholding “that socialism involves extended democracy and real equality. Democracy under socialism is extended to industry and the community … and must involve a substantial decentralisation of power.”
There was a commitment to “political pluralism” and to “economic pluralism” involving “a variety of forms of common ownership … and the toleration of a small private sector including self-employed workers and other private firms.” The economy must be dominated by mechanisms of “democratic planning … but also accommodating a market mechanism in some areas.”
But there was strong hostility to these mildly revisionist ideas from within Labour’s ranks at the time, including from Jeremy Corbyn and Tony Benn.
Tony Benn & Jeremy Corbyn
The Guardian newspaper reported the LCC conference with the headline: “Labour breaks taboo on ownership”. For a while, the LCC tried to keep the conversation going on the need to revise Labour’s aims. The LCC held a conference in Liverpool in June 1984 on “The Socialist Vision”. But enthusiasm for this discussion fizzled out. By 1985 the LCC’s revisionist initiative had been kicked into the long grass. My efforts had failed.
But to their credit, Neil Kinnock and his deputy Roy Hattersley saw the need for Labour to modernise its aims. I advised them both for a while. But after 1987 I became less active in the Labour Party. My inactivity was born partly out of frustration that it was so difficult to shift Labour from its congenital hostility to markets and private enterprise.
But after a fourth election defeat in 1992 the party became more pliable. Tony Blair was elected as leader in 1994. Blair successfully changed the wording of Clause Four to endorse a strong private sector, but the dramatic rise of Corbyn in the party since 2015 shows that the old collectivist DNA has endured.
In many ways I have always been a liberal, especially in my support for freedom of expression, other human rights and democracy. By the late 1970s I also accepted the importance of markets and private property. But the emphasis in my thinking has shifted further in the last 30 years.
My academic works show a few markers of my political evolution. On page xvi of my 1999 book Economics and Utopia I wrote of my common ground with the US liberal John Dewey and with
“British social liberalism, which stretches from John Stuart Mill through Thomas H. Green to John A. Hobson, John Maynard Keynes and William Beveridge.”
These thinkers still inspire me. But I would now also stress the importance of Thomas Paine. Other heroes include George Orwell and Arthur Koestler.
So by 1999 I was a true liberal, of social-democratic stripe. I had already moved some distance from the ideas in my 1984 book, which had over-stressed the possibilities for large-scale planning and for extensive democratic decision-making in large, complex economies.
But I still believe in judicious state intervention and regulation, and I am still an enthusiast for experiments with worker cooperatives and other forms of worker and community participation. With their lower levels of economic inequality, I see the Nordic countries as good role models for in the rest of the capitalist world.
From leaving Labour to joining the Liberal Democrats
In 2001 I left the Labour Party because of Blair’s energetic support for faith schools, Labour’s inadequate proposal for House of Lords reform and its neglect of the problem of economic inequality. I would have left over the Iraq War. Previously I had sometimes voted tactically for the Liberal Party, when they were second behind the Tories in my constituency. But what was tactical was also in growing part a matter of conviction.
I voted Liberal Democrat in the 1997, 2001, 2005 and 2010 general elections. But I did not approve of the coalition with the Tories. So the Liberal Democrats did not get my vote in 2015.
I re-entered political activity in 2016 after the Brexit referendum. My wife (Vinny Logan) had been a critical but close companion on my long journey since 1980. But unlike me she had always voted Labour. After the Brexit vote she joined the Liberal Democrats and I followed her after a few days. It will be a long hard slog to change British politics for the better, but it is vital that we try.
My wife and I were each brought up in a social culture where the Tories and the Establishment were the enemy, and the Liberals were seen as wishy-washy waverers in the class war. Labour was the only game in town.
It takes a long time to remove these ingrained preconceptions and learn that liberalism is the greatest legacy of the Enlightenment. It is the strongest guardian of both prosperity and freedom. Although Liberals have been in a minority, they are largely responsible for the foundation of the British welfare state. The NHS was originally a Liberal proposal. The Liberal Democrats constitute the most pro-EU party in the UK.
But some Liberal Democrats do not understand that it is the job of government in a recession to increase effective demand, particularly by increasing investment and raising disposable incomes for the poor. But the party is a broad church, and I will argue my corner in favour of Keynesian liberal economic policies.
I am a radical liberal. I believe in social solidarity with the less-privileged, as well as in individual rights. As Charles Kennedy showed when he was leader, the Liberal Democrats can succeed when they take principled, radical positions on justice, equality and war.
Today, both the Conservatives (now ruled by deceitful nationalists) and Labour (where the rising hard left dominate the timid moderates) are dangerous threats to the liberal and democratic rights and values that in the past we have taken too much for granted. We must now stand up to defend those rights and values, against dogma, ignorance, intolerance, petty nationalism and deceit.
20 September 2017
Minor edits – 25 September 2017, 22 October 2017, 10 April 2018.
This book elaborates on some of the political issues raised in this blog:
Published by University of Chicago Press in January 2018
Foote, Geoffrey (1997) The Labour Party’s Political Thought: A History, 3rd edn. (London: Palgrave).
Hodgson, Geoffrey M. (1975) Trotsky and Fatalistic Marxism (Nottingham: Spokesman).
Hodgson, Geoffrey M. (1977) Socialism and Parliamentary Democracy (Nottingham: Spokesman).
Hodgson, Geoffrey M. (1979) Socialist Economic Strategy (Leeds: Independent Labour Publications).
Hodgson, Geoffrey M. (1981) Labour at the Crossroads: The Political and Economic Challenge to Labour Party in the 1980s (Oxford: Martin Robertson).
Hodgson, Geoffrey M. (1984) The Democratic Economy: A New Look at Planning, Markets and Power (Harmondsworth: Penguin).
Hodgson, Geoffrey M. (1999) Economics and Utopia: Why the Learning Economy is not the End of History (London and New York: Routledge).
Kornai, János (1965) ‘Mathematical Programming as a Tool of Socialist Economic Planning’, reprinted in Nove, Alec and Nuti, D. M. (eds) (1972) Socialist Economics (Harmondsworth: Penguin), pp. 475-488.
Nove, Alec (1980) ‘The Soviet Economy: Problems and Prospects’, New Left Review, no. 119, January-February, pp. 3-19.
Nove, Alec (1983) The Economics of Feasible Socialism (London: George Allen and Unwin).
Nove, Alec and Nuti, D. M. (eds) (1972) Socialist Economics (Harmondsworth: Penguin).