The Ugly Face Behind the Mask of Socialism

By W. David Montgomery

As American politics becomes more polarized, a number of candidates jockeying for position around the leftward pole label themselves “Socialists.”  Others, not quite so ideological, travel with them by supporting policies found in the socialist package.  Polls of voters also show surprising numbers in favor of socialism, though digging deeper reveals that the respondents’ understanding of socialism is weak.  In particular, few seem to understand the cultural devastation and poverty that full-blown socialism has produced in practice.

The classic definition of socialism is a system based on abolition of private property with government ownership of the means of production, free provision of many goods and services, and a planned economy.   Socialists today advocate policies that are part of the classic definition — such as wealth taxes, Medicare for all, universal guaranteed income, free college education and other services — but they do not mention the abolition of private property and control of incomes and industry. 

As a result, a 2018 Gallup poll revealed that 37% of the American population had a positive view of socialism, rising to 51% for the 18-29 age group.

C. C. Pecknold stated it well: “Socialism is in vogue because no one is sure what it is. The classic definition … no longer applies. More people today believe that socialism means ‘equality’ than ‘government control.’ Six percent told Gallup that socialism is ‘talking to people’ or ‘being social.’

This vagueness about the meaning of “socialism” has generated positive attitudes toward a system with consequences that should appall its current supporters.  These consequences can be illustrated at both a micro and a macro level.

At the micro level, Professor Pecknold recently wrote about “the tragic dimensions of life on a Native American reservation, with a planned economy, and collective rather than private ownership.”  He writes that “we drove past one of the large tribal casinos situated at the reservation border.” The casino and water rights make the tribe very wealthy.  “Yet as I drove … deeper into the reservation, I saw profound cultural devastation.”

“Since the tribes hold their wealth in common, every member of the reservation gets a regular dividend check. The unemployment rate is triple the national average. The opioid crisis is everywhere apparent. Drugs, alcoholism, abuse are an everyday sight for children, few of whom ever see an intact family. The vast majority of children will experience sexual or physical abuse. Half of all teenage girls get pregnant, and very few get-and-stay married.”

He saw “what looked like soviet-era cinder block homes, with large black numbers painted on the sides indicating their address. When they aren’t guarding their home with menacing barks, feral dogs (run) in packs. Frequently there are broken down children’s toys in the driveways and yards…. as I should have guessed, there is no ownership, since there is no private property. It is ‘tribal housing.’

In this vignette, Professor Pecknold tells the story of what can happen when socialism is imposed on a formerly free and independent people.  The Index of Economic Freedom tells the same story from a comparison across countries and time.

The Index has been published annually by the Heritage Foundation for 25 years.  It scores countries on rule of law, size of government, regulatory efficiency, and open markets.

The correlation between economic freedom and material prosperity is striking (See Figure 1).  In 2019 Singapore was 2nd in the ranking and had per capita income of $88,000.  The United States ranked 12th in economic freedom and 13th in per capita income, at $56,000.  The Bahamas were in the middle, at 75th in economic freedom and $30,000 in per capita income.  Mozambique ranked 133, in the “Unfree” group, with $1,100 per capita income.  Venezuela was beaten to the bottom in freedom only by North Korea, and its per capita income is rapidly declining under socialism to a comparable place.

Figure 1

It is not just per-capita income that responds to economic freedom. The researchers find that human development and treatment of the environment also correlate strongly with economic freedom.

As Pecknold’s personal account and the cross-country and cross-time comparisons of the Index of Economic Freedom demonstrate, replacing the institutions of economic freedom with socialist policies is harmful to material prosperity, human development and the human and natural environment.  Even a small turn toward socialism has costs, and as socialist policies become more dominant their effects are increasingly disastrous. 

Confiscation of private property and state direction of the economy lead directly to the failed economies of the countries at the bottom of the ladder, just as they do in the reservations of the Southwest.  Even the expansion of government with free services and guaranteed incomes, characteristic of the moderately free, take their toll on initiative as well as ballooning government debt.  These lessons must not be missed in the growing enthusiasm for the bread and circuses promised by aspiring Socialist candidates.