Response to Sehon on Socialism
Last month, I debated Bowdoin’s Scott Sehon on socialism. Here’s my reply to his reply to me. Scott’s in blockquotes, I’m not.
The definitional question
[W]hy do I include the degree of egalitarian redistribution as part of the definition of “socialism”? Because if you had complete collective control or ownership of the means of production, but wildly unequal distribution of resources (which would be entirely possible), that would not be socialism according to any conception of it that I’m aware of.
How about every actual socialist dictatorship?! Yes, I know that their officially measured inequality was low, but that’s only because they dishonestly fail to count most of the private consumption of the ruling elite. Kim Jong Un’s palaces obviously aren’t in North Korean inequality statistics. Stalin officially only drew a modest paycheck, but had personal access to any Soviet resources he desired. Maduro feasts while ordinary Venezuelans starve. And that’s just the tip of the inequality iceberg. For most practical purposes, the Kims own North Korea, and Stalin owned the Soviet bloc. You could object, “It’s not possible for one human’s consumption to be so high,” but the same goes for any billionaire. When you’re that rich, you never even see where most of your money goes.
Yes, it might turn out that under a system with very little collective control, distribution of resources was largely equal. If there were actual examples of that, then that would be interesting, and it would show that there are governments that, because of the two-dimensional nature of my definition, do not fit neatly into a one-dimensional spectrum of capitalism/socialism. That’s fine. That’s the way two-dimensional characterizations of a term work: they are not one-dimensional.
This makes the issue sound totally hypothetical. But several of the main government policies I attacked — especially immigration restrictions and housing regulation — clearly count.
Moreover, as I say in the chapter Bryan liked, we shouldn’t argue about words. If someone really wants to deny me the word “socialism” because they define it solely in terms of collective ownership, then that’s up to them. I’d say that they have an oddly idiosyncratic conception of the term, but I won’t argue about the word. Call what I am arguing for “Socialism*” or even “Sehon-socialism” if you want; it matters not, as long as we are clear about how I am using the term.
It matters if you’re cutting yourself off from the vast majority of actual historical socialists, no? And it matters if you’re insinuating that actual government interference with capitalism promotes equality, which is debatable at best.
Scandinavian countries and the definition
Bryan says that I overstate the degree to which Scandinavian countries count as socialist, according to my definition. The Fraser ratings he cites include various factors that are orthogonal to the dimensions that I put as part of my definition—hence my decision not to list them simply as some sort of obvious measure of the degree to which there is collective control of the economy or egalitarian redistribution.
It sure seems like all of the Fraser measures are relevant. What’s wrong with them? For that matter, what’s wrong with Johan Norberg’s The Mirage of Swedish Socialism? I’m not a Sweden expert, but if it were my favorite country, I’d definitely want to respond to the most notable experts who claim that my favorite country isn’t what I imagine.
But, again, why quibble about words? Suppose Bryan were to grant me this much: “it would be good to go as far as the Scandinavian countries in terms of redistribution and greater collective control; I just wouldn’t count that as socialist.” Then I’d be pretty happy. Yes, I’d suggest going somewhat further, but I’d be happy with that huge concession. Of course, Bryan is not making any such concession, so I’m not sure what the point is of the definitional dispute about whether the Scandinavian countries count as moving in the socialist direction.
The point: If you’re right about good Scandinavian outcomes but wrong to believe that they achieved those outcomes because they have much more collective control and egalitarianism, that undermines your case for collective control and egalitarianism.
Inequality and data about overall well-being
Bryan does not present contrary data showing greater well-being in countries that are more capitalist, but instead questions bits and pieces of my data, and notes in particular that the Scandinavians are not that much happier than people in more capitalist countries. And he questions that the explanation for their happiness has anything to do with the fact that they are further towards socialism…
But note this: With all his efforts, Bryan is attempting to explain away data that, on their face, do not fit his thesis and do fit mine. That is hardly a positive case for his implicit claim that more capitalism will lead to greater well-being or that government “is terrible”. If government is terrible for well-being, then given that the Scandinavians have (by the numbers given above) a lot more government than the United States, then why aren’t they a lot less happy than people in the United States?
Reasonable points. Which I why I’m arguing that (a) Scandinavia is, properly measured, only moderately more socialist than the U.S., (b) that the U.S. is actually quite socialist in absolute terms, and (c) that the biggest government interventions in the U.S. (and other First World countries) are much worse than laissez-faire.
The ”most frustrating part of the debate”
Bryan says that the most frustrating part of the debate was that I kept comparing Scandinavia to the United States instead of comparing his ideal to my ideal. By way of explanation, let me say two things.
1. I’m not sure what my ideal is. I’m actually being driven by data in saying that more egalitarian distribution and more collective control lead to greater well-being. Various data indicate strongly that we can increase overall well-being by decreasing inequality, and this is hardly surprising given that money has diminishing marginal utility. How far can we go in this direction without, for example, destroying incentives that might be necessary to get people to be productive? That's an empirical question. I think that the data suggest that we can go a fair bit further than the Scandinavian countries, but I don’t know how far.
So why do you show so little curiosity about what happened in the Soviet bloc and other counties that did take collective control and egalitarianism (as you measure it) much further?
2. Bryan’s professed ideal (at least the next day in the class session if not in the debate) involved either no government (just privately run police, courts, etc.) or extremely minimal government. We have no data points on any country matching that ideal, because there aren’t any such countries.
I’m not frustrated that you didn’t respond to my brief answer to one curious student the day after the debate. I’m frustrated that you didn’t respond to my whole positive case that I did present in the debate. I say there are six massive areas of government regulation and ownership which the evidence strongly shows are terrible: immigration restrictions, housing regulation, universal redistribution, education subsidies, housing subsidies, and the near-ban on nuclear power. Do you really support all six of these? If not, you favor some big moves in a capitalist direction.
Rights and socialism
Bryan suggests that there is some right to private property or freedom of contract that would be violated by socialism. He doesn’t specify the contours of this right. At one extreme, one might claim that people have the right to keep any property currently in their possession; it would follow from this that it would be a violation of rights for there to be any taxation whatsoever.
I wouldn’t say “currently in their possession,” because that would mean that as soon as a thief grabbed something, it would be wrong to take it back. There’s got to be a background theory of justice in acquisition, a la Locke, Nozick, or Rothbard.
Is that Bryan’s position? That even if well-being is significantly enhanced by having taxation and government services, that any taxation is a violation of rights and thus should not happen?
We did discuss this; remember “weak deontology”? My position is that there is indeed a presumptive right against any taxation, which can be overcome if the net social benefits are large and certain enough. Which is probably your position, too, on freedom of speech, freedom of religion, voting, or any other rights you accept! My challenge: If you accept any rights, why not some property rights, too? Indeed, how meaningful is a right of religion, unless you have a right to own a church? How meaningful is a right of free speech, unless you have a right to own a printing press or AV studio? You must have heard such arguments many times before. Why not address them?
In practice Socialist nations just substitute inequality based upon income and wealth for inequality of rank within the party. Party leaders in Socialist or Communist nations always have very cushy lifestyles compared to the masses.
The difference is that they did nothing to create that wealth. They only expropriated it from others. Which in the long run undermines the standard of living of the masses.
There is no magic metric for judging the relative merits of different national economies, or for judging the degree to which qualitatively different mixes of privileges, immunities, and coerced wealth transfers makes one national economy more "socialist" than another. Indeed, empirical metrics are entirely inappropriate for formulating economic theories, since the mental states that are relevant to economics can't be directly observed or compared to a measurement standard by others, nor subjected to the kinds of experimental controls that are needed for rigorous logical inductions.
The correct method for an economist is to start with the self-evident truth that humans are purposeful actors, and deduce from that universally-valid causal theories that can then be applied to qualitative explanations of particular historical situations (i.e. abductive reasoning). An important aspect of abductive reasoning is that when evaluating different possible causes for a given outcome, the stronger explanation will be the one that involves the causal factor that also best explains other observed outcomes, and that best explains changes in the outcome of interest over time.
This approach greatly complicates comparisons between national economies. Rather than focusing on whether one economy is more "socialist" than another in some aggregate sense, an economic historian must examine specific privileges, immunities, and coercive transfers occurring in each country and the constellation of effects each of them is associated with.
In comparing America and Sweden, I would say that both countries are engaged in capital consumption and thus gradually deindustrializing and eroding the well-being of their working classes, but the Swedish policy of high progressive taxation and the American policy of printing fiat dollars to finance enormous government deficits and periodically bail out Wall Street and other privileged private entities have dramatically different impacts on their respective elites. Different forms of coercion can and do push inequality metrics in different directions.
Ordinary Swedes might enjoy their path to gradually increasing economic dysfunction more than ordinary Americans do, but one must make a leap from comparative economic history to ethics to claim that future poverty is a good thing if it promotes greater equality now. Pol Pot's regime, with its radical deindustrialization/deurbanization of Cambodia and profligate use of the killing fields to keep dissenters in line, was a flop in terms of producing useful goods, but it was enormously successful in terms of making sure that goods were equally distributed. If "coercive redistribution" to achieve equality is the goal, then the Khmer Rouge regime and not Sweden is the relevant example to ponder.
Once it is conceded that some inequality can be justified by the pursuit of other values and that even most socialists don't want to live under a Pol Pot-type regime, then they have to go back to the drawing board to come up with some other specious justification for usurping the moral and intellectual autonomy of others.
The core value of the "capitalism" they oppose is not the enrichment of a few wealthy capitalists, but rather a system of justice where each individual has exclusive control over the use and disposition of oneself and one's peacefully-acquired property; with private ownership being the essential institution that safeguards individual autonomy. Private ownership of the means of production doesn't mean that a capitalist owns one's workers or customers, nor does it prevent other people from exercising their liberty to become capitalists themselves and compete in the same line of production. Since coordination and exchange can only arise from voluntary cooperation in a system based on peacefully-acquired private ownership, a capitalist can only become rich by serving the interests of others, and doing so well enough that one isn't driven out of business by one's competitors.
If a few people grow richer by unjust means of privileges, immunities, or coerced transfers of wealth, that isn't the fault of the institution of private ownership; placing the blame on capitalists and "capitalism" for the unjust accumulation of wealth is misdirected. It is the market-rigging privileges, etc. that need to be abolished.