Popular Misconceptions About socialism
I feel this woman would be happier if she'd never discovered Marxism!
It's all very elegantly and rationally constructed, but my basic feeling is that - without the free markets and innovation poorer people would never have the standard of living that they do.
Crisis is as endemic to humanity as hubris and overreach, hence the 2007-2008 - this was caused by interventions in the economy. I can’t envisage a system of control which circumvents these problems. interesting how a democratising of the economy likely involves taking choice away from people as to how they spend, earn, invest etc.
I've often wondered: if socialists support separation of church and state, why not economy and state - what is the difference here? Both separations have reduced opportunities for controlling populations. I suppose Gellner would say that communism is a way of thinking with religious overtones and that a communist state would control how people thought in the Orwellian sense.
I love Elinor Ostrom's idea: "A resource arrangement that works in practice can work in theory". A great salvo against rationalism.
P.S. I have no beef with socialists - just interested in the ideas!
This is a comment I received on a YouTube video of Ellen Meiksins Wood speaking at the Rosa Luxemburg Foundation based on her book Democracy Against Capitalism. I wanted to write about it here because it brings up a handful of misconceptions that are foundational to liberal criticism of Marxism, socialism, communism, etc.
Setting aside the dismissive “this woman” comment directed at one of the late 20th century’s great historians of capitalism, and a former editor of influential political journals New Left Review and Monthly Review, I think all of us Marxists would definitely be happier if we didn’t have a thorough understanding of the ways our current society is structured both politically and economically in ways that create mass suffering around the world to enrich the ruling class. It’s a pretty miserable gig.
The idea that “crisis is endemic to humanity” doesn’t really say anything, especially not as an explanation for the 2008 financial crisis as pointed to by the commenter. If crises occur throughout human history they occur in different forms and for different reasons, and it’s necessary to understand the material conditions that led to them.
For the past few centuries, there has been a common factor we can use as a point of departure: the organization of the economy. Capitalism. This means we have to try to understand what the conditions within the context of a capitalist economy are which lead to crises.
Luckily the claim that the crash was the result of interventions in the market gives us a little more to work with than broad claims about “humanity.” This is of course the standard neoliberal understanding of the crash and has become received wisdom in right-leaning mainstream political economy. If the market was just left to its own devices without any government regulation, it would have never happened. Luckily this is something we can look at in concrete terms.
Since the 1970s — and especially since the rise of Ronald Reagan and Margaret Thatcher in the US and UK in the 1980s — deregulation, privatization and the cutting of social programs has been the standard operating procedure for governments in the capitalist sphere. This is what is often referred to as neoliberalism, or by certain Marxist political economists such as Samir Amin as monopoly capitalism. This spread of neoliberal ideology was also implemented through coercive means: military force in Iraq, US-backed coups in Chile, Bolivia, Nicaragua, etc. not to mention many failed coup attempts in Venezuela and Cuba, or through structural readjustments being required for IMF and World Bank loans and aid to countries all over the Global South.
This coincides with decades of smaller, albeit strengthening economic crises. Listed in John Bellamy Foster and Fred Magdoff’s book on the 2008 crisis The Great Financial Crisis: Causes and Consequence, these include: “the U.S. stock market crash of 1987, the savings and loan crisis of the late 1980s and early '90s, the Japanese financial crisis and Great Stagnation of the 1990s, the Asian financial crisis of 1997-1998, and the New Economy (dot-com) crash of 2000.”
Marxists have long discussed the tendency for capitalism to fall in and out of crisis. Historian Chris Harman notes in his book Zombie Capitalism that crises, “have occurred at longer or shorter intervals ever since the industrial revolution established the modern form of capitalism in Britain fully at the beginning of the 19th century.” These crises often prove beneficial to capital, as Michael Heinrich notes in a 2008 article about the financial crisis:
“in capitalism, crises function as brutal acts of purification. The destruction wreaked by crises removes previous impediments to accumulation and frees up new possibilities for capitalist development.”
Political economist Samir Amin, in The Implosion of Contemporary Capitalism, points to the internal contradictions of capital as the driving force of these crises. Amin points specifically to “growth in the productivity of social labor exceeding that of the price paid for labor power” as a significant source of crisis. Amin also notes that these crises result in the desirable outcomes of austerity and governments relinquishing power to the demands of the market. (Other Marxist economists have debated the role of “the tendency of the rate of profit to fall”, i.e. the tendency for capitalists to make less and less profit over time, in the role of systemic crisis. For more on the internal contradictions of capitalism that are often mentioned as abstractions, I’d recommend reading David Harvey’s Seventeen Contradictions and the End of Capitalism which outlines concrete examples.)
Moments of political crisis have been used to this end as well, for example in New Orleans after Hurricane Katrina, which was used as an excuse to gut social spending. This is even recognized by more liberal commentators such as Naomi Klein in her book Shock Doctrine. In several books including A Brief History of Neoliberalism and Spaces of Global Capitalism, David Harvey discusses how the crisis of the War on Terror has allowed the US to do this in Iraq and Afghanistan through the doctrine of neoconservatism, the spread of neoliberal economic policy through military force.
The YouTube comment makes the claim that without free markets, the world’s poor would never have the standard of living that they presently do.
Libertarians and other proponents of “free” markets insist that the efficiencies of the market are only possible when it is completely unencumbered by any state intervention, but this misses the role the state plays in maintaining these “free” markets. Enforcing private property rights, subsidizing industry, etc. The state doesn’t just exist or not exist, the state has class character. The state exists to mediate between conflicting class interests.
The market interventions of the state such as the New Deal were a response to worker demands and a need to stabilize economic development after the Great Depression. This post-War boom period is still viewed with nostalgia in the American imagination. The Keynesian policies weren’t enough to prevent the internal contradictions from causing issues, but the neoliberal reaction that began in the ‘70s which led to the deregulation and retreat of the state from involvement in the economy really set the present cyclical crises into motion.
A 1986 study published in the American Journal of Public Health looked at physical quality of life in capitalist and socialist countries based on raw data from the World Bank’s World Development Report. The report concluded that “in 28 of 30 comparisons between countries at similar levels of economic development, socialist countries showed more favorable PQL outcomes.”
The recent example of Bolivia is instructive in showing us what bold government policy focused on the development of the working class looks like. A report from the Center for Economic Policy Research states that in the 13 years following the initial election of former president Evo Morales of the Movement Toward Socialism (MAS) Party, Bolivia’s per capita GDP grew by 50% when adjusted for inflation, double the rate of the rest of Latin America and the Caribbean. Poverty and extreme poverty rates had been cut nearly in half — from roughly 60% and 38% respectively in 2006 to 35% and 15% in 2019.
The report points to the policies of the Morales government:
Bolivia’s economic transformation was possible due to overarching political transformations in the country. These included a new constitution with significant economic mandates; nationalization and public ownership of natural resources and some strategic sectors of the economy; redistributive public investment and wage policies; policy coordination between the Central Bank and the Finance Ministry; and monetary and exchange rate policies directed toward de-dollarizing the Bolivian financial system.
It also makes note of the government’s renationalization of the country’s hydrocarbon industry which increased government revenues from hydrocarbons “nearly sevenfold from $731 million to $4.95 billion.”
After the 2019 election which saw false claims of electoral fraud lead the military to force Evo Morales — who had won the election — to step down as president, a right-wing government led by Jeanine Añez took its place and immediately began working to gut the robust economic policies of the previous 13 years. (Incidentally, after seeing even mainstream US media give positive coverage of Bolivia’s economic conditions I said in an off-handed Facebook post to expect Bolivia to be the victim of a coup within the next couple of years. This was in 2018.)
According to another report by the CEPR, the Añez government reduced public spending by between 4 and 7% of quarterly GDP, though the MAS-led legislature was able to enact spending policies that attempted to mitigate the effects of these cuts as well as the economic crisis brought on by the COVID-19 pandemic. The MAS policies in this period totalled around 5.2% of GDP but as CEPR notes, much of this came after a new election was forced a year later and MAS candidate, Luis Arce — the former minister of the economy during the Morales presidency — was elected president, ending Añez’s brief presidency.
In this coup period, GDP fell by 7.7% according to the IMF, owing primarily to the pandemic, but worsened by the neoliberal austerity measures of the Añez government, which also saw the 2020 budget deficit land at 12.3%, which is 5.7% greater than the Añez government had aimed for. In 2021 the IMF is projecting a rebound of 5.5% growth adjusted for inflation.
It’s common throughout the history of the 20th century and the start of the 21st century to hold the view from the capitalist core that actually existing socialism was a failed experiment requiring mass repression and leading to the immense suffering of the people who lived under it. As I am writing this, there are small protests happening in Cuba stemming from the lack of food and medicine throughout the pandemic. This is presented to us as a failure of the Cuban socialist government. What is consistently left out of the discussion however is the role of the United States in completely cutting Cuba off from international trade, resulting in the small island becoming self-reliant with very limited resources, especially since the collapse of the Soviet Union, which was the one trading partner that would not be affected by the US embargo. (More recent sanctions by former US President Donald Trump prevent Cuba from receiving oil imports from Venezuela, one of its most important regional allies, to say nothing of the devastation sanctions have caused to the Venezuelan economy.)
In 1996, medical journal The Lancet published a report which showed that despite a 1992 exemption of medicine from the embargo, “the implementation of the CDA's requirements and the intensification of the embargo as a result of the passage of the Helms-Burton Act in March, 1996, have undermined the purpose of the medicine exemption. The resultant lack of food and medicine to Cuba contributed to the worst epidemic of neurological disease this century.”
The current unrest in Cuba is in fact the intended outcome of the blockade. An internal State Department memo from 1960, the start of the blockade, explicitly frames its purpose as “denying money and supplies to Cuba, to decrease monetary and real wages, to bring about hunger, desperation and overthrow of government.”
For a thorough account of the United States’ extensive efforts to undermine the Cuban government, I would recommend listening to the second season of the podcast Blowback, which is a thoroughly researched 10 part documentary. To understand the political economy of Cuba in the wake of the fall of the Soviet Union, economic historian Helen Yaffe’s book We Are Cuba! discusses the challenges Cuba has faced as a result of the blockade and the loss of its primary trading partner.
The achievements of the Cuban revolution are evident when you compare the conditions in Cuba before and after the revolution, as well as in contrast with other countries in the region. Health outcomes, literacy, extreme poverty and inequality, etc. were all greatly improved for millions of Cubans. When I spent time in both Jamaica and Cuba in 2015/2016 the contrast was stark. The US was able to successfully intervene in Jamaica’s political and economic system, overthrowing the democratically elected Michael Manley and implementing neoliberal structural readjustments and putting Jamaica in tremendous debt to the IMF. The resulting inequality is stark.
The growth of this inequality and mass poverty can be seen everywhere these neoliberal policies are introduced. Mike Davis’ book Planet of Slums documents the proliferation of this inequality and the increasing concentration of the global south’s population into massive urban slums.
Popular commentators such as Stephen Pinker and Jordan Peterson tell us that capitalism is responsible for reducing global inequality. This plays off of observation by Marx in his analysis of 18th century British capitalism in Volume 1 of Capital, which is that capitalism revolutionized and advanced the productive forces far beyond what was possible under feudalism. Pinker, et al. point to statistics such as the 2015 report by the UN’s Millennium Development Goals program which states that the global poverty rate has been cut in half since 1990. This is attributed by the likes of Pinker and Peterson to the developmental capacity of capitalism and the free market to lift people out of poverty, of course. What it ignores is a very large flaw in that narrative: The majority of these gains occurred in China.
There is intense debate on the left about the actual nature of the Chinese economy, with many anarchists and democratic socialists and even some communists claiming that it is not in fact a socialist economy but rather a “state capitalist” economy. Those on the right are much more willing to call China communist, though they’re also inclined to call Barack Obama and Joe Biden communists, so their view isn’t exactly coherent either. What neither side would dispute, however, is that China’s economy is most certainly not “free market.”
If we take China out of the equation, however, that’s when we begin to see the expansion of global inequality more clearly. Economic anthropologist Jason Hickel’s excellent book on the subject, The Divide — which he discusses in the context of the likes of Stephen Pinker and the broader media narrative in this episode of the Citations Needed podcast — outlines the extent of the growing inequality:
“In 1960, at the end of colonialism, per capita income in the richest country was thirty-two times higher than “in the poorest country. That’s a big gap. The development industry told us that the gap would narrow, but it didn’t. On the contrary, over the next four decades the gap more than quadrupled: by 2000, the ratio was 134 to 1. We can see the same pattern if we take a regional view. The gap between the United States (the world’s dominant power) and Latin America, sub-Saharan Africa, South Asia and the developing countries of the Middle East and North Africa has roughly tripled between 1960 and today. This is hardly a tale of ‘catching up’. And of course global inequality is even worse at the level of individuals. In early 2014, Oxfam reported that the richest eighty-five people had come to accumulate more wealth than the poorest 50 per cent of the world’s population, or 3.6 billion people. The following year things had already become worse – and so too the year after that. And in early 2017, as the World Economic Forum met in Davos, Oxfam announced that the richest eight people had as much wealth as the poorest 3.6 billion.”
The analysis of Hickel’s book tends to line up with that of legendary Guyanese historian Walter Rodney, whose book How Europe Underdeveloped Africa looked at the role of colonialism and capitalism in extracting cheap labour and resources from Africa (in incredibly violent manner) and traces the rise of Europe as an economic power as a result of this.
This violent process of what Marx called “primitive accumulation” or “accumulation through dispossession” — which includes land theft, slavery and the genocide of indigenous populations — is a historical process that Ellen Meiksins Wood, the subject of the initial YouTube comment, outlines quite thoroughly in her book The Origins of Capitalism and historian Gerald Horne documents in several books including The Apocalypse of Settle Colonialism and The Dawning of the Apocalypse. Haitian-American filmmaker Raoul Peck recently produced a four part documentary about the colonization of North America for HBO called Exterminate All The Brutes which offers perspective on the role of colonialism and white supremacy in building capitalism and its continued relevance to present day political culture.
Anywhere socialism and communism began to rise as a threat to capitalist and imperialist — the highest stage of capitalism” according to Lenin — hegemony in other parts of the world, the United States and its allies have waged war in places like Korea and Vietnam, killing millions in each country, overthrown governments in places like Chile, Haiti, Jamaica, Honduras, etc., and supported the mass slaughter of suspected communists, again killing several million in places like Indonesia, Nicaragua, Guatemala, El Salvador, etc. — see: The Jakarta Method by journalist Vincent Bevins and Washington Bullets by Vijay Prashad — in the name of spreading “democracy” and making the world safe for the “free” market.
The Cold War drive to defeat communism after WWII even saw the imperialist powers put former Nazi officials and scientists in high profile positions in NATO, NASA, etc. Many Canadians recently learned that we have several monuments to former Ukrainian SS officials in Canada, the result of Ukrainian fascists being brought in by Canadian resource extraction companies to undermine gains maid by organized labour. Our Deputy Prime Minister Chrystia Freeland, in fact, is the proud granddaughter of a Ukrainian Nazi newspaper editor.
This alliance between the imperialist powers and fascism is perhaps most notoriously displayed via The Black Book of Communism, which purports to document the “hundreds of millions” of victims of communism throughout history through a series of statistical distortions that the Alberta Advantage podcast offers a good debunking of. Historian Domenico Losurdo also discusses the historical revisionism of the Black Book in War and Revolution: Rethinking the 20th Century. The historical rise and fall of both fascism and communism is documented well by political scientist Michael Parenti in his indispensible book Blackshirts and Reds: Rational Fascism and the Overthrow of Communism.
This constant siege from capitalist powers naturally means that socialism is never able to develop in a way that truly allows it to maximize its productive forces and fully benefit the people. Socialism or communism don’t require Orwellian social control, they require the imperialist powers to stop violently undermining their progress at every turn.
To say that “communism is a way of thinking with religious overtones” betrays a complete lack of understanding of the workings of communism or the underpinning thought of Marxist analysis, which analyzes concrete social relations in their historical contexts. It is the proponents of capitalism who take on ways of thinking that border on religious.
It wasn’t Marx, Engels, Lenin or any other Marxist theorist who talked about the “invisible hand of the market.” It is not the Marxists who, in the face of centuries of mounting evidence that capitalism produces massive inequality insist that capitalism is solving that inequality; or despite capitalism being the driving force of global warming that is threatening more and more devastating disasters and inhospitable living conditions around the world, it is possible to find solutions to these problems through capitalist innovation.
It seems self-evident to us in the imperial core that capitalism — which has undoubtedly given many of us a standard of living that we could never have dreamed of if we weren’t in the imperial core, or if we were living under historical feudalism instead (though analysts like Jodi Dean have compared the development of capitalism and its widening inequality as akin to a form of neo-feudalism) — has been a net benefit for human wellbeing overall, but the evidence shows that it has in fact caused immense suffering and misery for the majority of the world and is continuing to expand the suffering and misery that it creates. It has been our attempts to fight back against this — whether in the form of organized labour fighting for better working conditions, or in the form of interventions in the market that force attend to the gaps left by market forces, or attempts at entire political and economic systems that are based around human needs rather than the accumulation of resources by an ever-shrinking ruling class — that have ultimately resulted in improved wellbeing of people in the world.
