Socialism: The Concise Encyclopedia of Economics | Library …
Socialismdefined as a centrally planned economy in which the government controls all means of productionwas the tragic failure of the twentieth century. Born of a commitment to remedy the economic and moral defects of capitalism, it has far surpassed capitalism in both economic malfunction and moral cruelty. Yet the idea and the ideal of socialism linger on. Whether socialism in some form will eventually return as a major organizing force in human affairs is unknown, but no one can accurately appraise its prospects who has not taken into account the dramatic story of its rise and fall. The Birth of Socialist Planning
It is often thought that the idea of socialism derives from the work of Karl Marx. In fact, Marx wrote only a few pages about socialism, as either a moral or a practical blueprint for society. The true architect of a socialist order was Lenin, who first faced the practical difficulties of organizing an economic system without the driving incentives of profit seeking or the self-generating constraints of competition. Lenin began from the long-standing delusion that economic organization would become less complex once the profit drive and the market mechanism had been dispensed withas self-evident, he wrote, as the extraordinarily simple operations of watching, recording, and issuing receipts, within the reach of anybody who can read and write and knows the first four rules of arithmetic.
In fact, economic life pursued under these first four rules rapidly became so disorganized that within four years of the 1917 revolution, Soviet production had fallen to 14 percent of its prerevolutionary level. By 1921 Lenin was forced to institute the New Economic Policy (NEP), a partial return to the market incentives of capitalism. This brief mixture of socialism and capitalism came to an end in 1927 after Stalin instituted the process of forced collectivization that was to mobilize Russian resources for its leap into industrial power.
The system that evolved under Stalin and his successors took the form of a pyramid of command. At its apex was Gosplan, the highest state planning agency, which established such general directives for the economy as the target rate of growth and the allocation of effort between military and civilian outputs, between heavy and light industry, and among various regions. Gosplan transmitted the general directives to successive ministries of industrial and regional planning, whose technical advisers broke down the overall national plan into directives assigned to particular factories, industrial power centers, collective farms, and so on. These thousands of individual subplans were finally scrutinized by the factory managers and engineers who would eventually have to implement them. Thereafter, the blueprint for production reascended the pyramid, together with the suggestions, emendations, and pleas of those who had seen it. Ultimately, a completed plan would be reached by negotiation, voted on by the Supreme Soviet, and passed into law.
Thus, the final plan resembled an immense order book, specifying the nuts and bolts, steel girders, grain outputs, tractors, cotton, cardboard, and coal that, in their entirety, constituted the national output. In theory such an order book should enable planners to reconstitute a working economy each yearprovided, of course, that the nuts fitted the bolts; the girders were of the right dimensions; the grain output was properly stored; the tractors were operable; and the cotton, cardboard, and coal were of the kinds needed for their manifold uses. But there was a vast and widening gap between theory and practice.
The gap did not appear immediately. In retrospect, we can see that the task facing Lenin and Stalin in the early years was not so much economic as quasi militarymobilizing a peasantry into a workforce to build roads and rail lines, dams and electric grids, steel complexes and tractor factories. This was a formidable assignment, but far less formidable than what would confront socialism fifty years later, when the task was not so much to create enormous undertakings as to create relatively self-contained ones, and to fit all the outputs into a dovetailing whole.
Through the 1960s the Soviet economy continued to report strong overall growthroughly twice that of the United Statesbut observers began to spot signs of impending trouble. One was the difficulty of specifying outputs in terms that would maximize the well-being of everyone in the economy, not merely the bonuses earned by individual factory managers for overfulfilling their assigned objectives. The problem was that the plan specified outputs in physical terms. One consequence was that managers maximized yardages or tonnages of output, not its quality. A famous cartoon in the satirical magazine Krokodil showed a factory manager proudly displaying his record output, a single gigantic nail suspended from a crane.
As the economic flow became increasingly clogged and clotted, production took the form of stormings at the end of each quarter or year, when every resource was pressed into use to meet preassigned targets. The same rigid system soon produced expediters, or tolkachi, to arrange shipments to harassed managers who needed unplannedand therefore unobtainableinputs to achieve their production goals. Worse, lacking the right to buy their own supplies or to hire or fire their own workers, factories set up fabricating shops, then commissaries, and finally their own worker housing to maintain control over their own small bailiwicks.
It is not surprising that this increasingly Byzantine system began to create serious dysfunctions beneath the overall statistics of growth. During the 1960s the Soviet Union became the first industrial country in history to suffer a prolonged peacetime fall in average life expectancy, a symptom of its disastrous misallocation of resources. Military research facilities could get whatever they needed, but hospitals were low on the priority list. By the 1970s the figures clearly indicated a slowing of overall production. By the 1980s the Soviet Union officially acknowledged a near end to growth that was, in reality, an unofficial decline. In 1987 the first official law embodying perestroikarestructuringwas put into effect. President Mikhail Gorbachev announced his intention to revamp the economy from top to bottom by introducing the market, reestablishing private ownership, and opening the system to free economic interchange with the West. Seventy years of socialist rise had come to an end.
Understanding of the difficulties of central planning was slow to emerge. In the mid-1930s, while the Russian industrialization drive was at full tilt, few raised their voices about its problems. Among those few were ludwig von mises, an articulate and exceedingly argumentative free-market economist, and friedrich hayek, of much more contemplative temperament, later to be awarded a Nobel Prize for his work in monetary theory. Together, Mises and Hayek launched an attack on the feasibility of socialism that seemed at the time unconvincing in its argument as to the functional problems of a planned economy. Mises in particular contended that a socialist system was impossible because there was no way for the planners to acquire the information (see Information and Prices)produce this, not thatneeded for a coherent economy. This information, Hayek emphasized, emerged spontaneously in a market system from the rise and fall of prices. A planning system was bound to fail precisely because it lacked such a signaling mechanism.
Continued here:
Socialism: The Concise Encyclopedia of Economics | Library ...
- Sen. Rick Scott to fly banner urging New Yorkers who hate socialism to move to Florida: We have better beaches - New York Post - July 27th, 2025 [July 27th, 2025]
- Socialism at Its Best - Daily Kos - July 27th, 2025 [July 27th, 2025]
- No plan or intention to reconsider or remove 'socialism' & 'secularism' from Preamble of the Constitution: - The Economic Times - July 27th, 2025 [July 27th, 2025]
- What The Centre Said On Removing 'Socialism' And 'Secularism' From Preamble - Times Now - July 24th, 2025 [July 24th, 2025]
- What The Centre Said On Removing 'Socialism' And 'Secularism' From Preamble - MSN - July 24th, 2025 [July 24th, 2025]
- No intention to remove 'socialism', 'secularism' from Preamble: Govt - Business Standard - July 24th, 2025 [July 24th, 2025]
- Mamdani explains his radical upbringing and fondness for socialism in unearthed clips - MSN - July 24th, 2025 [July 24th, 2025]
- The Future of Democratic Socialism - City Journal - July 22nd, 2025 [July 22nd, 2025]
- Opinion | Nepals socialism: The biggest scam - The Kathmandu Post - July 22nd, 2025 [July 22nd, 2025]
- Surveys On Socialism And Zohran Mamdani - Forbes - July 22nd, 2025 [July 22nd, 2025]
- John Swinney needs to understand socialism and independence are inseparable - TheNational.scot - July 22nd, 2025 [July 22nd, 2025]
- Jesse Kline: Give 16-year-olds the vote? Only if you want never-ending socialism - National Post - July 22nd, 2025 [July 22nd, 2025]
- Whole Hog Politics: Its the socialism, stupid - The Hill - July 20th, 2025 [July 20th, 2025]
- Marxism is key to leading fight from capitalism to socialism - The Militant - July 20th, 2025 [July 20th, 2025]
- Beware the Democrats dangerous embrace of socialism - The Hill - July 18th, 2025 [July 18th, 2025]
- Socialism for the rich should be the real concern | Linda Bernhardt - Wisconsin State Journal - July 18th, 2025 [July 18th, 2025]
- Red Flags: A necessary reckoning with Actually Existing Socialism (AES) - springmag.ca - July 18th, 2025 [July 18th, 2025]
- What you missed at the Socialism 2025 annual conference - The Hill - July 16th, 2025 [July 16th, 2025]
- Socialism failed spectacularly in India: Zohos Sridhar Vembu on why the word should be removed from Con - The Economic Times - July 16th, 2025 [July 16th, 2025]
- 'Socialism has failed': Zoho's Sridhar Vembu calls it a smokescreen to expand govt control - Business Today - July 16th, 2025 [July 16th, 2025]
- Democratic socialism is dying. First the socialism, now the democracy - telegraph.co.uk - July 12th, 2025 [July 12th, 2025]
- Socialism and corruption: what the PSOE labeled as conservative sexual morality - Contando Estrelas - July 12th, 2025 [July 12th, 2025]
- Bernard S. Sharfman: Socialism will not save the Democratic Party. Its historic centrism will. - Pittsburgh Post-Gazette - July 10th, 2025 [July 10th, 2025]
- Zohran Mamdani: Hypocrisy, Socialism and the Danger of Elitist Politics - Fair Observer - July 8th, 2025 [July 8th, 2025]
- 'Ask Ann Landers' column once used cows as analogy to explain fascism and socialism - Snopes - July 8th, 2025 [July 8th, 2025]
- Letter to the Editor: Republican reconciliation bill is 'socialism for the rich' - Sioux City Journal - July 8th, 2025 [July 8th, 2025]
- Opinion | Cliff Asness on Zohran Mamdanis Socialism - WSJ - July 6th, 2025 [July 6th, 2025]
- Some Thoughts on Techno-Fascism From Socialism 2025 - Organizing My Thoughts - July 6th, 2025 [July 6th, 2025]
- Dont go down the Islamist rabbit hole: Socialism is what makes Mamdani toxic - New York Post - July 4th, 2025 [July 4th, 2025]
- The Worker-Peasant Alliance in the Transition to Socialism Today - Monthly Review - July 4th, 2025 [July 4th, 2025]
- Socialism, secularism are the spirit of the Constitution - The Hindu - July 4th, 2025 [July 4th, 2025]
- Hour 1 - Socialism will ruin NYC | NewsTalk 1320 KWHN | The Clay Travis and Buck Sexton Show - iHeart - July 4th, 2025 [July 4th, 2025]
- Daughter of Cuban exiles says Democratic socialism is wonderful in theory but miserable in practice - Fox Business - July 2nd, 2025 [July 2nd, 2025]
- Readers sound off on vilifying socialism, Trumps retaliation and a snipers victims - New York Daily News - July 2nd, 2025 [July 2nd, 2025]
- Socialism is a fantasy politicians are selling and doesnt work: Editor - NewsNation - July 2nd, 2025 [July 2nd, 2025]
- As a New York Resident Here Is My Biggest Worry About Mamdanis Socialism - The Daily Signal - July 2nd, 2025 [July 2nd, 2025]
- Opinion: The secularism-socialism debate is a fight over words, not essence - The News Minute - July 2nd, 2025 [July 2nd, 2025]
- Winklevoss and Armstrong Warn: Socialism Punishes the Poor the Most - Bitcoin.com News - June 29th, 2025 [June 29th, 2025]
- The siren song of socialism - The Highland County Press - June 29th, 2025 [June 29th, 2025]
- How Bezos and Snchez Just Delivered a Pitch-Perfect Ad for Socialism - The Daily Beast - June 28th, 2025 [June 28th, 2025]
- Zohran Mamdani and the Rise of Hipster Socialism - City Journal - June 28th, 2025 [June 28th, 2025]
- From MAGA Marxism to NY Socialism, something is happening in America - AL.com - June 28th, 2025 [June 28th, 2025]
- GMR Today: Can socialism win at the ballot box? - Communist Party USA - June 28th, 2025 [June 28th, 2025]
- A City Not Of Socialism: Eric Adams Takes Shot At Zohran Mamdani As He Launches Reelection Bid - The Daily Wire - June 28th, 2025 [June 28th, 2025]
- Eric Adamss Common Sense Will Save New York From Radical Socialism - The New York Sun - June 28th, 2025 [June 28th, 2025]
- Socialism in practice: Private land was 32.4 times as productive as public land in the Soviet Union - Stephen Hicks.org - June 24th, 2025 [June 24th, 2025]
- NYCs Zohran Mamdani Tries Selling Socialism to the Home of Wall Street - Bloomberg.com - June 22nd, 2025 [June 22nd, 2025]
- In todays US, saying be careful with crypto sounds like socialism - The Irish Times - June 22nd, 2025 [June 22nd, 2025]
- Ahead of Shreveport Rally, Louisiana Says No Thanks to Bernies Socialism and Tax Hikes - Bossier Press-Tribune - June 22nd, 2025 [June 22nd, 2025]
- Despite the Pain in the World, Socialism Is Not a Distant Utopia: The Twenty-Fifth Newsletter (2025) - thetricontinental.org - June 20th, 2025 [June 20th, 2025]
- The Cuban regime now says that to build socialism, a "well-structured economic system" is needed - CiberCuba - June 18th, 2025 [June 18th, 2025]
- We are heading for economic disaster: say goodbye to virtue-signalling socialism - The Telegraph - June 10th, 2025 [June 10th, 2025]
- Party for Socialism and Liberation holds NATO protest in Dayton - Cincinnati Enquirer - May 26th, 2025 [May 26th, 2025]
- Anti-U.S. Extremist Party For Socialism And Liberation, Linked To DC Jewish Event Shooter, Celebrates Hamas Attacks In NYC On October 8, 2023: The... - May 26th, 2025 [May 26th, 2025]
- STUC general secretary accused of 'champagne socialism' over second home - Yahoo News UK - May 26th, 2025 [May 26th, 2025]
- Under the socialism umbrella: Labor torched over pie in the sky super reform - MSN - May 26th, 2025 [May 26th, 2025]
- Socialism dressed up in the politics of empathy - The Spectator Australia - May 26th, 2025 [May 26th, 2025]
- Daz-Canel: "The fight against homophobia and transphobia is part of the ideals of socialism in Cuba." - CiberCuba - May 19th, 2025 [May 19th, 2025]
- Left turns toward socialism, and America must be on guard - The Mountaineer - May 17th, 2025 [May 17th, 2025]
- Join the Trotskyist movement to fight for socialism - World Socialist Web Site - May 15th, 2025 [May 15th, 2025]
- "Socialism, yes... but with an hourly rate": The wave of memes about the rental of the Anti-Imperialist Tribune - CiberCuba - May 15th, 2025 [May 15th, 2025]
- Economic Nationalism Divides Us. World Socialism Is the Answer | Opinion - Newsweek - May 15th, 2025 [May 15th, 2025]
- Class struggle and identity politics in the era of Trump - International Socialism - May 15th, 2025 [May 15th, 2025]
- Breaking European socialism will solve Americas drug pricing gap - Washington Times - May 15th, 2025 [May 15th, 2025]
- We will intensify campaign for socialism: Chair Prachanda - The Rising Nepal - May 15th, 2025 [May 15th, 2025]
- Cuba and Vietnam walk together in the construction of socialism - Granma - May 15th, 2025 [May 15th, 2025]
- The trade deals will be wasted unless Sir Keir rejects socialism - The Telegraph - May 11th, 2025 [May 11th, 2025]
- Capitalism, Socialism, Communism, and the sausage line - Stephen Hicks.org - May 10th, 2025 [May 10th, 2025]
- Ending the Gaza genocide requires the fight for socialism - World Socialist Web Site - May 8th, 2025 [May 8th, 2025]
- Trumps dictatorship, global war, and the fight for socialism - World Socialist Web Site - May 8th, 2025 [May 8th, 2025]
- The Illusion Of Choice: Capitalism, Socialism, And The Suppression Of Religion In The Modern Era - Kashmir Reader - May 8th, 2025 [May 8th, 2025]
- Parroting of socialism: Merely in words, not in action - The Himalayan Times - May 8th, 2025 [May 8th, 2025]
- The end of post-socialism and the opportunity for a European public service media house - New Eastern Europe - April 30th, 2025 [April 30th, 2025]
- Socialism, the only alternative in the face of danger - Granma - April 18th, 2025 [April 18th, 2025]
- Study group: What are the prospects for socialism in the U.S.? - Freedom Socialist Party - April 12th, 2025 [April 12th, 2025]
- Debunking the Not Real Socialism Myth - New Ideal - April 12th, 2025 [April 12th, 2025]
- Capitalism versus Socialism: The Confusion of Knight, the Clarity of Mises | Peter J. Boettke - Independent Institute - April 12th, 2025 [April 12th, 2025]
- Dilemmas of Humanity: Socialism is the only way, says Vijay Prashad during the conferences opening - Brasil de Fato - April 12th, 2025 [April 12th, 2025]
- Brinda Karat interview: Socialism is only alternative to capitalism, loot, American hegemony - The Federal News - April 12th, 2025 [April 12th, 2025]
- Letters: "The bandwagon of vindictive socialism [against farming] rolls on" - Farmers Guardian - April 3rd, 2025 [April 3rd, 2025]