Economic Theory

‘Democratic Socialism’: still a mirage

In February 2019, the Economist ran an edition with the cover title The Rise of Millennial Socialism, which was dedicated to the resurgence of socialism in the UK and US. “When the Berlin Wall fell in November 1989, many consigned socialism to the rubble”, the magazine explained.

“[T]he 20th century’s ideological contest seemed over. Capitalism had won and socialism became a byword for economic failure and political oppression. […] Today, 30 years on, socialism is back in fashion. […] Socialism is storming back.”

A few months later, the New Statesman magazine ran a story with an identical titleThe Rise of Millennial Socialism – in which they argued that:

“[O]ne consequence of the financial crash of 2008 has been the intellectual rehabilitation of Marx. Outside academic precincts, his ideas have been […] exfoliated of their association with dictatorship and state-sponsored terror.”

The New York Times had already declared that The Millennial Socialists Are Coming, and the Financial Times also saw a new generation of socialists emerging.

Unsurprisingly, these publications differed in their assessment of the phenomenon. But on one thing, they were all in complete agreement: that ‘Millennial Socialism’ is indeed a real thing. It is not just a social media frenzy, or a semantic confusion about what ‘socialism’ means.

They are right. Socialism is back. In Britain, this is borne out by plenty of surveys. For example, 38 per cent of people under the age of 35 agree with the statement that “Communism could have worked if it had been better executed”. 40 per cent of people under the age of 50 have a favourable view of socialism. Some of the most common associations with the term ‘socialism’ are “Delivers most for most people”, “Fair” and “For the greater good”. There is also widespread support for a wide range of individual policies one could reasonably describe as ‘socialist’, such as industry nationalisations, price controls, state-directed investment, and a larger state in general. Perhaps more importantly, most of the people who do not subscribe to pro-socialist views do not actively disagree with them either. They just choose not-committal answers, such as “Don’t know”, or “Neither agree nor disagree”.

We can see the same phenomenon play out by simply setting foot into a high street bookstore. Over the past two years or so, there has also been a flurry of books which, in one way or another, make the case that socialism has never been properly tried, and that it deserves another chance. This market still shows no signs of saturation. Fully Automated Luxury Communism, The Socialist Manifesto, The People’s Republic of Walmart, Why Women Have Better Sex Under Socialism, The Fall and Rise of the British Left, Why Marx Was Right, Four Futures: Life after Capitalism etc. are all bestsellers within their genre.

And we can also see the phenomenon play out in our media landscape. In 2018, the journalist Ash Sarkar became a media celebrity overnight, simply for yelling “I’m a communist, you idiot! […] I’m literally a communist!” at a TV presenter. Fawning coverage in Teen Vogue, Elle magazine and the Guardian followed, and Sarkar has been regularly featured on prime-time political TV programmes ever since. When Guardian columnist Owen Jones declared triumphantly that communism is now all the rage, he was not exaggerating. As GQ Magazine journalist Andrew Anthony explains: “Sarkar’s profession of communist beliefs […] made her seem cooler, more edgy, more worthy of notice. […] [S]assiness is a clue to the appeal of this new communism.”

The fact that the climate strikes and Extinction Rebellion immediately got absorbed into the Millennial Socialism tent is another sign of our times. Given the terrible environmental legacy of former socialist states, environmentalism and socialism should not make natural bedfellows. And yet, in practice, they usually do. Against the backdrop of a socialist zeitgeist, climate change was quickly recast as a ‘crisis of capitalism’.

In the early days of the Millennial Socialism craze, it was still just about possible to dismiss it all as a semantic confusion. Strictly speaking, “socialism” means “collective or governmental ownership and administration of the means of production and distribution of goods” (according to the Merriam-Webster dictionary). But in practice, not everybody uses the term in that sense. At least in the UK and the US, some people use the term ‘socialism’ in a much looser, broader, and generally, less radical sense; for example, many confuse ‘socialism’ with social democracy.

On the whole, though, this is emphatically not what the Millennial Socialist movement (for lack of a better word) is about. It is about socialism in the proper and conventional sense of the word, and the movement’s figureheads are completely upfront about this: they have never claimed to be Nordic-type social democrats.

In his book The Socialist Manifesto, Bhaskar Sunkara, the founding editor of Jacobin magazine and former vice-chair of the Democratic Socialists of America (DSA), defines socialism specifically in contrast to Nordic social democracy. Sunkara’s main argument is that while social democratic reforms can bring some temporary gains for the ‘working class’, under capitalism, such gains will always be unstable. He believes that as long as there is a ‘capitalist class’, they will always seek to reverse any gains enjoyed by the working class, and that in the long run they will always get their way. Thus, the only way in which the working class can attain lasting gains is by overcoming capitalism altogether (rather than trying to ‘reform’ it) and replacing it with an economic system in which there is no capitalist class anymore.

This emphasis on collective ownership, and on the rolling back of markets, is not an optional part of this worldview, which one could discard or ignore, while agreeing with the rest. It follows logically from the fact that Sunkara sees politics in Marxist terms, that is, as a class struggle, rather than a battle of ideas. Sunkara does not advocate collectivisation of private companies because he believes that it will lead to superior efficiency, or to lower consumer prices. He advocates collectivisation, because he believes that this is the only way to undermine the ‘structural power’ of ‘the capitalist class’.

In the UK, the Marxist economist Grace Blakeley, who is the New Statesman’s economics commentator and a research fellow at the Institute for Public Policy research (IPPR), makes a similar argument:

“Today, the radical left in the UK, the US and France is calling not for social democracy but for democratic socialism. For me, the former means the taxation and regulation of private enterprise, while the latter means the democratic ownership of most large corporations and financial institutions.”

As in Sunkara’s case, this is not optional. Blakeley sees the world through a conventional Marxist-Leninist lens, which means that for her, everything revolves around notions of ‘class power’ and ‘class struggle’:

“Those of us on the left who remain materialists know that liberal institutions operate as a veil over underlying power relations. Liberalism survives by presenting the state as a neutral enforcer of a legal code […] rather than what it is: a committee for managing the affairs of the bourgeoisie.”

If we start from this premise, we cannot logically end up supporting Danish social democracy. If we start from Marxist assumptions, we can only reach Marxist conclusions.

The new left-wing think tank Common Wealth, which is, according to its self-description, “a think tank dedicated to democratising ownership”, fits into the same mould.

Guardian columnist Owen Jones also regularly calls for the wholesale nationalisation of entire industries. He wants a state-run banking industry, a state-run mobile phone industry, a state-run oil industry, state-run railways, a state-run energy industry, and a largely state-owned housing sector, among others. He also wants the state to abolish private schools, to set up a national estate agency, and to impose a moratorium on private dentistry. What little remains of a private sector would be indirectly directed by the state, under an extensive ‘industrial strategy’. Whatever this is – it is not Nordic-style social democracy.

To cut a long story short, Millennial Socialism really is what it says on the tin. It is about socialism in the way the dictionary defines it.

This raises an obvious question: how can an idea which has been tried so many times – from the Soviet Union to Venezuela – and which has ended in failure every single time, still be so popular? To a Millennial Socialist, this would already be the wrong question – the kind of question that only somebody does not understand socialism would ask. A Millennial Socialist would just not accept that any of the historical examples represented a genuine attempt to build a socialist society. They see them as totalitarian distortions of the original socialist ideas, which can tell us no more about those ideas than the Holy Inquisition can tell us about Christianity, or that Islamist terrorism can tell us about Islam.

Millennial Socialists often treat attitudes to socialism as an IQ test of sorts – a test of whether somebody is able to distinguish between the essence of an idea and a distorted application. Judging socialism by its real-world outcomes is seen as low-brow and unsophisticated. A more refined thinker would be able to see beyond those botched attempts; and focus on the original vision behind them. In short, the assumption is that shallow people judge socialism by its outcomes, while smart people judge it by its original intentions.

It is, of course, true that actually existing socialism never had much in common with the original vision. As Bhaskar Sunkara explains in The Socialist Manifesto:

“[S]ocialism essentially meant radical democracy. […]

It was not […] an authoritarian dictatorship; Marx described an egalitarian, participatory democracy. […]

Marx presented an immediate set of demands for the socialist movement. If successful, they would have resulted in a society where a radically transformed, democratic state held formerly private property and used it rationally under the direction and to the benefit of the people” (pp. 47-48).

In his book Fully Automated Luxury Communism (FALC), Aaron Bastani also argues:

“While it is true that a number of political projects have labelled themselves communist […] the aspiration was neither accurate nor […] technologically possible. (p. 50) […]

[T]op-down, nationally controlled industries […] came to dominate the economic landscape not only of the USSR but other countries such as Cuba and North Korea (p. 231).

Vice magazine journalist Tom Whyman asks:

“But has communism actually been tried? Granted, there have been regimes that call themselves ‘communist’. But just look at [Ash] Sarkar’s definition: ‘A belief in the power of people to organise their lives as individuals… without being managed by a state.’ Does that sound much like the Soviet Union to you?”

Grace Blakeley claims:

“We have had examples of state socialism, obviously, throughout the years, whether you look at […] the USSR, or […] Venezuela is an arguable case […]

I would argue that […] we have never had democratic socialism.”

And according to Ash Sarkar, socialist regimes like the Bolsheviks “remembered everything that Marx had to say about the need for dictatorship to fast-track collectivisation and forgot everything that Marx had to say about freedom and human flourishing.”

These are all longwinded ways of saying that socialism has not ‘failed’ – it has just never ‘really’ been tried. This has become the conventional wisdom of our time. It is the central assumption which underpins Millennial Socialism.

It is also fundamentally wrong. There have been many sincere attempts to build socialist societies. Socialism never turned out the way its supporters imagined, but this is not for a lack of trying. The gap between the original vision, and the way it turned out in practice, was not simply the result of deliberate political choices; it was not the result of distortions, misunderstandings or misinterpretations. It was the only way socialism could have turned out, irrespective of how good the intentions of its proponents may be.

Classical liberal critics of socialism have been making this point for over a hundred years. But it is a point which, although ultimately fairly straightforward, is also surprisingly hard to explain, especially in a heated discussion. Hayek’s Road to Serfdom is not easily condensable in an argument at the pub.

My paper The Mirage of Democratic Socialism, originally published in August 2018, and recently republished to mark the 30th anniversary of the fall of the Berlin Wall, is an attempt to make the classical liberal critique of socialism as intuitively clear as possible. It does so in the form of an ‘Alternative History’, because this format, much like the ‘Robinson Crusoe economy’ of the Econ 101 textbook, allows us to strip out unnecessary distractions, and get down to the basics.

It describes a fictitious socialist society, governed by people who (not coincidentally) very much share the mindset of today’s Millennial Socialists. It is set in a universe where the fall of the Berlin Wall, and the ousting of the East German ruling elites, does not lead to the end of socialism, but to its democratic renewal. Our fictitious post-1990s GDR turns itself into a role model of democratic socialism.

It is the sort of paper you might want to recommend to a socialist friend, because, while ultimately rejecting them, the paper neither dismisses nor misrepresents socialist ideas. It engages with them as honestly and fairly as it is possible for an author who profoundly disagrees with them.


Read ‘The Mirage or Democratic Socialism’ here.

Head of Political Economy

Dr Kristian Niemietz is the IEA's Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).

1 thought on “‘Democratic Socialism’: still a mirage”

  1. Posted 11/12/2019 at 21:18 | Permalink



    Many “levelers” (economic egalitarians or collectivists) believe that “Socialism is the total opposite of capitalism/imperialism. It is the rejection of empire and white supremacy. Socialism is the violent overthrow of the bourgeoisie, the establishment of a dictatorship of the proletariat, and the eradication of the social system based on profit. Socialism means control of the productive forces for the good of the whole community instead of the few who live on hilltops and in mansions. Socialism means priorities based on human need instead of human greed. Socialism creates the conditions for a decent and creative quality of life for all.” Of course, the number of admitted adherents to this definition diminishes when these collectivists learn that this rendering of socialism comes from the Weather Underground in its 1974 Prairie Fire Manifesto. [Note: Their chagrin only multiplies when they learn the motto of Vladimir Lenin’s newspaper, “The Left Voice” was “A single spark can start a prairie fire”.]

    Ayn Rand defined collectivism in 1944 magazine article (“The Only Path To Tomorrow”) as “… the subjugation of the individual to the group … Collectivism holds that man must be chained to collective action and collective thought for the sake of what is called ‘the common good'”.
    Currently, there is an almost endless drumbeat of anti-capitalist and pro-socialist articles in almost all newspapers, magazines and on many websites. One goal of these numerous essays is to mislead the American electorate regarding the history of socialism both in the US and around the world. Perhaps several examples will suffice to demonstrate this point. The New York Times on July 6, 2019, in its Sunday Review section printed Sitaraman & Alsort as follows: “The struggle between capitalism and socialism is back.” And that “Americans don’t need to resign themselves to vicious capitalism …” In the Aug. 12, 2019 edition of the Los Angeles Review of Books Prof. Christian Fuchs cited three left-wing authors to his readers to remind them that “… liberalism and capitalism have inherent fascist potential (and) that fascism is a terroristic version of capitalism.”

    Inexplicably, many (most?) redistributionists apparently choose to ignore the clear-cut results of socialism’s many actual historic experiments which can be handily recounted.

    Socialism (millenarian collectivism) traces its roots to 1789 and the French Revolution which is commonly known as “The Terror”. Of course, this led solely to tyranny and ultimately to the guillotine.[One must recognize that the vast majority of those who were beheaded in France were from the middle and lower classes and not from the aristocracy.] (See: “Tyrants” by Waller Newell) Beginning in the 1820s there was a wave of cooperatives (socialist experiments) formed in the US and Europe led by men like Robert Owen but most had failed by 1840. The average life span of these many “co-ops” was only two years. [See: ].
    The Socialist Party of America was formed in 1901 by Eugene Debs and Mr. Debs (from 1904 till 1920) never got more than 6% of the vote in any presidential election. From 1924 through 1948 Debs was replaced by Norman Thomas whose election results were also always in the low single digits. [Note: Interestingly, Mr. Thomas was always (like George Orwell) rabidly anti-communist and some fear that their combined virulence may not have rubbed off on many of today’s left-wing collectivist authors since it is suspected that some of these socialists may actually hold neo-Marxist views.] Since 1948 the Socialist Party in the US has only steadily faded away. [See: ]. In fact, the Democratic Socialists of America today boasts of less than 60,000 members which are a paltry few although their membership has grown from only 6,000 to 56,000 in just two years. [See: ].
    Economic historians cite three face-to-face “experiments” since WW II in which capitalism and socialism can be directly compared and these are West Germany vs. East Germany after 1945; China vs. Taiwan after 1949 and North Korea vs. South Korea after 1952. Suffice it to say that socialism has never measured up very well anywhere. [Note: Some experts in economic history are today examining Venezuela vs. Chile and many are reaching the very same conclusion.] On the other hand, capitalism has lifted over one billion people out of abject poverty in just the last 12 years. [See: ].
    In 1978 after Mao’s death China adopted market-based reforms and one need not recount the upward explosion in human economic well-being that followed. India saw the resulting skyrocketing increase in overall living standards in China and instituted market reforms of their own starting in 1991. Since then these two nations have lifted a combined one billion of their citizens out of subsistence poverty. [See: ].
    In 1945 Clement Atlee defeated Winston Churchill in Great Britain and quickly proceeded to nationalize most of that country’s major industries. By the 1970s the whole world was talking about the “British Disease” and the “Sick Man of Europe”. This led to the election in 1979 of Margaret Thatcher who insisted that “No theory of government was ever given a fairer test or a more prolonged experiment than democratic socialism received in Britain. Yet it was a miserable failure in every respect…” [See: ]. Indeed, Mrs. Thatcher insisted that “To cure the British disease with socialism was like trying to cure leukemia with leeches.” [See: ].
    Turning to Denmark, while Lars Lokke Rasmussen was Prime Minister he stated that “I know that some people in the US associate the Nordic model with some sort of socialism. Therefore, I would like to make one thing clear. Denmark is far from a planned economy. Denmark is a market economy.” [See: ]. Indeed, according to the Economic Freedom Index, all of the countries in Scandinavia are far more capitalist than socialist. [See: ]. All Nordic countries have no minimum wage and each offers full school choice. In addition, Denmark and Sweden have greatly reduced unemployment benefits.
    Some redistributionalists still cling to Norway as the final redoubt of Nordic democratic socialism but this tiny country adheres to its mix of capitalism and socialism solely because of that nation’s massive offshore oil and natural gas deposits. In May of 1963 Norway claimed the petroleum reserves off of its coast and in 1969 they struck oil which now produces 1,600,000 barrels per day. As a result, Norway’s GDP rose from $12 billion to $65 billion in only ten years. The government wisely formed a sovereign wealth fund which today is worth $1 trillion the largest in the world. [See: ].
    No socialist in France had won the presidency from the inception of the Fifth Republic in 1958 until 1981 when Francois Mitterrand ascended to that high office. As president, Mr. Mitterrand quickly implemented a program of nationalization coupled with an economic stimulus designed to jump-start France’s flagging economy. His election could not have come at a worse time. The world was suffering from a new phenomenon called “stagflation” and in less than two years after his election, President Mitterrand was forced to sharply curtail his collectivist efforts. [See: ].
    Even the well known Slovenian philosopher, Slavoj Zizek, (who is a self described “political radical”) admits that “Social democracy is of another era” and that “A simple return to old (20th century) social democratic welfare states can not work” due to “digitalization through new forms of science (and) new forms of liberal capitalism.” [See: ].
    From 1998 to 2015 fifteen Latin American countries elected socialist presidents in a trend called the “Pink Tide”. [See: ]. Now, Oxfam reports that Latin America has remained the most unequal region in the world. [See: ]. Also, according to the Igarape Institute, Latin America has persisted in being the most violent place on the planet. [See: ]. The UN asserts that Latin America has had no reduction in poverty and that extreme poverty has increased to its highest level since 2008. [See: ]. Corruption has continued unabated and all of this has led to a counter wave that includes new conservative leaders in Brazi, Argentina, Guatemala, El Salvador, Columbia, Chile, Peru, and Paraguay. [See: ]. Some of the people of Latin America who tried collectivism did not like what they got. This is especially true in Venezuela.
    Let’s examine Iran. The 1979 revolution promised three things: independence, social justice, and democracy & freedom. After 40 years there has been a 17-fold increase in the number of Iranians living in slums. Iran’s Gini coefficient has remained high while a growing sense of disillusionment and frustration forcefully erupted in the Green Movement in 2009, as well as, another upheaval in 2017-2018. [See: ].
    The book, “Heaven on Earth” (2nd edition 2019) summarizes all of this with “Socialism was man’s most ambitious attempt to supplant religion with a doctrine claiming to ground itself in ‘science’. Each failure to create societies of abundance or give birth to ‘The New Man’ inspired more searching for a path to the promised land: revolution, communes, social democracy, communism, fascism, Arab socialism, African socialism. None worked and some exacted a staggering human toll. Then, after two centuries of wishful thinking and bitter disappointment socialism imploded in a fin de siècle drama of falling walls and collapsing regimes. It was an astonishing denouement but what followed was no less astonishing. After a hiatus of several decades, new voices were raised, as if innocent of all that had come before, proposing to try it all over again.”
    Thus the economic record is clear. Over the last 230 years, socialism has caused only poverty, misery and human suffering. [See” ] While capitalism (in the opinion of many, humankind’s greatest invention since the wheel) has been slashing poverty as the next graph clearly documents.

    In a 2018 article in Foreign Affairs Magazine the esteemed historian, Prof. Walter Russel Mead, offered that over a 35 year period our nation had been plagued by “Ineffective politicians, frequent scandals, racial backsliding, polarized and irresponsible news media, populists spouting quack economic remedies, growing suspicion of elites and experts, frightening outbreaks of violence, major job losses, high profile terrorist attacks, anti-immigrant agitation, rising inequality and the appearance of a new class of super-powered billionaires in finance and technology-heavy industries.” But, Prof. Mead was writing about the period in American history from 1865 till 1901 after the end of the US Civil War. Like the movie “Groundhog Day” history only repeats itself but no one ever seems to notice that human economic improvement and overall well-being only continue to spiral ever upward. Does anyone really want to go back to living in caves eating nuts, berries, and roots, scavenging dead meat and consuming an occasional fresh kill where everyone is mostly equal? Given an informed choice, almost all of us would, one strongly suspects, opt for individualism and capitalism every time.

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