The Mirage of Democratic Socialism



No-Deal Brexit Fear-Checker, No. 2

Labour Market

Complexity, compliance and a case for reform

IEA publishes an alternative history of socialism

This short paper reiterates the classical liberal critique of socialism. It does
so in a format which is slightly unusual for IEA publications, namely an ‘Alternative History’. The history described here is identical to ‘ours’ up until just after the fall of the Berlin Wall. From then on, it deviates from ours. In this alternative version, German reunification never happens. Instead, East Germans elect a government of idealistic socialist reformers. East Germany remains a sovereign country, a democratic country with a socialist economy. The new government tries its best to democratise that economy from within. They try to move away from the old top-down way of doing things and towards a participatory model of socialism. Our fictional socialist leaders have the best of intentions. They share the ideals of democratic socialist thinkers such as Noam Chomsky or Owen Jones. There is no Stalin-like character among them.

Our alternative history is technically set in East Germany, but it is not really
about that particular example of socialism. It is about the very idea of socialism itself. The paper illustrates how, for a number of structural reasons, socialism must always lead to the rule of a technocratic elite, to political repression, and to economic failure – no matter how noble the intentions of its protagonists may be.

Fullscreen Mode

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).