[Rhodes22-list] Politics - Socialism, Free Enterprise, and the Common Good

[pdgrand at nospam.wmis.net]

Ed,

I did not have time to read through this when you first posted it, but I
just now finished it.  (Ed originally posted this on 12/3, I believe.) 
Really good stuff.  For those of you interested in politics, I suggest you
also take the time to read it and then comment on it.

Paul


Socialism, Free Enterprise, and the Common Good Rev. Robert A. Sirico
President, Acton Institute for the Study of Religion and Liberty

Robert A. Sirico is co-founder and president of the Acton Institute for
the Study of Religion and Liberty. He received his Master of Divinity
degree from the Catholic University of America, following undergraduate
study at the University of Southern California and the University of
London. He has written for a variety of journals, including the New York
Times, the Wall Street Journal, Forbes, the London Financial Times, the
Washington Times, the Detroit News and National Review. A member of the
Mont Pelerin Society, the American Academy of Religion, and the
Philadelphia Society, he is also currently pastor of St. Mary Catholic
Church in Kalamazoo, Michigan.

The following is adapted from a speech delivered at Hillsdale College on
October 27, 2006, at the first annual Free Market Forum, sponsored by the
College’s Center for the Study of Monetary Systems and Free Enterprise.


--------------------------------------------------------------------------------

In chapter 21 of St. Matthew’s Gospel, Jesus proposes a moral dilemma in
the form of a parable: A man asks his two sons to go to work for him in
his vineyard. The first son declines, but later ends up going. The second
son tells his father he will go, but never does. “Who,” Jesus asks, “did
the will of his father?” Although I am loath to argue that Jesus’s point
in this parable was an economic one, we may nonetheless derive from it a
moral lesson with which to evaluate economic systems in terms of achieving
the common good.

Modern history presents us with two divergent models of economic
arrangement: socialism and capitalism. One of these appears preoccupied
with the common good and social betterment, the other with profits and
production. But let us keep the parable in mind as we take a brief tour of
economic history.

The idea of socialism, of course, dates back to the ancient world, but
here I will focus on its modern incarnation. And if we look to socialism’s
modern beginnings, we find it optimistic and well-intentioned. In contrast
to contemporary varieties that tend to bemoan prosperity, romanticize
poverty, and promote the idea that civil rights are of secondary concern,
at least some of the early socialists sought the fullest possible
flourishing of humanity—which is to say, the common good.

A half-century before Karl Marx published the Communist Manifesto, there
was Gracchus Babeuf’s Plebeian Manifesto (later revised by Sylvain
Marechal and renamed the Manifesto of the Equals). Babeuf was an early
communist who lived from 1760 to 1797 and wrote during the revolutionary
period in France.
Although he was jailed and eventually executed, his ideas would later have
an enormous impact. And his explicit political goal had nothing to do with
impeding prosperity. To the contrary, he wrote:

The French Revolution was nothing but a precursor of another revolution,
one that will be bigger, more solemn, and which will be the last
 We reach
for something more sublime and more just: the common good or the community
of goods! No more individual property in land: the land belongs to no one.
We demand, we want, the common enjoyment of the fruits of the land: the
fruits belong to all.

We see in Babeuf’s writings two themes that would remain dominant in
socialist theory until the twentieth century: an aspiration to prosperity
through ownership by all and an equation of the common good with the
commonality of goods. Indeed, Marx took more from Babeuf than Marx himself
would ever acknowledge.

In our own time, we think of socialists as opposing capitalist excess,
disparaging the mass availability of goods and services, and seeking to
restrict the freedom to produce and enjoy wealth. Consider, for instance,
the wrath that modern socialists feel towards fast food, large discount
stores, and specialty financial services for the poor. They accuse the
mass consumer market of institutionalizing false needs, commodifying the
commons, glorifying the banal, homogenizing culture—all at the expense of
the environment and of equality of condition, the highest socialist goal.
Improving the standard of living in society is far down the list of modern
socialist priorities.

But to repeat, it was not always so. Early socialists believed that
socialism would bring about an advance of civilization and an increase in
wealth. Babeuf, for example, predicted that socialism would “[have] us eat
four good meals a day, [dress] us most elegantly, and also [provide] those
of us who are fathers of families with charming houses worth a thousand
louis each.” In short, socialism would distribute prosperity across the
entire population. A particularly poetic rendering of this vision was
offered by none other than Oscar Wilde:

Under Socialism
there will be no people living in fetid dens and fetid
rags, and bringing up unhealthy, hunger-pinched children in the midst of
impossible and absolutely repulsive surroundings
Each member of the
society will share in the general prosperity and happiness of the society,
and if a frost comes no one will practically be anything the worse


The core of the old socialist hope was a mass prosperity that would free
all people from the burden of laboring for others and place them in a
position to pursue higher ends, such as art and philosophy, in a
conflict-free society. But there was a practical problem: The Marxist
prediction of a revolution that would bring about this good society rested
on the assumption that the condition of the working classes would grow
ever worse under capitalism. But by the early twentieth century it was
clear that this assumption was completely wrong. Indeed, the reverse was
occurring: As wealth grew through capitalist means, the standard of living
of all was improving.

Lifting All Boats
Historians now realize that even in the early years of the Industrial
Revolution, workers were becoming better off. Prices were falling, incomes
rising, health and sanitation improving, diets becoming more varied, and
working conditions constantly improving. The new wealth generated by
capitalism dramatically lengthened life spans and decreased child
mortality rates. The new jobs being created in industry paid more than
most people could make in agriculture. Housing conditions improved. The
new heroes of society came from the middle class as business owners and
industrialists displaced the nobility and gentry in the cultural
hierarchy.

Much has been made about the rise of child labor and too little about the
fact that, for the first time, there was remunerative work available for
people of all ages. As economist W. H. Hutt has shown, work in the
factories for young people was far less grueling than it had been on the
farm, which is one reason parents favored the factory. As for working
hours, it is documented that when factories would reduce hours, the
employees would leave to go to work for factories that made it possible
for them to work longer hours and earn additional wages. The main effect
of legislation that limited working hours for minors was to drive
employment to smaller workshops that could more easily evade the law.

In the midst of all this change, many people seemed only to observe an
increase in the number of the poor. In a paradoxical way, this too was a
sign of social progress, since so many of these unfortunate people might
have been dead in past ages. But the deaths of the past were unseen and
forgotten, whereas current poverty was omnipresent. Meanwhile, as economic
development expanded in the nineteenth century, there was a dramatic
growth of a middle class that now had access to consumer goods once
available only to kings—not to mention plenty of new goods being created
by the engine of capitalism.

These economic advances continued throughout the period of the rise of
socialist ideology. The poor didn’t get poorer because the rich were
getting richer (a familiar socialist refrain even today) as the socialists
had predicted. Instead, the underlying reality was that capitalism had
created the first societies in history in which living standards were
rising in all sectors of society. In a sense, free market capitalism was
coming closest to realizing what Marx himself had imagined: “the all round
development of individuals” in which “the productive forces will also have
increased” and “the springs of social wealth will flow more freely.”

There was one Marxist in England who seemed to understand what was
happening. Eduard Bernstein, who lived from 1850 to 1932, is hardly known
today. His writings are not studied, except by specialists. But he was the
leading Marxist after Marx and Engels. Engels considered him their
successor, and even asked him to finish editing Marx’s fourth volume of
Capital.

In the 1890s, Bernstein began to observe the positive effects of
capitalism on living standards. “What characterizes the modern mode of
production above all,” he wrote, “is the great increase in the productive
power of labour.
The result is a no less increase of production—the production of masses of
commodities.” This empirical fact struck at the very heart of the Marxist
case. Bernstein also observed that the numbers of businesses and of people
who were well-off were rising along with incomes. As he put it, “The
increase of social wealth is not accompanied by a diminishing number of
capitalist magnates, but by an increasing number of capitalists of all
degrees.” In fact, in the 50 years after the publication of the Communist
Manifesto, incomes in England and Germany doubled—precisely the opposite
of what Marx had predicted. To quote Bernstein again, from 1899:

If the collapse of modern society depends on the disappearance of the
middle ranks between the apex and the base of the social pyramid, if it is
dependent upon the absorption of these middle classes by the extremes
above and below them, then its realisation is no nearer in England,
France, and Germany today than at any earlier time in the nineteenth
century.

The basis of Marxist doctrine had been the idea that society under
capitalism consisted of two classes—one small and rich, the other vast and
increasingly impoverished. The reality, however, was that the numbers of
the rich were growing more rapidly than those of the poor, while the vast
majority was falling into a category that socialism didn’t anticipate: the
middle class. Doctrinaire Marxists were of course furious with Bernstein
for noticing these developments. Rosa Luxemburg, for one, wrote a famous
essay in 1890 attacking him.

One might assume, then, that Bernstein changed sides—abandoning socialism
upon seeing its false premises —and took up instead the classical liberal
cause of free enterprise. I’m sorry to report that this is not the case.
What Bernstein changed instead were his tactics. He still favored the
expropriation of the English capitalists, but now through a different
method—not through revolution, but through the use of political
mechanisms.
And indeed, the political success of socialism during the twentieth
century would bring England to the brink of catastrophe more than once.

Ideology vs. Reality
If one becomes aware that the older moral argument for socialism is
wrong—that capitalism is actually benefiting people and serving the common
good—why would one hold on to the ideology rather than abandon it?
Clearly, it is difficult to abandon a lifelong ideology, especially if one
considers the only available alternative to be tainted with evil. Thus
socialism was, for Bernstein’s generation of socialists and for many that
followed, simply an entrenched dogma. It was possible for them to argue
the finer points, but not to abandon it.

However understandable this might be, it is not praiseworthy. To hold on
to a doctrine that is demonstrably false is to abandon all pretense of
objectivity. If someone could demonstrate to me that free markets and
private property rights lead to impoverishment, dictatorship, and the
violation of human rights on a mass scale, I would like to think that I
would have the sense and ability to concede the point and move on. In any
case, socialists like Bernstein lacked any such intellectual humility.
They clung to their faith—their false religion—as if their lives were at
stake.
Many continue to do so today.

Most intellectuals in the world are aware of what socialism did to Russia.
And yet many still cling to the socialist ideal. The truth about Mao’s
reign of terror is no longer a secret. And yet it remains intellectually
fashionable to regret the advance of capitalism in China, even as the
increasing freedom of the Chinese people to engage in commerce has
enhanced their lives. Many Europeans are fully aware of how damaging
democratic socialism has been in Germany, France, and Spain. And yet they
continue to oppose the liberalization of these economies. Here in the
United States, we’ve seen the failure of mass programs of redistribution
and the fiscal crises to which they give rise. And yet many continue to
defend and promote them.

There have long been cases where grotesque examples of the failure of
socialism exist alongside glowing examples of capitalist success, and yet
many people will use every excuse to avoid attributing the differences to
their economic systems. Even a superficial comparison of North and South
Korea, East and West Germany before the Berlin Wall fell, Hong Kong and
mainland China before reforms, or Cuba and other countries of Latin
America, demonstrates that free economies are superior at promoting the
common good.
And yet the truth has not sunk in.

The older socialists dreamed of a world in which all classes the world
over would share in the fruits of production. Today, we see something like
this as Wal-Marts—to cite only the most conspicuous example—spring up
daily in town after town worldwide. Within each of these stores is a
veritable cornucopia of goods designed to improve human well-being, at
prices that make them affordable for all. Here is a company that has
created many millions of jobs and brought prosperity to places where it
was sorely needed. And who owns Wal-Mart? Shareholders, people of mostly
moderate incomes who have invested their savings. We might call them
worker-capitalists. Such an institution was beyond the imaginings of the
socialists of old.

Although the free enterprise system obviously does not incorporate the old
socialists’ idea of a commonality of goods, it does seem to achieve the
common good as they conceived it. What then can we say of those who today
remain attached to socialism as a political goal? We can say that they do
not know or have not understood the economic history of the last 300
years.
Or perhaps we can say that they are more attached to socialism as an
ideology than they are to the professed goals of its founders. I’m
particularly struck by the neo-socialist concern for the well-being of
plants, animals, lakes and rivers, rain forests and deserts—particularly
when the concern for the environment appears far more intense than the
concern for the human family.

The Good of Freedom
When we speak of the common good, we need also to be clear-minded about
the political and juridical institutions that are most likely to bring it
about.
These happen to be the very institutions that socialists have worked so
hard to discredit. Let me list them: private property in the means of
production; stable money to serve as a means of exchange; the freedom of
enterprise that allows people to start businesses; the free association of
workers that permits people to choose where they would like to work and
under what conditions; the enforcement of contracts that provides
institutional support for the idea that people should keep their promises;
and a vibrant trade within and among nations to permit the fullest
possible flowering of the division of labor. These institutions must be
supported by a cultural infrastructure that respects private property,
regards the human person as possessing an inherent dignity, and confers
its first loyalty to transcendent authority over civil authority. This is
the basis of freedom, without which the common good is unreachable. Thus
Pope John Paul II wrote of economic initiative:

It is a right which is important not only for the individual but also for
the common good. Experience shows us that the denial of this right, or its
limitation in the name of an alleged “equality” of everyone in society,
diminishes, or in practice absolutely destroys, the spirit of initiative,
that is to say the creative subjectivity of the citizen.

To summarize: We are all entitled to call ourselves socialist, if by the
term we mean that we are devoted to the early socialist goal of the
well-being of all members of society. Reason and experience make clear
that the means to achieve this is not through central planning by the
state, but through political and economic freedom. Thomas Aquinas had an
axiom: bonum est diffusivum sui. “The good pours itself out.” The good of
freedom has indeed poured itself out to the benefit of humanity.

In conclusion, I ask you, “Who did the will of the Father?”

“Reprinted by permission from Imprimis, a publication of Hillsdale College.”