>Now do you see what Friedrich Hayek meant when he said that socialism puts a society on the road to serfdom? Protectionism — government coercion supplanting the voluntary transactions of markets in the allocation of wealth and opportunity — is socialism for the well connected. But, then, all socialism favors those adept at manipulating the state. As government expands its lawless power to reward and punish, the sphere of freedom contracts. People become wary and reticent lest they annoy those who wield the administrative state as a blunt instrument.
This is that all-American definition of socialism - where socialism is where the government does something, and the more it does it, the more socialister it is. You don't have to spend very long reading socialist texts to see why this is not a preferred way to understand socialism.
People don't really understand where the correctness of Hayek begins and ends. And they're not wrong that many socialist-leaning people make terrible economic arguments. The government being hands off is good much of the time. For instance, with housing, if housing is too expensive, you sometimes get people who want price caps on apartments. Things like this are a bad idea. A cap on rent merely disincentives people from building more housing. This kind of price control is exactly what Hayek is referring to as bad, essentially.
This was genuinely a problem in the Soviet system - factories could not run efficiently, because Soviet commissars couldn't figure out where to send stuff. Iron stock, for instance, could end up short at one factory, and be oversupplied to another. Because they couldn't figure out optimal distribution of iron. The theory is, if you have a money system instead, and let people buy their own iron from a bunch of suppliers, iron stock will end up being used more efficiently since the market will cause goods to shift hands more efficiently, and thus output will be higher. This higher output leads to all of the good growth **** and all of that. Hayek's idea was that no government could collect and process enough information to distribute materials as efficiently as the dumb logic of market economics. This then becomes an ideology that free markets are superior to centralized economies. So far, the understanding of Hayek is totally in the right.
However, there is none - not one - economist today who would say the government should stay entirely out of the economy. For instance, in 2008, during the threat of a real deflationary spiral, there is not one economist alive who would agree that all of the toxic assets should not be bought up to prevent the markets from collapsing. Many will disagree about exactly how and why the government should step in to stop deflation, but that it should be stopped is universal opinion (at least, wholly mainstream with maybe a handful of genuinely knowledgeable dissenters). In fact, if you spoke to an academic economist and asked, "we should be rid of government intervention entirely", you'd be laughed out of the room. This is where the understanding of Hayek is wrong: Hayek was ideologically anti-government, but even most neoliberals recognizes that sometimes intervention is good and necessary. However, there is a *huge* amount of people in popular culture who seem to have taken the bad lesson that government intervention = not good.
Of course, virtually any and all laws passed based on what we view as moral - like, you know, labor rights - are also a form of intervention. It may be that there are people out there willing to work in hazardous work environments for $3/hr, and can't find jobs otherwise - we might be not allocating labor efficiently because of minimum wage laws. It becomes a question of how much morality do we want, and what the downsides to the policy are. And there are people out there who would like to hire people in hazardous conditions for $3/hr. These people I think consciously are trying to get people to focus on the ideological aspects of Hayek and not follow mainstream economics. Because they want to use that anti-intervention ideology as a means to bludgeon away interventions that we've found to be economically healthy and good at protecting lower classes.
Really, it's the type of intervention that matters - when, why, and how are the key questions. Intervention isn't good or bad. Though most economists would err on the side of less intervention, some people have successfully tricked people into thinking any and all intervention is bad. Neoliberals would disagree, as acolytes of Milton Friedman believe that economic freedom is the apex freedom, and all other freedom comes secondary. I think that's a little absurd. But I think the basic idea somewhere in there is right, that a society's freedom and its economic liberty are at least correlated. I have a hard time imagining that a society centralized and run by people would ever not be a corrupt ****stain, because people are animals, and our instincts dictate our actions, and those instincts do not make good institutions.
So how does this relate to socialism? Well, many policies the more rational socialists would prefer do work pretty well. For instance, despite all of the whining about the Laffer curve - which I have already explained on here is a terrible justification in our context for tax cuts - doesn't seem to be as strong a justification on pure data. I mean, we can look:
https://krugman.blogs.nytimes.com/2014/03/08/redistribution-and-the-lesser-depression/
The basic data says redistributive policies hardly affect growth. I mean, really, if Jeff Bezos was worth $15 billion instead of $150 billion - would he really quit building Amazon because it was no longer worth it? I highly doubt it. The typical neoliberal argument is this, expressed by Margaret Thatcher:
The idea is that, as long as all people are getting more wealth, it doesn't matter that inequality is increasing. I doubt that, but what Margaret Thatcher says is sound - it's better to have increasing wealth inequality tied to increasing wealth overall, than inequality decrease as does overall wealth. Okay, yes, that's true. But it's kind of misleading. Because, the evidence seems to suggest that you can have redistributive policies without effecting wealth - so, Margaret, how about we keep the policies which are increasing wealth, and add policies to decrease inequality without hurting the wealth increase? It's doable, but I'm pretty sure you choose not to because you'd rather you and your rich friends have a bit more.
And this is all a pretty basic analysis. There are many reasons to be skeptical of everything neoliberals say. One thing that seems to elude them is, the common refrain: "poor people are actually less poor, so they really have no cause to be upset", which means, "since China can produce plasma TVs for so much cheaper, people can buy more useless crap, so people are wrong to dislike the current situation". I mean, we only have to look around us to see that this is a pretty poor argument. While it's not overwhelming, Americans generally feel worse about our current condition than in the past. It doesn't matter what wealth metrics should say if the lived experience of people is the opposite. What the issue is becomes squaring these things off.
Personally, I think a big reason for dissatisfaction isn't hardship. People can handle hardship. What people dislike about the state of America is they feel the hardship isn't equally spread out. It's like if there was a famine, and everybody stuck together and tried their best to feed everybody, versus if most stuck together, but a few snuck and hoarded food. The sneakers create an environment of paranoia and distrust that weakens society generally. People will feel the sneakers should be punished and made to pay their fare share.
Trying to figure out who the sneakers are and how to punish them is pretty indicative of the political struggles we are in. No matter what political camp you're in, you feel this is true, that there's somebody out there getting away with something during a hardship. Of course, I personally think Trump loving Republicans have falsely blamed this all on Democrats, immigrants, blacks, women and foreigners: to them, Hillary Clinton isn't paying her fair share and is, idk, laundering child sex slave money through the Clinton Foundation, welfare-sucking immigrants get paid $50k/year (lol) and don't pay taxes (refer to the Stephen Crowder video), and black people have too many kids and are all on welfare. Democrats focus on race and sexual issues: there is a specter haunting straight white men making them do bad things. Socialists blame class, social institutions that support class divides, and economic situations which produce these conditions. Of all of these, I think you can rank them by accuracy: Socialists > Democrats > Republicans. Sex and race issues are real, but overstated, and Republicans are majority delusional and wrong about everything they say and believe on these topics. However, class issues I feel are on point as most relevant as to why people feel so badly about society if things aren't objectively so bad.
By the way, if I was to propose foreign policy for a socialist administration, it would be to pressure the UN and other nations into an aggressive policy punishing tax havens and seeking to increase wealth taxes on the global rich. Ireland and Panama, for instance, need to be slapped with massive tariffs until they become more compliant with foreign tax agencies. I would also pursue an agenda of aggressive collective tariffs against countries which abuse labor, to prevent a "race to the bottom" condition of corporations seeking places where they can get labor as possible at the cheapest cost. In other words, my policy would be retribution for those who aide extreme wealth inequality, and would try to increase standards of living globally.
For socialism at home, my primary belief is that capital needs to be more open and free. Neoliberalism, at least in the United States, has failed to make markets freer. As I've discussed in previous posts, monopoly power is increasing, and M&A is still extremely common in the business world. We need to start actually fighting monopoly power, and as before, work with other countries to limit the effects of global competitors to seek monopoly positions in global markets. If you could get a whole bunch of countries to collectively tariff Chinese goods when they're dumping product, you could achieve quite a bit to prevent markets from breaking down. But in terms of economics within a country, reducing any barrier to creating new companies and creating barriers which limit the excessive growth and reach of companies would be a good idea. This is tricky, though, because it's not prima facie guaranteed that increasing market control is due to monopoly behavior and not truly because of a superior product. Details aside, there are some really obvious problems in American business that should be fixed; one of them is Disney, the others are in Silicon Valley, and many others that aren't household names.
Oh, and I would work to make it harder for money to influence politics. Because that's a huge problem that's underappreciated.
Okay, long-ass post over.