Socialism – idealization and reality

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By FERNANDO NOGUEIRA DA COSTA

It is up to the global left to discuss whether the priority of combating inequality without market mechanisms and without adequate economic incentives only results in scarcity and poverty for almost the entire population.

1.

Karl Marx outlined the idea of ​​socialism as a transitional phase between capitalism and communism, characterized by the dictatorship of the proletariat and the abolition of private ownership of the means of production. However, he did not give a detailed description of the functioning of a socialist society.

The “dictatorship of the proletariat” would be the working class (“proletariat”) taking control of the State and using its power to abolish capitalist relations of production. It would not be the dictatorship of a single party, but rather several parties of labor origin alternating in elected power.

This “dictatorship of the proletariat” in contrast to the “dictatorship of the bourgeoisie”, in force until then, would be a transitional phase towards the construction of a classless society. Didn't Marx make a binary reductionism like “us versus them” without even a third party included, like “the middle class”?

The abolition of private ownership of the means of production, in practice, even reached home ownership! Not to mention the provision of personal services with human capital, that is, the ability to earn from personal skill or knowledge.

Ownership of the means of production would be collectivized, with ownership and control passing from capitalists to workers, managed through public or cooperative structures. He ended up in possession of only the nomenclature of the single party, being a source of privileges for this technobureaucracy.

The economy would be democratically planned to satisfy the needs of society, rather than being driven by private profit. There would be a focus on the production and equal distribution of resources – and not the idea of ​​a central Committee being responsible for all economic-financial decisions of a complex society with thousands of interactive economic agents.

Socialist society should stimulate the development of productive forces, that is, a technological basis for increasing productivity and reducing alienating working hours in favor of creative work. Abundance would need to overcome scarcity, to create a sufficient material base, in order to advance to communism.

As Marx assumed social classes would disappear, the State, as an “instrument of oppression of one class over another” (contrary to what was seen in the Welfare State), would also disappear, culminating in a stateless communist society. In this utopia – a critique of reality –, Marx equates himself with anarchists, if not the lowly neoliberal in preaching something that has never happened in human society: the abolition of the State.

2.

The term “actually existing socialism” refers to forms of it implemented in the 20th century, such as in the Soviet Union, China, other Asian countries such as North Korea, Vietnam and Laos, and only in Cuba in the West. These experiments differed from Marx's theoretical concepts in several aspects.

Instead of a transitional state, with the prospect of disappearing over time, socialist states became highly centralized and permanent. The dictatorship of the proletariat, in almost all cases, turned into the dictatorship of a single party. The leadership of the Communist Party is mainly concerned with maintaining power and the state structure.

Although the planned economy was in line with Marx's vision, the practice resulted in inefficiencies in the use of scarce resources, bureaucratization and a lack of innovation in search of efficiency in its purposes. Rigid central planning, created by a technobureaucracy, ignored the needs and desires of citizens, leading to the misallocation of resources and consequent shortages of goods.

In general, the collectivization of agriculture and industry was implemented in a coercive manner. By causing resistance to expropriation, it ended up causing humanitarian tragedies, such as hunger during forced collectivization, whether Soviet or Chinese.

Real socialism involved political repression and human rights violations. Civil liberties were limited and political dissent was murdered.

Maintaining power through a party nomenclature contradicted the idea of ​​democratic management of the economy and society. Although they aimed at equality, real socialist regimes developed their own forms of inequality, with this political and bureaucratic elite enjoying privileges.

Marx's ideas about socialism were utopian idealizations, to criticize the reality experienced in the mid-19th century, still without social achievements due to union struggles and parties of labor origin. He dreamed of a transition to a classless, stateless society. He preached a proletarian revolution leading to the abolition of capitalism and the development of a society based on cooperation and equality.

The actually existing socialism, implemented in the 20th century, differed significantly from his ideas. Instead of a smooth transition to communism, armed revolutions put the military in power by adopting repressive and centralizing measures. They moved away from the idyllic vision of “scientific socialism”.

While Marx idealized socialism as a transitional stage towards a classless society, real socialism presented an authoritarian version. It was influenced by historical conditions and governance challenges faced by States when implementing their ideas in a forced manner.

In the context of real socialism, the attempt to combat inequality through centralized policies has led to scarcity. In almost all of their cases, poverty was widespread.

Centralized planning of the economy, a characteristic of real socialism, resulted in inefficiencies in the use of scarce resources, due to the complexity and difficulty of predicting all the needs and preferences of the population. The lack of market mechanisms to adjust supply and demand led to centralized production decisions that did not correspond to real needs, resulting in a surplus of some goods and a shortage of others.

Centralized and bureaucratic administration made the decision-making process slow and rigid. Innovation and adaptation to change were inhibited by bureaucratic administrative structures.

The elimination of private ownership of the means of production and the attempt to equalize incomes have removed economic incentives for people's hard work and entrepreneurs' disruptive innovation. Without incentives for managers and workers to increase productivity and improve efficiency, production stagnated, resulting in shortages of goods and services.

The forced collectivization of agriculture led to a decline in agricultural productivity. Peasants, demotivated by the loss of private property and state coercion, resisted or diminished their efforts. In the Soviet Union and China, collectivization resulted in severe famine and a decline in agricultural production.

The focus on eliminating inequalities, regardless of individual productivity or contribution, has resulted in the uniform allocation of resources in ineffective ways. This forced egalitarianism led to a situation in which the motivation to work and innovate was reduced, contributing to a less dynamic economy.

3.

The self-proclaimed socialist State prioritized weapons industry projects, including aeronautics and space, over the basic needs of its citizens. The emphasis on large infrastructure projects and heavy industry disregarded the production of consumer goods, leading to a shortage of essential products for the population. It subordinated individual needs to the “collective”, that is, to state-military priority.

Political repression and lack of civil liberties also affected the economy. The absence of an active and critical civil society prevented the expression of discontent and the correction of ineffective economic policies. Fear reduced individual initiative and innovation, worsening economic problems.

The attempt to eradicate inequality through centralized control has resulted in structural problems of scarcity and widespread poverty. The lack of economic incentives, the inefficiency of central planning, bureaucratization, forced collectivization and political repression contributed to an economic environment where productivity was low and the satisfaction of the population's needs was inadequate.

It is up to the global left to discuss whether the priority of combating inequality without market mechanisms and without adequate economic incentives only results in scarcity and poverty for almost the entire population. Marxist dogmas need to be questioned.

*Fernando Nogueira da Costa He is a full professor at the Institute of Economics at Unicamp. Author, among other books, of Brazil of banks (EDUSP). [https://amzn.to/3r9xVNh]


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