Abstract
The property-rights-based, Leninist definition of socialism operates based on an orthodox application of Marxist economic theory. Its labor-value theory excludes economic exchange under market prices, and therefore any form of government promoting such. By contrast, the redistributive, democratic definition of socialism has been economically more successful. It retains free-market prices for microeconomic allocation of resources. There is, however, a tension between microeconomic, free-market resource allocation, and macroeconomic redistribution. The challenge for democratic socialism is to apply their political method while maintaining an economic advantage over the Leninist socialist method and its teleological central planning.
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Notes
- 1.
Any attempt to put Marxist theory to work also runs into an egg-or-chicken problem, alluded to by Samuelson (1967, 619). Scarce resources are by necessity priced by the market; to shift away from market prices onto labor-value exchange rates, the central-planning agency must first overcome the scarcity, or else market prices will supersede the labor value. The only way out is for government to suspend the free market by force.
- 2.
It is often said that these are minor examples that do not show a consistent ideological trend. However, the very purpose of the welfare state is precisely that: to gradually, by small steps, reconfigure the economy in the image of economic redistribution.
- 3.
Again, socialists who choose the traditional, orthodoxically Marxist method to achieve their ideological goal, do not do so because ending capitalism is their end goal. They see it simply as the most effective policy method to eliminate economic differences between individual citizens.
- 4.
Comparable numbers for the United States with the same statistical meaning are not available.
- 5.
To even reach this volume, one has to define their welfare-state work broadly, including published material that is not even aimed at reforming welfare-state spending, only to describe and explain it.
- 6.
- 7.
- 8.
- 9.
https://nypost.com/2020/06/20/democrats-socialism-looks-more-like-venezuela-than-scandinavia/. Accessed 23 June 2020.
- 10.
Larson (2018, chapter 6) discusses these theories at length.
- 11.
It is possible that these four writers, again representative of American conservatism in general, are of the neoconservative opinion that there is a golden mean to be struck between the welfare state and the free-market economy. The neoconservative ideology is discussed in chapter 6 below.
- 12.
These numbers are based on pre-coronavirus conditions. It remains to be seen how much the welfare state will grow as a result of Congressional spending bills in response to the epidemic.
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Larson, S.R. (2021). Economics of Socialism 2: Planning vs. The Market. In: Democracy or Socialism. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-65643-0_3
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