5 Quick Reasons Why Socialism Fails

With the rise of Jeremy Corbyn in the UK and Bernie Sanders in the US, it seems that socialism is back and gaining large amounts of support. In my previous article, I was rather kind to Jeremy Corbyn, highlighting the positives that may come from his Labour party leadership. Within the article, the name ‘Corbyn’ could easily be replaced with ‘Sanders’, as they are both similar figures – they both are socialists. Although socialism sounds attractive in theory (who wouldn’t want free stuff, hey?) in reality socialism doesn’t work, hasn’t worked wherever tried and is a philosophy that is doomed for failure time and time again. For those who don’t know, pure socialism is a system in which the means of production are commonly owned, rather than privately owned. Typical features of socialist economies includes a large public sector, substantial welfare programs and high taxes. This article lists five reasons, in order of importance, of why socialism fails. So without further ado, here we go:

5.  High Tax Rates – One of the typical features of a Socialist system is the high levels of taxation that citizens are forced to pay for the provision of the considerable public services. When a large percentage of an individuals income is taken by the state, incentives to work are diminished, particularly when the public services are poor in quality. When socialists are questioned on who pays for the ‘free stuff’, the answer is always the same – “the rich”. In a graduated income tax system, the richest pay a much larger percentage of their income, which seems fair. However, at a certain point these rich people simply leave the country, taking their wealth with them, that would have otherwise been available for the public services. As a result, less money is available for the state to spend and public services suffer. Evidence of this can been seen in France, who adopted a 75% super-tax on the super-wealthy. French President Hollande was eventually forced to drop the tax as the richest either left the country or threatened strike action.

4. Victim Mentality – A problem with the socialist philosophy is that it encourages a victim mentality amongst its followers. Rather than empowering individuals by encouraging ambition and success, socialism instead blames the rich for all the problems of the poor. In life in order to solve problems, attain goals and become successful, traits such as self-awareness, self-discipline and personal responsibility are essential. However, socialism teaches none of these principles, and instead instills toxic characteristics such as envy and jealousy which keeps poor people down, ultimately helping nobody.

3. Subsidises Failure, Punishes Success – In this country, the government gives money to obese people. I don’t need to go into the negative consequences on health that obesity has, we all know. Yet, obesity is rising and the government is spending more and more on benefits to the obese. If, all of a sudden, a person that is obese starts making the right choices, becomes serious about losing weight, starts to eat healthily and begins to exercise, the benefits provided by the government are taken away. This takes away the incentive for an obese person to lose the weight and become healthy. And so, many obese people are simply happy to stay obese, so long as they keep receiving the benefits from the government. This is one example of how welfare programs actually subsidise failure and punish success, and it can be seen in many welfare programs which causes dependency.

2. Economic Calculation Problem – A fundamental flaw within the socialist centrally planned economy is the lack of rational economic calculation that can take place. In a market economy, there is a profit and loss system that provides signals based on consumer satisfaction. If the business is making a profit, we can assume that the consumer is being satisfied. However, if the business is making losses, then the consumer is not being satisfied and the business needs to change their strategy. A centrally planned economy, in which the state owns the means of production, does not have a functioning price mechanism, therefore information about desirability and abundance of a good is unavailable, which can lead to shortages of desired goods, and surpluses of unwanted goods. This ultimately has disastrous economic consequences.

1. Leads to Tyranny – The main reason why socialism fails is because it gives over too much power to the state. Not only is the socialist state substantial in size, having large amounts of control, but it is also coercive and incompatible with freedom. The simple fact is that man is corruptible by power, and power is what the socialist state most certainly has. Socialists commonly argue that the socialism we have seen in the Soviet Union, in Communist China and so on, is not ‘real’ socialism. This maybe true, however the fact is that these ‘not really socialist’ countries certainly set out to be really socialist. At some point somewhere along the line, these socialist regimes where corrupted and became tyrannical, resulting in the deaths of millions and millions of people. It is a pattern that we have seen time and time again almost wherever socialism has been tried. Whenever a state has substantial power, it almost always abuses that power. Which is why true and functioning socialism is simply unattainable.

Jeremy Corbyn: A libertarian view

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With staunchly left-wing candidate, Jeremy Corbyn increasing his lead in the polls, it looks likely that he will become the next leader of the Labour party. Not many would have predicted Corbyn’s rise to the top of the Labour party; just over a month ago bookmakers had Corbyn at 100-1 to win the leadership election, however he is now the strong favourite to take the role. The initial reaction of a typical libertarian is to face-palm and cry out “Socialism does NOT work!” However, upon further analysis, he does share some similarities with libertarians. and a Jeremy Corbyn leadership of the Labour Party may not actually be a bad thing.

Firstly, unlike the vast majority of politicians, he seems to be a decent and honest man who has a strong set of principles.  Regardless of whether you agree with his principles or not, it is refreshing to see a politician with a strong set of beliefs that he passionately believes in, and who speaks like a human being, not like a politician that has a strict team of campaign advisors rehearsing every sentence. Unlike most politicians, Corbyn does not shape his policies by toeing the party line, or by wetting his finger to see which way the wind of public opinion is blowing. He believes in his ideology, and the establishment hate him for it. The powers that be within the Labour party are desperate for Corbyn to not become leader. According to Tony Blair, the Labour party faces “annihilation” if Corbyn wins leadership; similarly Alastair Campbell has called upon voters to choose “anyone but Corbyn.” There is a resistance to Corbyn by the status quo, which libertarians can emphasise with.

Secondly, putting aside Corbyn’s disastrous economic policy, there is some common ground with libertarians. Corbyn follows a relatively non-interventionist foreign policy – he was passionately opposed to the Iraq war, and is against the idea of Britain doing whatever the U.S. asks it to. However, Corbyn does seem a little bit too friendly towards Hamas, unlike Libertarians who remain neutral towards both sides. Corbyn is also a Eurosceptic and has refused to rule out campaigning to take the UK out of the EU. Most libertarians see the EU as corporatist and undemocratic, and the left are finally beginning to agree. Corbyn has also pledged to cut taxes for small businesses, and has rallied against corporatism – the unity between the state and corporations.

Lastly, one of the most exciting prospects of a Corbyn Labour leadership, in my opinion, is the potential of a mainstream public debate over Socialism vs. Capitalism. Rather than the blandness of ‘he said, she said’ party politics that we usually see today, we would have an actual philosophical debate over the flaws and merits of both systems. See for example this Oxford university debate between Corbyn and Daniel Hannan about whether or not Socialism works: