Review of Thomas J. DiLorenzo, The Problem with Socialism (Regnery Publishing, 2016), xi + 226 pgs., hardcover.
Couple the presidential candidacy of avowed socialist Senator Bernie Sanders with decades of relentless criticism of capitalism by liberals, the media, intellectuals, and the public education system and it is no wonder that more Americans now than ever before have a favorable opinion of socialism. Thomas DiLorenzo doesn’t share their opinion. In fact, he views socialism as “a form of economic poison that destroys prosperity and is the biggest generator of poverty the world has ever known.”
DiLorenzo is a senior fellow at the Ludwig von Mises Institute, professor of economics at Loyola University (Maryland), and author of How Capitalism Saved America, The Real Lincoln, and other important books. His new book, The Problem with Socialism, couldn’t be more timely. The Problem with Socia... Best Price: $7.64 Buy New $12.79 (as of 02:10 EST - Details)
The book is eminently readable: it is in a handy size that will fit in a purse, backpack, or coat pocket, and its 200-plus pages are divided into sixteen chapters of between seven and fifteen pages. The first chapter basically serves as the book’s introduction. The book concludes with notes and an index. DiLorenzo sees the book as a “primer” on socialism, a “historical reminder” of the crimes and disasters of socialism, and a “handy sourcebook on all the problems of socialism and how it threatens a free society.”
Socialism was originally just a designation for government ownership of the means of production in contrast to capitalism, which signified private ownership of the means of production. But as DiLorenzo points out in his introductory first chapter, socialism has “evolved in the twentieth century to mean income redistribution in pursuit of ‘equality,’ not through government ownership of the means of production but through the institutions of the welfare state and the ‘progressive’ income tax.” Socialism involves “the government imposition of one plan for all of society.” Indeed, “Socialism is the forceful substitution of government plans for individual plans.” Socialists distrust the “spontaneous economic activity” of capitalists, who “assess risk and demand a thousand times every day and are regarded with profits or punished with losses depending on how well them serve customers.” Socialists prefer a planned economy, “designed by bureaucrats.” Socialism stands traditional morality on its head because of its acceptance of the principle that the ends (equality, uniformity, etc.) justify the means (redistribution, intolerance of dissent, etc.). Among other things, socialism suffers from a knowledge problem and a calculation How Capitalism Saved A... Best Price: $1.25 Buy New $9.78 (as of 07:30 EST - Details) problem. DiLorenzo argues that “no government planner could possibly possess, let alone efficiently utilize,” the knowledge “that the millions of people who make up the world economy possess and utilize to perform their unique jobs and live their lives.” He explains how government bureaucrats “face an impossible task” because “they have no idea how to go about arranging the production of goods and services without real, market-based capital markets” and “market prices.”
But the problem with socialism is not just that it won’t work and can’t work. DiLorenzo makes the case that socialism is always and everywhere an economic disaster. It destroyed the economies of many post-colonial African countries. It destroyed the economy of Great Britain after World War II. It destroyed the economy of Chile in the 1970s. It destroyed the economy of India after it gained independence from Britain. It destroyed the economy of Argentina many times over. In the socialist economies of the Soviet Union, “the common people were equal in poverty while the political elite lived privileged lives.” Socialism almost destroyed Colonial America. Today, “every democratic country has islands of socialism in a sea of capitalism.” This, unfortunately, also includes the United States with its government-run enterprises, Medicare, Medicaid, central bank, regulatory agencies, and public school system.
Throughout the book, DiLorenzo draws on the critiques of socialism by Ludwig von Mises and Friedrich Hayek. He explains how welfare harms the poor, how socialism causes pollution, how the minimum wage creates unemployment, how socialism distorts markets, how The Real Lincoln: A Ne... Best Price: $4.25 Buy New $7.48 (as of 02:10 EST - Details) government regulation makes monopolies, how the progressive income tax penalizes productivity and violates property rights, and how it is impossible for socialism to be anything but impoverishing as an economic system. He shows how fascism was merely a variety of socialism. It “achieved the basic aims of socialism—government control of the means of production—while leaving corporate managers in place.”
The Problem with Socialism not only destroys socialist myths, it also demolishes the superstitions about capitalism. It is capitalism that “has been the main cause of increases in wages, improved working conditions, and prosperity for the working class—and all other ‘classes.’” DiLorenzo sees capitalism as the “greatest engine for economic mobility, progress, and opportunity.”
Every college student ought to go off to school this fall with a copy of DiLorenzo’s The Problem with Socialism in his backpack.