Socialism was a specific philosophy of government ownership of the means of production.
The democratic welfare state was never a variety of socialism. Marx, the most famous socialist, despised democracy. He despised all attempts at economic amelioration through legislation. He wanted a proletarian revolution. He preached — the correct verb — a religion of revolution. That was the thesis of my first book, Marx’s Religion of Revolution (1968). You can download it here.
He was silent about how the state would allocate resources under his system. He published nothing about the actual operations of the post-revolutionary society, socialism, and its final successor, communism. Late in his career, in his final major publication, little more than a pamphlet, he wrote this: “Between capitalist and communist society there lies the period of the revolutionary transformation of the one into the other. Corresponding to this is also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat.” (Critique of the Gotha Program, Pt. IV, 1875) This was a purely political focus. He was silent throughout his career about how the state should or will or can run the economy.
He provided some famous slogans. He offered rhetoric about the inevitable triumph of the proletarian class. But he offered no guidelines for the leaders of the victorious proletarians.
Socialists in the nineteenth century were equally silent about how the state can allocate production so as to create the good society. In the twentieth century, there was no major detailed theoretical treatise on the economics of Human Action: The Scho... Best Price: $5.68 Buy New $11.70 (as of 03:25 EDT - Details) socialism that went into detail about the actual operations of central planning agencies in a world where the state owned the means of production. There was no equivalent of Ludwig von Mises’ Human Action or Murray Rothbard’s Man, Economy, and State or George Reisman’s Capitalism.
In retrospect, this seems incredible. Here was a movement that captured the Soviet Union and China. Yet there was not a single book, let alone a shelf of books, available to Lenin in 1917 and Mao in 1949 that could serve as a guide to the kind of economic organization that they should impose. There was no treatise that could serve as a blueprint for the socialist New World Order, whether non-revolutionary socialism or Marxist communism. Yet Marx said that his was scientific socialism — not utopian socialism, like the works of his critics.
Utopia meant “nowhere.” They were all utopian socialists, including Marx.
Socialism has always been a movement based mostly on rhetoric. There was never any logic to it. There were endless promises about how politics or class revolution could bring in a socialist paradise, but there was nothing written about how this paradise would operate.
Marx offered his famous ten steps in The Communist Manifesto (1848), but they were mere slogans. The fact that he included a central bank (#5) is indicative of how confused he was about the transition from capitalism to socialism to communism. He never went into any further detail. He had plenty of time to offer details. He died in 1883.
Man, Economy, and Stat... Best Price: $8.17 Buy New $23.00 (as of 04:45 EDT - Details) Here is what defenders of socialism refuse to face: there is no theory of socialist economic planning. Socialist economic theory has always been missing in action. There is also no practical treatise that has served as a guide for socialist economic planners after their national revolutions. Socialist economic planning has been chaotic. No theory of socialist planning ever emerged from this chaos.
When we look at the history of socialism, meaning the state ownership of the means of production, there are few examples. The USSR and Communist China did come close, but the black markets always operated in both societies. There have been tiny Communist states: Albania, Cuba, and North Korea. None have produced a theory of socialist planning.
The Labor government of Great Britain from 1945 to 1951 nationalized coal mining and much of medical care, but it did not extend control over the capital markets of The City, the separate legal jurisdiction of the bankers in the center of London. The Bank of England maintained most of its sovereignty. Labor nationalized it in 1946, but then failed to exercise control. It remained Keynesian.
In short, there are no working models of socialism. This is fitting because there are no theoretical models of socialism. It has always been based on rhetoric, not logic. It has never been based on any system of economic causation. It has no theory of economic sanctions comparable to the sanctions in the free market of monetary profit and loss.