Financial History 135 (Fall 2020) | Page 21

By Daniel C . Munson
The merits of socialism are again a hot topic of political debate and discussion — debates often more heated than enlightening . Politics is properly concerned with the future , but debates over socialism often focus on whether history can teach us anything . In the case of socialism , the answer is : quite a lot .
Collective ownership of productive assets is the textbook definition of “ socialism .” Such collectivizing can be accomplished in different ways . The pooling of assets can be voluntary , so that the members of the group are self-selected . If not voluntary , confiscation of the assets from those who built or grew or bought or otherwise own them is necessary , something eventually requiring force . Less violently , income can be taxed at very high rates so that the benefits of owning those assets are transferred from the owner to the group . All these methods have been tried , with results that have led not to any real effort to understand them but instead to intellectual contortions on the part of socialist thinkers to disown them . One popular approach is to dismiss earlier forms as not the “ true ” socialism they envision , one that — they assert — has yet to be tried .
An early and eloquent spokesman for this idea of collective ownership was an 18th century Swiss , Jean-Jacques Rousseau . Born to an upper-middle class family in Geneva , Rousseau led a directionless life until about the age of 37 , when the announcement of an essay contest in a Parisian literary magazine got him thinking :
Crowds of vivid ideas thronged into my mind with a force and confusion that threw me into unspeakable agitation . I felt my head whirling in a giddiness like that of intoxication . A violent palpitation oppressed me . Unable to walk for difficulty of breathing , I sank down under one of the trees by the road , and passed half an hour there in such a condition of excitement that when I rose I saw that the front of my
Top : The Beatles wrote lyrics in the mid-1960s decrying Harold Wilson ’ s Fabian socialist state . The song “ Taxman ” opens with the line , “ Let me tell you how it will be , There ’ s one for you , 19 for me .” Bottom : The popular Swedish rock band ABBA wore ridiculous , sequined outfits on stage because the high cost of such outfits could be deducted from their taxes , but only if the outfits were too outrageous to be of use as street clothing . waistcoat was all wet with tears … Ah , if ever I could have written a quarter of what I saw and felt under that tree , with what clarity I should have brought out all the contradictions of our social system ! With what simplicity I should have demonstrated that man is by nature good , and that only our institutions have made him bad !
Rousseau set about writing essays , discourses , even novels . His underlying premise remained : “ Man was born free and is everywhere in chains .” He saw in advanced civilization — its property laws , science , art , the church — decadence , hierarchy , inequality , greed , moral decay : i . e ., the chains . He traced the source , the wellspring of this immoral civilization : “ The first man who , having enclosed a piece of ground , bethought himself of saying ‘ This is mine .’”
Rousseau ’ s ideal was a rustic village of simple yeoman farmers . A rural collective . A charming notion , and one that appealed to the utopian mind . After all , if our civilizing institutions have made us bad , replacing them with better ones would result in a better humanity — and who isn ’ t in favor of a better humanity ? ( If the reader can put this riveting article down for a moment , they might agree that there is some humanity within eyeshot that could stand some improving .) Rousseau was also offering his followers a form of absolution , erasing the guilt they might feel for past misdeeds and placing blame squarely on some flawed institution .
If private property is the root cause of greed and civilization ’ s decay , then the institutions responsible for protecting such property — the courts , the deed registrars — should be changed . Reflective persons might observe that there are many types of greed — sexual greed , the grasping for power , the drive for adulation and attention — but Rousseau and his followers focused on the one dealing with property , the one protected by those institutions , the one they could do something about .
Voluntary sharing of property was one obvious solution . It was first tried in the utopian communes of the early 19th century : secluded , rural communities organized by wealthy , influential leaders like Robert Owen of Scotland and Charles Fourier of France . Such communes banned the arms-length transactions involving labor and goods that were thought to be based on greed . Members worked the property for the benefit of all the commune ’ s members .
By the mid-19th century , however , it was clear such communes could not sustain themselves and were failing due to inefficiency . Robert Owen ’ s son worked alongside his father in their failed commune in southern Indiana , and later wrote that , “ I do not believe that any industrial experiment can succeed which proposes equal remuneration to all men , the diligent and the dilatory .” Such communes were in this way like many family businesses , where the ambition and skill of the founder ( s ) is not necessarily shared by other family members .
A broader and more sustaining mandate was needed , one that could extend the reach of the theorist to everyone and exist in perpetuity — i . e ., one involving government . German philosophy was ideally suited to provide one , a strain of which had a love affair of sorts with government . The cronyism and corruption that generally plagued government action in practice did not seem to trouble them , and they saw the possibility of bringing about a governmentally mandated utopia . Prominent Prussian philosopher Georg Hegel was enchanted by the idea of unified state action to direct seemingly chaotic individual behavior . “ The modern State , proving the reality of political community , when comprehended philosophically , could therefore be seen as the highest articulation of Spirit , or God in the contemporary world ,” he wrote , concluding “ The State is God ’ s will .”
First , however , such thinkers had to explain the failures of these utopian communes . Young Karl Marx of Trier , Germany cut his intellectual teeth critiquing utopianism . He argued that organizers made their error in appealing to all , ignoring the fact that society is composed of classes whose interests are at odds with one another . Marx reasoned that the working class — what he called “ the proletariat ”— that was developing around the machinery of the industrial age had to take control from the capitalists —“ the bourgeoisie ”— by force and impose a new governmental order that would collectivize all property and eventually rid society of classes and greed . In deference to these early utopian experiments , he called this final , blissful , classless and greedless world “ communism .”
The idea had a certain appeal when it was floated in Marx ’ s 1848 work The
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