Book Review: The Problem with Socialism by Thomas J. DiLorenzo

The Problem with Socialism by Thomas J. DiLorenzo

A more apt title for this might be "The Problems with Socialism" as it describes the historical, economic, and philosophical failings of the governing model taken primarily from Marx and Engel's The Communist Manifesto.

The twentieth century is full of examples of failed socialist government, the most infamous examples being the Soviet Union and Nazi Germany. Both countries governments took over most of their nation's industries or created so many regulations that, in practical effect, they ran those industries. The Soviets had access to large amounts of natural resources and could last longer without resorting to taking over other countries (which they got away with as much as the could during the Cold War). The people weren't subjects of the state, they were subjected to its demands. Venezuela was an economic disaster. China still has massive human rights problems. The author even examines problems in the Scandinavian countries where socialist like to claim success.

While "from each according to his ability, to each according to his need" is a noble sentiment, the practical effect of establishing it on a national level is to suppress productivity. If a worker is not rewarded for extra effort or achievement or ability with a higher salary or other benefits, how motivated would anyone be to work harder? If someone with more technical abilities is paid the same as an unskilled laborer (the imposition of equality on the workers), how likely is someone to seek out abilities or use them? The problem is exacerbated in a socialist government where the means of production are all run by the government. The government basically establishes a monopoly with no competition to spur on creativity or frugality in producing goods and services. Instead, industries develop a top-heavy bureaucracy that is slow to implement change or raise standards.

A national economy is large and has many intricate interconnections, more than can be managed by any bureaucracy. Often, the bureaucrats work in their own self-interest, creating the typical socialist strata--the people and the government or governing party. While the people have to scrape by on the subsistence existence of "each according to his need," the ruling class lives a much better life. The practical result is the Orwellian "all men are equal, but some are more equal than others."

The book is an interesting analysis of all sorts of flaws in socialist thinking and governing. It's a little light on acknowledging the problems with capitalism. The focus is more on how capitalism is falsely depicted by socialists and how capitalism provides a lot more to people and the economy than socialism even could. His arguments that socialist countries get by on the wealth previously generated is not quite convincing. On the other hand, he's got it right about the false understanding of human nature that cripples any practical implementation of socialism.

Recommended.