After Socialism

Now the greatest threats to freedom come from those seeking stability and the "one best way."

Virginia Postrel from the November 1999 issue

(Page 2 of 3)

We must keep in mind what socialism is, and therefore what it is not. Socialism, creeping or galloping, is an ideological concept with a particular sense of what is important. What distinguishes socialism is its appeal to economic fairness. It declares that markets do not allocate wealth and power fairly, and that political processes will do a better job. Socialism is not simply about moving money from the powerless to the powerful--a goal as old as politics--but about flattening the distribution of income and wealth. Pork-barrel spending is not socialism. Farm subsidies are not socialism. "Corporate welfare" is not socialism. These programs are not ideological in nature. They are about competing interest groups.

Socialism is about claims of justice, and it is also about money: about wealth, income, physical and financial capital. It is an ideology based on allocating economic resources. It may try to achieve that goal by nationalizing assets, by command-and-control regulation, or by taxation and redistribution. But the goal is the same: to rearrange society's wealth, generally from the "haves" to the "have nots." Rearranging wealth (or income) is not the only possible ideological goal of economic regulation. It is merely the goal we have become accustomed to since the late 19th century.

Market processes do more than determine who winds up with which resources. That means that socialism is not the only conceivable ideology that might launch an attack on markets and, conversely, that anti-socialist conservatives are not the only possible allies for classical liberals in defense of economic freedom.

Markets have many characteristics. They serve and express the individual pursuit of happiness. They spread ideas. They foment change in the ways people live and work, and in what character traits are valued. They dissolve and recombine existing categories, from artistic genres to occupations. They encourage the constant search for improvements, and they subject new ideas to ruthless, unsentimental testing. Markets evolve through trial and error, experimentation and feedback. They are out of anyone's control, and their results are unpredictable. It is this dynamism of markets--their nature as open-ended, decentralized discovery processes--that attracts the greatest ideological opposition today.

The most potent challenge to markets today, and to liberal ideals more generally, is not about fairness. It is about stability and control--not as choice in our lives as individuals, but as a policy for society as a whole. It is the argument that markets are disruptive and chaotic, that they make the future unpredictable, and that they serve too many diverse values rather than "one best way." The most important challenge to markets today is not the ideology of socialism but the ideology of stasis, the notion that the good society is one of stability, predictability, and control. The role of the state, in this view, therefore, is not so much to reallocate wealth as it is to curb, direct, or end unpredictable market evolution.

Stasists object to markets because the decentralized evolution of market processes creates not just change but change of a particular sort. By serving the diverse desires of individuals and by rewarding the innovators who find popular improvements, markets constantly upset unitary notions of what the future should be like. Markets don't build a bridge to the future--a path from point A to point B across a scary abyss; they continually add nodes and pathways in a web of many different futures. Market processes make it impossible to make society as a whole adhere to a static ideal--whether that ideal is a traditional way of life, the status quo, or a planner's notion of the one best future.

As a result, we find stasist enemies of markets arrayed across the old left-right spectrum, which we may define by its relation to socialism. Consider CNN's Crossfire, a show whose entire premise is the sparring of left and right. In denouncing the dynamic economy, the show's right-wing host, Pat Buchanan, has joined forces on one occasion with left-wing technology critic Jeremy Rifkin and, more recently, with corporate gadfly Ralph Nader. All agree that international trade, technological innovation, global financial markets, corporate reorganization, the expansion of some industries and the contraction of others--and just about every other manifestation of economic competition or creativity--portend a terrible future. They also agree, in principle at least, that the government should do something to curb market dynamism. This is not a socialist call for regulation. It is a stasist one.

The stasist attack on markets, regardless of what part of the old spectrum it may come from, applies two common tactics that are very different from the old arguments for socialism. First, it argues that we should not let people take chances on new ideas that might have negative consequences. This "precautionary principle" is particularly well developed--and increasingly enshrined in policy--in the environmental arena. (See "Precautionary Tale," April.) But it can crop up anywhere. I recently read an article in Policy, the magazine of the Centre for Independent Studies in Australia, in which the author distinguished between conservatives like himself and classical liberals on just these grounds: He criticized the Tory government of London for deregulating the color of buses. "The gain remains potential, and this is the key word," he wrote, while the loss of uniformly red buses is guaranteed.

The precautionary principle counts only the downside of new ideas, not their potential benefits--the potential doesn't count--and it ignores the costs of maintaining the status quo. It puts no value on discovery and learning, either as social processes or as means to individual satisfaction. Market processes simply cannot survive this standard of judgment. It outlaws their inherent uncertainty.

The second stasist attack on markets has equally devastating potential. This is the argument against externalities. Most of us have been willing to grant the problem of externalities in such areas as air pollution and to look for ways of addressing it with minimal disruption of market processes. But it's not that hard to declare that every market action has potentially negative spillover effects. The infinitely elastic version of the externality argument turns the language of market-oriented economics against the essential nature of commerce. Indeed, we increasingly see the externality argument aimed not at producers, the traditional target, but at consumers. My choice of which movies to watch creates cultural pollution. My purchase of convenient packaging produces environmental waste. My house color or garage facade does not please the neighbors. My purchase of consumer goods leads to "luxury fever" that hurts everyone. We are all connected in the marketplace, and therefore, in this view, our actions must be tightly regulated to contain spillovers.

Stasists do not just make tactical left-right alliances on specific issues; they share a worldview and similar rhetoric. On the left, stasist critiques of markets are increasingly replacing traditional distributional arguments. Green demands for "sustainability" and a "steady-state economy" have supplanted socialist concerns for fairness. Critics like Juliet Schor and Robert Frank attack markets for encouraging ever-expanding yuppie consumption, not for immiserating the poor. The sociologist Richard Sennett, who was raised on children's books from the Little Lenin Library, attacks today's "flexible capitalism" not for exploiting the workers or paying poorly but for fostering instability and rewarding personal adaptability. Today's jobs, Sennett complains in The Corrosion of Character, do not tell workers who they are and thus threaten "the ability of people to form their characters into sustained narratives." Egalitarian bioethicist Daniel Callahan attacks the push for medical progress, which he finds expressed in the dynamic interplay of markets, technological innovation, and individual patients' desires. He calls for "steady state medicine" and "finite health goals." Although socialized medicine might provide a regulatory vehicle for achieving his goals, Callahan is not making a socialist argument.

Turning to the center of the old spectrum, we find stasists who are,if anything, even more upset about market dynamism than their counterparts to the left and the right--because decentralized discovery processes cannot coexist with technocratic, political control. There are many examples of such objections, which are particularly virulent when Europeans start denouncing the "American" openness of the Internet, but one of the best is from Arthur Schlesinger Jr., who defined the postwar "vital center" in the United States. Writing in the 75th anniversary issue of Foreign Affairs, Schlesinger condemns the "onrush of capitalism" for its "disruptive consequences." He warns of dire results from the dynamism of global trade and new technologies: "The computer," he writes, "turns the untrammeled market into a global juggernaut crashing across frontiers, enfeebling national powers of taxation and regulation, undercutting national management of interest rates and exchange rates, widening disparities of wealth both within and between nations, dragging down labor standards, degrading the environment, denying nations the shaping of their own economic destiny, accountable to no one, creating a world economy without a world polity."

Meanwhile, over on the right we find two major objections to market dynamism. Like their counterparts on the left, some on the stasist right attack trade, immigration, technology, large-scale retailers like Wal-Mart, and other elements of market dynamism that upset "settled ways." In these attacks, stasist conservatives often make alliances with environmentalists pursuing the same goals. Sometimes it's easy to apply the old left-right distinction--Pat Buchanan is clearly a man of the right--but not always. I would certainly put Prince Charles on the right--he's a hereditary aristocrat, after all--but many people consider his stasist views, especially his views of technology, to be versions of left-wing environmentalism.

At least in the United States, however, the more common right-wing objection is that by serving diverse individual desires, markets undermine a central notion of the good. Thus some conservatives, notably David Brooks and Bill Kristol of The Weekly Standard, have called for federal programs to serve the ideal of a "national purpose." More often, we hear markets subjected to conservative attack when they produce goods or institutions--from violent movies to domestic-partner benefits to in vitro fertilization--that do not fit conservative goals.

Even on education policy, where the conservative "line" is support for school choice, there are signs of disquiet. Choice is a useful political tool against the teachers unions tied to the Democratic Party and against secular public schools, but its premises of variety, competition, and tolerance cut against many conservatives' views of good education. When California conservative Ron Unz editorialized against vouchers in the left-wing Nation, he shocked many on both the left and the right. But he was only expressing a worldview he absorbed over years of reading neoconservative publications: We know the right answer already; there is no need for a discovery process in education.