David Brooks isn’t usually my cup of tea but yesterday he wrote an opinion piece about his own youthful socialism which I was happy to see appearing at the NY Times. Brooks says he began to change his mind about socialism while working as a reporter. It dawned on him that the people he was reporting on couldn’t possibly manage an entire nation’s economy:
I quickly noticed that the government officials I was covering were not capable of planning the society they hoped to create. It wasn’t because they were bad or stupid. The world is just too complicated…
It doesn’t matter how big your computers are, the socialist can never gather all relevant data, can never construct the right feedback loops. The state cannot even see the local, irregular, context-driven factors that can have exponential effects. The state cannot predict people’s desires, which sometimes change on a whim. Capitalism creates a relentless learning system. Socialism doesn’t.
This is basically the argument that the invisible hand of the market is smarter than any planned system. Socialists don’t like that but it keeps proving to be true. But the best part of the piece is the next step. Brooks argues something that I’ve raised before: Socialism breeds corruption.
Over the past century, planned economies have produced an enormous amount of poverty and scarcity. What’s worse is what happens when the political elites learn what you can do with that scarcity. They turn scarcity into corruption. When things are scarce, you have to bribe government officials to get them. Soon, everybody is bribing. Citizens soon realize the whole system is a fraud. Socialism produces economic and political inequality as the rulers turn into gangsters. A system that begins in high idealism ends in corruption, dishonesty, oppression and distrust.
Democratic Socialists and Communists are fond of claiming that, despite the history of the 20th century, socialism hasn’t failed because real socialism has never been tried. The Soviet Union wasn’t real socialism because it was authoritarian. And the same is true for China, North Korea, Venezuela, etc. What these excuses fail to acknowledge is that socialism lays the groundwork for authoritarianism.
The corruption that exists at the lowest levels of a socialist bureaucracy will only be magnified at the top in these same countries. The centralization of power that socialism idealizes inevitably results in leaders who enrich themselves at the expense of the people they govern. Put another way, power corrupts and socialist countries centralize economic and political power in one place by design.
Of course, this being David Brooks, his idea of an ideal capitalist state might include the nations of Scandinavia:
I don’t know if the Scandinavian welfare model would work in nations as big and diverse as the U.S. But its success points to a few truths: The state nurtures prosperity when it helps people become capitalists. The state causes incredible levels of misery when it gets too far inside the decision-making processes of capitalists. It creates enormous misery when it cripples the motivational system that drives capitalism. Its causes enormous misery when it meddles with the relentless learning system that market mechanisms make possible…
Today, the real argument is not between capitalism and socialism. We ran that social experiment for 100 years and capitalism won. It’s between a version of democratic capitalism, found in the U.S., Canada and Denmark, and forms of authoritarian capitalism, found in China and Russia. Our job is to make it the widest and fairest version of capitalism it can possibly be.
I wouldn’t want to live in Scandinavia but he is right that they are much better places to live than China, Venezuela, North Korea, etc. Still, in those countries that have made the government a caretaker rather than an enforcer of laws, the temptation to take the next, disastrous step is always going to be greater. Looking at the Democratic primaries, some of the candidates (and the voters) seem eager to make up for lost time moving hard left.