The Basic Inconsistency In The Economic Of Socialism

The socialist scheme implicitly suggests that consumers' and workers' choices can be freely and independently made while, at the same time, overall social goals can be imposed by central planners. Whereas in the capitalist economy individual choices are the ultimate variables shaping free-market prices, which direct the economic process, socialism makes the chosen social goals the starting point and sets prices and quantities to achieve those ends. Which set of priorities is better from a strictly ethical point of view is a matter for philosophical debate; the vital dis­tinction is that if comprehensive goals are chosen, individual action must conform to them, whereas if individual actions are left free from the start, no planned social goals will be possible. This is the basic inconsistency in the economics of socialism. The conflict of values is the point of Schump-eter's quip that socialist planners "may still let the comrades choose as they like between peas and beans. They may well hesitate as to milk and whiskey and as to drugs and improvement of housing. And they will not allow comrades to choose between loafing and [building] temples . . ."

Apparently socialists have not fully comprehended this dilemma, or they have tended to avoid discussing it seriously. The socialist rejoinder that neither consumers nor workers are entirely free to make whatever decisions they please under capitalism as it exists confuses the issue by trying to compare the theory of socialism with the practice of capitalism. The socialist, by his very case, must deal with the inherent nature of capital­ism in contrast with the inherent nature of socialism.

On this plane it becomes clear that capitalism inherently emphasizes individual choices as directing forces in the economy, whereas socialism emphasizes comprehensive goals. If we are to follow the ideas of social­ism in this regard, we must expect some deviation from the freedom of individual choice allowed under theoretical capitalism. This freedom, al­though much qualified in actual life, is apparently highly valued by many toward whom socialist claims are directed. To be consistent, programs of socialism must either cease to promise a continuance and enlargement of individual economic freedom or else successfully demonstrate how that freedom can be preserved in a socialized economy. Modern socialism has, as yet, done neither. to capitalist and to socialist economic systems. Economic planning can oc­cur in nations located at all points on the ideological compass.