http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2018/08/socialism-in-one-country.html
SOCIALISM IN ONE COUNTRY
When I tweeted the other day that the crisis of capitalism consists of a decade-long stagnation in productivity (which has given us falling wages), a wise man replied that this is true only in one country. Which set me wondering: might there be a case for socialism in one country?
Yes, I know the phrase has unhappy connotations. But what I mean is simply that (some form of*) capitalism suits some countries better than others. And perhaps the UK is not one of these.
We can think of this from two different perspectives.
One is the Smithian one, as suggested by Jesse Norman. This says that a healthy capitalism requires particular norms and culture. For example, a society in which there are norms against tax-dodging, rent-seeking or egregious exploitation will have a healthier capitalism than ones in which such norms are weak or absent. Also, for cultural and historical reasons some nations might have a bigger pool of managerial talent or greater entrepreneurial spirit than others. They too will be more suited to capitalism.
Where these conditions are lacking, however, (some form of) socialism might be needed. If some businesses cannot be regulated effectively by self-restraint, market forces or regulation (such as banks or utilities), nationalization might be an option. Where management is bad, worker democracy is needed. And where entrepreneurship is weak, the state must do more (pdf) of the job.
A nation whose ruling class produces people like Johnson, Farage, Cameron or Rees-Mogg is more in need of revolution than one whose ruling class produces better men.
The other is the Marxian perspective. He saw that capitalism was an immense force for economic progress. But, he wrote:
At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters.
Some countries have not yet reached this stage of development. In these – such as China – capitalism is a progressive force. The fact that the UK has suffered a decade of stagnation, however, suggests we might have reached that stage and that we need some changes in property relations if we are to generate further progress. These changes might be in a socialistic direction**.
The appropriate modes of economic organization vary from country to country. In saying this, I'm following Edmund Burke, who wrote:
Circumstances (which with some gentlemen pass for nothing) give in reality to every political principle its distinguishing colour and discriminating effect. The circumstances are what render every civil and political scheme beneficial or noxious to mankind.
These considerations mean it is perfectly coherent to argue that the UK needs more socialism whilst Venezuela needs more capitalism.
Why, then, do so few do this? The answer might lie in a distinction made by Burke as described (pdf) by Jesse. He distinguished between "embodied" reason – which proceeds from concrete actually-existing conditions – and abstract reason which began from theory. Those who give blanket, worldwide support to either capitalism or socialism are perhaps too prone to abstract reason and too little to embodied reason.
* In practice of course most countries are some mixtures of capitalism and socialism (and even feudalism). I'm thinking here of a spectrum between capitalism and socialism, not a sharp distinction.
** In fact, many intelligent free marketeers agree with this. Many of these favour relaxing planning laws to permit more housebuilding or less strict copyright laws. Both are, in effect, curbs on some people's property rights.
-- via my feedly newsfeed
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