Political Consequences of Socialism

Many people have considered the economic consequences of Socialism, a smaller number have considered the political consequences.  Socialism, as defined by socialists includes the democratic ownership and control over the means of production.  Opponents of socialism will often give it the more broad definition of state ownership and control over the means of production.  The popularity of democracy makes it so that such a system is likely to be popular.  The most persuasive arguments against such a system are inquiries into whether such a system is possible.

As I have pointed out before the Austrian economist, Ludwig von Mises, has argued that socialism would render economic planning impossible.  This would mean that any form of state ownership and control over the means of production would likewise be impossible, since planning would be an essential aspect of control.

F. A. Hayek argued that socialism wouldn't be compatible with democracy.  At first glance this seems implausible.  What could be more democratic than democratic control over the means of production.  However, democracy only implies that all political control should be in the hands of the people.  It says nothing about what should and should not be controlled by the government.  In fact if the government is to be under democratic control, then we will have to confine the government's decisions to those areas in which there is a public opinion.

It is not obvious that there can only be public opinion on a limited range of issues.  This takes rather sophisticated thinking.  If policy preferences are non-transitive, we can say that there is no public opinion.  It is possible that no matter what decision is made a majority will actually favor some other decision.  At first glance this seems like nonsense.

Lets take an example of three people who's preferences are determined by three different points in space.  The three points are not necessarily in a line.  Each person prefers a policy choice that is closest to their own.  The three points will have to be in a plane.  If there is some point that is not on the plane, all three will prefer some point on the plane.  For every point on the plane there will be a majority of two who both prefer some point on the line that connects their two points.  There will be no point that is on all three sides of the triangle.  Preferences are not transitive.

In general preferences need not be transitive unless political choices are constrained to a single dimension and are single peaked.  That is each person must prefer some policy option and the further you go from that option, the worse they like it.  The political options must be such that they can be described by a single, real number.

That might sound excessively technical, but now think about the implications for democratic control over the means of production.  Clearly the policy space that we would need to consider here would be the most extreme form of multidimensional space.  We would have to decide how much in resources to devote to each individual industry.  In order to represent an individual's policy preferences on this matter we would need one dimension for each industry we were considering.

Now consider the implication for the more limited versions of socialism.  For instance we have socialized education.  Thus our policy space includes a dimension for each decision that we need to make about how much in resources to devote to education in each discipline, not to mention such thorny issues as the treatment of religion and teaching about evolution.  In contrast to this, if we were to hand out education vouchers, then we would reduce our policy space to a single dimension, the size of the voucher.  Such a system would create a problem in that the government would still have other decisions to make, and we would have to come to some agreement about what constituted education.  In other words our policy space as a whole would not be confined to a single dimension.

Another area of concern is medicine.  Many argue that we need to have a national health plan.  There can be some disagreement about whether such a system needs to entail socialized medicine.  What is clear is that it does not mean a market based system.  Telling advocates of a national health plan that you plan to allow people to spend as much of their own money as they want to and can afford on whatever kind of healthcare they want and can afford would not satisfy their desire for planning.  Clearly the kind of planning they want must involve some measure of government control over healthcare.

But there are many aspects of healthcare.  Broadly speaking, healthcare can include anything that contributes to one's health and wellbeing.  I would hope that that would include a large portion of the goods and services produced.  If we were to determine that socialism was a bad idea in general, but was a good idea when it came to healthcare, what would this mean?  Where would we draw the line?  In addition it seems more than likely that control over healthcare would involve more than a single dimension.  Any national health plan worthy of the name will create a multidimensional policy space.  Hence there need not be any public opinion in this area, and it is doubtful whether there can be any democratic control.