The mainstream media is currently hyper-ventilating over Alexandria Ocasio-Cortez, the self-styled “democratic socialist” from Queens who pulled off an upset win in a New York Democratic primary recently. She has since gone on to campaign with Bernie Sanders in the Midwest and has appeared on dozens of soft talk shows; all this, of course, without being seriously challenged about the specifics of her economic philosophy.
Let’s correct that here.
Socialism holds that capitalism is a failed economic system that should be replaced by government control of investment and production. This means that basic economic decisions (what goods and services to produce, what prices to charge, what funds to invest in new capital, where to locate, etc.) should be made by governmental institutions and not by private businessmen seeking profits.
The “democratic” part of the definition implies that these governmental institutions should be freely elected and that they should adhere to basic constitutional rules that protect civil liberties. How this latter objective can be accomplished in a social system without strict property rights is unclear.
Cortez has a degree in economics but does she really believe that democratic socialism makes sense? Probably not and for a number of reasons.
In capitalism, price information and profit incentives guide resources into uses that consumers prefer relative to alternatives. But in socialism, where the crucial factors of production (such as capital and land) are owned or controlled by government, there would be no meaningful price signals and profit/loss incentives to ensure that scarce resources aren’t wasted; in short, socialism can’t calculate. Indeed, the entire economy under socialism would resemble a giant Motor Vehicles Department bureaucracy, quite oblivious to waste and consumer preferences, even though the government in charge might be democratically elected with noble intentions to do good.
In addition, socialism in actual historical practice has been an economic disaster wherever it’s been seriously tried. Most of the socialist experiments have ended up confiscating wealth, wasting capital, destroying incentives, impoverishing the great bulk of the population and even severely limiting basic civil liberties that socialists pledged to protect. Can anyone say Venezuela?
And don’t believe for a moment that it’s any lack of democracy that has doomed these experiments in socialism. Socialism has failed precisely because it rejects strict property rights, free market exchange, and competition between business organizations. Socialism makes no sense in theory and can’t work in practice.
I conclude, therefore, that Cortez is too clever to be a democratic socialist — although that catchy phrase has earned her votes and fawning media attention. Instead, Cortez is a radical progressive, much like fellow-traveler Senator Bernie Sanders, who also mislabels his economic philosophy and gets away with it.
Radical progressives accept (grudgingly) the basic institutions of capitalism (the price system, stock and bond markets, etc.) but they also want a never ending laundry-list of social programs and free lunches for the “underprivileged”. They also want (more) progressive taxation, more antitrust enforcement, higher minimum wage laws and sharply increased regulation of the environment, of large corporations and of financial institutions.
These are all familiar (and mostly nutty) ideas and reforms that have been pushed forward by progressives for decades. Cortez may be the newest progressive flavor-of-the-month but her agenda is unworkable old hat.
Democratic socialism is a fraud masquerading as a legitimate alternative to market capitalism. It isn’t. And once the tough questions finally begin to materialize, we will really see how committed Alexandria Ocasio-Cortez is to this economic chimera.