A Note on Socialism and the Mixed Economy

Image credit

Talking about the mixed economy, Willis Eschenbach is right:

[L]et me clear up one extremely common and dangerous misconception. Socialism is NOT about taxpayer money providing social services like the Fire Department, or roads, or medical care, or the Post Office, or the military, or public parks, or the Police, or piped water. Those are all services, and all governments of all types provide a greater or lesser range of services. That’s the basic reason that we have governments.

Socialism, on the other hand, has nothing to do with the provision of services. It is an economic system where the government owns the means of production of wealth—in Socialism the government owns the farms, fishing boats, and factories.

So please, don’t be claiming that the northern European countries are socialist. They are not, because those European governments do NOT own the farms, fishing boats, and factories. Those countries may provide a wider range of taxpayer-paid services than the US or other countries provide … but that does NOT magically make their capitalist economies into socialist economies. Quite the opposite. Their successful capitalist economies are the reason that they can afford to provide those services …

The source. 

The "right" do not have a theory of the mixed economy. They do not, because they believe in rather an unfounded and nebulous vision of a pure market economy, which exists only in bad theory.  Their idea of a pure market economy has little place for government, for they think what government can do, if it is at all likely to do something good, the pure market economy can do it still better. In a kind of pars pro toto reverse deduction, they see contained in every act of economy-stifling market intervention/market-substituting the full organism of socialism. Hence government participation in the socio-economic dimension is quickly equated with socialism. 

The "left" are eager to instrumentalise the exceptional powers of the state to implement their objectives. Therefore they tend to idealise the state and are willing to let it assume extensive  unchecked powers. 

Of course, strictly speaking, every economy is a mixed economy in that  the economic activities of any community do comprise free-wheeling individual initiative and discretion as well as actions  imposed upon the collective by political coercion.

However, I think it fair to argue that socialism — state ownership of the means of production — marks the border beyond which lays the realm where a colourful mix in which individual freedom and political constraint are both strongly represented becomes a monotonous landscape, where the political constraints set by the state totally dominate and individual freedom languishes as a distrusted residual figuring like cracks in a picture meant to be perfect. 

The "left" find it hard to appreciate that the state becomes intolerable when it goes socialist. 

The "right" do not understand that there is a lot of mixed economy left before social interventions become so pervasive as to amount to socialism.