Bryan Caplan  

Richter Contra "New Socialist Man"

My Letter on California Studen... Great Minds Think...Somewhat D...
The classic argument against socialism is that it gives people bad incentives.  What's the point of working, conserving, saving, quality control, and/or taking out the garbage if they don't pay?  The classic socialist reply is that capitalism creates the selfishness it purports to benevolently channel.  Socialism will give birth to a "New Socialist Man" who loves his neighbor as himself.

I've often been amazed by how many Austrian economists take the New Socialist Man position seriously.  Several Austrians have seriously told me that the incentive argument is "weak" because it's vulnerable to the New Socialist Man response.  But I've always considered the New Socialist Man position to be not just weak, but absurd.  Ever heard of Darwin?  People are selfish because of billions of years of evolution, not capitalism.  End of story.

Is it possible, though, that I underestimate the initial plausibility of the New Socialist Man response?  After the horrors of Lenin, Stalin, and Mao, it's easy to ridicule the idea of reshaping human nature (for the better, anyway).  But was the failure of socialism to change human nature really foreseeable before the socialists got their hands on the reins of power?

It was - at least to the great Eugen Richter.  I just discovered his attack on New Socialist Man in his dystopian novel Pictures of a Socialistic Future - dating from 1893.  The leading critic of the fictional socialist state begins by pointing out its obvious evils:
"What have we come to? In endeavouring to get rid of the disadvantages of the socialistic method of manufacture, you place such restrictions on the freedom of the person, and of commerce, that you turn Germany into one gigantic prison.

The critic then confronts the feeble attempt to blame these evils on the pre-existing corrupting influence of capitalism:

"Your explanation of all this is, that we are at present in a state of transition. Nothing of the sort. Things will get worse and worse the longer the present system lasts. Hitherto you have only descended the topmost steps of those which lead to the abyss. The light of day still reaches you on those upper steps, but you turn away from it. Whatever culture is now extant, whatever schooling, and practice, and skill, are all due to former systems of society. But in our socialistic schools of to-day, both elementary, advanced, and technical, our young people make no progress at all, not from any lack of time, or means of instruction, but merely because no one feels that he is absolutely bound to acquire certain things as stepping stones to future success in life.

"You live upon the capital of culture and of wealth which descended to you as the result of former arrangements of society. So far are you, however, from putting by anything, and from providing for improvements and additions, that you cannot even properly maintain such possessions as we have, but suffer them to fall into decay.  There are now no means to keep all these things intact, because in destroying the hope of profit, which induced capitalists to engage in enterprises, you simultaneously prevented all further formation of capital, which in its turn would again have led to new undertakings.

"All higher development of the faculties, no less than all material progress, is at a stand-still since the abolition of free competition. Self-interest used to sharpen the wits of individuals, and bring out their inventiveness. But the emulation of the many who strove in the same field of labour, constantly operated to make common property of the achievements of individuals.

I take hindsight bias seriously.  Many mistakes really are hard to see until you actually make them.  But socialism wasn't one of them.

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COMMENTS (18 to date)
Troy Camplin writes:

Read Mises' "Liberalism." There's your answer to New Socialist Man. In it he observes that under capitalism you get rich by serving your fellow man -- and the better you serve him, the richer you get. That's more than love your neighbor. That goes straight to what Jesus said about the last (the servants) shall be first. Socialism always tries to sell itself as the Earthly realization of Christianity or Heaven -- but Capitalism is the real deal.

Matt writes:

Caplan to an extent the new socialist man is true. Socialism CAN work at family and very small community levels for a variety of reason. At some level some communes can form moderately well, so to some extant the argument is weak. And considering how many problems there are with socialism, the strongest one is not necessarily the incentives one, because what is easier to convince, and a theory of people changing, or any hosts of others.

Snorri Godhi writes:

There is no need to bring in Darwin and millions of years of evolution to show the stupidity of the N.S.M. concept: it is sufficient to bring in Edward Thorndike and the Law of Effect. People learn by trial and error; under socialism*, people do not see the consequences of their actions, and therefore cannot learn to work, save, take out the garbage, and to behave unselfishly in general.

Of course, the Law of Effect is the product of random mutation + natural selection (which is also trial + error btw); but one does not need to know that eyes are the product of natural selection when shopping for glasses.

* except for the socialism of very small communities as pointed out by Matt.

Daniel Kuehn writes:

I agree that NSM is very weak. I wouldn't feel countered in an argument if they threw that at may.

However, I don't think the Darwin response is an entirely conclusive one either. Yes, evolution made us competitive and selfish. But it also made us altruistic, cooperative, and social. These are traits that contribute to functioning markets as much as they contribute to socialism - and I'd say they help to undergird a liberal communitarianism more than full-blown socialism - but the point is it's still more complicated than "Darwin means we're selfish and competitive". Darwin has a lot of implications for us - some of which actually make the prospect of socialism marginally more feasible... margnially.

Les writes:

It seems illogical to confuse self interest with selfishness.

Self interest leads one to serve others ethically and with respect, in order to gain and retain their confidence and their business.

Selfishness means treating others without respect, as means, not ends, which will betray their confidence and lose their business.

Therefore self interest and selfishness are precise opposites, and should not be confused as synonyms.

Under capitalism there is free choice and consumer sovereignty, so ethics and confidence provide strong incentives. Under socialism there is neither free choice nor consumer sovereignty, so ethics and confidence have little if any incentive effect.

Scott writes:

"Ever heard of Darwin? People are selfish because of billions of years of evolution, not capitalism. End of story."

Could someone just as easily reply: "Ever heard of Darwin? People will sometimes take bullets for others and undergo other acts of self-sacrifice because in hunter-gatherer societies certain altruistic behaviors evolved to ensure tribal survival."

The evolutionary morality explanation has never been very convincing to me because you can use it for any typical human behavior you like and create a "just-so" argument. Is selfishness any more a product of evolution than communitarianism? Human beings are very complicated organisms and I don't think all of their varieties and flavors can be explained in terms of evolution.

Daniel Klein writes:

I second Daniel Kuehn and Scott. Ever heard of Hayek?

I take serioulsly the solidaric, group-selection view of the cradle of human society.

Indeed, I am inclined to think the best way to understand social-democratic penchants is as reassertion of the mentality and instincts of the small band. Atavism.

Indeed, such interpretation helps us explain the appeal of socialism, and why socialism is so foolish.

Gavin Andresen writes:

Responding to Matt's comment "socialism CAN work at family and very small community levels:"

If by "work" you mean "survives the test of time / gets passed down from one generation to the next" ...

Well, no. A quick Google Scholar search and skim of some of the research on commune survival makes it clear that, on average, small-scale socialism usually fails. A typical research result: religious communes last, on average, 20 years. Non-religious, 10.

There will always be outliers that last longer, and survivorship bias will make people BELIEVE that small-scale socialism works, but it just ain't true.

Kurbla writes:

Socialism can be developed from capitalism by replacement of a capitalist private property with some kind of collective property. Let's say with state property (although many socialists want smaller units, say workers councils.) The workers in a socialism have roughly the same incentives as in a capitalism.

Only essential difference is behaviour of the owners - the state vs. capitalists. The capitalist has strong incentives to make his company efficient. How to organize similar incentive system for the state officials? It is not simple question, but it is not specific for socialism. If it is possible to organize incentives so politicians control army and police and education etc. and whole state actually "works", then there is little reason to believe it is impossible for, say, furniture production.

In practice, Marxist-Leninist states were not socialist states, because essential component missed: collective ownership. Except, well, if Stalin is considered to be "collective". Still, these countries were examples of economy without capitalists - and practice has shown that it just worked. It is not that these countries collapsed in the first months they are established - they existed for decades, and economy, living standard and life expectancy improved. Improvement wasn't that consistent as in many capitalist countries did, but it definitely existed.

Hence, the problem with incentives doesn't appear to be fundamental. It is technical. It is not the question whether country can exist and progress without capitalists. It is only the question how efficient it can be.

jb writes:

There is a lot of social cooperation built into our genes - groups with members that co-operated fared better than groups that behaved completely selfishly.

There is absolutely a strong genetic benefit to cooperation - and the more cooperation there is, the stronger that benefit becomes

HOWEVER - the benefit to defecting from cooperation grows even faster than the original benefit. This is the critical tension - the more widespread the cooperation is, the greater the incentive to cheat.

The argument against socialism is not that our genes are selfish - it's that we are made of crooked timber, and can't resist the urge to "fudge"

At this point, the socialist retorts with growth rates in Norway & Sweden, and we're in a pedantic argument about genetic homogenity, outliers, etc, etc, etc.

Randy writes:

It seems to me that there is man in a state of nature and man under the rule of authority. The latter can then be subdivided in accordance with the degree of authority which our man must submit to.

There is really no such thing as "socialist man" because there is no such thing as "society".

More precisely, all political organizations claim to speak for society, by which they really mean their interests in the population under their control as the authority over that population. The population itself is always naturally free, but responsive to the methods of authority practiced by the political organization.

Socialism, then, is not a unique form of political organization, or a unique form of human nature, but merely a form of propaganda used by a political organization by which it exercises a degree of authority.

Chris writes:

I think that when thinking in terms of social status the problem becomes clearer (credit to Hanson where it is due).

In small groups where everyone knows everybody, one can raise their status with other group members by working harder or being good at something. Since everyone knows where you (and they) fit within the group, material displays of status are pointless and attempts to do so are seen as artificial and wind up lowering your status. When you start growing the group beyond what an individual can reasonably keep track of, external displays of status become more important.

Thus, socialism works well enough at the small group level (think hunter gatherer) because the primary means of compensation is something that is inherently known and tracked by all members and does not need to be displayed. This completely breaks down at the national level, since the people in control of resources can't possibly know how hard you personally work and other means of gaining and displaying status are necessary.

This also explains altruism - raising status in one's peer group or displaying loyalty to the group.

Lars Schumacher writes:

I'm not sure that the assurance that under socialism there would be a New Socialist Man is a classic socialist reply. It certainly wasn't Karl Marx's principle argument for socialism. On the contrary, he argued for socialism on the basis of rational self-interest.
The standard Marxian argument was that socialism would eliminate what he called 'the anarchy of production.' Why have, say, six shirt-making companies, all operating at 80% of capacity and producing shirts in advance of people having requested them, and when it is clear to everyone that many shirts would go unsold. Much better to take three of those shirt-making companies, consolidate them into one big shirt-making company, and then turn those other three companies over to some other line of production. Remove the chaos of capitalist production, Marx said, introduce some rational planning, which you already see anyway at the level of the corporation, and we will soon live in a world of superabundance.

Jeremy, Alabama writes:

New Socialist Man was discredited by Aristotle.

Troy Camplin writes:

Evolutionary explanations may not be "necessary," but when properly understood, they are more than sufficient. People evolved to be rationally self-interested, cooperative (when others are), altruistic (toward family and tribal members), good most of the time, and altruistic punishers of antisocial behavior.

The problem with socialism is that it demands that I treat unknown strangers as being as important to me as is my family. Sorry, but nobody is anywhere near as important as 1) my wife, 2) my daughter and son, 3) my brother and his family, 4) my father, and 5) my wife's family. In that order. I will never consider any stranger to be more important than these people I listed, and I will sacrifice a trainload of people to protect any one of these listed. And so will anyone who has a family. That is why the first thing the Left try to do is destroy the family. They must first destroy our natural tribal/familial loyalties because no ethical person would do anything other than what I would do (and you know it's true, even if you try to pretend otherwise -- unless you really are so unethical as to consider your children to be no better than some random stranger). So long as people love their families, there can never be any kind of Socialist Man, New, Old, or otherwise.

Peter writes:

I'm intrigued by the exceptions made for small communes, etc, because I wonder how many variables go into making those exceptions. For example, is it enough that communes (at least where they're seen in the US) are entirely optional? That is to say, only people who are willing to serve one another and/or the greater good go live there, and thus, they work? Or is it something more complex, such as an issue of scale? (increasing the total number of members decreases the total possible efficiency), or more than that? I'd like to see more discussion about that.

Bill Drissel writes:

Matt and others,
I think you need to talk to people who lived in the small, hippy communes of the 60s and 70s. The dozen or so that I've met all mentioned the "deadbeat" problem - people who would not do their share, many would do nothing. They all mentioned the filth. People wouldn't keep the common areas clean.

All the people I talked to belonged to communes founded by young people with inherited money. None were sustainable by the members. They disbanded when the money ran out.

Anecdotal, small sample selected by the unlikelihood that I'd meet anyone who lived on a successful commune. But still ,,,

Bill Drissel

Mary writes:
In small groups where everyone knows everybody, one can raise their status with other group members by working harder or being good at something.

Or get called "Show-off" or even physically assaulted by people whose envy is roused and who do not want to face their lack of skill or their sloth (or both).

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