WHAT SOCIALISM IS & IS NOT

...A capitalist economy, moreover, can only respond to "effective demand" backed by actual purchasing power...

...His distinguished contemporary Oskar Lange, viewing the scene some years later from the opposite political pole, agreed substantially that socialism signified state control, and central planning...

...If one feels in need of a summary definition, that offered by Dickinson in 1939 still seems the best: Socialism is an economic organization of society in which the material means of production are owned by the whole community and operated by organs representative of and responsible to the community according to a general economic plan, all members of the community being entitled to benefit from the results of such socialized planned production on the basis of equal rights...

...It is sometimes argued that under continuous full employment the status of wage earners loses its degrading character, since employers have to bid for labor in circumstances where the workers (unionized or not) are in a position to dictate terms...

...International trade takes place predominantly among industrially advanced countries and only marginally between them and the "underdeveloped," which is why the loss of their colonies did no economic harm to the West European countries—or to Japan, which was likewise stripped of its colonial possessions in 1945...

...In this sense the preconditions of a socialist order do not at present exist anywhere...

...This is among the reasons why relatively small and stable countries such as Denmark and Sweden have been pacesetters in education and in the equal provision of social services generally...

...The obvious means to this end are taxation of the rich and the expansion of the public sector (education, health, and housing...

...If the balance of external trade acts as an economic pacesetter, any decline in relative efficiency will promptly make itself felt in the form of stagnation, unemployment, and other disagreeable consequences...

...We assume then that the economy, or the greater part of it, is socialized, i.e., that the principal means of production are publicly owned...

...Keynes had no social vision extending beyond the England of his day, but he did have an answer to the problem of unemployment...

...It also operates against the public interest by making the great monopolies the final arbiters of the key decisions that are invariably taken behind closed doors...

...The same applies to central planning, which has indeed come to play a more important role in France than in Britain: the main impetus behind it being the long-established SaintSimonian tradition of the French political and bureaucratic elites...

...A system of this kind necessarily perpetuates the class division between a wealthy minority and a propertyless majority...

...38 material resources through mass unemployment...

...The 42 appropriate moral was drawn in 1966 by an eminent British economist who combined socialist convictions with long-standing adherence to the Keynesian school: The proposition that, in an industrial economy, the level of money-wage rates governs the level of prices was an essential element in the analysis of Keynes' General Theory of Employment, Interest and Money, published in 1936...

...Schumpeter expressly excludes 2Cited by H. Smith in The Economics of Socialism Reconsidered (London, New York, Toronto: Oxford, 1962), p. 113...

...If it appears problematic in the United States, the explanation has to do with the political system, not with lack of resources...

...It operates for the benefit of paying customers only and does not recognize the existence of other people...

...In a socialist economy, welfare services would be equally available to all at zero prices, the wage A. Schofield, Modern Capitalism (London, New York, Toronto: Oxford, 1965), p. 80 ff...

...If a socialist society is defined as one in which the wage relation has been abolished, the producers placed in control of their tools, and the cleavage between physical and mental labor overcome through an all-round development of the human personality, we are still far from the attainment of such goals...

...Social conflict assumes new forms, the steady growth of monopoly and the expansion of a bureaucratically controlled public sector driving the private entrepreneur out of business and producing novel confrontations dimly foreshadowed by the strikes and factory occupations of recent years...

...But there was nothing socialist about the motor propelling the machinery...

...and the reluctance of the electorate (including a majority of the industrial working class) to press on more rapidly toward genuine social equality...

...The built-in automatism is such that those who start off with material advantages (including advantages in skill, training, and education) secure a disproportionate share of the social product...

...In such an economy the quarrel would be over the distribution of the social dividend as between the state and the producers, with politics resolving itself into a tug between the central planning bureaucracy and the more or less autonomous workers councils representing all those engaged in the production and distribution of goods and services...

...One might also cite the corresponding examples of Austria, Denmark, Holland, and Switzerland, where the labor movement has contented itself with being a partner in a rapidly expanding capitalist economy, wage rates rising on an average no faster than output per head, so that prices have been kept relatively stable...

...But in a theoretical excursion we are not obliged to confine ourselves to what is politically relevant...

...What actually happens under Social Democratic management is a more or less steady expansion of welfare-state services designed to equalize the distribution of incomes...

...Genuine equality—the distribution of the "national dividend" according to criteria of need alone cannot be attempted if the result is likely to be a significant decline in economic efficiency, a slowing down of growth, loss of export markets to foreign competitors, and a consequent fall in living standards and in the funds available for private and public consumption...

...We are here solely concerned with regions that have passed beyond this phase and have - become sufficiently rich and productive for something like equality to be attainable...

...If a socialist system of distribution is defined as one in which consumption is 9 Pachter, in Howe, op...

...At their present political and cultural level even the most advanced democracies are unlikely to forgo the advantages accruing from rapid technological change, higher production, rising money wages and the inequality that goes with it...

...Socialists are at a minimum committed to economic planning that goes counter to the operation of an economy in which private firms predominate and profits are distributed among shareholders and managers...

...The argument itself was convincing enough, and once it had sunk in, the practice of digging holes in the ground (largely for military purposes) was employed whenever growth rates threatened to slacken, or unemployment rose above a level judged politically tolerable...

...But a moment's consideration will show that even at the lower stage, where people still have to be paid in accordance with their labor, it is possible to provide a number of basic services on the principle of equal distribution to all, irrespective of ownership or social status or personal merit...

...If socialism were to become permanently identified with the kind of life imposed after 1945 on Eastern Europe, few sane people would want it...

...The goal of a classless and conflict-free society is not easily reconciled with the drive toward ever higher levels of economic performance in a competitive world, most of which is still desperately poor...

...Since under modern industrial conditions this cannot be done individually (the common error of liberals and anarchists is to believe that private ownership can be restored, whereas in 37 fact it cannot, apart from consumer goods that by definition are not "instruments of production"), the only reasonable description of socialism is one that centers on common or social ownership...

...41-42...

...If liberal laissez-fairists had no other competition to face, they could save themselves the trouble of trying to prove that capitalism will in due course make everyone rich and happy...

...But only Fascists and/or Stalinists were satisfied with the resulting state of affairs...

...Unfortunately, such a state of things is not yet sufficiently general, even in the richest and most civilized countries, to remove the topic of economic growth from the agenda...

...These aims may be unattainable, in which case democratic socialism will have to be written off, but it is just as well to be clear as to the meaning of what one is arguing about...

...The upshot has been to place centralized economic planning in the forefront of public debate in France, Italy, Britain, Holland, and Austria, where Communist or Social Democratic pressures were strong...

...If they owned them, they would still have to work, but the profits would no longer go to the owners of capital...

...The distinction is important, and its neglect leads to some confusion...

...guild socialism, syndicalism and other types" 5 on the grounds that "Centralist Socialism seems to me to hold the field so clearly that it would be waste of space to consider other forms...

...To put it crudely, the logic of the system entails the production of luxury goods for the few, rather than the provision of food, clothing, and decent housing for the many...

...salaried, any advance toward socialization hinges upon the willingness of the labor movement to back long-term planning at the expense of short-range economic gains...

...It is sometimes alleged that such an arangement corresponds to the higher stage of socialism (described as "communism" by Marx in 1875) when society will have become sufficiently wealthy to permit everyone to draw upon the common pool according to his needs...

...For justice in distribution we clearly have to summon the forces of the state...

...This bias became important in an environment where state intervention to speed economic growth had been rendered respectable by the failure of classical liberalism, the rise of the wartime Resistance movements, and the temporary breakthrough achieved by the labor movement in 1945...

...The main reasons can be summarized under two heads: continuing economic scarcity, with the resulting pressure to place rational economic calculations first...

...Under Social Democratic rule the balance of power shifts from the side of private enterprise and corporate management to organized labor...

...Yet it took about fifteen years of experience for the point to really sink home...

...The gap between socialist rhetoric and laborist performance measures the difficulty of making social equality relevant to people overwhelmingly concerned with simple economic issues: specifically, guaranteed full employment and a steady rise in living standards...

...owever important and beneficial, such arrangements fall short of socialism inasmuch as they do not alter the status of wage and salary earners, not even if key industries and public services are nationalized or municipalized...

...As to the first, it needs no great effort of the imagination to conceive a state of affairs where noneconomic considerations have become paramount because all reasonable economic demands have been met or are in process of being satisfied...

...Equally, they cannot be satisfied with a kind of central planning that vests all authority in the government, notably if the latter is not democratically controlled...

...This is not due to the bad will or imbecility of those in control: it follows logically from the operation of the market...

...That similar results can be obtained under Social Democratic government is attested to by the case of Sweden, once more a combination of good luck and good management, aided by specialization in the newer industries...

...Keynes had the candor to admit this...

...Much of the world is still going through the early phases of the industrial revolution, while the advanced countries are taken up with the attainment of higher living standards...

...The consequent tensions were duly illustrated by the events in Czechoslovakia, where the reformers were treated as a potential threat by the Soviet autocracy and its Eastern European satellites because they tried to convert bureaucratic dictation into genuine social control...

...Keynesian economics are morally neutral and can be employed in the service of capitalism, socialism, or anything else...

...There is no point in debating the question whether wealth should in all circumstances be equitably divided, even if the result is economic stagnation (as it certainly would be in any poor country lacking the necessary capital equipment...

...In an egalitarian community this would not happen, since all customers would have approximately the same purchasing power, but bourgeois society is not egalitarian...

...When accused of wanting to set the unemployed to work digging holes and filling them up again, he pointed out correctly that even if they were paid for doing nothing else, they would spend their wages on food and other necessities, thereby increasing the sum of real incomes...

...Two pyramids, two masses for the dead, are twice as good as one...

...I f one adopts Dickinson's formulation as a yardstick, one necessarily parts company with Schumpeter, for whom socialism is defined as "an institutional pattern in which the control over means of production and over production itself is vested with a central authority...

...To balance the account it has to be added that, while Communists tend to confuse socialism with state ownership, Social Democrats are in the habit of equating it with labor reformism and welfare policies...

...That this is in fact practicable, without any undue strain on the public sector, is taken for granted not only in Europe, but also in Canada, Australia, and New Zealand...

...but they can be held down to a tolerable level...

...Ideally, the adoption of the "new economics," by permitting a relatively rapid growth and near full employment, also makes possible a steady expansion of the social services...

...For of course international trade enters into the matter...

...2 The objection that such a community might be so poor "that life within it might be wellnigh intolerable" 3 is valid in principle, but for practical purposes it has always been assumed that one is talking about an advanced industrial society, not about a return to primitiveconditions...

...Yet no one would describe the resulting pattern as socialist, save insofar as there has been a growth in the importance of central planning...

...In such an atmosphere the expansion of welfare services out of taxation is all that can be done by governments dependent on public opinion...

...The system in some respects now departs from the classical model of a society in which state intervention occurs only to facilitate the maximizing of private profit...

...This elegant cynicism (a notable feature of the Bloomsbury set and its culture, of which Keynes was the most distinguished ornament) was merely frosting on the cake of economic reasoning...

...This process may, but need not, be accompanied by the nationalization of a significant sector of the economy...

...Success in this field is always uncertain, some countries benefiting from temporary advantages at the expense of others...

...The government, by enlarging the public sector, may set itself such noneconomic goals as the equalizing of incomes, the financing of public health and housing, or the provision of cultural amenities...

...If theoretical development does not lag too far behind, socialism as a movement may transcend its class origins and come to represent the aspirations of the intelligentsia, as well as those of a working class in process of acquiring new skills and higher levels of education and awareness...

...Nor is there any need to waste time and energy over frivolities such as the demand that the "consumer society" be abolished...

...The distinction between state property and social ownership ought to be obvious: the former vests effective control in a political bureaucracy, the latter does not...

...It was easy to predict that if we stumbled into near-full employment with institutions and attitudes unchanged, the balance of power in wage-bargaining would tip in favour of the workers, so that a vicious spiral of wages and prices would become chronic...

...The price mechanism rewards people according to the scarcity of resources (labor and property) that they possess, but it does not itself contain any mechanism for equalizing the distribution of scarcities...

...Anything that falls short of abolishing the wage relation has no claim to being described as socialism, although it may be a station on the way thereto...

...It is also the reason why "communism" of the Russian variety has become a misnomer for a system of state-enforced capital accumulation...

...The term "socialism" was originally coined for the purpose of designating a society in which the producers own their tools...

...New York: Pantheon, 1968), p. 19...

...People who have once seen a Stalinist or Fascist regime at work will go to great lengths to avoid having one imposed on them...

...but not so two railways from London to York...

...For all its inadequacy when measured by socialist standards, electorates (if they are consulted) generally prefer modern, controlled, or "post-Keynesian" capitalism to both state ownership on the Soviet model and the laissez-faire system that periodically restores its equilibrium by way of gigantic crises and the wholesale waste of human and 5 ib id., p. 168...

...society grows richer and there is some rise in real incomes...

...This is the justification for describing an economy of this type as "laborist," even though the ownership of the means of production remains wholly or predominantly private...

...It is of course open to individuals to settle for monastic poverty if that is what they want, in which case comparisons with wealthier communities are unlikely to bother them...

...In consequence it normally fails to satisfy basic material needs except in a roundabout way that is not to everyone's taste...

...But such conditions have never existed anywhere, save for brief and exceptional periods (generally during a war), and even if they were somehow rendered permanent by appropriate monetary management, this would not alter the fact that the profits of the enterprise would still go to the shareholders, who also benefit automatically from the steady march of technical progress...

...The former may occur under capitalism or socialism alike, but a socialized economy devoted to the aim of keeping up with the fastest growth rates achieved in the capitalist world must give preference to economic rationality at the expense of other considerations...

...Conversely, if a democracy is to opt voluntarily for a greater degree of social equality than even the best managed capitalist system can permit, the voters may by the same token have to opt for a slowdown in economic growth...

...If one abstracts it from the rather hollow phrase-mongering that surrounds it, the neoliberal system is a capitalist economy that retains the market mechanism but employs the "countervailing powers" of state intervention to ensure a rate of growth substantially higher than the normal expansion achieved under a "free" system in which the propertied class retains full control over the economy and the government...

...New York: Harper, 1950), p. 167...

...Unlike state socialism it is burdened with the irrationality of having to conceal its planning apparatus behind a phraseology inherited from the age of "pure" market-economy capitalism...

...I, General Problems (New York: Macmillan, 1963), p. 81...

...Alternatively it may take the strongest unions into partnership, at the cost of steady wage7 Pachter, in I. Howe, ed., The Radical Papers (New York: Doubleday, 1966), pp...

...40 relation would gradually disappear, and claims arising from capital or property would not enter into the reckoning at all...

...Although he spoke of "social ownership of the principal means of production," 6 he was silent on the difference between state ownership and common ownership...

...How should it not...

...The latter being the mainspring of the state-socialist systems introduced throughout Eastern Europe after 1945, it is hardly surprising that the Czechoslovak experiment in 1968 was dubbed "revisionist," as the rather more successful Yugoslav model had already been stigmatized years earlier...

...36 inequalities resulting from the unrestricted operation of a capitalist price system...

...It is due to the unresolved cleavage between short-term and long-term aspirations, the socialist parties having failed to reconcile their ultimate aims with the pressures arising from the normal political process in a democracy where wage-earners 43 have become a majority of the electorate...

...EDS...

...Since it does not appear in his collected essays, and remains a thoughtful contribution to the continuing discussion on the meaning of socialism, we are pleased to make it available again...

...Taken by itself this is a democratic rather than a socialist line of reasoning...

...These hopeful factors must be weighed against the inherent problem of making equality rhyme with the requirements of a culture shaped by the recent speed-up in the rate of technological change...

...The smaller and more highly specialized a country, the more likely it is to suffer from fluctuations in world trade, unless it manages to keep ahead of its competitors...

...Moreover, for all the rhetoric in which it is typically enveloped, the system functions most effectively if there is a moderate degree of unemployment, so as not to give undue bargaining power to the unions...

...A conscious choice to this effect is conceivable, but not very likely in the short run...

...Contrary to popular misconceptions, Keynesian theorizing had nothing whatever to do with it...

...9 What has been said so far relates to production and to the social relations arising from the production process...

...This kind of talk commonly issues from people who do not have to work for a living...

...It avoids the waste of the free market, and it does not permit investments to be misplaced in the stage of development or to become obsolete in the stage of saturation...

...Like state socialism it works best if there is little or no democratic control, although the formalities of constitutional rule may be preserved...

...Let us now consider why even under relatively favorable external conditions—e.g., in Western Europe since the end of World War II progress in the direction of socialism has been slower than was originally expected...

...cit., p. 48 ff...

...Conversely, both nationalization and the expansion of social services may occur where Social Democratic control is lacking: witness the record of France and Italy since 1945...

...Lange, Political Economy, Vol...

...The systematic correction of built-in social inequalities by appropriate public action is an aspect of what has come to be known as the welfare state...

...Even in a fairly advanced industrial society such as Japan, it would be eccentric to discuss socialist aims without reference to economic scarcity...

...3 Ibid...

...The part of his argument which concerned the need for government policy to maintain "a high and stable level of employment" was accepted into the canon of received orthodoxy in this country even before the end of the war in 1945, but the part which concerned wages and prices was resisted much longer...

...It would be truer to say that the French were favored both by their national tradition and by the fact of not having to bother about the "new economics...

...witness his celebrated argument that socially wasteful investments may be economically useful: Ancient Egypt was doubly fortunate, and doubtless owed to this its fabled wealth, in that it possessed two activities, namely pyramidbuilding as well as the search for precious metals, the fruits of which, since they could not serve the needs of man by being consumed, did not stale with abundance...

...Since the industrially developed countries outside the Soviet bloc are for the most part governed democratically and since their electorates are predominantly 101 Robinson, Economics, An Awkward Corner (London: Allen & Unwin, 1966...

...It follows that Socialists (as distinct from Social Democrats) cannot regard full employment and the welfare state as their ultimate goal...

...Even the most fanatical laissez-fairist will grant that criminal justice can and must be so dispensed, and he may also make a grudging acknowledgment to that effect in regard to public transport, sanitation, or the post office...

...Genuine equality is in fact possible only in a homogeneous community where cultural standards do not conflict so violently as to render social intercourse intolerable...

...They will even put up with slumps and unemployment, so long as there is a reasonable chance of getting back to normal...

...Budgets must be balanced, investments must be planned in accordance with profit expectations, and human needs for the most part are still satisfied in relation to the "effective demand" of paying customers...

...i° It seems probable that the British economy had by the 1960s reached an "awkward" corner" for historic reasons quite unconnected with the current behavior of employers and unions, but this does not invalidate the theoretical part of the argument: in a capitalist economy, whether or not administered by a Labor government, the attainment of even relatively modest welfarestate goals depends on growth rates that in turn depend, in part at least, on competitiveness in the world market...

...State socialism may be regarded as a perversion of authentic social ownership...

...It can direct investments toward ventures which create new demands—Keynes's "pyramids," Tugan-Baranovsky's tower of equipment, a huge defense establishment, or a "New Frontier"—and it may even balance inefficient production units against overproductive units.' Although wasteful, the system is superior to "free" capitalism in that its built-in stabilizers enable it to even out the fluctuations of the trade cycle...

...The incidental benefits of the new system were considerable, even taking into account the unsolved problem of inflation...

...The wage relationship is rooted in the fact that wage and salary earners do not own the means of production, i.e., the instruments of labor...

...One is also saying something about the inherent conflict between two quite different and possibly irreconcilable goals: economic growth and social equality...

...But if they are honest they will not pretend that the kind of society they would like to see is inscribed in the logic of the immediate future...

...The same, more or less, applies to most European countries and to the Americas, North and South...

...Both attitudes reflect short-term political options that may be inevitable, given the circumstances, but cannot serve as a suitable definition of traditional socialist aims...

...In practice this goal is usually sacrificed to other aims, unless political pressures become sufficiently strong to secure some diversion of resources to public sectors such as health and housing...

...When it comes to matters such as education, public and private claims may indeed conflict, in that freedom of choice may be endangered by uniformity arising from demands for equal access to all types of learning...

...And nothing less will do...

...Even without the monstrosities associated with these two regimes, the kind of central planning that vests all control in a political bureaucracy is unlikely to be efficient, and it is certain to be destructive of freedom...

...In its usual formulation the "welfare-state" doctrine leaves the wage relationship unaltered...

...We can abstract from short-term considerations and inquire what a socialist economy would look like under conditions where the production process is taken for granted...

...On these assumptions, which are of course quite arbitrary, how does socialism work as a system of distribution...

...4 By this standard Pharaonic Egypt and Stalin's Russia were both socialist societies...

...The chief difference was that the state now undertook to make up for inadequate investment on the part of capital owners...

...In practice this meant introducing a measure of democracy in the shape of workers councils, so as to counterbalance the hitherto unchecked power of the political bureaucracy in charge of the central planning apparatus...

...When one says that even in the most highly industrialized countries of the Western world the transition from a "mixed" to a socialist economy still lacks adequate popular support, one is not just saying something about the power of conservative ideology or the relative failure of Social Democratic (or for that matter Communist) parties to expand beyond their traditional base in the industrial working class...

...Schumpeter, Capitalism, Socialism, and Democracy (London: Allen & Unwin, 1950...

...State capitalism differs from it principally in that it retains private ownership of the means of production: typically in the form of corporate monopoly...

...But the relatively smooth and peaceful integration of hundreds of thousands of immigrants in contemporary Britain, France, and Holland can serve as proof that— up to a point determined by public sentiment— a democracy is capable of digesting an 41 influx of newcomers without having to establish "separate but equal" treatment...

...Under less favorable circumstances, e.g., in Britain, wages have risen appreciably faster than productivity, thus driving prices up more rapidly than among some of Britain's main competitors...

...The crisis through which the contemporary socialist movement is passing has not been brought about by the corruption of the working class through excessive rise in money incomes or the desire to possess consumer goods...

...It was still the old competitive nexus based on the investor's profit expectations...

...It also applies to the hypothetical case of a completely socialized economy...

...This is what modern neoliberalism amounts to in practice, which is why its social achievements rarely match the enthusiastic verbiage of its sponsors...

...A certain minimal degree of economic planning is after all attainable even under modern corporate capitalism, and the social injustice that goes with the system is preferable to being shot or sent to a labor camp, or at best made to queue endlessly for a capricious supply of inferior goods and services...

...q 44...

...Full employment and central planning existed under Hitler and Stalin, the latter having also done away with private ownership in the means of production...

...This is the "classical" approach, common to liberals and Marxists alike...

...In practice this amounted to equating nationalization with socialization— inevitable in post-1945 Poland and the remainder of Soviet-controlled Eastern Europe, but misleading from the standpoint of socialist theory...

...The Middle Ages built cathedrals and sang dirges...

...Apart from the inevitable damage to the country's share of world trade (not to mention the stability of its currency), the result has been to associate laborism with inflationary price rises from which people living on fixed incomes are notoriously the chief sufferers...

...The result is that social inequalities are constantly reproduced and even rendered more acute, even though This article is reprinted, with permission, from the April 9, 1970 issue of the New York Review of Books, copyright c) 1970, NY REV...

...But in all essentials the economy still operates in accordance with market criteria, and it does so in the public sector no less than in the private...

...This applies with particular force if reformist rather than socially conservative parties are in political control...

...Today this is still the case in most developed countries (let alone the undeveloped ones), which is why the topic of economic growth tends to be debated in terms of competing capitalist and socialist models...

...Neither has it accounted for the superior performance of the French economy compared to the British since about 1950...

...The inner logic of the production process does indeed favor socialization, inasmuch as the "post-industrial" development of automation gives rise to a new hierarchy of functions no longer measurable by the cruder standards of an earlier epoch...

...Under optimal conditions, Social Democratic governments based on parliamentary majorities are able to make the welfare state a reality, the classic case being the Scandinavian countries...

...divorced from capital, so that all citizens have an equal claim upon the provision of goods and services, irrespective of property ownership, then clearly no such system is in existence in any industrially advanced country...

...In the political vocabulary of the welfare state, laborism is equated with socialism, so that socialist theory is made to take the blame for the typically capitalist behavior of employers and unions alike...

...39 price inflation, the effects of which are mostly felt by the elderly, the unemployed, the unskilled, and the nonunionized sections of the salariat...

...Much of the verbal confusion surrounding the British and Scandinavian variants of this sytem is due to the habit of equating laborism with socialism...

...Historically, it is the outcome of a situation in which wealth-creation takes precedence over all other considerations, as it must do in a scarcity economy...

...If economic conflict as a source of political antagonism is ruled out, as on our assumptions it would be, the residual cultural tensions in such a society need not and doubtless will not fall to zero...

...The prospects of socialism in the classical sense are brightest where economic pressures are negligible and people can envisage an egalitarian way of life on the basis of social ownership Of the means of production...

...Under somewhat less favorable circumstances, as in post-1945 Britain, they can still correct the worst W. A. Lewis, The Principles of Economic Planning (London: Dennis Dobson, 1949), p. 12...

...Socialists will find plenty to occupy them during the coming decades, if only because liberalism has disintegrated both as a philosophy and as a way of managing the political system...

...Unlike private capitalism it acts systematically to promote employment, if necessary through the wholesale waste of public funds on armaments and other unproductive forms of expenditure which (unlike public housing) have the advantage of not competing with the private sector...

...If we stay with Western Europe after 1945, the outstanding success along neoliberal lines has been the expansion of West Germany's external trade, a performance paradoxically helped along by military defeat and the resultant ban on heavy and wasteful arms expenditure...

...Needless to say, none of this has any relevance to the backward countries, with their rising populations and stagnant incomes per head, or to the Soviet orbit, where socialism performs the historic functions normally associated with the earlier stages of capital accumulation...

...Whatever falls short of such an arrangement is not socialism, even though it may be socially progressive in the sense of substituting social for economic (profit-and-loss) criteria...

...Unless and until a majority of the electorate in a democratically governed country is prepared to do without a continuous rise in living standards (as conventionally interpreted), economic considerations will take precedence over social and cultural claims...

...In economically backward countries, capital creation and the efficient use of labor are overwhelmingly the most important issues...