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How Socialism Fails

James R. Otteson, the Thomas W. Smith Presidential Chair in Business Ethics at Wake Forest University, possesses one of the greatest minds in defense of classical liberalism in the modern era. I say that as a friend but even more as an admirer. He has authored two definitive works on Adam Smith, a clear rebuttal of the ethics of Peter Singer, and now a crucial attack on the “near-socialist” theories so pervasive throughout the world today.

Socialism not only fails to work in reality, notes Otteson, it is also malicious in its ethics and morality—even if most of its current adherents believe themselves humane and well-intentioned. At its core, “socialism is a difficult and costly system of political economy that the specific conceptions of its moral values do not justify.” This, he continues, “constitutes the end of socialism, then, in both senses of the word end: an attempt to implement it will inevitably end in heavy costs to its community, and the philosophical case for socialism ends in failure.”

Otteson cites the historical examples of the USSR, Cuba, North Korea, and China. Following the horrors of 20th-century socialism in its various communist and fascistic forms, very few respectable politicians in the West today fully embrace the title “socialist.” Yet whatever the problems of socialism, many of its ideals linger, often taking weird, bizarre, and unpredictable forms. As the ex-socialist James Burnham predicted in the 1940s, we can no longer separate the capitalist from the socialist, the labor union from the corporation, the business sector from the political one. Rather we have become, to varying degrees, subjects of the managerial state. Though Otteson does not cite Burnham directly, the man’s ghost haunts this book.

Recognizing the nuances of a post-Berlin Wall world, Otteson labels the two predominant positions in the Western world “socialist-inclined” and “capitalist-inclined.” Socialist-inclined persons not only see centralization as economically effective and morally just, they also tend to “distrust granting local people or communities a wide scope to organize themselves according to their own lights.” While they might not despise individual liberty, they prefer centralized decision-making and, critically, they prize equality as the highest good.


One of this book’s greatest strengths is its author’s unwillingness to counter ideology with ideology. Otteson cites his own authorities, but he takes those with whom he disagrees very seriously. So, on the one hand, he borrows liberally from the ideas of Aristotle, the Scottish philosophers Adam Ferguson and David Hume, American radical individualist Albert Jay Nock, and the German free-market social thinker Wilhelm Röpke. On the other hand, he treats the theories of progressive and socialist philosophers such as John Rawls, Cass Sunstein, Martha Nussbaum, G.A. Cohen, and Peter Singer with the utmost respect.

In his writing style, Otteson carries the reader through his own way of thinking. We see not just his propositions and conclusions; the reader actually travels along with the author on his own intellectual journey. Otteson has too much respect for the intellectual process, his craft, and the human person to manipulate any of it. He offers everything he has—and it is considerable—for his art. thisarticleappears [1]

His attention to his own literary creation follows from his repulsion at those who would rule through a fatal conceit. Drawing upon Adam Smith’s arguments in The Theory of Moral Sentiments against the “Man of System,” Otteson diagnoses socialist-inclined persons’ current conceit as the “Great Mind Fallacy,” the belief that any one person or group of persons knows the details of the past, present, or necessary future well enough to govern in any total or systematic manner. Rather than being planned, real community—that is the community of free and dignified individuals—arises organically and naturally “as a result of human beings associating, and dissociating, with one another according to their own lights.”

The End of Socialism is at its best in Chapters 6 and 7: “Economics and Morality” and “Respect and Individuality.” Otteson’s voice soars here as he movingly explains the mysteries of the individual, creative person. “They are not Africans or kulaks or women or homosexuals or Christians or Jews or Irish or Tutsis or Hutus: they are unique, individual, precious human beings—each and every one of them.”

In each person resides a form or forms of genius, often untapped and neglected and, more often than not, only partially understood. In Otteson’s world, there is no essential left, right, black, white, Asian, male, female, Greek, or Jew. There is, at the essence of each of us, a gloriously flawed unrepeatable center of dignity and liberty. 

No politician, moral philosopher, or economic planner should demand certainty of tomorrow—or of the next hour. “Living free is uncertain and sometimes dangerous,” Otteson explains, “and it involves both success and failure.” In the end, though, dignity demands that we recognize our failures and our successes as our own. “The fact that human beings are autonomous entails that they are the authors and owners of their own lives,” Otteson writes, and “that they are thus responsible for their lives, and therefore that they possess a uniquely human dignity.” Far from being contradictory, dignity naturally adheres to choice. “Autonomy and judgment,” he writes, “go together” and “possession and use of judgment lead to decisions that others are morally bound to respect.”

In one of Otteson’s most interesting side trips, he explores the connection between the drive for equality and the puritanical impulse to control others. Most socialist-inclined persons sincerely seek equality, but in so doing they often conflate it with other values. When they speak or write of equality, they often mean control or nudging toward what is at that moment perceived as healthy for the mind and body.

Consider obesity, for example. Much contemporary socialist-inclined policy is motivated by a desire to combat obesity, which is growing in incidence and in the risks it posts to individuals’ health. Yet consider: it is possible for a person to be rationally obese? Imagine an intelligent person with a high level of education—a Ph.D. in philosophy, say—who makes this claim: “I am fully aware of the medical, social, and financial risks involved with obesity. Indeed, I have studied them carefully. Yet I am also fully aware of the delights and pleasures that I receive from eating what I like to eat, as well as the displeasure I receive from exercising.”

Otteson asks if this is not a legitimate and well-considered choice, at least according to the lights of the one who made it. Does the impulse that insists it is not really arise from a desire for equality—or is it a desire to choose for another what the socialist-inclined person wishes to be the norm? 

The End of Socialism is one of the best books written on political thought and the philosophy of classical liberalism since Friedrich Hayek’s The Constitution of Liberty. What will Otteson do next? Here’s hoping that in a subsequent book he explores the horrors of democratic despotisms, nationalisms, fundamentalisms, and terrorisms, as well as the glories of human creativity.

Bradley J. Birzer is author of the forthcoming Russell Kirk: American Conservative and co-founder of The Imaginative Conservative website.

58 Comments (Open | Close)

58 Comments To "How Socialism Fails"

#1 Comment By Jack On July 10, 2015 @ 12:03 am

I didn’t have to read past KD to see what misunderstandings would be rife throughout these comments.

Free markets do not lead to the evils that KD attributes to his poker game analogy. These are the fruits of the state.

Socialism is a natural, effective means of managing our affairs. We just need to accept that it is only successful on the smallest of scales– i.e families, congregations, neighborhoods. When you try to apply the natural social urges of selfless cooperation to a mandatory experience on a grand scale, you inevitably have abuses, imbalances and officially sanctioned winners and losers. Sorry, guys. You’ll have to keep it local.

#2 Comment By KD On July 10, 2015 @ 10:18 am

Alas Jack, if you read my comments, you will notice I said “capitalism” which is very different from “free markets”. Capitalism is essentially markets rigged in favor of capital. Moreover, what you find from Russia to China to Europe to America is various forms of state capitalism.

Although I agree with your comments about locality, the question is how can you protect and preserve your locality from an all-devouring global capitalist system. You certainly cannot by voting for neo-conservative or liberal internationalist politicians.

#3 Comment By KD On July 10, 2015 @ 10:26 am

The Hamiltonian vision comes down to managing trade, immigration, and finance in the national interest, and serving as a neutral umpire in the conflict between capital and labor. Free trade and open borders on the other hand is simply cheerleading for the capitalists. Moreover, unlike the 19th century capitalists, who cared deeply about the national interest and used their fortunes to help Americans, the billionaires of today seem to be focusing their charity elsewhere. So we are helping a cast of characters whose principal loyalties seem to lie somewhere else.

#4 Comment By Rebecca Trotter On July 13, 2015 @ 1:35 pm

This article and, I assume the book it reviews, fails to address the myriad of ways that the autonomous individual is something of a myth. Using the issue of obesity illustrates this quite nicely. The first problem is that we have bodies which are biologically and psychologically inclined to desire certain things with an intensity that can override rational, conscious choice, particularly when we are stressed, tired and overwhelmed as modern society tends to render us. But that’s just part of being human and not.really something that government or society can do much about. However, food manufacturers have invested many billions of dollars into developing food products which take advantage of our inherent weaknesses regarding food without any regard for the food’s effect on the human body. Expecting the average already stressed person to hold their own against this deliberate manipulation of our bodily weaknesses by monied interests is not particularly realistic. Then there’s the billions of dollars spent on marketing food to us in ways that manipulate weaknesses in our decision making processes, such as offering larger portions of food for relatively small additional costs. So it’s not so much that most people are making the mindful choice to disregard the problems caused by obesity in favor of increasing pleasure; rather the average Joe Blow is not doing a very good job of overcoming their unavoidable inherent weaknesses in the face of massive manipulation by profit seekers who have no regard for human flourishing.

Ideas about the beauty of the self directing individual, making their own decisions, unfettered by the excessive demands of government and society are lovely and all, but don’t align very well with the real world that free market capitalism has made.

#5 Comment By Poncho Guthrie On September 5, 2015 @ 6:09 pm

“In each person resides a form or forms of genius, often untapped and neglected and, more often than not, only partially understood. In Otteson’s world, there is no essential left, right, black, white, Asian, male, female, Greek, or Jew. There is, at the essence of each of us, a gloriously flawed unrepeatable center of dignity and liberty.”

The idea that this is somehow alien from socialism is a great flaw. Many socialists, particularly the witty and fabulous Oscar Wilde, tied socialism to individualism. Yes, there are beautiful, unique geniuses in the hearts of all people, from all places, of all classes. This is precisely why capitalism is a flawed system. At best, it allows a handful of people to develop their genius and individuality in a limited context; most, however, due to economic constraints, must hide their light under a bushel.


#6 Comment By Lou Ploch On September 3, 2016 @ 11:11 pm

If someone wants to buy the drug company that makes EpiPen and raise the price 500% or even 5000%, that’s capitalism at work. If the government steps in to try to limit profit, that’s socialism. End socialism, let the rich get richer and let the poor pay for the sake of profit. WE DO NOT WANT SOCIALISM…. If the poor can’t afford it, at least they will be off the welfare and social security rolls.

#7 Comment By Patrick On June 28, 2018 @ 11:03 pm

Lou I see what you were saying but using the pharmabro and an example in that case was a poor example at best if an example at all..

#8 Comment By Patrick On June 28, 2018 @ 11:05 pm

Poncho Guthrie, You do realize that socialism is shared misery.. It brings even the brightest light down to the lowest common denominator. Individual expression by the sweat of one’s own existence remains futile under the yolk of socialism.