The following is a reply by Nick Beams, a member of the World Socialist Web Site Editorial Board, to an email from BM, commenting on a previous exchange “Reply to a letter on socialism and economic laws”. BM, who describes himself as “a Reagan Conservative Republican and a Jeffersonian Liberal,” begins by declaring: “Your letter though intelligently written still refuses to acknowledge the true nature of humankind. Centralised planning does not work and history has shown that to be true and so does the present. The freer the society the more prosperous it is.” The full text of BM's email is posted at “Reply to Nick Beams”

Thank you for your e-mail for it provides us with the opportunity to get to grips with a number of the arguments that are frequently advanced in one form or another against socialism and socialist planning.

Your defence of the capitalist market boils down to the following argument: socialism is doomed to failure because it is incompatible with human nature and freedom, whose true expression can only be found under the free market system.

I propose to begin my reply with an examination of the views of Thomas Jefferson since they form the core of your argument. Then I shall turn to Ronald Reagan.

The political ideas of Jefferson, and the other leaders of the American Revolution, were rooted in the ideas of Enlightenment of the 18th century, many of which in turn had developed from the political theories advanced both prior to and in the aftermath of the English Civil War (1642-49). The social context in which these ideas were advanced was the struggle to overturn the political structures of feudalist or absolutist forms of rule which were coming into increasing contradiction with the new forms of economic organisation associated with the development of capitalism.

In the latter part of the 17th century John Locke had identified certain inalienable rights—the right to life, liberty and property. According to Locke, every man was the sole proprietor of his own person and capacities and that his right to property derived from his right to enjoy the fruits of his own labour.

The Canadian political theorist C. B. Macpherson has shown how the political concepts developed by Locke were intimately bound up with the rise of the free market and individual property rights. Past societies had, of course, developed concepts of property. What was new in the 17th century was the development of exclusive private property, bound up with the development of capitalist relations. This involved a sharp break with the previous conception that land and the fruits of the earth were originally given to mankind in common.

The significance of Locke, as Macpherson draws out, is that he provided the ideological basis for exclusive private property, so essential to the development of the new mode of production.

“[I]f the new kind of property required by the capitalist market society, i.e. property as exclusive, alienable right to all kinds of material things including land and capital, was to be thought to be justified, the right would have to be based on something more universal than the old feudal or customary class differentials in supposed needs and capacities.

“The universal basis was found in ‘labour'. Every man had a property in his own labour. And from the postulate that a man's labour was peculiarly, exclusively his own, all that was needed followed. The postulate reinforced the concept of property as exclusion. As his labour was his own, so was the land with which he had mixed his labour, and the capital which he had accumulated by means of applying his labour. This was the principle that Locke made central to the liberal concept of property” [C. B. Macpherson, Democratic Theory, Oxford University Press 1990 pp. 129-130].

By the time of Jefferson, a century later, the notion of property as a natural condition of human existence had already come under criticism. In his Discourse on the Origin and Foundation of Inequality Among Men, published in 1755, Rousseau explained that in his natural state man did not own property, it was the product of the growth of civilisation and this civilisation had come to enslave man. In man's natural state the earth and its fruits had belonged to no one and hence to all. The establishment of private property was the source of inequality, crimes, wars and murder.

The American Declaration of Independence

This critique had a profound impact on Jefferson among others. As David North points out in his essay Equality, the Rights of Man and the Birth of Socialism, the Declaration of Independence was not merely a restatement of the Lockean theory of natural rights.

“There is no doubt that the writings of Locke exerted an immense influence on the generation of 1776. But nearly a century had passed since Locke had written his Second Treatise in Civil Government. And inasmuch as the conceptual products of the human mind are not static, but change under the influence of the objective reality which they reflect and strive to reproduce in abstract form, the formulation of the theory of natural rights in the Declaration of Independence differed fundamentally, in one highly significant respect, from that of Locke's Second Treatise. The three natural rights recognised by Locke were that of life, liberty and property, or estate.

“But in the Declaration of Independence, the ‘inherent and inalienable rights' identified by Jefferson are ‘life, liberty and the pursuit of happiness.' Why did Jefferson depart from the Lockean formulation and substitute for property ‘the pursuit of happiness'? It will not do to claim that the difference was of no significance. Jefferson and his associates were too steeped in the political thought of their age to choose their words carelessly, particularly on such a crucial matter” [David North, Equality, the Rights of Man and the Birth of Socialism International Worker Books pp. 11-12].

Jefferson was not, as North points out, some kind of “proto-socialist who opposed the institution of private property.” But he was aware that the unfettered rights of property could endanger life and liberty. This was why he was of the view that it should remain small.

Jefferson certainly argued that individual property in the means of one's own labour, that is, in the means of production, was necessary for the maintenance of liberty. Ownership of small property was the safeguard against both government tyranny and economic oppression. In Jefferson's conception, freedom from both arbitrary government and coerced labour was based on the individual private ownership of land and the means of production.

But the very logic of a free market society based on small property-owners and producers, which Jefferson saw as the basis for life, liberty and the pursuit of happiness, inevitably results in the dispossession of the small producer and his transformation into a wage worker and the concentration of the means of production in fewer and fewer hands.

After all, the aim of competition, the basis of the free market, is not to perpetuate it for its own sake, but to drive competitors to the wall and concentrate private ownership. Jefferson himself was aware of these processes and the dangers they held for his vision of freedom. This is why he wanted America to remain a country of small proprietors.

But small-scale production and capitalist private ownership are inherently incompatible. The very development of the productive forces, which is driven on by the competitive struggle to accumulate profit, leads to an ever-greater concentration of ownership. It was precisely because the scale of production developed far beyond the scope of the individual owner that the joint stock company arose along with a series of financial institutions—the banks and the stock market—through which the resources of society could be mobilised to carry out increasingly large-scale production. From the owner-proprietor of Jefferson's day, we have seen the rise of the giant national corporation at the end of the 19th century, the development of the multinational enterprise by the middle of 20th and today, at the beginning of the 21st, the rise of the transnational corporation.

Transformation in the functions of property

This has brought about a transformation in the functions of property. The theory which identifies freedom with private ownership is based on the claim that each individual has the natural right to the fruits of their own labour and that private property is the means through which this right is secured.

But concentration of ownership and the separation of the mass of the population from the means of production with nothing to sell but their labour power to the owners of capital means that private property itself has long ago undergone a transformation. No longer is it a social mechanism through which individuals secure the fruits of their own labour, it is rather the mechanism through which capital secures the fruits of other people's labour in the form of profit.

In other words, whereas in Jefferson's day, the defence of private ownership could be said to be the defence of the rights of the individual against the tyranny of government or absolutist forms of rule, today the defence of private property (in the means of production) is the defence of the despotic rule of vast corporations and capital in general over the mass of the population.

And this rule brooks no opposition. Margaret Thatcher, Ronald Reagan's trans-Atlantic partner in the “free market”, got it absolutely right when she insisted that “there is no alternative”—the rule of capital does not brook any opposition. But what does this mean for democracy?

The very essence of democracy is surely the right to choose, the right of the majority of the population to decide between alternative courses of action. That, however, is impossible in present-day society which is subordinated to the profit requirements of capital, exercised through the dictates of the free market to which there is no alternative. In short to ensure that “government of the people, by the people and for the people” shall not perish from the earth—to cite another great American democrat—it is necessary to overturn the despotic rule of capital on a global scale.

This requires the development of new forms of property. The private ownership of the means of production has long ago ceased to form the basis for the defence of the rights of the individual. Those rights can only be maintained and expanded today with the establishment of new property forms. Private property, based on exclusion, must be replaced by common property based on inclusion. The vast productive forces which have been created by the common labour of the whole of mankind must be brought into common ownership and democratically controlled by the associated producers. Only in this way can human freedom, rather than the freedom of capital, be assured. This is the essence of the socialist perspective.

Thomas Jefferson proclaimed the necessity of the American Revolution and the right to overthrow British rule in the name of “life, liberty and the pursuit of happiness.” To be sure, Jefferson and his fellow Enlightenment thinkers represented the interests of the rising bourgeoisie. But the ideals they articulated reach across the last two centuries to the present day because they advanced the broader cause of human emancipation and freedom.

However, anyone who claims adherence to these ideals, such as yourself, must, if they are intellectually honest, ask themselves what has happened to these great goals in present-day society?

Life, liberty and the pursuit of happiness

An examination of each of them shows how its realisation is incompatible with the continuation of the capitalist mode of production, based on the private ownership of socially produced wealth, and its subordination to the dictates of private profit.

Take the right to life. At this very moment millions of people all over the world, a great many of them children, are dying either because of inadequate food, decent drinking water or basic medical facilities. Yet the means exist to feed, clothe and house the population of the world in common decency. However, the application of these resources to meet human need is blocked by the operations of the profit system. In Africa, for example, many countries are forced to pay the international banks and financial institutions more in debt servicing than they spend on basic health care. Life-saving drugs for AIDS and other diseases are not made available because of the “property rights” of the pharmaceutical corporations.

In the advanced capitalist countries, health services are increasingly blighted by the development of a two-class system in which access to treatment is restricted by the ability to pay. In the United States, all the furies of the private enterprise system rise up at the merest mention of the necessity to establish a universal health care system with access to all on the basis of need.

Liberty, if it is to have any meaning, must imply a secure existence. When Jefferson spoke of liberty he had in mind the despotic acts of governments and authorities defending the old order. But what liberty do ordinary working people, whether blue collar or white collar professionals, enjoy when they can lose their livelihood overnight as the corporation for which they work decrees that they must be “downsized” in the interests of the “bottom line?”

And what of happiness? It is of course inconceivable without the provision, as a right, of the basic necessities for a decent existence. But more than this, happiness involves the conscious preparation of the future, the sense of participation in the development of one's individual talents and capacities as part of a wider project, the advancement of society itself in which to use Marx's words “the free development of each is the condition for the free development of all.”

The more capital has tightened its grip on society, excluding genuine democratic participation in its organisation, with the propagation of the notion that there is no alternative to the dictates of the market, the more it has sought to promote the conception that human happiness is the accumulation of money and wealth—the acquisition of more things.

One need only point to just a few of the present social ills to indicate how unsuccessful this project has been. The school shootings in the US and the incidences of mass murder, for example the mass killing of 36 people in the Australian “holiday isle” of Tasmania, point to a deeply troubled society. No less indicative is the rise of ethnic, national and religious conflicts all over the world. In Australia, the third largest cause of the burden of disease, after heart disease and smoking, is depression. It is has been estimated that some 20 percent of 12-16 year-olds suffer from some form of mental illness. At the turn of the century, five teenage males per 100,000 committed suicide. Now the figure is 20 per 100,000.

Citing Ronald Reagan, you point to the need to release the individual genius, talent and energy. No socialist would disagree. In fact, in a brilliant anticipation of the information and technological revolution now unfolding, Marx explained almost 150 years ago that the very development of the productive forces under capitalism made ever more important the application of science and technology. General social knowledge, he explained, becomes the most decisive force in the further development of material wealth, the basis for the achievement of genuine human freedom.

But the development of such knowledge requires the expansion of education, not just for the privileged few, but for the whole of society. But what do we find? In the poorest countries, education budgets are cut under “structural adjustment programs” dictated by the International Monetary Funds in the interests of the banks. In the major capitalist countries, the growth of social inequality over the past two decades has seen the development, as in health, of a two-class system in which education depends increasingly on the ability to pay. In the United States this has reached such a point that families are now literally gambling their life-savings and future on the stock market in order to try to secure the funds to provide a decent education for their children. Release talent and energy ... absolutely. But in order to do that it is necessary to release society from the coils of the profit system and establish it on new foundations.

Socialism and the Soviet Union

In conclusion, let me turn to the issues raised by your citations from Ronald Reagan. The basis of Reagan's pronouncements, as with so many opponents of socialism, is his identification of the Soviet Union with communism. Such identification, however, involves the abandonment of all standards of intellectual rigour.

Just as we do not judge an individual by what he or she might say about themselves but from what they do, so we cannot judge a society by the label it might attach to itself. You would not, for example, accept the claim of a society to be “democratic” if it systematically jailed, repressed and murdered all the proponents of democracy.

But you, like so many others, accept the proposition that the Soviet Union under the Stalinist bureaucracy was in some way “socialist” or “communist”, ignoring the fact that the basis of bureaucratic rule was the jailing and mass murder of socialists and communists. It is a fact that more revolutionists, socialists, Marxists and communists were murdered by the Stalinist regime than by any fascist regime, that of Hitler included.

In the face of this glaring contradiction, we are forced to pose the following question: why does the Big Lie of the 20th century—that is, that the Stalinist regime in the Soviet Union in any way represented communism—continue to persist and is immediately brought forward in reply to the socialist critique of capitalism.

The answer to this question lies in the fact that in politics a lie persists if it serves definite social interests.

For its part, the Stalinist bureaucracy, having usurped power from the working class and ever fearful of being overturned from below, proclaimed itself to be the legitimate continuation of the October Revolution of 1917.

In the West, the bourgeoisie and its representatives have always found it useful to claim that the Soviet Union was “communist” in order to deflect socialist criticism of capitalist rule. The claim of the bourgeoisie that its right to rule rested on its adherence to “democracy”, in contrast to “communist dictatorship,” would have been far shakier if there were a widespread understanding of the real course of history and that Stalinism did not represent Marxism or communism but was based on its suppression.

In your e-mail you assert that the experience of the former Soviet Union and what you call “Communist China” demonstrates that centralised planning does not work. But here we face the same issues, which arose with regard to the designation of the Soviet Union as “communist”.

The emergence of the Stalinist bureaucracy, and its usurpation of political power from the working class, which had carried out the revolution, meant that planning, in the real meaning of the term, could never be carried out in the Soviet Union. This has far-reaching implications for an understanding of how genuine socialist planning will be undertaken.

The overturn of capitalist rule will not see the overnight abolition of the market. The price mechanism will still be needed for a whole period as a guide in the provision of information regarding the relative costs of alternative production methods of investment decisions. But increasingly it will be made subordinate to and eventually replaced by the conscious regulation of the economy according to a plan, decided on, checked and altered to meet changing circumstances through the involvement of workers and the population as a whole in process of economic decision-making.

In the Soviet Union, such planning was impossible because it would have immediately threatened the privileged social position of the bureaucracy and its monopoly of political power. As Trotsky explained, the demand for Soviet democracy was not the demand of an abstract policy much less the expression of a moral ideal but an economic necessity. The establishment of a planned economy, he wrote, was “by its very nature insoluble without the daily experience of millions, without their critical review of their own collective experience, without their expression of their needs and demands and could not be carried out within the confines of the official sanctums” [Trotsky, Writings 1932-33 p.96].

The collapse of the Soviet Union did not constitute a refutation of socialist planning. Rather, it was a verification of the prediction made by Leon Trotsky, long before Ronald Reagan appeared on the scene, of the inherent unviability of the nationalist program of the Stalinist apparatus—the construction of “socialism in one country”—and the destructive economic consequences of its bureaucratic suppression of the working class.

To sum up let me underscore the point I made in my “Reply to a letter on socialism and economic laws.” The establishment of a socialist society is not an ideal but a necessity if mankind is to advance.

The goal of human freedom and a free society, towards which Jefferson and the revolutionary thinkers of his day made such great strides, can only be achieved if the tyranny of global capital and its rule through the “free market” is overturned. It must be replaced by a social system in which the productive forces, created by the intellectual and physical labour of working people the world over, are harnessed by them to meet their needs.