The Future of an Illusion

Though there is much with which I agree in the splendid essays by Francisco Weffort and Francis Fukuyama, I want to focus here on certain points in their respective contributions that I find questionable or obscure.

Weffort is concerned with the aims and ideas that will characterize socialism in the future. After the communist debacle of 1989-91, one might well have asked if socialism even has a future. Weffort avoids this question, asking instead what the new meaning of socialism will be after the collapse of communism. After thus assuming without argument that socialism can survive, he tries to stake out its new meaning by setting up certain side constraints: future socialism will be 1) democratic (as opposed to authoritarian or totalitarian), and 2) compatible with private property and the market economy (as opposed to requiring state ownership and central command of the economy).

So far, so good. But given these constraints, what distinguishes democratic socialism from democratic capitalism? Apparently, there will be more state intervention—and hence less room for the market—for the sake of reducing inequalities. There is nothing futuristic about this position, which social democrats and Fabian socialists have been defending for decades. Weffort neither acknowledges this fact nor seeks to answer any of the criticisms that have been raised in the past against this brand of socialism.

The main point to be noted here is less the failure of totalitarian socialism than the drift and confusion that now beset democratic socialism. In Spain, the current socialist government favors free markets much more than the right-wing dictatorship of General Francisco Franco ever did. In other countries, socialism represents a conservative force, closely linked to certain interest groups (e.g., key trade union associations) that resist the changes which are advocated by groups favoring free markets.

Perhaps there is a way out. Perhaps the ideal of equality can be reinterpreted in some powerful new fashion. But to do so in a manner consistent with democracy and competitive markets will surely prove a task of extreme difficulty. Weffort's essay exemplifies this difficulty and does little to assuage my fear that in many countries democratic socialism might mean merely a new type of mercantilism advancing under the banner of equality. Nor do I see any signs of an attractive new socialist agenda. Just compare socialism's fading cultural appeal with the allure of the ecology movement. At least for the time being, socialism has lost its loveliness.

At the heart of socialism—at least of the Latin American variety—lies the belief that the economy ought to answer to the will of the people expressed through political channels. The ideal of a people's cooperative, where each person has an equal vote, is contrasted with the market, where there are huge inequalities of income and power. A contemporary democratic socialist may accept the market as the main allocator of resources, but still favors democratically enacted political interventions designed to correct market results in the name of equality. We all know that such interventions can be and have been carried out without destroying capitalism. We also know that they have certain costs and risks.

Schumpeter pointed out the naivete of the "classical doctrine of democracy," which holds that "the people itself decide[s] issues through the election of individuals who are to assemble in order to carry out its will."¹ Democratic socialists seem never to have learned this lesson, and often act instead as if the "classical doctrine" were true. "Democracy," wrote Schumpeter, "does not mean and cannot mean that the people actually rule in any obvious sense of the terms 'people' and 'rule.' Democracy means only that the people have the opportunity of accepting or refusing the men who are to rule them" (pp. 284-85).

That is why it is so easy even for elected politicians to use the power of the state to secure privileges. An interventionist political agenda is easily manipulated by powerful economic interest groups, as the history of Latin America amply demonstrates. If democratic socialists cannot solve this problem, their program of "correcting" market results in the name of equality will...