Liberalism vs Socialism

Both liberals and socialists value equality and liberty, but their visions for the world can be vastly different from each other. Perhaps the best way to distinguish between liberalism and socialism can be clarified by a single question: Who should own the means of production?

American Liberals would say that private individuals should own the means of production. However, they would also argue that the State should invest in a strong social safety net in order to combat the inequalities created by capitalism. The political philosopher John Rawls gives credit to this view in his work A Theory of Justice. Rawls provides two principles to follow in order to obtain a just and fair society:

The First Principle of Justice

First comes the priority of liberty: Each person is to have an equal right to the most extensive basic liberty compatible with a similar liberty for others.”

Basic liberties include the political liberty to vote and run for office, freedom of speech and assembly, freedom of religion, freedom of personal property and freedom from arbitrary arrest.

(Note: Rawls clarified in the revised version of A Theory of Justice that he did not consider private ownership of the means of production or the freedom of contract a “basic liberty,” although this point is the main source of contention by libertarians and conservatives)

The Second Principle of Justice

Social and economic inequalities are to be arranged so that:

“(a) they are to be of the greatest benefit to the least-advantaged members of society, consistent with the just savings principle. (the difference principle)
(b) offices and positions must be open to everyone under conditions of fair equality of opportunity(Rawls, 1971, p. 302; revised edition, p. 53-54)

Liberals can satisfy these principles by ensuring that inequalities exist only insofar that they increase the net prosperity for society (ex: create innovative technologies, pay taxes, etc.) while still maximizing basic liberties for all people.

Perhaps the best examples of this are the Scandinavian social democracies. These countries rank high in both economic freedom through “free”-market practices and egalitarianism through supporting a giant welfare state. Given the means of production are owned by private individuals in these countries, they represent the tip of the iceberg of what is possible within liberal democracies.

Socialists, in contrast, would say that the workers should democratically own the means of production. They argue that this would naturally create a more egalitarian society because profit sharing would better reflect workers contribution and profits would no longer be concentrated to a small number of capitalists. Most would agree that this is a noble and ideal goal, but figuring out how this transition of power would occur has been socialism’s major shortcoming.

The other hurdle socialism faces is its perception in the public eye. It’s history is filled with staunch authoritarianism and state violence trying to achieve it, in addition to it being consistently misunderstood by people without a clear understanding of capitalism. Outside of intellectual circles, being a socialist in America is one of the worst things you can be.

This claim of course is ridiculous. One could be a socialist and believe in all of the same liberties laid out in Rawls First Principle of Justice. One could also be a socialist and have social conservative values (which are the values of the Amish). Indeed, socialism is not mutually exclusive to social ideologies- it is a stance on economics and nothing more.

One of the best critics of left wing liberalism came from the socialist G.A. Cohen in his book If You’re An Egalitarian, How Come You’re So Rich? Cohen elegantly points out that liberal rhetoric on equality doesn’t reflect what individuals do with their money. How is it that liberals demand our institutions to act altruistically, but on the other hand say individuals should act in their own self interest? The challenge for a liberal America is to convince 300 million Ayn Rand’s that an egalitarian society is in their self interest and to act on it.

Several questions remain for liberal democracies: To which degree of inequality is appropriate morally? To which degree of inequality can be tolerated economically? Should the CEO to average worker be 300 to 1? 100 to 1? 20 to 1? And perhaps most importantly: Can capitalism continue to evolve in the technological age or will it succumb to socialism? I’ll leave you with this thought provoking video: Humans need not apply.



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