The Incoherence of Democratic Socialism: A Restatement

Makovi, Michael (2015): The Incoherence of Democratic Socialism: A Restatement.

Abstract

The criticism of democratic socialism by F. A. Hayek's Road to Serfdom (2007 [1944]) and John Jewkes's The New Ordeal by Planning (1968 [1948]) differs crucially from more recent arguments against market socialism made by Andrei Shleifer and Robert W. Vishny (1994). The Hayek-Jewkes argument therefore deserves a restatement. An economic analysis of the political institutions of democratic socialism shows that democratic socialism must necessarily fail for political (not economic) reasons even if nobody in authority has ill-intentions or abuses their power. Shleifer and Vishny show that market socialism will fail to properly incentive rationally utility-maximizing political actors, and that it will entail unacceptable economic inefficiencies. But Hayek and Jewkes go further and show that democracy as a political system and socialism as an economic system are fundamentally incompatible, making the system of democratic socialism logically incoherent.

• Item Type: MPRA Paper
• Language: English
• Keywords: Hayek; democratic socialism; market socialism; totalitarianism
• Subjects: A - General Economics and Teaching > A1 - General Economics > A12 - Relation of Economics to Other Disciplines; B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B24 - Socialist ; Marxist ; Sraffian; B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B25 - Historical ; Institutional ; Evolutionary ; Austrian; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B51 - Socialist ; Marxian ; Sraffian; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B53 - Austrian; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D70 - General; J - Labor and Demographic Economics > J0 - General > J00 - General; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J20 - General; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J30 - General; J - Labor and Demographic Economics > J4 - Particular Labor Markets > J47 - Coercive Labor Markets; P - Economic Systems > P1 - Capitalist Systems > P10 - General; P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P20 - General; P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P30 - General; P - Economic Systems > P5 - Comparative Economic Systems > P50 - General

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