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The Incoherence of Democratic Socialism: A Restatement

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

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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.

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