Indeed! Why Socialism?!? A Response to Albert Einstein by Kevin Craig
Kevin Craig is founder of Vine & Fig Tree, a non-profit educational ministry promoting "Liberty Under God," a shorthand for the fulfillment of the prophecy of the Old Testament Prophet Micah, who spoke of a day when we beat our swords into plowshares and everyone dwells securely under his own vine and fig tree. More here.
My response to Einstein's article in the left-hand column is in this column.
Albert Einstein is the world-famous physicist. This article was originally published in the first issue of Monthly Review (May 1949). It was subsequently published in May 1998 to commemorate the first issue of MR‘s fiftieth year. —The Editors
So who am I to argue with a great mind like Einstein? Notice how he begins his article:
Is it advisable for one who is not an expert on economic and social issues to express views on the subject of socialism? I believe for a number of reasons that it is.
If it's good enough for Einstein, it's good enough for the rest of us too.
Surprisingly, Einstein's essay is remarkably fuzzy-headed. It is filled with slogans, myths, half-truths, and fallacies. It would take many hours to refute it step-by-step. The links I've provided can help fill this bill. Einstein's article is persuasive only to an audience that is the victim of educational malpractice.
Let's start by defining terms, something Einstein doesn't do.
I define "socialism" as an economic system in which consumers are forbidden from buying goods and services of their choice, and producers are prohibited from selling goods and services of their choice, and from hiring Smith as a worker if Smith is willing to work for less than Jones is willing to work. Under "socialism," violators of these prohibitions will hear a knock on their door in the middle of the night by armed agents of the government who will shoot the violator's dog and take the violator to prison, or kill the violator if the violator resists.
Those who defend "capitalism" define "capitalism" as the economic system which repudiates all initiation of force or threats of violence by the government, by
businesses, and by consumers. Capitalism means freedom. Capitalism means consumers are free to buy whatever they want, or sell what they buy. If they can't find what they want to buy, they are free to go into business for themselves and sell products they believe will make them a profit. Capitalism means I have the freedom to get a job by my willingness to work for a lower wage rate than a competing worker.
I see no relevant difference between use of force by socialists and the use of force by fascists.
Those who defend Capitalism oppose any government-corporation nexus. Those who attack Capitalism claim that Capitalism IS a corporate-government nexus. But that is "fascism." Capitalism is Freedom.
Capitalism depends on the moral
character of the people. Socialism depends on force, coercion, and threats of violence waged against the majority of the people by an elite party oligarchy. Einstein says below that Capitalism turns into an elite corporate oligopoly, but at least people are free under Capitalism to boycott all corporations. There are no boycotts against the State under Socialism. Boycotts are met with tanks. WalMart doesn't own tanks. Don't shop there if you don't like WalMart. Tell your friends on Facebook not to shop there. There is no Facebook under Socialism. There is only one aisle under Socialism.
Let us first consider the question from the point of view of scientific knowledge. It might appear that there are no essential methodological differences between astronomy and economics: scientists in both fields attempt to discover laws of general acceptability for a circumscribed group of phenomena in order to make the interconnection of these phenomena as clearly understandable as possible. But in reality such methodological differences do exist. The discovery of general laws in the field of economics is made difficult by the circumstance that observed economic phenomena are often affected by many factors which are very hard to evaluate separately.
The main reason why economics is different from astronomy is because astronomical activity is objective while economic activity is subjective. The measurement of the distance between the earth and the moon is objective; the measurement of the difference between a new car and a remodeled kitchen is a matter of subjective preference in the mind of a consumer, and the value a consumer attaches to economic goods and the choice to buy a new car rather than remodel a kitchen cannot be quantified or studied by bureaucrats the same way objects in space can be measured.
In addition, the experience which has accumulated since the beginning of the so-called civilized period of human history has—as is well known—been largely influenced and limited by causes which are by no means exclusively economic in nature. For example, most of the major states of history owed their existence to conquest. The conquering peoples established themselves, legally and economically, as the privileged class of the conquered country. They seized for themselves a monopoly of the land ownership and appointed a priesthood from among their own ranks. The priests, in control of education, made the class division of society into a permanent institution and created a system of values by which the people were thenceforth, to a large extent unconsciously, guided in their social behavior.
The point here is that economic choices can be distorted by external compulsion by princes or pirates.
Critical point: the idea of "the State" originated in conquest. Not just "most" states, as Einstein says, but the entire institution. The entire concept of "the State" originated in conquest and plunder. Einstein's point was made by the German sociologist, Franz Oppenheimer, on whom see here and here.
Einstein is generally correct, but his criticism of compulsion is indirectly a criticism of government Socialism, not Capitalism.
But historic tradition is, so to speak, of yesterday; nowhere have we really overcome what Thorstein Veblen called “the predatory phase” of human development. The observable economic facts belong to that phase and even such laws as we can derive from them are not applicable to other phases. Since the real purpose of socialism is precisely to overcome and advance beyond the predatory phase of human development, economic science in its present state can throw little light on the socialist society of the future.
"Economic science" was unable to predict the personal computer in 1850, and economic science cannot predict today what the 22nd century will be like.
Second, socialism is directed towards a social-ethical end. Science, however, cannot create ends and, even less, instill them in human beings; science, at most, can supply the means by which to attain certain ends. But the ends themselves are conceived by personalities with lofty ethical ideals and—if these ends are not stillborn, but vital and vigorous—are adopted and carried forward by those many human beings who, half unconsciously, determine the slow evolution of society.
Capitalism trusts the "slow evolution of society." Socialism wants to create utopia "ex nihilo."
For these reasons, we should be on our guard not to overestimate science and scientific methods when it is a question of human problems; and we should not assume that experts are the only ones who have a right to express themselves on questions affecting the organization of society.
The same thing should be said about politicians, who would control everything under Socialism. We should not overestimate politicians and their plans for human problems. I trust those who use persuasion more than I trust those who resort to compulsion.
Innumerable voices have been asserting for some time now that human society is passing through a crisis, that its stability has been gravely shattered. It is characteristic of such a situation that individuals feel indifferent or even hostile toward the group, small or large, to which they belong. In order to illustrate my meaning, let me record here a personal experience. I recently discussed with an intelligent and well-disposed man the threat of another war, which in my opinion would seriously endanger the existence of mankind, and I remarked that only a supra-national organization would offer protection from that danger. Thereupon my visitor, very calmly and coolly, said to me: “Why are you so deeply opposed to the disappearance of the human race?”
Keep in mind that Einstein was writing this over 60 years ago.
I am sure that as little as a century ago no one would have so lightly made a statement of this kind. It is the statement of a man who has striven in vain to attain an equilibrium within himself and has more or less lost hope of succeeding. It is the expression of a painful solitude and isolation from which so many people are suffering in these days. What is the cause? Is there a way out?
It is easy to raise such questions, but difficult to answer them with any degree of assurance. I must try, however, as best I can, although I am very conscious of the fact that our feelings and strivings are often contradictory and obscure and that they cannot be expressed in easy and simple formulas.
Man is, at one and the same time, a solitary being and a social being. As a solitary being, he attempts to protect his own existence and that of those who are closest to him, to satisfy his personal desires, and to develop his innate abilities. As a social being, he seeks to gain the recognition and affection of his fellow human beings, to share in their pleasures, to comfort them in their sorrows, and to improve their conditions of life. Only the existence of these varied, frequently conflicting, strivings accounts for the special character of a man, and their specific combination determines the extent to which an individual can achieve an inner equilibrium and can contribute to the well-being of society. It is quite possible that the relative strength of these two drives is, in the main, fixed by inheritance. But the personality that finally emerges is largely formed by the
environment in which a man happens to find himself during his development, by the structure of the society in which he grows up, by the tradition of that society, and by its appraisal of particular types of behavior. The abstract concept “society” means to the individual human being the sum total of his direct and indirect relations to his contemporaries and to all the people of earlier generations. The individual is able to think, feel, strive, and work by himself; but he depends so much upon society—in his physical, intellectual, and emotional existence—that it is impossible to think of him, or to understand him, outside the framework of society. It is “society” which provides man with food, clothing, a home, the tools of work, language, the forms of thought, and most of the content of thought; his life is made possible through the labor and the accomplishments of the many millions past and present who are all hidden behind the small word “society.”
The most important definition of "society" is one which distinguishes it from "the State."
The idea that man is a "social animal" was set forth by Aristotle in his defense of the polis. Aristotle, like Einstein, was wrong. Man is a commercial being, but not a political being -- except when he seeks to "be as god."
It is evident, therefore, that the dependence of the individual upon society is a fact of nature which cannot be abolished—just as in the case of ants and bees. However, while the whole life process of ants and bees is fixed down to the smallest detail by rigid, hereditary instincts, the social pattern and interrelationships of human beings are very variable and susceptible to change. Memory, the capacity to make new combinations, the gift of oral communication have made possible developments among human being which are not dictated by biological necessities. Such developments manifest themselves in traditions, institutions, and organizations; in literature; in scientific and engineering accomplishments; in works of art. This explains how it happens that, in a certain sense, man can influence his life through his own conduct, and that in this process conscious thinking and wanting can play a part.
Socialism is more like the bee hive than "society."
Man acquires at birth, through heredity, a biological constitution which we must consider fixed and unalterable, including the natural urges which are characteristic of the human species. In addition, during his lifetime, he acquires a cultural constitution which he adopts from society through communication and through many other types of influences. It is this cultural constitution which, with the passage of time, is subject to change and which determines to a very large extent the relationship between the individual and society. Modern anthropology has taught us, through comparative investigation of so-called primitive cultures, that the social behavior of human beings may differ greatly, depending upon prevailing cultural patterns and the types of organization which predominate in society. It is on this that those who are striving to improve the lot of man
may ground their hopes: human beings are not condemned, because of their biological constitution, to annihilate each other or to be at the mercy of a cruel, self-inflicted fate.
How do "cultural patterns" and "types of organization" come into existence apart from the actions of men? How did the cultural constitution of men change in order to create "cultural patterns" and "types of organization" which did not exist in the past? Has Einstein committed the chicken-and-egg fallacy?
If we ask ourselves how the structure of society and the cultural attitude of man should be changed in order to make human life as satisfying as possible, we should constantly be conscious of the fact that there are certain conditions which we are unable to modify. As mentioned before, the biological nature of man is, for all practical purposes, not subject to change. Furthermore, technological and demographic developments of the last few centuries have created conditions which are here to stay. In relatively densely settled populations with the goods which are indispensable to their continued existence, an extreme division of labor and a highly-centralized productive apparatus are absolutely necessary. The time—which, looking back, seems so idyllic—is gone forever when individuals or relatively small groups could be completely self-sufficient. It is only
a slight exaggeration to say that mankind constitutes even now a planetary community of production and consumption.
There is nothing inherently bad about this. The "division of labor" is a good thing. "Self-sufficiency" means poverty.
I have now reached the point where I may indicate briefly what to me constitutes the essence of the crisis of our time. It concerns the relationship of the individual to society. The individual has become more conscious than ever of his dependence upon society. But he does not experience this dependence as a positive asset, as an organic tie, as a protective force, but rather as a threat to his natural rights, or even to his economic existence. Moreover, his position in society is such that the egotistical drives of his make-up are constantly being accentuated, while his social drives, which are by nature weaker, progressively deteriorate. All human beings, whatever their position in society, are suffering from this process of deterioration. Unknowingly prisoners of their own egotism, they feel insecure, lonely, and deprived of the naive, simple, and unsophisticated enjoyment of life. Man can find meaning
in life, short and perilous as it is, only through devoting himself to society.
The key here is to understand economics and the division of labor, and to appreciate the gifts of others, and the value of one's own specialized contribution to society. This can be done best under Capitalism. "Devoting oneself to society" can be done under Capitalism. The worker who works every day on his "routine" job performs a specialized function under the division of labor that benefits all of society. It's a matter of understanding and perspective. Education can teach this to people, or it can try to scare people into socialism.
The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil. We see before us a huge community of producers the members of which are unceasingly striving to deprive each other of the fruits of their collective labor—not by force, but on the whole in faithful compliance with legally established rules. In this respect, it is important to realize that the means of production—that is to say, the entire productive capacity that is needed for producing consumer goods as well as additional capital goods—may legally be, and for the most part are, the private property of individuals.
I don't "see" producers striving to deprive me of anything. Producers are trying to deprive their competitors of my money. Producers are striving to produce things I want -- at a price that deprives me of less money in exchange for the things I want than the producer's competitor.
For the sake of simplicity, in the discussion that follows I shall call “workers” all those who do not share in the ownership of the means of production—although this does not quite correspond to the customary use of the term. The owner of the means of production is in a position to purchase the labor power of the worker. By using the means of production, the worker produces new goods which become the property of the capitalist. The essential point about this process is the relation between what the worker produces and what he is paid, both measured in terms of real value. Insofar as the labor contract is “free,” what the worker receives is determined not by the real value of the goods he produces, but by his minimum needs and by the capitalists’ requirements for labor power in relation to the number of workers competing for jobs. It is important
to understand that even in theory the payment of the worker is not determined by the value of his product.
Most workers share in the ownership of the means of production through investments in pensions, insurance, and other retirement vehicles.
The phrase "real value" is a dead give-away that Dr. Einstein doesn't understand economics. The value of the goods produced by the worker is not created by the labor put into the goods, but upon whether the consumer wants to buy those goods or some other goods. See the question about a new car or a remodeled kitchen at the top of this page.
Private capital tends to become concentrated in few hands,
I broke Einstein's next paragraph into numbered propositions for easy comparison.
1. I dispute the claim that private capital "tends" to become concentrated in few hands in the absence of Socialism or other government intervention. See Chapter 10 of George Reisman's text, Capitalism.
2. partly because of competition among the capitalists, and
2. "Competition" would not cause this tendency, quite the reverse. Freedom allows more people to compete with existing private capital by developing new private capital.
3. partly because technological development
3. "Technological development" means it is cheaper to compete. It can also break down functions into smaller competing units. Who owns the private capital used to produce computers? Is it in a few hands, or in almost innumerable hands? The private capital used to produce the hard drive is not in the same hands as the capital used to produce the processor chip. This trend toward smaller units of capital is also found in the next claim:
4. and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones.
4. The increasing division of labor encourage the formation of smaller units of production, as specialization increases. There is no reason why larger units of production in one area of specialization would operate at the expense of smaller ones in that same area, or in different areas. One small entrepreneur armed with the technology of a bulldozer can compete with a larger corporation armed with hundreds of shovel-wielding slaves.
5. The result of these developments is an oligarchy of private capital
5. In the absence of Socialism or other government intervention, there is no inherent tendency toward oligarchy under freedom of competition. While there might be a momentary accumulation of capital in, say, the aluminum industry, there is no evidence that this harms consumers, and technological innovation creates substances which can compete against aluminum, just as aluminum competes against steel in certain areas.
6. the enormous power of which cannot be effectively checked even by a democratically organized political society.
6. It is true that "democratically organized political society" is largely an ineffectual illusion. But since there is no evidence that "oligarchy" harms consumers, what needs to be "checked" by "democratically organized political society?" Is mere "bigness" or "oneness" a harm?
7. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature.
7. The Marxist worries that the big capitalist fish will swallow the little capitalist fish, until finally all capital is head by a global super-conglomerate. The socialist dream is to replace Bill Gates and the Board of Directors of this conglomerate with Jane Fonda and a Board that will operate this conglomerate selflessly in the interests of mankind. But Einstein is unwittingly correct: the political process is more corrupt and monopolistic than free and open competition in the Market.
8. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population.
8. The underprivileged sections of the population are better off under Capitalism than they are under Socialism. The gap between them and the richest sections may be greater under Capitalism, but this is a "problem" only for the envious. Socialism is institutionalized envy.
9. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education).
9. This claim is demonstrably false in the age of Internet technology. It is in fact the government that seeks to protect monopolies in order to prohibit speech which critiques the State and competes against its myths.
10. It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights.
The situation prevailing in an economy based on the private ownership of capital is thus characterized by two main principles: first, means of production (capital) are privately owned and the owners dispose of them as they see fit; second, the labor contract is free. Of course, there is no such thing as a pure capitalist society in this sense. In particular, it should be noted that the workers, through long and bitter political struggles, have succeeded in securing a somewhat improved form of the “free labor contract” for certain categories of workers. But taken as a whole, the present day economy does not differ much from “pure” capitalism.
The last sentence in this paragraph is completely false. Our economy is largely fascist or socialist, not free from government manipulation and regulation.
Production is carried on for profit, not for use.
There is no provision that all those able and willing to work will always be in a position to find employment;
an “army of unemployed” almost always exists.
The worker is constantly in fear of losing his job.
Since unemployed and poorly paid workers do not provide a profitable market, the production of consumers’ goods is restricted, and great hardship is the consequence.
Technological progress frequently results in more unemployment rather than in an easing of the burden of work for all.
The profit motive, in conjunction with competition among capitalists, is responsible for an instability in the accumulation and utilization of capital which leads to increasingly severe depressions.
Unlimited competition leads to a huge waste of labor, and to that crippling of the social consciousness of individuals which I mentioned before.
Once again, I have broken this paragraph into numbered propositions. They are all false, and do not logically lead to the conclusion that a government-controlled life is better than a life of freedom.
A business will not profit unless consumers can "use" the product and are willing voluntarily to buy it.
The able-bodied unemployed always choose to be unemployed, rather than be employed at a wage rate they consider to be "unacceptable."
The first worker fears the second worker who is willing to work at a wage rate the first worker finds "unacceptable," but the second worker finds acceptable.
Relatively poorly paid workers have more purchasing power under Capitalism than under Socialism. This is not because they are paid a higher wage. Consumers have more purchasing power when capitalists lower the costs of production.
Technology never results in more unemployment. Not in the long run. Are there more or fewer jobs today than before the invention of cars, computers, "labor-saving appliances," etc.? Clearly, these technological innovations have created billions of jobs that did not exist two centuries ago. I said "Billions."
This is truly a nonsensical statement. It cannot be logically or factually explicated.
I was about to award Sentence 7 with "The Most Nonsensical Statement Ever," but then I read Sentence 8. In what sense is competition today "unlimited?" Who should limit it? How? If labor is "wasted," wouldn't competitive entrepreneurs seek to use it productively? How does the invention and production of a computer in order to compete against slide-rules "cripple the social consciousness of individuals?" How does the invention and production of a bulldozer in order to compete against slaves with shovels "cripple the social consciousness of individuals?"
This crippling of individuals I consider the worst evil of capitalism. Our whole educational system suffers from this evil. An exaggerated competitive attitude is inculcated into the student, who is trained to worship acquisitive success as a preparation for his future career.
How is our educational system a reflection of Capitalism rather than Socialism? How can education be more controlled by the government than it is already? Why would not freedom and competition under Capitalism allow entrepreneurs to compete in education with schools which do not teach "an exaggerated competitive attitude?" But then, isn't it a "competitive attitude" needed to compete with schools which teach competition?
I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy,
accompanied by an educational system which would be oriented toward social goals.
In such an economy, the means of production are owned by society itself
and are utilized in a planned fashion. A planned economy, which adjusts production to the needs of the community,
would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child.
The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow men in place of the glorification of power and success in our present society.
So far, living with the benefits of competition and freedom, I see no "grave evils."
I think our current government-run socialist education system needs more freedom and competition. I think "social goals" should be defined by society, not by government.
See the discussion of "society" above. Under Socialism, the means of production are owned/controlled by bureaucrats, not "society." The stock exchange is more "social" than a political bureaucracy. More people have more votes in a stock exchange than they do in a political bureaucracy.
Because consumers have more votes under Capitalism than they do when a few bureaucrats make all the decisions, consumers also participate in more economic planning than they do when planning is controlled by a political elite. Planning: Free vs. Centralized
Capitalism creates more work. Capitalist economies get more economic work done than in socialist economies. Socialism can only redistribute a smaller amount of work among politically-favored workers.
I believe in the separation of school and state. We need more competition among schools. Government management of one-size-misfits-all schools has been harmful to society.
Nevertheless, it is necessary to remember that a planned economy is not yet socialism. A planned economy as such may be accompanied by the complete enslavement of the individual. The achievement of socialism requires the solution of some extremely difficult socio-political problems: how is it possible, in view of the far-reaching centralization of political and economic power, to prevent bureaucracy from becoming all-powerful and overweening? How can the rights of the individual be protected and therewith a democratic counterweight to the power of bureaucracy be assured?
Clarity about the aims and problems of socialism is of greatest significance in our age of transition. Since, under present circumstances, free and unhindered discussion of these problems has come under a powerful taboo, I consider the foundation of this magazine to be an important public service.
Clarity is the most absent thing about Einstein's article.
I hope you feel as I do that the government take-over of society has not been successfully argued and proven by Einstein's article.
Why Socialism?