{"id":202488,"date":"2026-03-15T21:06:12","date_gmt":"2026-03-15T21:06:12","guid":{"rendered":"http:\/\/davidmhart.com\/wordpress\/new-dummy-page-3-4-2-2\/"},"modified":"2026-06-26T16:35:50","modified_gmt":"2026-06-26T06:35:50","slug":"topic-socialism","status":"publish","type":"page","link":"http:\/\/davidmhart.com\/wordpress\/topic-socialism\/","title":{"rendered":"Topic – The Critique of Socialism"},"content":{"rendered":"
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\nRevised: 26 June 2026\n<\/p>\n

Introduction<\/a> | Further Reading<\/a><\/p>\n\n\n\n

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Introduction<\/h2>\n\n

This is a summary of the material on socialism and the Classical Liberal critique which we have online. There are also a couple of blog posts on this topic:<\/p>\n

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  1. \u201cThe Socialist Critique of Private Property and Free Markets and the French Political Economists\u2019 Response<\/a>\u201d (12 May 2021)<\/li>\n
  2. \u201cSocialism is Zombie Economics<\/a>\u201d (24 Jan. 2021)<\/li>\n
  3. Mises on Economic Calculation under Socialism<\/a> (30 September, 2020)<\/li>\n <\/ol>\n

    On the critique of socialism see especially the Austrian economist Ludwig von Mises’ early and devastatiing critique of central planning in Socialism<\/a><\/em> (1922)<\/a> and the work of the Scottish economist and poet Alexander Gray (1882-1968) The Socialist Tradition: Moses To Lenin<\/em> (1946)<\/a>. The latter is a comprehensive history of socialism which is peppered with his great insight, deep learning, and sceptical and witty observations.<\/p>\n\n<\/div>\n\n\n\n

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    Further Reading: A Survey of the Socialist Tradition and its Critics<\/h3>\n
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    The Beginnings<\/h4>\n

    An early argument in favour of a completely "closed economy" where the state would control every aspect oif production and exchange, in other words a vision of a centrally planned economy which the Bolsheviks would attemtp to introduce in Russia in 1917, was provided by Johann Gottlieb Fichte (1762-1814) in Der geschlossene Handelsstaat<\/em> (The Closed Commercial State) (1800) [auf deutsch in HTML<\/a> and facs. PDF<\/a>]. He was reacting to the economic impact of the Napoleonic Wars on the fragmented German states and the rise of England as an industrial and commercial power. In France, the same concerns led the liberal Jean-Baptiste Say to write his Treatise on Political Economy<\/em> (1803) [HTML<\/a>] in which he advocated the exact opposite, the most \u201copen commercial state\u201d imaginable.<\/p>\n

    As socialist ideas began to emerge during the 1820s and 1830s in Europe, especially in France, classical liberals began to turn their attention to this new set of ideas calling for greater intervention by the state in the economy. I think we can identify four key periods when classical liberals were active in opposing socialist and interventionist ideas more broadly understood:<\/p>\n

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    (David with Karl and Friedrich in Shanghai)<\/p><\/td>\n

    The 1840s in France<\/h4>\n

    There were three influential French socialists during the 1840s who were all elected to the Chamber of Deputies during the revolution and sparred with Bastiat and the other liberals and political economists. They and their main texts are:<\/p>\n

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    The 1880s and 1890s in France, Italy, England, and Germany <\/h4>\n

    France<\/strong>: Following the defeat of the Paris Commune in 1871 French socialists took two routes, one intellectual by working within the economics faculties of the state University system (where economics was taught only in the Law Faculties), and the other with the formation of socialist parties which would get into power by means of elctions. The \u201cParti Ouvrier Fran\u00e7ais\u201d (French Workers Party) was formed in 1879, while in the Universities the following scholars pushed interventionist ideas: <\/p>\n

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    Britain and the Colonies<\/strong>: The Irish playwright George Bernard Shaw (GBS), along with the writers and educators Sidney and Beatrice Webb, the feminist Emmeline Pankhurst, and the novelist H. G. Wells, founded the Fabian Society in England in 1884. Its aim was to bring about a socialist society by means of intellectual debate, the publication of books and pamphlets, and the \u201cpermeation\u201d of socialist ideas into the universities, the press, government institutions, and political parties.<\/p>\n

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    Germany<\/strong>: The main theorist of the "communist" or "revolutionary" variant of socialism, Karl Marx (1818-1883), died before he could finish and publish all the volumes of his Das Kapital<\/em>. (vol. 1 appeared in his lifetime in 1867). This was left to Friedrich Engels who published vols. 2 (1884) and 3 (1896). See<\/p>\n

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    Post-1917<\/h4>\n

    Because the "revolutionary socialists" like Karl Marx were very coy about describing in detail how the future centrally planned communist economies would be run (unlike the "democratic socialists" who saw the legislative process as the means to build socialism gradually), we therefore have to make do with sketchy outlines such as:<\/p>\n

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    The Keynesian Revolution<\/h4>\n

    The monetary theory of the English economist John Maynard Keynes (1883-1946) produced a revolution in thinking about how governments in the non-Communist world could and should control the economy to overcome the defects of "laissez-faire capitalism", one which would conme to dominate the world for the next 80 or 90 years. In many ways, it was a return to the oilder socialist ideas of Proudhon put forward in the 1848 Revolution for a "Peoples" or "Exchange" bank to be set up by the state in order to provide low or zero interest loans to workers to fund their "ateliers" or workshops.<\/p>\n