Socialism vs. Welfare Statism: Why These Terms Matter

I originally posted a version of this essay about 8 years ago. But after reposting my updated version of Criminal Socialism vs. a Free Society, and given the recent surge in interest and support for Democratic Socialism in the United States of America, I see it necessary to repost an updated version of Socialism vs. Welfare Statism: Why These Terms Matter. Why? Because Socialists are pointing to America’s welfare programs as Socialism, and arguing for more of the same. But the welfare state, more accurately called Welfare Capitalism, is not Socialism. Socialism and welfare statism of fundamentally different social systems. The Democratic Socialists are trying to pull off a dangerous bait-and-switch, and if America falls for it, we will end up an enslaved country.

Venezuela is a prime example, among many prime examples, of Socialism fully and properly instituted. But Socialists point to welfare states as examples of Socialism in action. But Germany, England, the Scandinavian countries, Canada, et al are NOT socialist. Socialism is the political implementation of the principle that the interests of “society” as represented by the government take precedence over individual interests. Therefore, socialism denies individual rights, including rights to property and free trade: The “people,” as a number of individuals, exist to serve the interests of society as determined by the state. Socialism, to be socialism, has to deny individual choice (individual rights), because Capitalistic rights directly conflict with it’s principles. As the Socialist Robert Heilbroner observed:

The rights of individuals to their Millian liberties [are] directly opposed to the basic social commitment to a deliberately embraced collective moral goal…

Dissents, disagreements, and departures from norms then assume a far more threatening aspect than under bourgeois [i.e., Capitalist] society, for they hold out the possibility of destroying the very commitment to a moral consensus by which socialist society differs from capitalist.

Nor can we wriggle off this hook by asserting that, among its moral commitments, socialism will choose to include the rights of individuals to their Millian liberties. For that celebration of individualism is directly opposed to the basic socialist commitment to a deliberately embraced collective moral goal. [my emphasis]

These European countries are not socialist (although Germany WAS once socialist, under National Socialist [NAZI] rule). They, like America, are mixed economy welfare states. Unlike totalitarian socialism, Western welfare states still have a healthy degree of private enterprise and free market Capitalism, and thus a still-healthy recognition and protection for individual rights, including rights to property and free trade. Because of this, welfare states’ Capitalist-oriented, hampered market economies can still generate continued prosperity and rising living standards even while carrying the burden of financing the welfare state, differing only in the balance between the two. 

It’s important to get this understanding right, because most Democrats now view socialism more positively than capitalism, according to Gallup.* Welfare statism is different in crucial respects from democratic socialism. It is true that the limited socialistic aspects—mainly redistribution of wealth—of the welfare state requires the limited use of the same statist powers as does full socialism. But its goal, in theory, is a “safety net” for capitalism, not a replacement--i.e., a mixed economy; that is, a mixture, albeit a tense one, between socialism and capitalism. Under the Western style welfare state, individual rights and free enterprise are still fundamental, and socialism is limited in scope so much freedom remains. Democratic Socialism implies no limits. The distinction is important. No longer content with the limits of the welfare state, and driven by hatred of freedom, capitalism, and achievement, the Democrats are now in the process of “graduating” to full blown totalitarian socialism, including massive central control and strict economic regimentation. It won’t be easy to bring about in America. But once we start down this road, the result will be the same as it always is--loss of economic, political, and intellectual freedom, growing economic paralysis and eventual collapse, massive human suffering, and the total state. What else can one expect when the individual is subordinated to the collective? Of what importance are hordes of suffering individuals next to whatever grand utopian collectivist ideal the state happens to want to impose “for the good of society?” 

No doubt, Trump has an authoritarian streak--his antitrust threats against Amazon for Bezos’s WAPO editorial criticisms; his regulatory threats against Google for alleged search engine “bias”; his tax bullying of U.S. multinational corporations; his threat of stronger libel laws against reporters; his communistic taking of equity stakes in dozens of private companies; his nation-over-individual rights of Americans’ justification for unConstitutional tariffs. But this is penny-ante statism next to democratic socialism. Totalitarian? Based on

what ideology? Trump doesn’t even have one! Next to democratic socialism, Trump is a schoolyard bully. Democratic socialism is the Al Capone crime organization, rising out of the underworld to rule a nation. Democratic socialism is across the board a criminal enterprise, but with law as protector rather than adversary. It makes the real Al Capones of history look like pickpockets.

If you like Germany, then stick with what Germany actually is, a Western-style mixed economy welfare state. We can at least debate the relative balance between capitalism and socialism. Freedom and prosperity, at least, has a chance. But be aware of what you’re advocating if you declare your allegiance to socialism, democratic or otherwise--the total subordination of the individual to the state.

As theory and history has unequivocally demonstrated, there is no essential difference between Socialism and totalitarianism. A government that owns and regulates the means of production, exchange, and distribution; that can distribute all of a country’s money equally; in which government rather than individual people owns or controls all industry, is a government with total control over the economy. Since economics is the field of human activity by which people support their lives, a government that totally controls the economy has total control over people’s means of survival. A government with total control over people's means of survival is a government that has every individual by the throat. Such a government can enforce its will in every area of life  and liberty through economic sanctions. What freedom, what opposition, is possible under such conditions? Does it matter whether the political leaders are elected or not? A government, of whatever kind, that has every individual by the throat IS a totalitarian state. Logic confirms this truth. History has proven this time and again.

To summarize, the welfare state—more accurately labeled Welfare Capitalism—is a Capitalist-oriented, individualistic, free market system with a government-imposed “social safety net” but with strong though not fully consistent protections for individual rights to life, liberty, and property. Capitalistic freedom is the foundation and the financial support for the welfare state. Socialism is a collectivist other-oriented system that prioritizes the group over the individual, in which the state tolerates individual existence only to the extent that it furthers the goals of the state as the determinant of the collective will. Of necessity, Socialism is totalitarian, because it owns or controls all economic activity—“the means of production”—and thus exerts control over all aspects of people’s lives because the economy is the area of activity in which people work and trade to support their lives. Poverty is the unavoidable result because the market freedom that supports the welfare state is erased under Socialism.

Related Reading:

Socialism's Totalitarian Nature Cannot Be Obscured by 'Democratic Socialism'

Criminal Socialism vs. a Free Society

We Need a Deeper Understanding of Socialism

Why Nazism Was Socialism and Why Socialism Is Totalitarian--George Reisman

The Myth of Scandinavian Socialism

Elizabeth Warren’s Plan — We’ve Seen This Before--Stephen Hicks

Fascism: Back Door to Socialism that Obama and the Left Well Understand

A is A, and Socialism by any Other Name...

QUORA: ‘Is it possible to be both a Communist and a Fascist?’

Why do fascism and communism often go hand in hand when they are philosophically polar opposites?

Is fascism a form of capitalism?’