Is Socialism a “Failed Idea”?

A Review of Niemietz’s Book and a Challenge to the IEA

By Collective 20

[Collective 20 is a group of writers located in different  places throughout the globe. Some young, some older; some long-time organizers and writers, others just getting started, but all equally dedicated to offering analysis, vision, and strategy useful for winning a vastly better society than we currently endure. The members of Collective 20 hope their contributions concerning social, political, economic, and environmental issues will generate more useful content and better outreach through a collective publication effort as opposed to individuals doing so on their own. Collective 20’s cumulative work can be found at, where you can learn more about the group, see an archive of its publications, and comment on its work.]


Last year (2019) the Institute for Economic Affairs (IEA) – “the UK’s original free-market think-tank” whose mission is to “improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems” – published a book, written by staff member Kristian Niemietz, titled Socialism: The Failed Idea that Never Dies

The paradox in the title refers, on the one hand, to the continued popularity of socialism and, on the other hand, the growing list of examples of failed attempts to establish a socialist system: “Despite its long list of failures, socialism remains far more  popular than capitalism.” (p xiv) The argument presented by Niemietz is an attempt to resolve this absurdity. 

To do this Niemietz draws on the work of social psychologist, Jonathan Haidt, which “shows that most political and moral reasoning is about finding post-hoc justifications for an initial intuitive judgement”. From this Niemietz concludes:

 “The case for capitalism is counterintuitive: to most of us, capitalism simply feels wrong. Socialism, in contrast, chimes with our moral intuitions. Socialism simply feels right”. (p xiv)

Niemietz continues adding, “Appreciating the benefits of a market economy, in contrast, takes some intellectual self-discipline”. However, Niemietz only resorts to psychology to resolve his paradox because he assumes the earlier parts of his argument are valid. But are they? Or is Niemietz’s own intellectual self-discipline lacking in some way? To help us answer these questions we will draw on another book, Rob Larson’s Capitalism VS. Freedom: The Toll Road to Serfdom, which was published a year before (2018) by Zero Books – a publishing company set-up to combat the “sped up and deepened […] process of alienation and atomization”. 

The First Part of Niemietz’s Argument

Whilst there are a number of aspects to Niemietz’s argument the core of it is made-up of two parts. The first part is what he calls the “not real-socialism defence”. This part of Niemietz’s argument goes like this:

“Over the past hundred years, there have been more than two dozen attempts to build a socialist society.” 

He then lists all the usual examples – from the Soviet Union to Venezuela – pointing out that, “All of these attempts have ended in varying degrees of failure.” For Niemietz these simple facts lead to what must be a perplexing, if not infuriating, question:

 “How can an idea which has failed so many times, in so many different variants and so  many radically different settings, still be so popular?” (p 21) 

Part of the answer to this question, according to Niemietz, is that “socialists have long been very effective at distancing themselves from real-world examples of socialism in action”. He goes on to list examples of high profile socialists – including Noam Chomsky, Richard Wolff and Owen Jones –  guilty of this then draws the following conclusion:

“Thus, contemporary socialists believe that their brand of socialism is so fundamentally different from anything that has gone by that name in the past that it makes all comparisons meaningless. Historical evidence of socialism in action can therefore hold no relevant lessons. It can be safely ignored.” (p 25) 

The obvious question here is whether this distancing is legitimate, or not? How we assess this will depend, at least in part, on how we understand our key terms. According to Niemietz:

“The general definition of ‘socialism’ is straightforward enough: according to the Merriam-Webster dictionary, it is ‘any of various economic and political  theories advocating collective or governmental ownership and administration of the means of production and distribution of goods’.” (p 17)  

However, for some, things aren’t quite so straightforward. For example, Larson points out, “Socialism, like many other political and social traditions, is made up of a variety of different schools and therefore different definitions of what the idea is.” He continues, adding:  

There tends to be a core of features that a socialist economic system would be expected to have, including equality and a limit to the scale of private property. However, the most essential element of the socialist tradition is workplace control over production and investment – economic democracy.” (p 194)

What Larson is pointing to here is the distinction, within the socilist tradition, between top-down or authoritarian socialism and bottom-up or libertarian socialism. From the perspective of the latter position, the lack of economic democracy in the “real-world examples of socialism” legitimise the distancing from them. Given the IEA’s stated interest in “institutions of a free society” (see here) we might assume that Niemietz would have some sympathy for this argument. However, when Niemietz considers the libertarian socialist position (in the conclusion to Chapter Two on the Soviet Union, for example) he is quite dismissive: 

“Of course, socialists who judge real-world experiments against such utopian standards would not have found much to like in Lenin’s system. If one’s idea of socialism demands the immediate abolition of the police, the army, the court system, the prison system, etc., if it requires people to voluntarily give up money, private property, exchange, etc., and if one does not accept any compromises, halfway measures or phase-in periods, then yes, such a person would not have been seduced by Leninism. But this is simply because they would have set the bar impossibly high.” (p 97-98)

The Second Part of Niemietz’s Argument

This dismissiveness – the “utopian standards” and the “set the bar impossibly high” is linked to, and ultimately justified by, the second part of Niemietz argument – what he calls “escape into the abstract”. Unlike the first part of his argument, which focused on the past, the second part of Niemietz’s argument focuses on the future:

“Despite the vehemence with which contemporary socialists reject comparisons with any variant of socialism that has so far been tried, they usually struggle to explain what exactly they would do differently. What is the difference between ‘real socialism’ and  ‘unreal socialism’? What is it about the versions of socialism practised in the Warsaw Pact countries, Maoist China, North Vietnam, North Korea, etc., that makes them  all  ‘unreal’?  What  would  they  have  had  to  change  in order to move into the ‘real socialism’ category?” (p 25)

Niemietz continues: 

“This is where contemporary socialists usually become evasive and talk about lofty ambitions rather than tangible institutional characteristics. Real socialism, they claim, is a democratic socialism from below, a socialism which democratises economic life, and ensures that wealth and power are evenly shared. Real socialism puts ordinary working people – not technocrats, dictators or party elites – in charge.” (p 26) 

Niemietz adds:

“These are nice aspirations. But they are also highly abstract aspirations. Which set of institutions would deliver them? How would those institutions work? How would we

monitor whether they deliver what they ought to deliver, and how would we correct them if they do not? These are questions Chomsky does not bother to address.” (p 27)

Larson’s initial discussion of what “social control over the economy would look like” falls, roughly, into both “not real-socialism defence” and “escape into the abstract”:

“The basic contours would mean a much freer society than our current capitalist one. Obviously, this bottom-up picture of running an economy is very different from the countries called “socialist” in recent history”. (p 195) 

Larson justifies this position by pointing out that the “proper approach to these issues is an experimental one”:

“…instead of mapping the future society out in detail, we should be encouraging different people and communities and industries to try out different methods and configurations of participatory socialism.” 

Such an approach, according to Larson, would both “acknowledge our limited understanding of social evolution” and be inline with “the scientific approach we rely on everywhere else”. Having said that, Larson then points out that:

“A number of radical theoreticians and economists have, however, prepared rather detailed projections for how societies could be organized to allow for the maximum level of democracy and grassroots participation in economic decisions. (p 204)

Larson then acknowledges that these are “quite handy as jump-off points for discussion and socialist creative thinking”, adding that:

One of the best-known examples is Parecon, a proposed system of economic organization based on councils and recursive decision-making developed by [Michael] Albert and [Robin] Hahnel.” (p 204)

These “detailed projections” or models are precisely what Niemietz claims contemporary socialists fail to produce. However, as Larson points out, Parecon is one of the “best-known” examples of this kind of work. Furthermore, Noam Chomsky has consistently supported Parecon, since its first public presentation in the 1990s, and has said that the model “merits close attention, debate and action”. Furthermore, this is not difficult to find out:

“He also exhibits some favor for the libertarian socialist vision of participatory economics [Parecon].” (Wikipedia page: Political Positions of Noam Chomsky

The first thing to say about this work is that, what Niemietz calls “real-world examples of socialism” are, for Albert and Hahnel, examples of “coordinatorism”: 

“In capitalism, capitalists own the means of production, use markets for allocation, define the purpose and character of work, and hire and fire workers (and managers). In coordinatorism, capitalists are gone. Managers, planners, engineers, and other intellectuals define work, using either central planning or markets for allocation. Workers continue to carry out tasks defined by others.” (Looking Forward, p 5) 

We can see from this that Albert and Hahnel employ the “not real-socialism defence”. However, what is important to understand here is that this “relabeling” of “actually existing socialism” as “coordinatorism” is not the outcome of an intellectual game. Rather it is the result of serious analysis and critical thinking that makes the “not real-socialism defence” a perfectly reasonable position to hold. According to Albert and Hahnel, Marx and his followers simply got class analysis wrong: 

“Unfortunately, for all its emphasis on class analysis, Marxism blinded many fighting against the economics of competition and greed to important antagonisms between the working class and the new, professional managerial, or coordinator class.” (Hahnel, Economic Justice and Democracy: From Competition to Cooperation. p 65) 

“The remaining problem with Marxism is that in virtually every variant, however flexible and enriched it is, Marxist class theory denies the existence of what I call the coordinator (or professional-managerial, or technocratic) class and underemphasizes, or more often literally denies, its antagonism with the working class as well as with capitalists. This failing obstructs class analysis of the old Soviet, Eastern European, and Third World non-capitalist economies, and of capitalism itself. Worse, it interferes with attaining worthy goals.” (Albert, Realizing Hope: Life Beyond Capitalism. p 150) 

Furthermore, Albert and Hahnel identified the corporate division of labour as the source of socio-economic power for the coordinator class. From this they realised that if socialism is to work then they needed to come up with an alternative. Their suggestion is the Balanced Job Complex (BJC’s):

“A collection of tasks within a workplace that is comparable in its burdens and benefits and in its impact on the worker’s ability to participate in decision making to all other job complexes in that workplace. Workers have responsibility for a job complex in their main workplace, and often for additional tasks outside to balance their overall work responsibilities with those of other workers in society.” (Looking Forward, p 151) 

Clearly, BJC’s constitutes an example of “tangible institutional characteristics” that Niemietz says he is looking for but claims does not exist. BJC’s also constitute only one of the clearly defined institutions that make up the Parecon model. In addition to BJC’s Albert and Hahnel also propose a clear definition of self-management for worker and consumer councils and a new criteria for remuneration. Perhaps most importantly, however, Parecon includes an alternative to both the authoritarianism of central planning and the anti-social dynamics of competitive markets. They call this alternative Participatory Planning:

“A social, iterative planning process in which producers and consumers propose and revise their own economic activities in such a way as to yield an equitable and efficient plan.” (Looking Forward, p 152) 

In the conclusion to their 1992 paper, Socialism As It Was Always Meant To Be, Albert and Hahnel layout their critique of markets and challenge their advocates:

“We have explained why markets are incompatible with equity and systematically destructive of solidarity. We have explained why market economies will continue to destroy the environment, and why a radical view of social life implies that external effects are the rule rather than the exception, which means markets generally misestimate social costs and benefits and misallocate scarce productive resources. And we have explained that while markets may fulfill the liberal vision of individual economic freedom to dispose of one’s personal capabilities and property however one chooses, they are inconsistent with the radical goal of self-management for everyone.” (p 65) 


“While many have told us casually that markets are not as bad as we make them out to be, no political economist has yet responded specifically to a single criticism we have made. We can’t help but feel the debate […] would be more engaging if marketeers responded more directly to their critics as we have attempted here.” (ibid) 

Since their early efforts Albert and Hahnel have elaborated on their alternative to both markets and central planning. When actually examined, it turns out that their preferred method of allocation – called participatory planning – not only meshes with the classic socialist priorities of collective self management, equitable remuneration, and classless organization inside workplaces, but also facilitates proper assessment of ecological, social, and personal costs and benefits in determining production and consumption. This includes investments over time, attaining not only sustainability but also respect for people’s time and resources. 


It turns out that the paradox in the title of Niemietz book is not the result of irrational moral intuitions and/or a lack of intellectual self-discipline – as he suggests – but is (perhaps ironically) instead the product of a line of thinking that fails to take into consideration certain important developments in socialist thinking that are easily accessed by anyone with a genuine interest in the topic. Only by ignoring models like Parecon can Niemietz draw the following conclusion:

“Economic planning can only ever be done in a technocratic, elitist fashion, and it requires an extreme concentration of power in the hands of the state. It cannot ‘empower’ ordinary workers. It can only ever empower a bureaucratic elite.” (p 295) 

When supported by a model of “socialism as it was always meant to be” the “not real-socialism defence” turns out to be a perfectly reasonable position. Parecon, in a sense, can be understood as giving intellectual rigor to the intuitions of the public. Albert and Hahnel’s work, therefore, represents a serious challenge to both aspects of Niemietz’s argument. Furthermore, more generally, it represents a direct challenge to the ideological position of the IEA. 

For Niemietz to argue that the public’s continued support for socialism results from a lack of intellectual self-discipline is simply a rationalisation for elitism. For advocates of competitive market economics to continue to ignore models like Parecon so they can draw ideologically convenient conclusions is simply self-serving. To conclude that socialism is a failed idea, before this challenge is met, is simply irrational. 

[INITIAL SUBMISSION: Mark Evans | AUTHOR: Collective 20 (Andrej Grubacic, Brett Wilkins, Bridget Meehan, Cynthia Peters, Don Rojas, Elena Herrada, Emily Jones, Justin Podur, Mark Evans, Medea Benjamin, Michael Albert, Noam Chomsky, Oscar Chacon, Paul Ortiz, Peter Bohmer, Savvina Chowdhury, Vincent Emanuele)]