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Is Barack Obama really a socialist?

Not exactly, but his 'socialist-lite' policies should still be cause for concern.

By Donald J. Boudreaux / October 30, 2008

Fairfax, Va.

Since telling Joe the Plumber of his wish to "spread the wealth around," Barack Obama is being called a socialist. Is he one?

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No. At least not in the classic sense of the term. "Socialism" originally meant government ownership of the major means of production and finance, such as land, coal mines, steel mills, automobile factories, and banks.

A principal promise of socialism was to replace the alleged uncertainty of markets with the comforting certainty of a central economic plan. No more guessing what consumers will buy next year and how suppliers and rival firms will behave: everyone will be led by government's visible hand to play his and her role in an all-encompassing central plan. The "wastes" of competition, cycles of booms and busts, and the "unfairness" of unequal incomes would be tossed into history's dustbin.

Of course, socialism utterly failed. But it wasn't just a failure of organization or efficiency. By making the state the arbiter of economic value and social justice, as well as the source of rights, it deprived individuals of their liberty – and tragically, often their lives.

The late Robert Heilbroner – a socialist for most of his life – admitted after the collapse of the Iron Curtain that socialism "was the tragic failure of the twentieth century. Born of a commitment to remedy the economic and moral defects of capitalism, it has far surpassed capitalism in both economic malfunction and moral cruelty."

This failure was unavoidable. It was predicted from the start by wise economists, such as F.A. Hayek, who understood that no government agency can gather and process all the knowledge necessary to plan the productive allocation of millions of different resources.

Likewise, socialism's requirement that each person behave in ways prescribed by government planners is a recipe for tyranny. A central plan, by its nature, denies to individuals the right to choose and to innovate. It replaces a multitude of individual plans – each of which can be relatively easily adjusted in light of competitive market feedback – with one gigantic, monopolistic, and politically favored plan.

A happy difference separating today from the 1930s is that, unlike back then, no serious thinkers or groups in America now push for this kind of full-throttle socialism.

But what about a milder form of socialism? If reckoned as an attitude rather than a set of guidelines for running an economy, socialism might well describe Senator Obama's economics. Anyone who speaks glibly of "spreading the wealth around" sees wealth not as resulting chiefly from individual effort, initiative, and risk-taking, but from great social forces beyond any private producer's control. If, say, the low cost of Dell computers comes mostly from government policies (such as government schooling for an educated workforce) and from culture (such as Americans' work ethic) then Michael Dell's wealth is due less to his own efforts and more to the features of the society that he luckily inhabits.