[This is Chapter Nineteen of Murphey’s book The Emerging Crisis of Economic Displacement

The victory of free market societies over Communism! Everywhere the decline of socialism and an affirmation of the innovative energies of private individuals and firms! The downsizing of government! The growth of a global competitive market! These were the themes of the final decade of the twentieth century.

Several forces have come together: a consensus in favor of deregulation; another in support of privatization; the crumbling of the USSR's eastern European empire as symbolized most by the tearing down of the Berlin Wall; the dissolution even of the Soviet Union and the repudiation of Communist ideology; the consequent withering away of Communist revolutionary efforts all over the world; the marketization of China despite the continuing political hold by the old Maoist clique; the rapid development of the global marketplace; and the prevalence in the most influential circles of Free Trade ideology, extended by international and regional pacts.

All this and more has made the last few years an "age of capitalism" and of "the demise of socialism." Although imperfect and as yet incomplete, it satisfies the fondest hopes of those who see individual liberty as the fount of progress and have detested the abuses of modern totalitarianism. At the same time, socialists themselves in large numbers now see the competitive market not as an enemy but as an engine to be kept in place so that the means can be created with which to serve the egalitarian purposes they value.

It is ironic, at such a time, that the very processes of innovation and of market competition are bringing on a crisis of work, distribution and polarization. At the moment of its clearest triumph, the market system starts to become clouded and it becomes apparent that that system, to survive, will itself have to undergo major revision – in the direction of what has been considered socialism! That is why I have named this chapter "Socialism's Erstwhile Demise." As loath as I am as a classical liberal to express it, the future will have to be informed by much that socialists have been saying. Their day is by no means over. Political entities will have to step in to address the basic needs of peoples as work becomes marginalized; and a society that is not based primarily on work will be a different place than classical liberalism has envisioned as its model. The life within such a society will be much closer to the non-competitive life that socialists have long favored.

Why devote a chapter to this when it will amount to "rubbing salt into the wounds" of my closest friends? The answer is that I do not want to restrict this intellectual odyssey to my friends among conservatives, libertarians and classical liberals. It is essential that everyone take part. And that includes socialists, who have made up a major part of the world's intellectual culture and of the intellectual component of modern American liberalism.

What is needed is for science, a capitalistic market and egalitarian distribution to come together into a workable whole in light of the onrushing realities – and, what is of the utmost importance, for a consensus to emerge (among the diverse believers in all of the earlier ideologies) that the State's power must not be allowed to grow into an abusive force because of this mix. If the State must become the engine of distribution, as it will, the potential for abuse of power will be central – a problem to which I will give considerable attention in later chapters. A consensus about limiting the State requires that those who have wanted an active egalitarianism be very much part of the dialogue. For those who have been ideological enemies to talk is galling, but vital.

When I speak of "socialism," I don't restrict it to government ownership of the means of production. If I did, I couldn't speak of socialist thought's having a significant place in a society centered around what I call "a shared market economy." I envision competitive capitalism's continuing!

This will be perplexing in light of the definition of "socialism" so often given by people who ought to know better. It is common to define it as "government control and ownership of the means of production," as Leonard Read, the founder and long-time president of the Foundation for Economic Education, did in a recently reprinted article.[1]

The problem is that this overlooks a vast amount of thinking in the history of socialism, especially in the nineteenth century and since World War II. The world Left's central perspective has been that the have-nots need help in a struggle with the haves. Driven primarily by the predominant intellectual subculture's rivalry with and antagonism toward the acting man of commerce and industry, the Left came into being in the nineteenth century in a variety of forms. Its members shared the common worldview that capitalism traps and exploits millions of people, and that the historic task is to liberate those millions. They differed among themselves, however, about the institutional form this liberation should take, the methods to be used in effecting the change, and the theoretical framework for understanding the forces at work. Many of the forms of nineteenth century socialist thought either opposed calling a large central State into play or saw such a State as a temporary instrument. These formulations were, of course, overshadowed when the Bolshevik Revolution in 1917 brought the Soviet system into existence. Under the Soviet system, at least before the ideologically called-for "withering away of the state," the central State was the essence of socialism. But after World War II the socialist parties of western Europe moved sharply away from this model, even affirming the principle of private property (as the German socialists did in their Bad Godesberg program in 1959) and the idea of a "social market economy" in which the State would occupy "the commanding heights" but would otherwise encourage a competitive market.

So we see that "government ownership and control" has not been the defining characteristic of socialism, even though it has been one of the forms of socialism.

It is not hard to see why virtually all the literature so far on "downsizing," the "end of work," and the displacement from jobs has come from authors within the socialist milieu. Socialists have been criticizing the market economy for two hundred years, seeing (as Marx did) "contradictions" within it and forces that will bring it to crisis. Classical liberals, in contrast, have been on the defensive, manning the barricades in support of the market. Given those orientations, who would be the first to notice new grounds for a crisis of the market? Socialists, of course; certainly not classical liberals.

It is important that supporters of a market economy not allow this to block their comprehension of what is happening in the world. Friends have said to me, "Oh, Rifkin; you can't count on what he says." They are surprised when I tell them that Rifkin's The End of Work is the best I read of the many books and writings I studied in my own preparation. The fact that Rifkin draws (mildly, for his part) from a socialist perspective, quoting from Marx, Engels, Theobald, Heilbroner, Oppenheimer, Marcuse, Sismondi and Bellamy (but also Milton Friedman, definitely not a socialist), does not mean that his insights in The End of Work aren't right. And even though I count myself among the more severe critics of socialism, I am not prepared to say that everything in its thinking has been wrong. Marx was off by almost two centuries when he predicted that automation would eventually eliminate workers altogether,[2] but he saw the long-term secular tendency accurately. Does recognizing this amount to an acceptance of Marx's overall views, and of everything that has been done in pursuit of them? The question pretty much answers itself.

The authors I have read who have talked about the coming displacement have, consistently with their socialist orientation, called for various measures of "social democratic" State intervention. My own proposals won't be identical to theirs, but will contain echoes from social democracy, classical liberalism and cultural conservatism.

[1]. See Leonard E. Read, "Economics for the Teachable," The Freeman, January 1960, reprinted in The Morality of Capitalism, Mark W. Hendrickson, ed., (Irvington-on-Hudson, NY: Foundation for Economic Education, Inc., 1996), p. 37.

[2]. Marx's position is spoken of by Jeremy Rifkin in The End of Work (New York: G. P. Putnam's Sons, 1995), p. 16.