Which is to say: Socialism is not redistribution. Socialism is central planning. Under socialism, The Plan is everything. The presence of The Plan, and the empowerment of The Planners, is to socialism what the Eucharistic sacraments are to Christians and what the Mosaic Law is to the Jews: the fundamental expression of what is good and true. When The Plan conflicts with the desire to redistribute income or to subsidize the poor and the working class, The Plan always prevails. Indeed, even Mikhail Gorbachev, a committed socialist who believed he could reform the Soviet Union’s single-party system from within, gave up on the idea of equalizing incomes when doing so interfered with the ability of central authorities to implement The Plan; “Wage-leveling,” he told the Soviets’ Central Committee in a 1988 speech, “has a destructive impact not only on the economy but also on people’s morality, and their entire way of thinking and acting. It diminishes the prestige of conscientious, creative labor, weakens discipline, destroys interest in improving skills, and is detrimental to the competitive spirit in work. We must say bluntly that wage-leveling is a reflection of petty bourgeois views which have nothing in common with Marxism-Leninism or scientific socialism.” Such sentiments would be at home at the annual luncheon of any American chamber of commerce — except for the scientific socialism part.
What Gorbachev is making clear here — and what too many critics of socialism fail to understand — is that the necessary thing from the socialists’ point of view is not egalitarian economic outcomes, but state control. And that control need not be enacted nationwide or imposed by a single-party dictatorship of the Chinese or Soviet sort. State direction comes in many degrees and can take many forms, from Venezuela’s nationalizations under Hugo Chávez to FDR’s cartels to Richard Nixon’s regime of wage and price controls. American socialists for years have been eager to use the Medicare/Medicaid system to impose a system of price controls on pharmaceutical companies and other medical-service providers — and the 2010 legislation we know as Obamacare today lays the groundwork for empowering them to do so. Stalin argued for “socialism in one country,” while American progressives argue for socialism in one industry — or, one industry at a time.
The modern experience suggests that the economist Ludwig von Mises was only partly correct when he wrote, “The socialistic State owns all material factors of production and thus directs it.” That was true for the authoritarian, single-party powers of his day. In our own time, the converse is a more accurate description of the real economic arrangement: Under socialism, the state directs the material factors of production as if it owned them. The state does not have to actually own factories, mines, or data centers if it has the power to dictate, in minute detail, how business is conducted within them. Regulation acts as a proxy for direct state ownership of the means of production.
Even in its more dispersed modern forms, socialist central planning is fairly easy to spot, because it has an easily identifiable signature: failure. Socialism reliably produces economic failures when applied nationally (the USSR, China, India, Chile, Vietnam), when applied in modified forms across mixed economies (post-war Britain’s nationalized industries), and when applied to particular sectors within largely capitalist economies (national health-care programs). Pockets of socialism found within largely liberal countries can be evaluated — as socialism — regardless of the fact that they are operating within a largely non-socialist context, just as the limited free-market activities that were permitted within Soviet Russia or Deng Xiaoping’s China can be evaluated as free-enterprise initiatives. Socialist economic failures spring from well-understood defects within the socialist form of organization itself; those failures are not dependent upon the intelligence, goodwill, or moral character of those who are attempting to implement a socialist system, though often enough venal human failings have magnified the inherent problems of socialism.