Improving Our Standard of Living (Wattpad Edition)

Chapter 19: Cooperative Socialism Failed

When most people think of socialism, they think of the Soviet-style communist states of the 20th century.

Cooperative socialism is a little different. It's more democratic. The people create and vote on laws directly, rather than delegating that task to government officials. But unlike direct democracy within a capitalist system, a cooperative socialist society owns all business property collectively. Residents make every economic decision collectively as well. There are no private investors or business owners. Private property for business purposes is illegal. There are no companies, no stock market, no free trade. The people decide what to produce, how to produce, where to produce, and how resources are distributed. They do that via regularly held voting sessions. Money is replaced by a rationing system. The price of each good and service—in rationing tickets or whatever—is determined by the community.

Slight variants of cooperative socialism include collective socialism, democratic socialism, libertarian socialism, social anarchism, syndicalism, and others. They all mean the same thing in practice. Each prohibits private ownership of the means of production. In other words, these economic models ban personal ownership of business assets. Recall that a business asset is property or other tools used to produce goods and services for profit.

Noam Chomsky is a well-known libertarian socialist. Bernie Sanders is a famous democratic socialist. George Orwell, author of Nineteen Eighty-Four, and Howard Zinn, author of A People's History of the United States, were also democratic socialists.

Born 47 years before Karl Marx, Robert Owen was an early pioneer of cooperative socialism. His philosophy was called Owenism. He funded the creation of several communities in the UK and North America to test his political-economic system. They all failed.

The self-sufficient cities proposed by adherents of the Venus Project and Zeitgeist Movement bear similarities to cooperative socialism. But rather than rely on voting, followers advocate using sensors, meters, and computers to calculate optimal resource allocation. (Something that's achieved automatically by supply and demand under a capitalist system with a competitive market.) However, residents would have to agree with the decisions made by the algorithms. Voting would be important for making other decisions as well.

Most socialists today know that socialism failed in the past. But they believe their particular brand of socialism hasn't been tried yet. Generally, they are referring to the more democratic varieties.

But neo-socialists are perpetuating a big myth. Cooperative socialism and all its variants have been tried many times before. They too failed because of economic flaws in the system. The socialist model—even a "democratic" one—prohibits private ownership of the means of production. Socialism by its nature eliminates competition between businesses. And it removes consumers' capability to vote with their money every time they buy things. For these reasons, socialist communities have low scientific output and are incapable of generating a variety of high-quality goods at low cost.

By contrast, these things come easy in a capitalist system in which several firms are competing for customers.

Below is a list of socialist communities, several of which were founded in the United States [1] [2] [3] [4]. All of them failed after a few years or less. Some collapsed within the same year. That's why some only have one year listed.

Anarchist Aragon (Aragon, Spain) (1936-1939)

Blue Spring Community (Indiana) (1826-1827)

Danish Socialist Colony (Kansas) (1877)

Equality Colony (Washingon) (1900-1907)

Franklin Community (New York) (1826)

Free Territory (Ukraine) (1918-1921)