NEW YORK – “Communism would have worked, if the Soviet Union had only tried it for real.” I must have heard this argument a dozen times from die-hard leftist friends. Marxist economists such as Richard Wolff and Stephen Resnick even wrote a book making exactly this claim.
No doubt, true believers will be just as unwavering in the face of Venezuela’s collapse. That country, which embarked on a misguided “Bolivarian revolution” under Hugo Chavez and his successors, has imploded almost as spectacularly as the Soviet Union — the country is in such dire straits that the government is now calling for forced labor. Yet there will be many who claim that the dramatic reversal of what some on the left hailed as an economic miracle just a few years ago tells us nothing about the efficacy of socialist revolutions.
This demonstrates that for any political-economic ideology, there is always a hard core of believers who will never waver in their conviction that if only the program were tried in its pure form, it would succeed. Any failures — even debacles on a grand scale, including the fiasco of 20th century communism — will be chalked up to ideological impurity and improper application.
In economists’ models, humans are a rational bunch, willing to change their beliefs as soon as new evidence presents itself. In reality, true believers often cling tenaciously to their worldviews. This can even happen in science — a recent study found that research productivity in a scientific field actually increases when old, respected scientists die, bringing to mind the maxim that “science advances one funeral at a time.”
The tendency toward ideological commitment is now being tested in the United States, as free-market dogma — sometimes known as neoliberalism — is coming under increasing attack. Bernie Sanders’ presidential campaign gained a surprising amount of support from young people. Economists are focusing more on inequality and embracing a more activist role for the state. Business professors are starting to question the short-termism of financial markets and shareholder control. Some researchers at right-leaning think tanks are saying that Republicans need to move away from Reaganomics and its mix of tax cuts and deregulation.
Certainly, free markets haven’t produced dramatic failures on the level of the Soviet Union or Venezuela, but “not as bad as communism” is a fairly low bar to clear, and there’s a definite sense that the reigning economic policies have run out of steam.
In the face of this wave of attacks, many proponents of free-market ideology will be tempted to double down. If we had only tried real laissez-faire, they will say, we wouldn’t be experiencing problems like declining median income, decreased economic dynamism and excessive health care costs. Russ Roberts, host of the EconTalk podcast and a staunch free-marketer, opines that we should “actually try” free markets, “instead of just talking about it.” I encounter sentiments like Roberts’ on a regular basis, when I call for a more activist government. Many people bought into the laissez-faire idea strongly over the past few decades, and are not prepared to abandon it just because a socialist candidate wins votes or an economist writes a paper suggesting we need higher taxes. They will chalk up our problems to insufficient rather than excessive free-marketism.
And who knows? There’s an outside chance they’re right. Maybe the U.S. health care system, which now achieves results similar to nationalized systems at much greater cost, would be even better if government removed all interference. Maybe broader deregulation, the end of the Environmental Protection Agency, full privatization of public schools and even deeper tax cuts would supercharge productivity growth, boost median income and make people forget about inequality and insecurity.
But chances are we’ll never get a chance to find out. The public — especially the American public — doesn’t have the same kind of ideological commitment that some individuals display. It might be hard for one person to abandon a deeply held belief system in the face of new evidence, but the populace itself will change course through a huge number of small, incremental shifts in beliefs and outlook. As in financial markets, the crowd converges on a new equilibrium faster than many individuals.
And like it or not, the mass of humanity tends to be small-c conservative. Most people are not ideological crusaders — they want to keep their jobs, feed their families, pay their mortgages and not have to worry too much about politics. If a policy program such as communism or neoliberalism seems like it isn’t delivering the goods, the public will be quick to embrace a course correction.
That’s why I think there’s very little hope for political-economic programs whose benefits only become apparent after a very large dose. For an ideology to be successful, a moderate amount of it has to do a moderate amount of good. Relatively few nations have the unity and commitment to push through the doldrums in search of some grander success that’s just over the next hill.
So despite the protests of committed free-marketers, I expect the U.S. public to cast around for alternatives to the neoliberalism of Reagan, Bill Clinton and George W. Bush. Bernie Sanders-style socialism is one alternative option. “New Industrialism” is another. But some sort of course change, rather than a doubling down, seems inevitable.
Noah Smith is a Bloomberg View columnist. He blogs at Noahpinion.
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