The Instability of Socialism

Over time, socialism will produce bad outcomes even if it initially secures material equality, widespread unionization, and so on.

To see why, imagine that you wake up tomorrow and everyone in the US has an equal amount of resources and all workers have joined a union. Suppose further that harmful policies like drug prohibition have been eliminated. How stable is this situation?

Suppose that police union lobbyists work to insert fine print into some otherwise mundane legislation to create a small penalty for the possession and distribution of certain “controlled substances” to increase revenue for their department. All else equal, we should expect this legislation to pass. After all, the benefits to the police union are concentrated and the costs to the rest of us are dispersed. The expected benefit of your effort to read and vote against the legislation is smaller than (e.g.) the expected cost of the gas it takes to get to the polls. So the legislation passes and the penalty is created. Police unions have enriched themselves but harmed the public.

This is merely one case that illustrates a broader point. The public choice worry that concentrated interests will tend to win out over dispersed interests applies even to a socialist society that has somehow achieved all of its goals. So whatever equality, justice, and efficiency a socialist society might initially realize will tend to unravel over time simply because of the logic of collective action.