Collectivist Debate

The Collectivist Debate

What is Collectivism?

On the surface, collectivism is the thought that individual utility can be maximized when the factors of production such as capital are taken out of the hands of private individuals and made communal. Every person shares in the fruits of the labors of these factors of production. As such, there will be no class system, and man will be equal.

The Fabians and Social Democracy

The Fabian Society, which included George Bernard Shaw, Beatrice and Sidney Webb, HG Wells, William Clark, Sydney Olivier, Graham Wallas, Virginia Woolf, John Maynard Keynes, and Bertrand Russell, was one of the most influential groups in popularizing social democracy. This British group believed in gradually changing the British system to this hybrid form of capitalism. This group wanted to remove the injustices of the capitalist system via state regulation and the creation of state programs to remove these injustices.

One of their main arguments was that the rent paid to landowners was unfair and exploited the laborer. George Bernard Shaw sets out this portion of Fabian reasoning for socialism in the aptly titled "Fabian Essays in Socialism". The basic economic principle is that the proletariat are exploited because they cannot or do not own the land - they must pay rent to the wealthy landowners. By discussing the expansion of capitalists from lands that are the most fertile, and produce the most, to lands that are the least fertile, Shaw shows some of the reasoning for capitalism.

If the most fertile land is assumed to be worth $1000, and the least worth $100, the person owning the $1000 will allow laborers to work on his land if they pay economic rent of $900 - equal to the same amount they would get if they owned the least fertile land. As the story progresses, the rich land-owners get richer by exploiting the proletariat that cannot afford the land. Soon after, monopolies occur limiting the supplies of goods to affect their price in ways to benefit the land-owners more. By the time the story reaches its conclusion, the rich have become obscenely richer without doing any of the work, and the poor have become poorer while doing all the work.

Four of the Fabians, Shaw, the Webbs, and Wallas, founded the London School of Economics.

The Fabians were attacked from the left by socialists and communists, and the right by economic liberals

Critics

Numerous critics of collectivism have arisen, ranging from Orwellian literature, to C.S. Lewis, Ayn Rand, and Friedrich Hayek, and also include modern criticism through movies such as 'V for Vendetta'. As will be illustrated in the debate, the critics had different reasons for disliking socialism.

The Debate: Hayek v. Lange

Oskar Lange's Economic Theory of Socialism

Written in 1938, the Economic Theory of Socialism was written as both a counter to Ludwig von Mises, Freidrich Hayek, and Lionel Robbins' earlier critique of pro-collectivist works.

Von Mises' earlier critique is the backbone for most of the essay. Von Mises says that economic calculation is impossible in a socialist society, and, therefore, socialists cannot solve the rational allocation of resources problem. Lange counters this by saying that this is based on the wrong definition of price. Citing P. H. Wicksteed, Lange suggests looking at price as having two meanings - one being the typical exchange rate meaning, and the other being looked at as terms oupon which alternates are offered. The second meaning is broader and encompasses the first meaning.

Therefore, in order to perform economic calculation, one would only need three sets of data: the preference scale, the knowledge of terms on which alternatives are offered, and knowledge on the amount of resources available. The preference scale is assumed as given based upon demand schedules or the judgment of authorities. Three is given because a Central Planning Board would know the amount of resources available. Two therefore must be accessible because the terms on which alternatives are offered is simply the production function of the economy - socialist planners would have this knowledge as well. Von Mises' argument was therefore based upon an improper narrow definition of price.

Lange next moves on to Hayek & Robbins. Specifically, Hayek & Robbins state that they don't deny the theoretical possibility of the ability of socialist planners to be able to handle the problem of research allocation, only the possibility of a satisfactory practical solution. Hayek insists that it would take hundreds of thousands of equations, while Robbins goes farther to say that it would, "necessitate the drawing up of millions of equations on the basis of millions of statistical data based on many more millions of individual computations. By the time the equations were solved, the information on which they were based would have become obsolete and they would need to be calculated anew" Lange sums up the argument by saying that Hayek & Robbins say it could be solved, but it would take a lot of effort. In the next few pages, Lange convincingly argues, however, that the same mechanism used by capitalists to determine output and the allocation of resources could be used by socialist planners.

If, as stated by Hayek & Robbins, markets are an arena to provide a method of trial and error in a capitalist society, then it can also be an arena in a socialist society. In order to reach the proper equilibrium, Lange develops the following framework:

- Competitive market prices are given and there are low barriers to entry. There are three conditions of equilibrium:

1. All individuals must attain their maximum positions based upon equilibrium prices

Equilibrium occurs at the point of utility maximization, where consumers spend their income so that the marginal utility is equal for all commodities. Producers also maximize profits by determining the correct combination of factors and the optimum scale of each output. The correct combination of factors is determined by equating marginal productivity and the minimum cost curve. The maximum scale of output is determined where marginal cost equals the price of the product. Total output is based on free entry & exit, and owners of productive resources such as labor and capital maximize their profits by selling their services to the highest bidder.

2. Equilibrium price occurs where supply equals demand

Prices are constants independent of consumer's behavior, and each set of prices yields to different quantities demanded and supplied. Equilibrium serves to pick out the special set of prices as the one which assures the collective maximization of all in the system.

3. The social organization of the system must also be known

As a corollary, Lange defines the income of consumers as equal to the receipts from selling labor plus any entrepreneur's profits. In a socialist system, a similar trial and error process will be successful, based upon the parametric function of prices - each individual separately regards the actual market prices as data to which he must adjust, while trying to exploit market conditions he cannot control. Therefore, market prices are parameters determining behavior.

Lange lays out his trial & error process in a socialist system:

Given random prices, individuals fulfill their subjective equation condition to attain their maximum utility positions. Any discrepancies between supply and demand are removed due to competition between buyers and sellers. This leads to a new set of prices, and continues to run through the process repeatedly until the proper set of prices is reached.

In the socialist economy, freedom of choice in both consumption and occupation is assumed. Preferences are expressed by demand, and prices are the guiding criteria in production and allocation of resources. There is a genuine market for consumers' goods and labor, with no outside market for capital and productive resources outside of labor. Equilibrium is determined by:

A. Public officials make decisions according to certain principles

The officials are individuals participating as consumers and laborers, and managers of production of non-labor resources

B. Prices are determined where supply equals demand

C. As productive resources outside labor are public property, incomes of consumers are removed from ownership of resources, and the social organization is determined by principles of income formation adopted

Since socialists have different ways to determine C, this gives them considerable freedom in matters of income distribution. However, the income of consumers is limited due to freedom of choice of occupation. Income is equal to receipts for labor performed, as well as the social dividend constituting an individual's share of income derived from capital and other resources.

Equilibrium is reached:

A. The incomes of consumers and prices of goods are given, demand can be determined.

B. Decisions of managers of production are no longer guided by the aim of profit maximization. Rules are imposed by the Central Planning Board to determine the best way to maximize preferences and utility

Each industry has to produce exactly as much of a commodity as sold or accounted for by other industries at a price equal to marginal cost. The decisions of managers of production must always use the method that minimizes average cost and produces as much as will equalize marginal cost and price. Therefore, each commodity is produced with a minimum sacrifice of alternatives, and the marginal significance of each preference which is satisfied is equal to the marginal significance of alternative preferences the satisfaction of which is sacrificed.

With the freedom of choice of occupation assumed, labor offers itself to the industry or occupation with the highest wage. Publicly owned capital has a price fixed by the Central Planning Board, and the resources can only be directed to industries that can pay this price. Prices must be given to determine what minimizes the average cost and price; there is only one set of prices to reach equilibrium. Socialists can control production to reach this level - the parametric function of price becomes an accounting rule. The Central Planning Board fixes prices and ensures all stick to it. Any price different from the equilibrium price would show up as a surplus or shortage at the end of the accounting period. In this sense, the Central Planning Board performs the function of the market.

The trial and error method works as follows:

Prices are random, and decisions are made on these prices. The quantity supplied and demanded of a commodity based on these prices is determined. If the quantity demanded does not equal the quantity supplied, the Central Planning Board sets new prices, which becomes the basis for new decisions. In Fred Taylor's work, called the Guidance of Production in a Socialist State, too high or too low of valuations would mark a surplus or shortage and would mark it to be fixed. Successive trials eventually makes the right valuations and right combination of prices. This removes the need for knowing the complete list of prices or exchange rates between every single commodity, or hundreds of millions of equations to calculate prices.

Lange goes on to argue that the "solving" done in this system would be the same as done in a competitive market. The right prices would be found by watching supply and demand and adjusting until they balance. Lange even goes as far to say that the Central Planning Board could work better than a competitive market because the Central Planning Board would have a wider knowledge base.

While Lange effectively argues how the mechanism could be properly executed, the socialist movement would continue to be bombarded throughout the century from all angles, including other economists, as well as through movies and books.

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Hayek: The Use Of Knowledge in Society

A student of Ludwig Von Mises, Friedrich August von Hayek followed in the footsteps of his teacher regarding the ability of socialism to work in society. Primarily, Von Mises work concerning the socialist debate enveloped the economic calculation problem. Through his work, Von Mises argued that a socialist government could not make the necessary economic calculations that are the basis of any complex economy. He also deduced that without a market economy goods could not be rational allocated to their most productive uses because no function price system would exist. Therefore, socialism would fail as demand cannot be known without prices. In The Use of Knowledge in Society Hayek elaborate on these arguments put forth by his teacher Von Mises.

In this piece Hayek puts forth the argument that the primary economic problem facing society is not how to most efficiently allocate resources, but rather, "a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only those individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge not given to anyone in its totality" (520).

Determining how to deal with this "knowledge problem" and the best way to utilize all the information that is dispersed randomly throughout the population, Hayek raises the question, "Who is to do the planning?" Here Hayek begins to debate whether or not planning should be done centrally by a single individual or group of individuals or whether it should be left to be performed by competition.

In order to determine which particular way lends itself to the fullest use of all existing information, we must first establish what knowledge are we talking about? Primarily, Hayek asserts that while scientific knowledge is important, the knowledge of the circumstances of time and place are as important if not more important. Hayek explains this assertion by indicating that "every individual has some advantage over all others in that he possess unique information of which beneficial use might be made, but which use can be made ONLY if the decision..are left to him." (522)

Similarly, economists have shown the tendency to focus more on statistical aggregates and less on the detailed changes that occur on a day to day basis. In many instances these aggregates demonstrate stability but they do not show the constant random changes that maintain this stability. These changes are made with the knowledge available to those individuals of that particular time and place and in the light of circumstances that were unknown days if not minutes before. This type of knowledge cannot be entered into any type of statistical information available to central planers. They would only have available to them, information that is clumped together. Here Hayek begins to argue that decisions should be left to those most familiar and close to them; A central planning authority cannot lend itself to utilizing all knowledge and then issuing its orders. Hayek makes reference that this authority "cannot take direct account of these circumstances of time and place, and that the central planner will have to find some way or other in which the decisions depending on them can be left to the man on the spot." (524).

He (Hayek) also addresses the knowledge available to the "man on the spot" does not constitute the entirety of the knowledge needed to make an informed decision. This is where the price system becomes important part of the market. A price system allows an individual to focus on the relative scarcity (how difficult or easy it is to obtain a good) of a good and not on the why certain events occurred. For example, "it does not matter why at the particular moment more screws of one size than another are wanted, why paper bags are more readily available than canvas bags...all that is significant..is how much more or less difficult to procure they have become." (525).

Even if all the knowledge was readily available to one individual or a group of individuals given authority over a society, they would be unable to follow the relationships of every single contributing factor to the end.Only a price system allows the actions of one individual to be coordinated with the actions of all others in society. It does not matter the reason a good becomes more or less scarce, but that through the signal of prices individuals know that some portion of a good has become more profitable if it were to be used elsewhere and they should economize their consumption of that particular good and switch to another product. What is remarkable (to Hayek) is that this one signal influences the whole of the market, impacting substitutes and compliments without the knowledge of the original cause of the changes.

Hayek's reply to Lange and Taylor's argument using The Use of Knowledge in Society impacted the overall debate and stirred up more and more arguments on whether or not socialism is an effective policy. This Debate, as we will see, spilled over to the literature of the era both for and against socialist policies and central planning

The Debate and It's Effects on Literature

George Orwell's Animal Farm

Description

Cartoon of The Road to Serfdom [1]

Much of George Orwell's literature has been read and viewed as providing his opinions on the role socialism should play in society. While a critic of capitalism and its potential ability to produce a tyranny, Orwell is most known for his arguments against central planning and socialist totalitarianism. His writing can be seen as demonstrating the effect the socialist and anti-socialist movements had on the literature of that era. Orwell, himself, was a democratic socialist believing socialism as the basis for the economy with democratic ideals governing society. Primarily, this meant that the means of production were collectively owned by the citizens of a given society and that the political aspect of this society would be handled democratically much like a commonwealth of republic. While he is socialist his views led him to believe that only his type of socialism would lead to a desired outcome and that all others led necessarily to a totalitarian state. Specifically, the arguments put forth by Orwell in Animal Farm can be seen as an attack on the prominent tyranny in Russia led by Stalin.

If we were to look at the concepts put forth by Orwell's novel, Animal Farm, and the ideas presented in The Road to Serfdom by F.A von Hayek, a prominent anti-socialist economist several key elements would appear within both pieces of literature. In fact, looking at a cartoon rendition of Hayek's Road to Serfdom and the path it lays for a totalitarian government to occur and the storyline of Animal Farm, the storyline accurately mirrors the structure and path set forth by the cartoon.

In Orwell’s book we see the introduction of central planning coming from war-time necessity. The reader is also introduced to the central planners, the pigs (Napoleon, Snowball, and Squeaker) who take it upon themselves to teach and organize the other animals on the Manor Farm for the upcoming rebellion. The pigs push forward the idea of rebellion with the promise that no mouths will go unfed and that every animal would be free. As we move to chapter 3 in Animal Farm we can see that directly view themselves as the supervisors and are becoming like the central planners in Hayek's Road to Serfdom. On page 30 we read that “the pigs did not actually work, but directed and supervised the others. With their superior knowledge it was natural that they should assume leadership.” Around this time we can see the pigs planning, instituting resolutions, and forming committees

Similarly, the cartoon portrays the idea of planning begin due to war-time situations in order to fully mobilize the nation's economy. In the same regard as Orwell's book, the cartoon demonstrates that once the war (or rebellion) is over, the planners want to stay in power and promise a Utopian society with hopes of remaining in power.

The cartoon then demonstrates a potential flaw of planning is that the planners cannot agree on a single plan. The argument is based on the fact that for each individual planner has an incentive to get their particular plan passed and will not cooperate with others. Not only that, but the cartoon shows that even if plan is introduced, citizens often disagree whether it was the correct plan (often these disagreements occur between two different groups of people (e.g. farmers and factory workers)).

On page 34 we see that Orwell captures the potential flaw that Hayek discusses when he contends "Snowball and Napoleon were by the most active in the debates. But it was noticed that they were never in agreement: whatever suggestion either one of them made, the other could be counted on to oppose it." (34) As the book continues the reader is brought to the attention of the windmill debate. Here we see Snowball presenting the idea of the windmill, and Napoleon vehemently opposing it. At one point he (Napoleon) urinates on the construction plans. We also see at this time, that the plan of building the windmill has also divided the farm into two factions.

Two parties are formed (1) with Snowball and for the construction of the windmill and (2) with Napoleon and against the construction of windmill. During a great debate, Napoleon seizes power using 9 enormous dogs who he has under his control. These dogs chase out the only opponent,Snowball, leaving only Napoleon to become the leader of Manor Farm.

Description

Here we notice a slight discontinuity between the cartoon and the events within Animal Farm. Within the cartoon the people become tired of the fighting and constant disagreements among the planners want to get a man who can make the plan work. However, the end is the same in both the literature and the cartoon. The "strong man" (Napoleon) takes power and has complete control over the daily workings of society.

On page 62 we see how propaganda plays a important role in ensuring obedience and loyalty from all of the animals. After Napoleon has taken control of the farm, Squealer (another pig) is sent around to explain the situation to all the other animals. He begins by arguing about the sacrifice that Napoleon has made and that leadership brings heavy responsibility. He also proclaims that "bravery is not enough, loyalty and obedience are more important." (62) He also threatens that disobedience will bring back their enemies (the farmer, Mr. Jones).

We also begin to see the manipulation of events to create a united coalition of farm animals by implicating the ousted pig, Snowball, as being a traitor and in cahoots with the humans. On 65 Orwell writes, "and the plan which Snowball had drawn on the floor...had actually been stolen from among Napoleon's papers." We see this portrayal of Snowball as the enemy or traitor again after the windmill they had been building was blown down: "Comrades, do you know who is responsible for this? Do you know the enemy who has come in the night and overthrown our windmill? SNOWBALL!" (65) Observing the cartoon depiction of the Road to Serfdom, we also see how it is not uncommon for the newly appointed (whether by force or misfortune) dictator to use a negative aim at a particular person or group of people. As the cartoon asserts, in Germany the negative aim was Antisemitism.

In both the cartoon and Orwell's book we also see the use of secret police to keep anyone from opposing the plan and to impose the dictator's will. Specifically, on page 85 in Animal Farm the hens on the farm are told that they must give up their eggs because Napoleon had signed a contract for four hundred eggs a week. The hens protested saying that taking the eggs should be considered murder. They proceeded to lay their eggs up in the rafters. Napoleon then ordered his dogs to stop their rations until they went back to their boxes and allowed their eggs to be taken. From this situation 9 hens died, but all the other animals were told that a disease had led to their death and that it was not a result of their Napoleon's strict rules.

Description

As we move towards the end of the cartoon, we are left with the idea that the strong man controls every aspect of an individual's life determining what a person does for recreation, for a profession, and even so far as telling someone what to think. Orwell uses these ideas when he writes about every animal required to work on the windmill and the chickens required to turn over their eggs to be sold. Similarly, Orwell demonstrates that Napoleon attempts to change historical events and the way that the animals view things through the book by showing how the seven original commandments were changed to permit actions that he (Napoleon) felt were entitled to him.

Animal Farm concludes with the striking reality that the oppression and misery experienced when the farm was controlled by Mr. Jones is no different from the reign of Napoleon and the pig "planners" after the rebellion took place. The animals are still hungry, still labored, and still received no extra benefits from what they produced. In the end, Orwell seems to have been taken the words of Hayek very seriously when he argues that planning (socialism) may very well put society down the path to the Road to Serfdom and to a totalitarian state

George Orwell's 1984

Description

Overview of the Story

Orwell's story begins with the introduction of a large country, Oceania that is ruled by a single party led by the man named Big Brother. Early on we are introduced to Winston Smith, the protagonist and main character in this book. Winston works for the party controlling the Newspaper clippings to ensure only what Big Brother wants published, gets published. However, early on we see that he displays rebellious tendencies (e.g. purchasing a book as a diary and writing down "DOWN WITH BIG BROTHER") and understands the government is manipulating individuals for their (gov't) benefits. This manipulation is most widely see through the control that Big Brother has over the citizens of Oceania. Specifically, each roomor house is required to have a television, showing propaganda and political pamphlets, which had a built in camera and microphone to watch over and observe their actions. The thoroughness of the propaganda and mind altercation has led to the society excepting and cherishing the party slogan, which we read throughout the book as, "WAR IS PEACE, FREEDOM IS SLAVERY, IGNORANCE IS STRENGTH."

As the story moves forward, Winston displays his rebellious nature when he writes in his diary about the sex he had with a prostitute 3 years ago. For the people of Oceania, chastity was ingrained as party loyalty. All pleasure was to be removed from sexual acts, and their only purpose was in the creation of children to serve the party. In fact, illegal sexual relations were considered thoughtcrime and "thoughtcrime is death." The reader's is also brought to the attention of that he believes the only hope for Oceania, lie in the proles (the workers) because they make up a large part of the population and have to numbers to overthrow the party.

At this time, Winston returns to the shop where he bought his diary and purchases a glass orb with a piece of coral inside. He is also shown an upstairs room which is free of the televisions and the watchful eye of the government. Around this time, we meet another prominent character, Julia, who proclaims she loves Winston and together they arrange a private meeting. During this meeting, the two engage in illegal sexual relations and at one point Winston asks Julie if she has done this before, to which she replies yes, many times. This statement turns on Winston and gives him hope that the corruption (in the eyes of the party) in her gives him hope that the government is rotten and may simply crumble and fall apart one day.

The meetings between Winston and Julie become more and more frequent. Winston went back to the store and rented the room without the televisions and cameras so that they can be together without the fear of being caught. During this time, Winston and Julie are introduced to Mr. O'Brien, who gives them hope of a resistance movement against Big Brother. When at O'Brien's house, Winston and Julie and asked questions on their willingness to commit various atrocities on behalf of the resistance movement. Winston and Julie both state that they want to work against the Party and believe in the resistance movement. After they leave, Winston receives a copy of The Book, written by the leader of the resistance movement and proposed traitor, Emanuel Goldstein.

Later in the book, it turns out that O'Brien had actually written the book given to Winston in a ruse to weed out potential revolutionaries. Winston and Julie are caught and accused of thoughtcrime. The reader follows Winston as he is taken to the Ministry of Love and tortured. Here the reader sees O'Brien use what Winston had written in his diary: "Freedom is the freedom to say that two plus two makes four." O'Brien holds up four fingers of his left hand, and he asks Winston how many there are. Winston answers four a couple of times, and each time the pain increases. The torture goes on until Winston breaks and answers what Mr. O'Brien wants to hear, that he sees five fingers instead of four being held up. Winston is then taken to Room 101, where his worst fear is realized, rats. This final sequence forces Winston to betray everything in his life and and comes to love Big Brother.

The View of Socialism in 1984

Description

The book 1984 demonstrates the combination of opinions that Orwell held concerning both socialism and capitalism. Orwell has been documented as say that "I became pro-Socialist more out of the disgust with the way the poorer section in the industrial section were oppressed and neglected that out of any theoretical admiration for a planned society. Primarily, Orwell believed that a capitalist economy led to inequalities through the overproduction of goods. Capitalism also had the tendency to concentrate the levels of capital held by an increasingly smaller number of individuals, producing a path-like analysis from industrialism to monopoly to tyranny. It is in those regards, Orwell could have been seen as pro-Socialist; however, his views were not consistent with those of utopian socialists, but in reality he did see socialism as a push for centralization and that centralization led ultimately to totalitarianism. Specifically, the main concept within socialism that Orwell worried would lead to totalitarianism is the idea that someone must be invested with the power of enforcing an economic plan. Just as Hayek claimed his piece was a warning bell for all who read, Orwell's piece can be seen as a similar warning arguing, "Capitalism leads to dole queues, the scramble for markets and war. Collectivism leads to concentration camps, leader worship, and war." (Roback 128)

Perhaps the most insightful paragraphs in 1984 that lends itself to the political and economic views of Orwell is the one that demonstrates:

"The Party seeks power entirely for its own sake. We are not interested in the good of others; we are interested solely in power. Not wealth or luxury or long life or happiness: only power, pure power. What pure power means you will understand presently. We are different from all the oligarchies of the past, in that we know what we are doing. All the others, even those who resembled ourselves, were cowards and hypocrites. The German Nazis and the Russian Communists came very close to us in their methods, but they never had the courage to recognize their own motives. They pretended, perhaps they even believed, that they had seized power unwillingly and for a limited time, and that just round the corner there lay a paradise where human beings would be free and equal. We are not like that. We know that no one ever seizes power with the intention of relinquishing it. Power is not a means; it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power." (1984 263)

This paragraph shows the nature of Orwell's opinions regarding totalitarianism. Once power is given to a person or group of persons (Big Brother/The Party) that person or group will tend to use that power to control more of society and usurp individual's liberties and rights until all that is left is a state not unlike Oceania. Within this paragraph the statement, "We know that no one ever seizes power with the intention of relinquishing it. Power is not a means; it is an end," shows that once power is given it cannot be taken away, these individuals want to stay and power and will enforce strict rules and regulations to keep in power. For example, we see these regulations through the altering of newspaper and the propaganda machines being placed in every household in the country of Oceania.

Within 1984 we also see some of Orwell's socialist ideals. As mentioned, Orwell was a democratic socialist who believed his meant that the means of production should be collectively owned by the citizens of a given society and that the political aspect of this society would be handled democratically much like a commonwealth of republic. In this sense, Orwell depicts the proles (the working class) as embodying the ability to save society as they know it and overthrow Big Brother.

C.S. Lewis' That Hideous Strength

Overview

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“That Hideous Strength” is the third in C.S. Lewis’ Space Trilogy. The other books in the trilogy include “Out of the Silent Planet” and “Perelandra”. Lewis, a Christian, portrays his Christian beliefs throughout the work, providing a religious and philosophical contrast to George Orwell’s work, who was an atheist.

As mentioned in the introduction, “That Hideous Strength” is a ‘modern fairly tale for grown-ups,’ meaning there is a lot of sci-fi and fantasy throughout the book. The genre is of note because it provides a stark contrast to other anti-collectivist books, signaling the expansion of the debate into all walks of literature.

“That Hideous Strength” takes place in England in a small university town. The university sells some of its land to the National Institute of Coordinated Experiments, or N.I.C.E. The N.I.C.E. is essentially a government-funded central planning board.

Throughout the book, a conflict arises as characters try to prevent the N.I.C.E. from taking over England, Earth, and the rest of the universe. The N.I.C.E. is portrayed as a group of scientists trying to make science the guidelines for human life and to use science to improve the lives of humans. By taking over the government and economy, the group would be able to control everything and further their quest. The people will simply become material for experiments, with the useless and obsolete individuals being removed from the earth. The N.I.C.E. paints another picture of the potential horrors of a central planning board. Descriptions throughout are filled with images of the torture, horror, and pain for individuals when they no longer have control of their own life. People become mere pieces to the scientists and ultimately are just fuel for the machine.

Comparable to “the Road to Serfdom” and “1984”, Lewis shows how central planning results in the loss of human rights, and the sheer and utter misery of all those within the system. George Orwell’s review of the book shows synergy between Lewis and himself, as he describes the N.I.C.E. as being a “modern machine civilization [sic]”, consisting of a “company of mad scientists” that plan to “use the common people are to be used as slaves and vivisection subjects by the ruling caste of scientists, who even see their way to conferring immortal life upon themselves.”

The two authors provide differing viewpoints regarding the use of religion. Orwell, an atheist, mentions that the miracles, supernatural, and divine intervention throughout take away from the story. Regardless, the point is still evident that the debate, especially the anti-collectivist side, has spread throughout all types of works, and all moral, philosophical, and religious backgrounds.

HG Wells' Time Machine

Overview

First published in 1895, HG Wells' Time Machine was one of the works that argued for collectivism. It was published six years after the Fabian Essays in Socialism, and incorporated many of the ideas of that work.

The story takes place in London in the late nineteenth century. Wells paints a picture of a Time Traveler discussing his invention, a time machine. After briefly introducing the concept and background of the time machine, the narrator switches from an ambiguous "I" to the Time Traveler himself. The Traveler begins to tell his story of time travel.

After traveling through time for a while, the Time Traveler finds himself in London in the year 802701. The landscape has completely changed, and the buildings that once occupied London have been replaced by a few buildings, a large Sphinx-like statue, and other buildings in ruin. The rest of the landscape is covered in trees, flowers, and other vegetation.

The Time Traveler notices in the distance several strange people. When he finally encounters these people, known as the Eloi, he describes them as almost child-like, very weak and delicate looking. They speak a different language, and as such it is difficult for the Time Traveler to communicate with them. They take the Time Traveler and show him around their buildings, offering him a feast of hybrid fruits. The Time Traveler continues to explore, and when he returns to the field he landed on he notices his time machine is gone. He begins a frantic mission to try to find his time machine to no avail.

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Sleeping outside one night, the Time Traveler notices another creature in the distance. He tries to catch up to it to no avail. Puzzled, the Time Traveler continues his exploration of the land. Eventually he finds a huge, well-like structure going deep into the ground. He decides to climb down the well, and finds out that this is where the Morlocks, the other inhabitants of the Earth, live.

The Time Traveler describes the Morlocks as both subhuman and subterranean, with pale skin, large eyes, and confusion in the sunshine. Here, the commentary on Capitalism begins.

The Time Traveler hypothesizes about how it came to be that there were a group of people above the ground, and a group below:

...the gradual widening of the present merely temporary and social difference between the Capitalist and the Labourer was the key to the whole position ... There is a tendency to utilise [sic] underground space for the less ornamental purposes of civilisation [sic].

The Capitalists kept expanding above ground, and eventually industry was forced underground. The richer people, interpreted as the Capitalists, began to monopolize the ground, and there was a split into the Haves (the Capitalists or Upper-Worlders), and the Have-Nots (the Laborers or Under-Worlders). The Haves lived above ground, where they could pursue pleasure and comfort, and the Have-Nots were forced underground.

Eventually, the Upper-worlders had exploited the Under-worlders to such a point that they no longer had to work, while the Under-worlders were constrained only to working - the rich was assured of his wealth, and the laborer assured of his life of toil. As such, the Upper-world eventually reached a stasis where there was no unemployment, no social problems, and, on the surface, a Utopia. The Under-worlders, forced to labor and completely separated from their fruits of labor, eventually began coming to the surface at night to feed.

description

The Time Traveler eventually recovers his machine, and completes his travels by going 30 million years in the future. Through his travels, he notices the Earth begin to fall apart, and eventually humanity ceases to exist. The world has devolved, and the only living creatures are crabs and other large animals. Safely returning to the present, the Time Traveler reflects on his trip.

Through the extreme use of Upper-worlders and Under-worlders Wells paints a picture of the effects of Capitalism. As argued in Collectivist literature, class structure enables the continued exploitation of the laborers by those who own the capital. Wells takes this notion, and uses it as the basis for the creation of two worlds. Ultimately, the Capitalists get richer, and the Laborers are eventually exploited to a point of being forced below ground. Incorporating many Collectivist themes in his work, Wells creates a startling image warning of the evils of Capitalism.

Concluding Remarks

The "Socialist Calculation" debate began with Von Mises and Barone in the early 19th and intensified with the work of both Lange and Hayek in the years slightly before as well as after WWII. It can be viewed as emerging due to the immense poverty faced by several countries even while the industrial revolution took off. These Socialists, Marxists and other critics of lassiez-faire markets felt that this was a prime example of a market failure and that a centrally planned economy provided a logical and practical solution. Those against socialism disagreed and argued that no socialist state planner could ever aquire the necessary amount of information to properly allocate resources.

As mentioned in the previous sections to prominent economist rose to the forefront of this debate and offered their opinions.

Oskar Lange’s argument for socialism was compelling in that he suggests looking at price as having two meanings - one being the typical exchange rate meaning, and the other being looked at as terms oupon which alternates are offered. The second meaning is broader and encompasses the first meaning.

On the other side of the debate, F.A von Hayek used a strong argument that any stat-run economy would fail in comparison to capitalist economy in the allocation of resources in large part due to the fact the price system conveyed all necessary information that would be unavailable to a central planner.

These two sides of the debate can be found in the prevailing literature of the time. In the Time Machine, H.G. Wells shows his disgust for the capitalist ideals and his belief that it leads immense and incredible differences in equality (the top and bottom dwellers). On the other hand, George Orwell demonstrates his belief that both socialism and capitalism tend to lead to a similar situation, tyrannical governments. In fact he himself states ""Capitalism leads to dole queues, the scramble for markets and war. Collectivism leads to concentration camps, leader worship, and war." Finally, the opinions of C.S. Lewis within That Hideous Strength show the reader that he believed a centrally planned society was doomed to lead to totalitarianism.

While these books might seem like antiques or old news, they still play a prominent role today. In fact, the comparisons of Orwell's 1984 have been drawn between the United States and their recent policies surrounding 9/11. The loss of freedoms from wire tapping conversations to face scanning machines in airports could be seen by the followers of Orwell's arguments in 1984 as the start down a path leading to Oceania. As incredible as this may seem, Orwell's book should serve as a warning to societies, even today.

References

Hayek, F.a. "The Use of Knowledge in Society." The American Economic Review 35 (1945): 519-530. <http://www.jstor.org/sable/1809376>

Lange, Oskar and Taylor, Fred. On the Economic Theory of Socialism. Minneapolis: The University of Minnesota Press, 1938.

Lewis, C.S. That Hideous Strength. New York: Scribner, 2003.

Orwell, George. 1984. New York: Penguin Group, 1950

Orwell, George. Animal Farm. New York: Penguin Group, 1945

Orwell, George. The Scientist Takes Over: review of C.S. Lewis, That Hideous Strength (1945) by George Orwell. Manchester Evening News, 19 August 1945. <http://www.solcon.nl/arendsmilde/cslewis/reflections/e-orwellths.htm>

Rai, Alok. Orwell and the Politics of Despair. Cambridge: Cambridge UP, 1988

Roback, Jennifer. "The Economic Thought of George Orwell." The American Economic Review 75 (1985): 127-132. <http://www.jstor.org/stable/1805583>

Shaw, George Bernard. Fabian Essays in Socialism. Garden City, New York: Dolphin Books.

Wells, H.G. Time Machine. New York: Random House, 1931.