Groucho Marxism

There is no doubt that globally, socialism is in decline. At one time around one-third of the world’s population lived under socialist governments, most notably in the republics of the Soviet Union and its satellites. Today, socialism is the official form of government in only five countries: China, Cuba, Vietnam, Laos, and North Korea. In fact, most experts argue that China’s contemporary economic system represents a form of capitalism rather than socialism, which brings the number of socialist countries down to four. Moreover, it can hardly be said that any of these four countries is doing particularly well. Of the 186 countries included in the CIA’s World Factbook, Vietnam ranks 86 in terms of GDP (PPP) per capita, Cuba ranks 99, Laos ranks 121, and North Korea ranks last.

These two facts – the global decline of socialism, and the fact that the remaining socialist countries are relatively poor – are often trotted out as a way to demonstrate that, whilst socialism might be a great idea in theory, in practice it just doesn’t work. And on the face of it, it is difficult to argue. So how should we socialists respond? We cannot deny the facts on the ground, but we can start by putting them into context. First, we can point out that although the remaining socialist countries may be relatively poor, so are their closest neighbours. Vietnam and Laos’ closest neighbour, Cambodia, ranks 144 on the list of countries based on GDP (PPP) per capita, and Cuba’s closest neighbours, Jamaica and Haiti, rank 111 and 158 respectively.

Nobody ever blames capitalism for the relative poverty of Cambodia, Haiti, and Jamaica, despite the fact that these are capitalist states. So blaming the poverty of neighbouring socialist countries on socialism is an obvious case of cherry-picking data to fit preexisting beliefs. However, although this may be true, the argument is not all that convincing as all four socialist states also have capitalist neighbours that are richer than them. For example, Thailand ranks 73 on the list of countries by GDP (PPP) per capita, ahead of both Vietnam and Laos; the Dominican Republic ranks 71, ahead of Cuba; and South Korea ranks 28, way ahead of North Korea (in fact every country in the world ranks above North Korea).

A better riposte is to point out that GDP is just one metric, and a flawed one at that. Perhaps we should look instead at the UN’s Human Development Index. Unfortunately socialist states don’t fare any better here either: in the list of 193 countries for which the index is calculated, Vietnam ranks 93, Cuba ranks 97, Laos ranks 147, and poor old North Korea didn’t even make the list. It seems pretty clear therefore that these countries are not exactly socialist utopias. But before we jump to the conclusion that socialism doesn’t work, we need to consider another possibility: outside sabotage. It is notable that in the last century, the US has gone to war with three of these four countries (Vietnam, Laos, and North Korea) and has imposed a brutal embargo on the third (Cuba).

Is it possible that the reason these countries are poor is that they are being actively sabotaged by the US? I think it unlikely in the case of Vietnam, Laos, and North Korea, as the US-led wars in these countries, destructive as they were, all ended many decades ago. However, as the US embargo on Cuba is ongoing, you could make a case that it is having a significant impact on the country’s economy. In fact a 2015 report in Al Jazeera estimated that the embargo had cost the Cuban economy $1.1 trillion in the 55 years since its inception, once inflation is taken into account. This equates to around $20bn per year, or around 15% of Cuba’s GDP (PPP). But a 15% increase in GDP (PPP) per capita would hardly turn Cuba into a rich country; it would still be poorer than its neighbour the Dominican Republic, for example.

Thus, although the US embargo clearly has some impact on the Cuban economy – it must do, otherwise why would they do it? – I don’t think we can blame it for the state the country is in. How, then, do we as socialists reconcile ourselves to the fact that socialist countries are so poor? I think our only option is to accept that these countries are not really socialist. This answer will not be popular with those who are opposed to socialism. It will also not be popular with many who are in favour of socialism, as Vietnam and Cuba in particular are often held up as examples of successful socialist states. I am also conscious that this answer might sound like a cop-out, and that by saying that these countries are not really socialist I am simply dodging the question. So let me try to expand on this a bit.

Recall the basic definition of socialism: an economic system based on social (i.e. common) ownership of the means of production. This contrasts with capitalism, an economic system based private ownership of the means of production. Which is a better description of the economic systems that exist in Cuba, Vietnam, Laos, and North Korea? I would argue it is the latter rather than the former. Although these countries are nominally socialist, in each of them an authoritarian state has effectively taken on the role of the ruling class. In other words, they are state capitalist rather than socialist. In my view, this is the real reason these countries are so poor, and will remain so until there is a truly democratic socialist revolution – one that takes place on a global scale.