Executive Summary

Robert Heilbroner (1919-2005) was the most distinguished American academic socialist of the 20th century. He was a long-time professor of economics and author of the best-selling The Worldly Philosophers. In this article, written after the fall of the Soviet Union, Heilbroner argues as a social scientist that socialists must diagnose accurately the failings of socialist experiments in order to correct them.

1. Socialism has “far surpassed capitalism in both economic malfunction and moral cruelty.” Even so, “the idea and the ideal of socialism” still exists. Hence, socialists must learn from its actual history to assess its prospects for improvement.
2. The revolution of 1917 turned Russia into the Soviet Union. Applying Karl Marx’s ideas, Lenin and Stalin tried organizing the economy without the capitalist incentives of profit and competition. Production levels quickly fell “to 14 percent of its prerevolutionary level.
3. Over the next half-century, several types of central planning were tried in good faith and with great effort—New Economic Policy, forced collectivization, top-down-pyramid-directives, and more. The results were consistently bad: By the 1960s, “the Soviet Union became the first industrial country in history to suffer a prolonged peacetime fall in average life expectancy.
4. Why? One reason was informational: the impossibility of rational planning without the price signals that only markets can provide. This early criticism of central planning by free-market economists Ludwig von Mises and Friedrich Hayek, Heilbroner grants, “was all too prescient.”
5. Another reason was the concentration of decision-making power in the hands of a few individuals at the top, with the necessary consequent “bureaucratization of economic life,” resulting in slow communication, bottlenecks, and red-tape.
6. A third reason concerns incentives and the lack of “motivation to act” in a system without the profit motive. Capitalists know they must act to gain profit or avoid loss, but under socialism, Heilbroner argues, everyone learned “that doing something is more likely to get them in trouble than doing nothing, unless doing nothing results in absolute disaster."
7. By the late 1980s, Soviet leaders recognized that the 70-year experiment in socialism was a failure. Under President Mikhail Gorbachev, perestroika (“restructuring”) allowed the re-introduction of some market freedoms, private property, and free trade with the West.

Read Robert Heilbroner’s essay here. Summary by Stephen Hicks, 2020.