Socialism is dead. This can be contended and debated, but I would assert that socialism as a pure doctrine has been defeated. The original form of socialism is barely, if at all, relevant to modern politics or economics. Almost no one goes against markets, money, property, or economic liberty on principle in the 21st century. Socialist policy has thus become a matter of pragmatism and not philosophy. One may argue that any degree of statism is socialism, but socialism as it was in the 19th and 20th centuries is no longer a threat in the Western world. Almost no person wants a command economy and no one says that the price system should be completely replaced by central planning. Only the most fringe radicals say that there should be no property and that the proletariat should have free access to capital and consumer goods.
The socialism that Mises described and the socialism that the early libertarian movement viciously attacked has long since disappeared from the common political sphere. There are still radicals who are true socialists, but even most self-described socialists have adopted positions that are in opposition to state socialism and planned command economies. The usefulness of the market in deciding the allocation of goods is almost universally recognized and economics no longer has a large current of pure socialism running through it. The closest school of thought in mainstream economics to actual socialism is post-Keynesianism, which is still quasi-capitalist. Although there are still a few socialist experiments, only Cuba and North Korea manage to remain truly and properly communist. One could argue that North Korea is just as fascist as communist, and that some other small states like Laos still retain communism. But when one looks at official state ideologies and their practice, these are the two most communist states. The Western world has fully embraced economic liberalism, although liberalism now has an inherent focus on welfarism alongside economic freedom.
By using welfare, workplace democracy, or other methods that preserve the market system, the modern anti-capitalist tries to create what they call a mixed economy. This mixed economy is supposed to be a combination of socialism and capitalism, but in reality it is trying to achieve the moral goals of socialism while still retaining the benefits of a capitalist economy. Trying to create this balance between socialism and capitalism results in a system that is still fundamentally capitalist. However, this capitalist system is restricted and encumbered by various reforms and privileges granted to favored groups. Modern anti-capitalism is no longer anti-capitalist, but simply capitalism with additional fetters. The Nordic countries are the only Western countries that socialists can point to, and they have relatively laissez-faire principles outside of the welfare state. And even the Nordic welfare states were previously balanced by the relatively high trust and high quality populations. This may be related to eugenics or other factors that make these countries different. The success of these countries is certainly despite the massive social democracies that they have in place. The only arguments that are being had concern the degree to which capitalism ought to be allowed to operate before it is restricted. The conflict is really about how capitalism ought to be improved and not whether to transform the economy into a socialist one. People who continue to call themselves socialists are far removed from what socialists used to be.
Cause for Optimism
Even traditional Keynesianism is nowhere in sight; the Keynesian assumptions still underline mainstream economic theory and some Keynesians are extremely prominent, but no one outside the Cathedral really argues for Keynesianism. There are new Keynesianism and neo-Keynesianism, which distance themselves from original Keynesianism and take a slightly more market-oriented approach. Even though Keynesianism was somewhat resurrected by the economic crash, it died again soon after. The far-left and the far-right are attempting to resurrect the theory again, but thus far they have had little luck in actually doing so.
Traditional Keynesianism is no longer a dominant paradigm, but rather confined to the spheres of radical Internet politics and extremely well-connected and state-sponsored academics. This does not mean that everyone is suddenly a libertarian; far from it. However, if a time traveler were to go back to the 1950s and tell Mises and Hayek that 60 years later, labor unions would be in decline, mainstream economics would not be hostile to the market economy, planned economies would be out of fashion, the government would not be seen as a god, and that the greatest current enemy to capitalism is universal healthcare, they would be extremely relieved.
Current Threats Against Capitalism
Since there is no organized and consistent opposition to capitalism as a whole in eminent positions or the common conscience, the threats against capitalism have become those parties which aim to limit capitalism rather than those that aim to entirely smash the capitalist system. Libertarians tend to be incredibly pessimistic and assume that the success of socialist propaganda with young people is indicative of a return to the old Communist Party, but it is actually just a desire for a more prominent central regulatory system and an increase in welfarism. There is no concentrated desire to end the market system as a whole. This is because it has been demonstrated that ending capitalism ends in ruin no matter what. The establishment media may try to downplay this as much as possible, but the common person knows that any system that is anti-capitalist ends in death and starvation. The foremost threat to capitalism is not that the state will exist or that some people seriously favor syndicalism, but that the state will gain an increasing mandate to restrict capitalism to the point that we are back to full socialism without realizing it.
Libertarians tend to spend a lot of time in intellectual circles and on the Internet, the two places in which there still are dedicated socialists. The existence of socialists on the Internet and in intellectual circles does not demonstrate that anyone actually values old-style socialism in the real world. The word ‘socialism’ is still anathema for many of the older generation. Even worse, the continuous protest against socialism only serves as to make the modern form of socialism, which consists of taxing the rich so the rest of society can receive welfare handouts, more radical and rebellious. This is not an actual threat against the capitalist system itself, but rather a threat to the free and unrestrained capitalism that libertarians favor. But libertarians are still overly focused on the 20th-century phenomena of intellectually pure socialism and Keynesianism, and thus associate the relatively market-friendly social democrats and new Keynesians with the original socialist and Keynesian platforms. Libertarians need to acknowledge that the modern opponents of capitalism do not think like their predecessors.
Since free marketeers have won the ideological debate, it is better to focus on the debate over restrictions imposed upon capitalism. One often hears that capitalism is good up to a point but needs to be restricted. Most people have their own preconceived boundaries, past which they cannot see how capitalism can work. Modern anti-capitalism will not be defeated by talking about lower tax rates or less regulation. It will also not be defeated by defending capitalism on principle. Instead, it is necessary to demonstrate how capitalism can solve problems and how the state fails to do so. Appealing to regulation or taxes will always come across as deliberately reducing the burden on those who are privileged in society and not caring about the poorest and the weakest. This feeds into the moral sentiment from which anti-capitalism arises. Libertarians must make sure that people do not automatically assume that capitalism should be subordinated to the state at the certain occasions in which they think that it does not work. Empirical demonstration will be more convincing than arguing based on principles and abstractions. It is vital to demonstrate how capitalism can solve the problems people think it creates. We should not work on what is irrelevant to average people, but rather focus on the reasons they oppose capitalism. People rightly do not want to be oppressed and exploited by their bosses, health insurance providers, or Internet service providers. This means that we need to ensure that people do not associate pure capitalism with being oppressed and exploited by those with economic pre-eminence.
Many people currently favor free healthcare, central banking, extensive welfare, workplace safety regulations, and other conveniences. The goal should not be to tell these people about how the wondrous forces of the free market will fix all their problems, but rather demonstrate how the state is not effective at providing these services and how unrestrained capitalism is theoretically capable of doing so. An appeal to the invisible hand setting a rational economic order is not poignant when these people already acknowledge that the capitalist market system is the best system for accomplishing most goals. They accept that the capitalist premises are correct but simply refuse to follow through in certain areas. People are completely aware of why capitalism benefits them, as Westerners live in overwhelmingly capitalist societies.
There are countries in which there is an increasing opposition to capitalism, but these are isolated places and do not reflect the paradigm across most of the West. It is unnecessary to prove how capitalism can function; we need to prove what capitalism can do. Modern anti-capitalism is a very weak form of anti-capitalism, clinging onto the emotional appeal that it still has and nothing more. If we are able to defeat this aspect of anti-capitalism, we will be the closest we have been to a full acceptance of capitalism since the 19th century.
Education is not sufficient for creating a libertarian society, but it is necessary. Libertarian language and arguments are still tailored to those who oppose capitalism on principle and not anti-capitalists who think capitalism is a mostly decent system. This is improving somewhat, but there are very few systematic works that show how capitalism can properly solve issues and how the state is not a virtuous or effective mechanism. The people who promote capitalism as a definitive solution and not an ideal are few and far between. We do not need to show how capitalism can cause a general increase in the quality of living, as this is already known. Our current ideological opponents are the people who believe in the new neo-classical synthesis, the people who ask about how libertarians think roads would work and the people who think that healthcare gets expensive in a free market. These are not people who hate capitalism and the free market; they are not dedicated socialists or Keynesians; they are people who know how capitalism increases their quality of living.
To protect capitalism, we need to focus on furthering it because restriction is the only way in which capitalism is actually threatened. Fighting socialism is not completely useless, but the purpose of doing so should be to demonstrate how the socialist dogma is wrong to those who could be swayed by socialist moralism. We also need to talk to people in person; we cannot contain our arguments to fringe radicals on the Internet. Convincing someone is almost always impossible if there is no real conversation with that person. We should make sure that the line people draw of what capitalism is capable of is the closest it can be to the full and pure form of capitalism.