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Israeli Kibbutzim and the Failure of Socialism:

Nobel Prize-winning economist Gary Becker has a fascinating post on Israel's kibbutzim. The kibbutzim are Israeli agricultural communities initially organized on socialist lines, mostly between the 1910s and 1950s. Originally, most kibbutzim followed strict socialist policies forbidding private property; they also required near-total equality of income regardless of differences in productivity, and in some cases even abandoned specialization of labor. In recent years, Becker points out, most of the kibbutzim have had to abandon these policies, due to the perverse incentives they create and their inability to to hold on to their more talented younger residents.

As Becker puts it, "nowhere is the failure of socialism clearer than in the radical transformation of the Israeli kibbutz." If a socialist experiment could ever succeed, it should have done so in this case. Most kibbutzim were founded by highly motivated volunteers strongly committed to socialist ideology. For many years, kibbutzim had great prestige in Israeli society, and many of the nation's early leaders were kibbutz members. After Israel became an independent state in 1948, the kibbutzim also benefited from extensive government subsidies. Unlike other socialist experiments, the failure of the kibbutzim cannot be ascribed to lack of ideological fervor, inadequate resources, or hostility from the surrounding "capitalist" society. Despite these advantages, kibbutzim failed to achieve a high level of economic productivity, and even failed to retain the loyalty of many of their own members. Over time, many kibbutz residents became frustrated with the perverse incentives created by socialism, and many also yearned for the individual freedom and privacy created by private property rights.

Only by watering down or abandoning their comitment to socialism have kibbutzim been able to survive. If socialism cannot work under the highly favorable circumstances of the Israeli kibbutz, it almost certainly cannot work anywhere.

Of course there is one advantage that socialist governments enjoy that the kibbutzim did not. Unlike a kibbutz, a totalitarian socialist state can use its secret police to suppress dissent and force the people to work for the state whether they want to or not. This explains why Israel's kibbutzim have mostly abandoned socialism, while North Korea and Cuba have not. When given a choice (as in Eastern Europe after 1989), the people of socialist states have rejected socialism even more decisively than most Israeli kibbutzim eventually did.

The failure of socialist kibbutzim does not prove that small, voluntary communities should abjure all communal property. To the contrary, scholars such as Elinor Ostrom have shown that voluntary social groups can often manage common property resources effectively if they also have private property as well. In Israel itself, the less famous moshavim have enjoyed much greater success than the kibbutz model. Unlike the original kibbutz, moshav members hold their land as private property and are paid at least in part on the basis of performance; at the same time, moshavim also often have considerably communal property as well, managed by rules that try to curtail free-riding and the "tragedy of the commons." Small-scale experiments in limited communal property can sometimes work. Indeed, they are perfectly consistent with free-market libertarianism, so long as they remain purely voluntary in nature. By contrast, the kibbutz experience shows that experiments in full-blown socialism are likely to fail even under very favorable conditions. A free society should not ban the formation of voluntary collectivist communities. However, their debilitating shortcomings provide a valuable lesson in the virtues of private property.

Related Posts (on one page):

  1. Why the Debate Over Socialism Isn't Over:
  2. Israeli Kibbutzim and the Failure of Socialism:
62 Comments
Why the Debate Over Socialism Isn't Over:

Many commenters on my post on "Israeli Kibbutzim and the Failure of Socialism" argue that socialism is a dead issue. Why, they ask, should we bother arguing against an ideology that is already so completely discredited? Their point is not without some merit. In most of the world, socialism has far fewer adherents today than at any time in the last 100 years.

Nonetheless, there are still some good reasons to continue the debate over socialism, and to explore the reasons why that ideology proved so disastrous in both theory and practice. First, to state the most obvious, there are still at least two governments that continue to practice full-blown socialism: Cuba and North Korea. It is important to understand the reasons why the people of those two nations live under such horrible oppression.

Second, it is far from impossible for socialism to stage a political recovery in the future. Especially when packaged with nationalism, socialist rhetoric still has tremendous appeal to many people. Hugo Chavez's political success in Venezuela is an example of how some of the most disastrous socialist policies can be successfully sold to the people if combined with nationalism - a lesson first taught by Hitler and Mussolini. Political entrepreneurs in other Third World nations may well try to emulate Chavez's successes; the same could even occur in parts of the developed world if economic conditions deteriorate sufficiently. And, as Bryan Caplan shows in this excellent paper (scroll down to the link marked "The Totalitarian Threat"), several likely future technological and political developments may increase the viability of socialist totalitarianism and render its reemergence more likely.

Third, full-blown socialism continues to have some important and respected advocates in the intellectual world. Yale economist John Roemer and Oxford political theorist G.A. Cohen are two of the most sophisticated, and both are leading scholars in their fields. There are other academic advocates of socialism who enjoy considerable followings despite the fact that their work is far less impressive than Cohen's and Roemer's, or is even downright dishonest (as in the case of Noam Chomsky's political writings). By contrast, there are virtually no intellectually respectable advocates of fascism (in the true, rather than the purely pejorative, sense of the word) or racism left in the Western world.

Fourth, even among those who agree that socialism has been an abject failure to date, there is disagreement about the reasons for that failure. Some defenders of socialism claim that it failed in the USSR and elsewhere only because of insufficient ideological fervor, negative attributes of Russian culture, the hostility of capitalist states, or other causes that do not discredit the ideology's core ideas. As I explained in my previous post, the failure of the Israeli kibbutz model is important precisely because it helps rule out some of these arguments.

Finally, some, though by no means all, of the shortcomings of full-blown socialism are shared by more moderate interventionist policies. The problems of knowledge, incentives, and political ignorance that undermines democratic control of big government are particularly important here.

For all these reasons, the debate over socialism is far from over. The spectre that once haunted Europe and the world may have been defeated and discredited. But we have not yet completed the task of driving a stake through its heart.

UPDATE: To avoid confusion, I should emphasize that in this post, as in the previous one, I use the term "socialism" to refer to government control of all or most of the means of production, not to more moderate departures from the free market, such as welfare statism or government regulation of industries that remain privately owned.

Related Posts (on one page):

  1. Why the Debate Over Socialism Isn't Over:
  2. Israeli Kibbutzim and the Failure of Socialism:
98 Comments