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Does the Information Society Need a Free Market?

The Gilder Fellows’ July Seminar will wrestle with why Millennials favor socialism

With the collapse of the Soviet Union in the late 1980s, many commentators assumed that, in the age of information, its command-and-control worldview would slowly diminish. But a 2018 poll from Buzzfeed News and Maru Blue showed that 31% of American Millennials (people aged 22 to 37) embraced socialism in one or another form:

At the height of the Cold War, it would’ve been unimaginable for so many young American voters to indentify as socialists or support candidates who indentify in this way, but things have clearly shifted since the fall of the Soviet Union.

John Haltiwanger, “A large percentage of millennials are embracing socialism and a majority disapprove of Trump, a new poll indicates” at Business Insider (October 4, 2018)

Sources across the spectrum have offered their takes on why:

  • “They realized that the “trickle-down economics” theory didn’t work.HuffPost)
  • “… young adults may take for granted the bounty capitalism has bestowed, from cellphones to inexpensive air travel to an endless array of food and beverage options. They can’t remember the time when those things didn’t exist. But they will never forget the pain and uncertainty caused by the brutal recession of 2007-09, which has taken years to overcome. ” (Chicago Tribune)
  • “… a CBS/New York Times survey found that only 16 percent of millennials could accurately define socialism, while 30 percent of Americans over 30 could.” (The Federalist)

(The photo above shows the dismantling of the Berlin Wall, erected to keep Germans under Communist rule confined (December 21, 1989). The Wall’s destruction was considered emblematic of the collapse of the Soviet socialist republics generally. In the photo East and West Germans mingle freely.)

Millennials seem to assume that a more intrusive government would act in their interests. More of a yearning than an assertion, that view resists critiques based on the historical experience of coercive utopian government:

For those of us who had an opportunity to travel in the Soviet Union before its disappearance from the political map of the world in December 1991, the promised heaven on earth had turned out to be a graveyard of broken dreams, a place of ruined and impoverished lives, and a nightmare chamber of horrors.

Disastrous decades of centralized government planning had left the people of the Soviet Union in a stagnant poverty of empty shelves or shoddy unwanted goods in the “people’s” retail stores to which Soviet citizens trudged with grim faces to obtain some meager amounts of the things needed for everyday life.

Tyler Durden, “The Dangers Of The New Democratic Socialism” at ZeroHedge

But many Millennials believe that, this time, things will be different:

In retrospect, a key moment for the revival of American socialism was the Wall Street bailout of 2008 and 2009, when taxpayers were forced to rescue the very rogues who had helped bring about the financial crisis, even as many ordinary families were being evicted from their homes for failing to service their mortgages. From an economic perspective, there were some sound reasons to prevent the financial system from collapsing. From a political perspective, the decision to save the banks persuaded many Americans—on the left, center, and right—that the political system had been captured. There is a direct linkage from the Wall Street bailout to the Occupy Wall Street movement…

John Cassidy, “Why Socialism Is Back” at New Yorker

Why would Occupy Wall Street be more likely than Wall Street to bring about prosperity—especially in an age when information is the principal source of new wealth? How will the constraints on information that are inevitable in a socialist system affect the free flow of information and innovative techniques?

This summer, scholars such as George Gilder, Michael Medved, Jay Richards, Christopher Rufo, and John West hope to interact with college students, graduate students, or young professionals under age thirty on these and a number of other issues at the Gilder Fellows Seminar: July 22-26, 2020, in Seattle, Washington (scholarships available). Details here.

We asked Jay Richards (left), author of The Human Advantage: The Future of American Work in an Age of Smart Machines, a couple of questions based on the topics the Seminar proposes to tackle:

Mind Matters News: How should we respond to the resurgence of interest in socialism?

Jay Richards: We first need to go on the offense. Champions of a free economy are constantly having to answer charges about the supposed evils of economic freedom. In reality, socialism is a human catastrophe whenever it’s tried, and it’s more of a catastrophe the more it’s tried. One hundred million people died in the 20th century from socialist experiments. In contrast, countries who embraced generally free economies emerged from the absolute poverty that had beset most people for most of history.

Second, we should defend the free economy not just as a necessary evil, as the best known system for creating wealth and alleviating poverty.

Third, we should insist on definitions. Most young people who respond to these polls about socialism don’t even know what socialism is. Probably few of them would endorse it if they first read Merriam Webster’s definition of the word:

Definition of socialism

1: any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods

2a: a system of society or group living in which there is no private property

b: a system or condition of society in which the means of production are owned and controlled by the state

3: a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done Merriam Webster

Mind Matters News: What makes the information economy unique? Is there a way in which it changes the picture between, say, capital and labor?

Jay Richards: In my book, The Human Advantage, I argue that five things distinguish the information economy from early economic stages (even though every stage shares these features to some degree): Disruption, exponential growth, digitization, hyper-interconnection, and ever increasing information.

To boil this down, in the information economy, ideas and information become and ever larger part of the total picture. Land, labor, and capital will always play a role, of course. But ideas and information have begun to predominate.

Richards argues that the major issues will play out very differently in an information economy than they did in socialism’s heyday. Thus, a key Seminar topic will be: How do we prepare for a future of smart machines and artificial intelligence? At its most basic level, this includes “robot-proofing” your career. But it goes well beyond that, to much deeper questions. More information.

Further reading on the information economy’s impact on young people:

Robot-proofing your career: Peter Thiel’s way

Students, don’t let smart machines disrupt your future Three ways you can avoid life in Mom’s basement and the job pouring coffee.

Creative freedom, not robots, is the future of work. In an information economy, there will be a place where the human person is at the very center


Maybe the robot will do you a favor and snatch your job. The historical pattern is that drudgery gets automated, not creativity

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Does the Information Society Need a Free Market?