FE1993-v1—The Origin of Socialism

This page addresses a web-based essay written in the mid-1990s, originally titled The Origin of Socialism. [1] I’ve reproduced the original essay embedded below— word for word—with the only change being its formatting, and now I’m calling it a Foundational Essay of U2D2.

It explained how socialism didn’t emerge primarily from envy or rebellion—it was born out of admiration. Admiration for the coordinated productivity of industrial capitalism. What early socialists saw wasn’t merely inequality—they also saw efficiency. And they mistakenly assumed that the state could replicate and scale that efficiency through central planning. Their motivation was to eliminate greedy capitalists and thereby  eliminate wage slavery—the exploitation of workers by capitalists. Unfortunately, what they achieved, was a form of state-based slavery, where everyone was a slave to the state.

When people say, “government should be run more like a business,” they may not realize that Karl Marx had the same idea when he wrote the Communist Manifesto: a centrally managed system modeled after industrial organization. That’s what you’ll find in this essay. However, knowing now what we do about Communism—its inefficiency, its tendency toward rigidity, loss of individual freedom, and eventual collapse—we should ask a deeper question: What does that say about the structure of our largest businesses, which operate in much the same way?

I actually began researching the content of that essay in the late 1980s—about 40 years ago. Much of the same material also appeared in the first Constitutional Enterprise Newsletter, published in July 1993. Since then, both my approach and my thinking have evolved considerably. But beyond that, the world itself has changed dramatically. The rise—and the lessons—of the cryptocurrency industry have also taken my thinking in new directions. While the basic observations in that essay remain valid, some corrections are needed. That’s why I plan to write The Origin of Socialism—Revisited in the near future.

IMD Notes

1. I actually began researching the content of this essay in the late 1980s—nearly 40 years ago. Much of the same material also appeared in the first Constitutional Enterprise Newsletter, published in July 1993. Since then, both my approach and my thinking have evolved considerably. But beyond that, the world itself has changed dramatically. The rise—and the lessons—of the cryptocurrency industry have also taken my thinking in totally new directions. Please see version 2 for updated content.
2. Text of IMD note 2.
3. [EP-4] Text of EP note 4.