By Vincent Cook

On its webpage explaining what democratic socialism is, the Democratic Socialists of America (DSA) states that its goal is to replace capitalism with an alternative system featuring collective ownership of the “key economic drivers that dominate our lives” in order to give a “real voice” to ordinary people so they can transition to a supposedly freer, more just life where all can flourish:

Capitalism is a system designed by the owning class to exploit the rest of us for their own profit. We must replace it with democratic socialism, a system where ordinary people have a real voice in our workplaces, neighborhoods, and society.

We believe there are many avenues that feed into the democratic road to socialism. Our vision pushes further than historic social democracy and leaves behind authoritarian visions of socialism in the dustbin of history.

We want a democracy that creates space for us all to flourish not just survive and answers the fundamental questions of our lives with the input of all. We want to collectively own the key economic drivers that dominate our lives, such as energy production and transportation. We want the multiracial working class united in solidarity instead of divided by fear. We want to win “radical” reforms like single-payer Medicare for All, defunding the police/refunding communities, the Green New Deal, and more as a transition to a freer, more just life.

From an economic point of view, there is much to criticize in the DSA’s aspirations. As long ago as 1884, Austrian economist Eugen von Böhm-Bawerk refuted the exploitation theory of capital; later laying the foundations of Austrian capital theory, which explains how thrift and investment are necessary for boosting productivity. The capitalist’s contribution of refraining from present consumption so that labor and other inputs can be redirected towards earlier stages of production makes more time available for transforming inputs into outputs; the resulting investment earnings and increases in real labor incomes and in outputs constituting a win-win-win proposition for capitalists, workers, and consumers.

Moreover, a productive deployment of these inputs can only be achieved by private owners who are constrained by the necessity of pursuing profits and avoiding losses in a competitive market setting, not by socialist planners who lack prices and profit/loss incentives. In 1920, Austrian economist Ludwig von Mises, Russian economist Boris Brutzkus, and German sociologist 

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