As Thomas Sowell said, “Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it.” And, boy, do they. If I had a dollar for every time a would-be intellectual has airily claimed that ‘socialism will work this time’, I’d be rich enough to be a socialist.
Still, at least one rich socialist put his money where his mouth is, rather than the usual socialist practice of putting their mouth where other someone else’s money is. It ended exactly like every experiment in socialism before and since.
In 1825, Welsh industrialist Robert Owen bought the entire town of Harmonie, Indiana, for around $150,000. He got 20,000 acres, more than 160 buildings, working mills and productive farms. He renamed it New Harmony and invited the faithful to build the perfect cooperative society.
He believed that if you removed private property and paid everyone equally, cooperation would naturally replace competition.
Owen already ran profitable textile mills in Scotland where he treated workers decently, so he fancied himself the man to prove the theory. Close to a thousand people arrived in the first year. In January 1826, a riverboat dubbed the ‘Boatload of Knowledge’ delivered scientists, teachers and intellectuals, including Thomas Say, the father of American entomology.
This was the most educated, best-funded, best-equipped socialist community ever attempted on American soil.
If cooperation could beat markets anywhere, it should have worked here. In just two short years, it went tits-up, which is an impressive result, even for socialists.
The most obvious problem was that New Harmony was entirely populated by, well, socialists. People of the ilk of America’s most famous socialist, Bernie Sanders: surely the only man in history to be booted out of a hippy commune for being too lazy.
When you populate a town almost entirely with Bernies, the result is as predictable as it is hilarious.
The hardest workers were feeding, housing, and clothing neighbors who did nothing while receiving the same food, the same shelter, and the same rewards.
So they stopped working too. Why wouldn't they?
Production dropped, food ran short and buildings decayed because no one owned them and no one was responsible for maintaining them. Endless meetings replaced actual labour. Owen scribbled seven different constitutions in two years. None worked.
American inventor Josiah Warren, an early libertarian thinker who lived through the experiment, watched it fracture. He concluded that demands for conformity only increased differences of opinion. The more the community insisted on unity, the more it splintered.
When everyone owns everything, no one owns anything. When labor earns the same reward regardless of effort, effort disappears. When prices vanish, no one knows what anything is worth.
Owen finally admitted defeat in 1827. In his farewell address, he blamed the settlers, claiming they were “unprepared to be members of the community of common property and equality”. Socialists, in a word.
The system would have worked if only people had been different.
His own son, Robert Dale Owen, later put it more plainly after living through the collapse:
“All cooperative schemes which provide equal remuneration to the skilled and industrious and the ignorant and idle must work their own downfall.”
Every socialist experiment since New Harmony has ended the same way and for the same reasons. Prices communicate what things are worth. Ownership creates responsibility. When both are abolished, production collapses because no one can calculate what to make or repair.
Owen had every advantage the modern socialist dreams of: a pile of seed money, an actual entrepreneur at the helm and a wealth of intellectual talent. The result was the same as every other attempt. The theory always blames human nature instead of admitting the system itself is the problem.
Two centuries later the excuses have not improved one bit and nor have the results of socialist experiments.
