Political Economy, Socialism, and the Myth of Sharing

For too many Americans, socialism and communism are no longer associated with central planning, coercion, or economic depression. They have been successfully marketed as moral impulses of fairness, compassion, and sharing. A kinder alternative to the harshness of markets.

What is lost in this framing is that these systems are not about generosity between people, but about power, control, and the management of behavior through force.  

Engels and the Critique of Capitalism

This confusion isn’t new.

Nearly two centuries ago, Friedrich Engels argued that political economy itself was a form of deception, a “science of enrichment” designed solely to justify exploitation. In his view, economic theory didn’t describe a neutral reality but instead functioned as an ideological cover for elites who already held power.

Markets, competition, and private property were not accepted as tools for human flourishing, but as mechanisms that rationalized suffering and inequality. He obviously did not live long enough to see the error of his analysis, which, in all fairness, was made at the dawn of the free market taking hold in the West.

If capitalism was enacted to act as an instrument of oppression, it failed miserably. In fact, many hundreds of millions of people were raised out of poverty because of it, and the elites were soon forced to share their tables at the country clubs.  

Engels wrote at the height of the Industrial Revolution, when the costs of rapid industrialization were brutal and visible. Child labor, dangerous factories, and starvation wages shaped his imagination.

From his historical vantage point, it was reasonable to conclude this economic form would not transform but remain corrupt to its core. Economics, as he saw it, was merely the language used to explain why the poor must remain poor and why their suffering was unavoidable.  

The Great Enrichment

Where Engels went wrong was not in recognizing the issues but in assuming inevitability only ran in one direction.

He treated capitalism as a closed system. Fixed, static, and predatory.

History, however, tells a different story.

The same market forces that produced misery early on would also generate unprecedented innovation and eventually mass prosperity. The working class that Engels spoke of did not become poorer. They became wealthier, healthier, more educated, and lived longer.  

This transformation, or what economists would later dub the Great Enrichment, was not accidental.

It was the result of economic growth driven by trade, property rights, and incentives that were aligned with productivity. Simple accumulation of capital alone does not account for this. Moral and institutional constraints do.

The markets functioned best when corruption was restrained, contracts enforced, and political power limited. This is where modern debate enters again.  

The Problem of Centralized Power

Engels warned that the craft of economics could be used to justify exploitation. He wasn’t wrong, but that evaluation is not reserved for capitalism alone.

Centralized economic systems, i.e., socialism and communism, are even more vulnerable to this danger because they turn economic decision-making into political authority. Once a state controls production, distribution, and opportunity, the economic outcomes no longer depend on value or success but on proximity to power.  

Socialism and the Language of Compassion

Socialism today is often described as a “warm hug of collectivism,” to quote the recent self-proclaimed Socialist New York City Mayor, Zohran Mamdani.

In practice, however, it replaces voluntary exchanges with compulsory redistribution. It removes all incentives for productivity while concentrating authority in institutions that are neither neutral nor benevolent.

Sharing is no longer a voluntary moral act between two people. It is a mandate imposed from above and with force. Compassion becomes policy, policy becomes coercion.  

What History Repeatedly Shows

Here is where history is unambiguous.

Wherever socialist or communist systems have been put into practice, scarcity and corruption followed. A new ruling class emerges, to be sure, but not of entrepreneurs, but of administrators.

The much-promised “equality” never appears. Inequality simply changes hands. These administrators proceed to enrich themselves while those who produce lose all agency.  

Ironically, many modern critics of capitalism echo Engels without acknowledging how closely their solutions resemble the very conditions he denounced.

They argue that free markets are immoral because the outcomes are unequal but show little concern for the morality of state monopolies. Engels condemned private monopolies and endorsed collective ones, assuming that once working for the state, those same abusers would somehow exercise their power virtuously.  

The Lesson Modern Economics Learned

Modern political economy has thankfully grown more self-aware.

It no longer assumes that markets are benevolent by nature or that state power acts selflessly. Today’s economic analysts regularly focus on incentives, accountability, and unintended consequences, especially where power is concentrated.

One of the more important insights of recent decades is that governments fail for the same reasons markets do.

Self-interest, corruption, and misaligned incentives.  

Historical Amnesia

Unfortunately, this hard-won insight is almost entirely absent from the public discourse.

Socialism is sold as morality and not a mechanism. Its advocates rarely grapple with how power actually behaves once unrestrained, or why these centralized systems repeatedly produce callous repression and servile poverty.

They speak only in abstractions. Equity, justice, dignity. Perhaps they do know the outcomes of the policies they promote, and a vague, lofty rhetoric conceals their true intentions.  

Regardless, the appeal of socialism in America today relies largely on historical amnesia. It assumes economic outcomes can be engineered without tradeoffs, that human nature can be ignored, and that power can be trusted as long as it’s labeled as compassion.

We hear that prosperity is something that can be redistributed rather than created, and morality is something imposed rather than cultivated.  

Freedom Versus Force

Political economy is, at its best, not a defense of greed nor a rejection of compassion. It is an attempt to understand how humans actually behave under different systems of incentives and constraints.

When grounded in realism, it can and does expose corruption, identify failures, and suggest reforms. When severed from moral restraint, it becomes exactly what Engels feared. A tool for rationalizing power.  

The real question is not whether capitalism is perfect or not. Markets can fail and often do.

The question is whether concentrating economic power in the hands of the state makes people more virtuous and more free.

I think we know the answer.  

Contrary to what is taught in universities and repeated on TV, economic systems do not save souls. They create conditions.

Systems that reward dependency and political loyalty produce scarcity and control. Systems that reward responsibility and voluntary exchange produce abundance.

The difference is not compassion versus cruelty; it’s freedom versus force.  

Conclusion

Socialism is not sharing. It is the government and its employees deciding who shares and who receives.

Political economy, when practiced honestly and bounded by moral limits, can serve as a tool for human flourishing. When practiced ideologically, it becomes a mechanism for domination.

Engels did offer one warning worth preserving. When economics serves power alone, it becomes oppression. His answer, however, to abolish markets in favor of centralized control, has so far proven to be more destructive than the problems he diagnosed. The job now is not to replace markets with ideology but to anchor economic life once again in personal responsibility, institutional restraint, and human dignity.