Foreign Affairs. January-February 2020

January/February 2020 49

time, for there are indeed crucial

problems on today’s agenda—climate

change high among them. Dealing with

these challenges will certainly require

effective government policy and invest-

ment. But the bulk of the actual prob-

lem solving and practical innovation

involved will inevitably come from the

private sector. The war against climate

change, that is, will ultimately be fought

and won in large part by an army of

Schumpeterian entrepreneurs large and

small, deploying their mage-like powers

for humanity’s collective defense.

Unless the neosocialists have their way,

and turn off the engines of innovation

just when they are needed the most.∂

from their success? Absolutely. But so

have the rest of us, and vastly more—in

improved lives, to be sure, but even as a

result of their companies’ supposedly

threatening corporate growth, since

those companies are mostly owned by us,

the broadly dispersed shareholders of

their common stock.

TURNING OFF THE ENGINE

Capitalism drives economic and social

dynamism, prosperity, and personal

freedom but also erodes tradition and

stability. It produces universal gains in

the long term but inequality and

volatility along the way. From Smith

onward, the system’s greatest defenders

have acknowledged the full range of its

effects and accepted the need to address

the downsides in a variety of ways, not

least in order to preserve political peace

and social harmony. Capitalism’s great-

est critics, in turn, have always re-

spected its awesome capacity for growth

and invention, and successful progres-

sive movements have sought to domes-

ticate markets rather than abolish them.

That is not the game the neosocialists

are playing. What is distinctive about

their program is not its promises—any-

body can produce impossible wish

lists—but its threats. They are funda-

mentally uninterested in sustaining a

dynamic, entrepreneurial private sector

and milking its proceeds for public

investment. They don’t care about the

health of the geese, because their

economists simply assume an endless

supply of golden eggs. They abhor

inequality and are out to reduce it in the

simplest, most direct way possible: by

lopping off the outliers at the top.

The growing popularity of this

movement could not come at a worse

The Neosocialist Delusion

08_Muller_proof_Blues.indd 49 11/18/19 4:21 PM