Adam Summers: The success of Mamdani and the failure of socialism
No place in the country rings in the New Year like New York City, but as the crystalline ball of lights drops in Times Square to mark the coming new year, so, too, does a shadow fall over the city as Zohran Mamdani takes power as the new mayor. Mamdani has promised greater affordability and “free” services (paid for by taxpayers, of course) such as child care and bus rides, but if he were to actually implement his schemes, his brand of “democratic socialism,” like all other forms of socialism, will only spread more poverty — not prosperity.
In addition to doling out such freebies, Mamdani envisions a substantial expansion in government housing projects, freezing rents on rent-stabilized units, and increasing the minimum wage to $30 an hour by 2030. But New York City should have learned from its own history that such public housing projects are doomed to suffer from disrepair, crime and numerous health and safety issues. Furthermore, his promise to build housing with union labor ensures that it would cost substantially more than if they used market-rate wages, meaning that fewer units would be built to house the poor whom he claims to want to help. Further rent control only exacerbates the situation since making housing less profitable discourages the production of more housing, and the quality of existing housing will suffer as landlords postpone maintenance and eschew providing amenities in order to make up for their lost income. And the minimum wage hike would only result in higher unemployment and higher prices (i.e., less affordability).
One of the reasons that socialism is destined to fail is its lack of a viable price system that accurately reflects the desires of millions of producers and consumers. Prices are much more than random numbers used to place arbitrary values on the things we buy. In a free-market system, prices convey crucial information about the costs of production, changes in market conditions and the subjective values that people place on goods and services. The average consumer may not know about a supply shock halfway around the world, but the increased scarcity will be reflected in a higher price, prompting him to adjust his spending, and perhaps his priorities, accordingly.
Under a socialist system, by contrast, prices and production decisions are determined arbitrarily by government edict. As such, they are unable to determine, or adjust to, consumers’ preferences, oftentimes resulting in shortages, waste and even famines. As famed Austrian economist Ludwig von Mises explained, this is socialism’s “economic calculation problem.”
“The paradox of ‘planning’ is that it cannot plan, because of the absence of economic calculation,” Mises wrote in his magnum opus, “Human Action.” “What is called a planned economy is no economy at all. It is just a system of groping about in the dark.”
It is also paradoxical that the same people who decry “affordability,” which has only worsened as the size and scope of government intervention have continually increased over the years, feel that the solution to the problem is still more government intervention!
Socialism fails not only because of its economic inefficiency, however, but also because of its moral rot. Fellow Austrian School and Nobel Prize-winning economist Friedrich A. Hayek explained how socialism’s concentration and “glorification of power” lead to tragic effects on individual liberty and morality.
“The principle that the end justifies the means in individual ethics is regarded as the denial of all morals,” Hayek wrote in his book “The Road to Serfdom,” in a chapter titled, “Why the Worst Get on Top.” “In collectivist ethics it becomes necessarily the supreme rule; there is literally nothing which the consistent collectivist must not be prepared to do if it serves ‘the good of the whole,’ because the ‘good of the whole’ is to him the only criterion of what ought to be done.”
In other words, power not only corrupts, it also attracts the corrupt and the corruptible — those who are willing, and even eager, to use force against people who do not abide by the dictates of those in power. Thus, while socialist apologists have sometimes tried to suggest that, despite the examples of Vladimir Lenin and Joseph Stalin in the Soviet Union, Mao Zedong in China, Pol Pot in Cambodia and many others — collectively responsible for roughly 100 million deaths during the 20th century, as detailed in “The Black Book of Communism” — socialism could “work” if you could just get the right people in power, the rise of such monsters to the political leadership of socialist governments is a feature, not a bug.
Thus, the promise Mamdani made during his victory speech in November was all the more chilling. “We will prove that there is no problem too large for government to solve, and no concern too small for it to care about,” he vowed. Such a view could be used to justify any government intrusion into any aspect of a person’s life, and it leaves no room for pesky individual liberty. It certainly bodes ill for New Yorkers in 2026 and the coming years.
Adam B. Summers is a columnist, economist, and public policy analyst, and a former editorial writer for the Orange County Register/Southern California News Group. He is also editor and coauthor of “Beyond Homeless: Good Intentions, Bad Outcomes, Transformative Solutions.”