Socialism

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“The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else.”[1]
French statesman Frederic Bastiat 
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“Socialism proposes no adequate substitute for the motive of enlightened selfishness that to-day is at the basis of all human labor and effort, enterprise and new activity.“[2] 
William Howard Taft, 27th President of the United States
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Socialism is a broad economic theory where the government or collectives own or control all means of production, with the government deciding how to distribute the nation’s production to the people. Socialism is more than an economic system. It is, in practical application, a political system.  The major difference between capitalism and socialism is who owns or controls business and personal property - the government or private individuals. The lure of socialism is its doctrine of fairness and equity. This belief has no basis in fact. The theory behind socialism is fatally flawed.

Degrees of socialism
Socialism is implemented in two very different ways. Most of the western democracies have a socialism/capitalism mix and then you have true socialism, which is the political system of choice for authoritarian leaders.  Since human nature likes to control, the democratic model historically tends to inch towards the dictatorial model via socialism.

• In the socialism/capitalism mix, people are free to choose - through elections - how much socialism they want. Western democracies have different combinations of capitalism and socialism.  Most of the socialism in these countries is social welfare socialism, although some industries are government run. Today, many of these democracies are under assault from “creeping” socialism - the result of ever increasing regulations and judicial rulings. As more regulatory and bureaucratic burdens are placed on business, it becomes more difficult to stay in business, giving the government greater ability to control the industry and in effect “own” it. People get more socialism than they want. Even so, most of the economy is still  based on capitalism. Capitalism is still the engine of prosperity for countries with this socialism/capitalism mix. A common problem in many of these countries is the inability to control government spending, leading to massive national debt and economic crisis.

• True socialism is in countries where the rule of law, democratic ideals and property rights are compromised or don’t exist. This brand of socialism has been the preferred system of government for dictators for hundreds of years. Past socialist dictators include Hitler, Mao-Ste-Tung, Stalin, Vladimir Lenin and Ho-Chi-Minh. Today, dictatorial socialism exists in Russia (Putin, Medvedev), China, North Korea, Venezuela (Chavez), Cuba (Castro) and numerous countries in Africa and the Middle East. The government owns or controls everything. The government has absolute control over the people, either with brute force, or more typically, being manipulated until you stop resisting the power of the state. Dependency is so much easier then freedom and responsibility.

Communism is the extreme form of socialism. The state owns and controls every aspect of society - all in the name of “The People.”

2) Philosophical differences between Capitalism and Socialism
Essentially there are two competing philosophies in economics and politics:
• Capitalism: People should take care of themselves as much as possible. You are responsible for your own destiny. Social programs are kept to a minimum, as are taxes. You provide most of your own safety net through insurance/benevolent associations. This produces people who are self reliant and responsible. People should keep their money to spend rather than give it to the government for some bureaucrat to spend.
 
• Socialism: Liberals believe the government should take care of people. They want people dependent on  the government. The government then owns you - and your vote. Liberals create huge bureaucracies to administer all these programs. Taxes are very high in order to support all the social programs. There is no incentive to end these programs because once people get used to it, it’s nearly impossible to end. It’s almost like a drug addiction. Once on these government programs, you’re hooked. These programs foster laziness and irresponsibility.

Emergence of Socialism/Collectivism 
Modern socialism was developed in the 1700s due to the unequal distribution of wealth. However, the idea of collectivism has been around for thousands of years. The first English settlement in the New World was at Jamestown, Virginia in 1607. Jamestown was a disastrous experiment in collectivism. Its demise came because of very understandable and predictable reasons: people simply do not put forth their best efforts in communes, and diligent workers soon catch on to the fact that they are supporting free loaders. This is the reason that all socialistic/collectivist experiments fail. After nearly starviing to death, the settlement then instituted capitalism, with people being rewarded for their work, and the colony then thrived. 

Socialism versus human nature
Human nature wants someone else to take care of them. That’s why socialism is so inviting: Everyone wants to live off everyone else. Under socialism, a subtle shift takes place in an individual’s mindset.  It’s the government’s responsibility if I make it or not. This destructive attitude is easy to see in America in our dependency class - people on welfare and other forms of government handouts. People want the government to take care of them. Everything is the government’s responsibility. Most of your problems are somebody else’s fault. It is a fatal shift in personal thinking. 

While socialism appeals to human nature in some ways, in other ways, it goes against human nature. People want to improve their life -  a newer car, nicer home, better job, etc.  Self interest is a strong motivation and usually goes against socialistic standards. There is no outlet for self motivation under socialism. Socialism replaces self initiative and ingenuity with conformity and obedience to government policies. 

Socialism is NOT a good system in theory, or in practice
The idea of socialism is very enticing. We all believe in fairness and equality. Yet socialism is unfair to the achiever, rewards the underachiever and the lazy, produces mediocrity and does NOT produce equality. The truth is, equality can never be achieved simply because everyone has different levels of motivation, responsibility and goals.  If the government gave $10,000 to everyone, some would use it wisely and some would blow it. Soon you would have rich people and poor people again. You CAN NOT manage outcomes. Freedom and equality are opposed to each other. You can’t have both. 

Socialism claims to value equality. Yet neither communism or socialism has ever produced equality. There is always a rich class - the ruling class that lived far better then the people, and there was the “connected” class - people who lived very well due to their connections with the ruling class. Socialist leaders have their own interests in mind, not the “masses.” Equality is not possible. True socialism has proven to be a failure over and over. You cannot have a market without property rights and you need market forces to make an economy work. 

Socialism/communism is hypocritical. Those that profess the most fervent belief are either government officials or the people with connections to government officials that allows them to live better then everyone else. Socialism rewards loyalty, not hard work and ingenuity.

The millions of immigrants who come to America did NOT come here for handouts or equality. They came for freedom and economic opportunity. No government can guarantee equality of outcomes. The best method is equality of opportunity - Capitalism. If you look past all the hype about socialism, you can clearly see that it is unfair and corrupt. Capitalism is a more moral economic system, despite some inherent flaws.

Many Western ecologists have argued for years that the causes of pollution are property rights and capitalism. But in fact, where there are no private property rights or capital markets, pollution is a nightmare. In the old Soviet Union and eastern Europe, pollution was widespread. Pollution is a big problem in China.

True socialism leads to tyranny and serfdom. The alternative is liberty, a market economy, property rights,  the rule of law and prosperity - capitalism.

 Socialism is all about control and the accumulation of power
People like to control and socialism/communism is the economic system of choice for control freaks. Socialist/liberal/big government types are able to feel good about themselves as they acquire ever increasing power - creeping socialism. They love taking care of people - so they are dependent on them.

Socialism must control people in order to function.  Socialism concentrates power in a small group of government officials with bureaucrats carrying out their orders. Socialism has a strong tendency to lead to ever increasing controls. Dictators like socialism because it allows them to control every aspect of society. The list of socialist dictators - past and present - is long: Hitler, Mao-Ste-Tung, Stalin, Vladimir Lenin, Ho-Chi-Minh, Putin, Medvedev, Hugo Chavez, Castro and many lesser known dictators in Africa and the middle east.

Socialism is the ultimate monopoly.  No competitors are allowed.  All major industries, including food, banking, transportation, communication, health care, education, and insurance are owned and operated as state monopolies. 

In western style socialism, more socialism equals more bureaucrats and more taxes. There is a very heavy tax burden and a huge, overbearing bureaucracy.  When the government controls the economy, they control you. Socialism is the most politically vindictive system in that it gives the government the ability to reward supporters and punish opponents. Contributions to candidates is little more than bribes and protection money. Capitalism promotes freedom and choice through competition.  Power and control is dispersed and there is much opportunity to compete.
 
Supporters of socialism want to break down self-interest in favor of society’s interest. - which in itself promotes authoritarianism. Who decides what society’s self interest is?  Who decides what “the masses” want? Some bureaucrat with a political agenda will.  Socialism attracts corruption and corruption attracts Socialism.

What Happens when socialism takes over
Over the long haul, socialism consumes itself. Socialism preserves the economic status quo in which the society existed at the time it was overtaken. The economy chugs along on momentum for a few years but then begins its inevitable decline. As time goes by, people vote themselves more and more freebees that cannot be paid for. Socialism will become ever more corrupt and inefficient. After only three generations, the economies of socialist Greece, Ireland and other European democracies are about to collapse under a mountain of debt. Spain, Japan, the US and many other countries are struggling to reign in their massive national debt.
 
Early experiments in socialism by early settlers to America were spectacular failures.  “Hippie” communes formed in the 1960s and later usually collapsed. Government run industries and programs are universally noted for their inefficiency and bureaucratic mismanagement. The tendency for the ruling class to insulate themselves from competition through legislation is greater in socialism than capitalism. Capitalism is constantly re-invigorating itself. 

Source:
1. http://www.brainyquote.com/quotes/quotes/f/fredericba122879.html
2. Popular Government: Its Essence, Its Permanence and Its Perils, chapter 3 (1913)
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Finally, [under socialism] we shall see the entire people transformed into petitioners. Landed property, agriculture, industry, commerce, shipping, industrial companies, all will bestir themselves to claim favors from the state. The public treasury will be literally pillaged. . .  "Let me have the benefits, and let others pay the costs." Everyone's effort will be directed toward snatching a scrap of fraternal privilege from the legislature. The suffering classes, although having the greatest claim, will not always have the greatest success; their multitude will, meanwhile, increase constantly, from which it follows that we can have only one revolution after another.

It will not be long before the public finances reach a state of complete disorder. How could it be otherwise when the state is responsible for furnishing everything to everybody? The people will be crushed under the burden of taxes; loan after loan will be floated; after having drained the present, the state will devour the future.

Frederic Bastiat, (1801 – 1850) French theorist, economist, and member of the French assembly.

Source: http://bastiat.org/en/justice_fraternity.html