Posts Tagged ‘Socialism’

SOCIALISM AND THE FREE MARKET

June 12, 2010

SOCIALISM AND THE FREE MARKET
The free market and socialism are not totally incompatible. It’s true that a free market cannot exist legally under a socialist government. That’s what they call a black market. However, socialist countries usually do have a black market and probably would soon collapse without it. This is because socialist bureaucrats do a really dismal job of trying to achieve what the free market does so well; the assignment of the available labor, materials, and capital to efficiently satisfy the wants of consumers. That’s what economics is all about.

What I say about socialism applies equally to all of its variants: communism, socialism, fascism, the welfare state, and others. The differences between them are more a matter of degree than of principle.

Socialism can exist within a free market. The oldest form of commune, the family, has always been an essential tool of survival. Communes of any size can exist legally within a free market system, provided only that membership in the commune is voluntary. However, the larger a commune becomes the less efficient and the more dictatorial it becomes. Only strong bonds of family, tradition, or religion can hold it together.

A commune within a free market system soon reveals its inefficiency by its poverty in contrast with the prosperity of the people in the free market. This strains the bonds binding the commune together, and hastens its eventual collapse.

The solution for socialism is to completely isolate the commune from the outside world. Thus after WW2, the Russian empire (The USSR) proceeded to block all contact with the rest of the world. Winston Churchill put it aptly, “An iron curtain has fallen across Europe”.

All Russian soldiers who had contacted Europeans during the war, even if only in combat, were sent off to labor camps in Siberia, quarantined there until they had been decontaminated of any possible negative thoughts about communism. For decades the Soviet leaders tried to hide from their people their poverty in contrast with the prosperity of the rest of the Western world. Now the USSR has collapsed and Russia has adopted what might best be described as a “corporate welfare state”.

Meanwhile, the USA has become an ever-expanding welfare state with politicians buying votes, and gaining campaign contributions, by granting privilege and power to assorted special interest groups. Why do we so easily sell our votes? Do voters realize that they are being bought? Do they care?

Do they all believe that somehow each of them can get more out of the pot than they put in? (That’s impossible). Those who do get more out than they put in are parasites. The rest of us are their victims. This is theft, not a free market exchange, where each party profits by the exchange.

Government budget bills are always loaded with amendments submitted by congressmen to allot some money for some project which will benefit the people of their particular congressional districts. This is called the “Pork Barrel”. This is how your congressman tries to buy your votes. He has no trouble getting his amendment inserted in the budget bill. It’s an unwritten agreement among all congressmen; “you vote for my bit and I’ll vote for yours”.

I suspect that most of the public goes to the polls uninformed, except for the sound bites repeated over and over on TV, and paid for by campaign contributions from the corporate and special interest groups. If we are that careless about our votes, perhaps we deserve to be taxed for the benefit of these parasites.

The men who produced our Constitution imagined informed voters electing wise, public spirited men to represent them in Congress. What we got instead must have shocked them. How do you remove such corruption from government? Power is what creates corruption. Is it possible to create a government without power? Free market anarchy is the only answer I can see. If you can think of something better, please add your comment to this blog.

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The Tragedy of the Commons

April 23, 2010

The Tragedy of the Commons
The basic principle of socialism is that people must share something: land, goods, income, or responsibility. The various socialist forms of government are: Communism, Fascism, and the welfare state.
The family is the simplest commune. All property, income, control, and responsibility are shared by the parents, but not necessarily equally.
A communist community shares ownership of property, especially the means of production: land, farms, factories, and machinery. It works, but it tends to become a dictatorship, and no member is free.
Fascism is only related to racism and genocide by coincidence; they both existed in Adolph Hitler’s Germany in the 1930s. Both Italy and Spain were fascist, too, at that time, but neither was involved directly in the Holocaust.
A fascist community retains nominal private ownership of the means of production, but governmental control of the economy is so complete that, in effect, the government owns everything and everybody.
The welfare state is primarily about redistributing wealth and income to make the citizens dependent and patriotic. The government’s unlimited power to tax, appropriate, and redistribute income and wealth makes common property of all income and wealth. To the extent that the government controls the economy by regulation and manipulation of the money, the government is fascist.
Common property distorts our incentives. The result is usually exploitation of the property by most of the communal owners, and improvement of the property by few or none of them. Some common property is unavoidable. To avoid wasteful exploitation, all else should be privately owned.
In a free market, enterprise, innovation, and taking risks are the road to riches for the most successful, and increasing wealth for all. Better, cheaper products and services benefit everyone.
Under socialism of any sort, the riches of the successful are taxed heavily. This stifles the incentive to take any risk and so stifles enterprise. Poverty, on the other hand, is rewarded with an extra slice of the common wealth, killing any incentive to try to earn a living. Only the coercion of a totalitarian state can induce workers to bother to even seem to be working. In its efforts to spread the wealth, the Socialist society effectively spreads the poverty.
Through the ages, thousands of socialist experiments have failed because the rules defeated the normal human incentives. People act to improve their lot, but under socialism, any improvement they achieve is divided among 100 or a million others, while without bothering to produce at all, they are still entitled to an equal share- of the poverty.
Of the pilgrims who landed on Plymouth Rock, most died of starvation rather than work for the benefit of others, until the socialist experiment was ended and the people were granted private ownership of some land and whatever they produced. From then on, they thrived. If you favor prosperity, the free market is the only way to go. Socialism is basically slavery. You own a share of a million people and the same million people share ownership of you.