What’s wrong with Socialism?

The following is partly fact and partly my opinion. I will leave it to the reader to determine which is which and if in doubt, please ask.

Our great Country used to have the free enterprise system as a basis for economic freedom, which many including myself believe, is one of the two cornerstones of Liberty. There is good reason that the words “Free Enterprise” have the word “Free” in it. Much to my chagrin, we currently have a combination of Socialism and the Free Enterprise system.

Social Freedom and Economic Freedom are both necessary for true freedom. Socialism, Communism and other Authoritarian forms of economic and political interaction, all deny the freedom for one to choose his vocation based upon his desires and abilities.

A Russian friend of mine back in the late 1970’s once told me, “You Americans don’t really understand freedom. You come to my Country and see us going about our daily lives, people standing on soapboxes, complaining about various things, going to the store to buy things, etc.”

“What you don’t realize is that those on the soapbox will find that tomorrow they have been reassigned to a different factory in a different town and a much worst apartment as a punishment for daring to speak out. Their shoe rations have been cut, and they are on a ‘watch list’ from that day on.”

“This happens in China as well. When we go to the store to by food, we find that we cannot always get what we want because of government interference in our businesses. The social and economic planners and their “5 year plans” can never react quickly enough to the market needs. This causes Black Markets and crime.”

The key to understanding Economics and their theories is the understanding of human nature and not the understanding of mathematical theories of “economic equilibrium and the static state.”

The main failure of Socialism is the elimination of the need for the entrepreneurial function. With Socialism the productive are punished and the non-productive are rewarded. This is the main reason why all Socialism and Communism systems will always fail. It is the worst form of discrimination, it is discrimination based upon productivity. When all are paid whether they work or not, too many will choose to not work. We see it everyday in our welfare system. Why work for ten dollars an hour, when you can stay at home and get by on the sweat of others brows?

The second reason socialism doesn’t work is because of the problem of establishing the value of goods. While the free market system establishes value by way of supply and demand, which can be dealt with using math, i.e., V = D/S, that is to say Value is equal to Demand over Supply. (In other words, we can say the bigger the demand relative to the supply, the more the value.) In Socialism there is no mathematical formula for value because the value of production is based upon some nebulous number based upon wants and needs that either produces shortages or excess of a given product. Ludwig Von Mises calls this “The Impossibility of Economic Calculation Under Socialism.”

In the year 1620 William Bradford and other elders wrote an extraordinary charter called the “Mayflower Compact.” The original contract that the pilgrims who settled in New Plymouth, Virgina, had with their sponsors in London called for everything they produced to go into a common storehouse.

This attempt to practice socialism had very poor results and Bradford wrote in his Journal why it failed, he said, “For this community (so far as it was) was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort. For young men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men's wives and children without any recompense ... that was thought injustice.”

Of course it was considered unjust! It is a form of economic slavery. Humans all naturally want to find the most pleasurable jobs, that is to say the ones with the most relaxed atmosphere. This means very few want to do the “difficult or more labor intensive” jobs. Who wouldn’t or who hasn’t wished for the job of the supervisor or manager. According to many, most people perceive manual labor as a form of pain. “No pain, no gain” is just as true in economic sense as it is in physical exercise.

So, Bradford assigned each family a plot of land to work and manage for their own benefit. He then wrote, “This had very good success, for it made all hands industrious, so as much more corn was planted than otherwise would have been.”

It is natural for people to hope to “get ahead” or to have a more “pleasurable” life, one of leisure if you will. They do this by working hard to save for their future. When under Socialism they find that any extra work goes to someone else, they tend to do just enough to get by.

The story of the “Little Red Hen” that I grew up with has great moral value and wisdom. It tells of human nature and the problems we as a nation are facing in the years ahead. For as soon as men get a little authority they immediately begin to unjustly dominate others.

Sometimes they believe that by doing what is called “Social Engineering” they can use this power to mold others into better people. This is a form of “forcing others to become what they perceive is best for society.” The problem lies in “who” gets to become the enlightened class or who gets to do the molding or forcing. At the moment that distinction belongs to those in Washington and in the Social Elite. No matter their motives, their methods involve “force.” Socialism can only exist if it is “forced” upon a society either by a tyrant or by a vote of the majority.

Socialized medicine is just around the corner. Our great country was built upon principals of freedom. We cannot really be free under Socialism. Socialism requires people to work for others without just compensation. Some day we will learn the lesson the pilgrims and Russia learned, but we will learn it by even a harder lesson, for we will have lost the most glorious system of government ever devised by human minds.

True freedom requires both social and economic freedom. Socialism is economic force. You are forced to work partly for your neighbor without just or fair compensation. Those that get ahead are punished with a fine or fee we sometimes call a “progressive tax.”

At the moment almost half of the Budget for the U.S.A. goes to three main categories, Medicare, Medicaid, and Social Security. This percentage will only continue to grow as we move toward even more socialism. National Health Care will ruin our economy and our great founding principals of Freedom. (In my humble opinion.)

UPDATE 01-01-06
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Since I am very close to being a libertarian in many areas, (use taxes as the fairest tax, and free market), I thought I would add a new piece of infrormation from a site that I visit often called Lewrockwell.com.

Here is a link to a very good article on the evils of Socialism, specifically "African Socialism" and it's founder Julius Nyerere from Tanzania. Here is a qouote from the article about the dismal failure of all Socialism projects, "All these different forms of socialism not only implied huge economic waste, inefficiency and poverty but also great centralization of political power. As a consequence, African leaders gave themselves and their parties great influence. "

And finally he says, "To sum up, the rich world exported the ideas of Karl Marx instead of Adam Smith to Africa. The ideas of Marx haven’t worked anywhere and apparently they did not work in Africa either."

"Nyerere left Tanzania as one of the seven poorest countries on earth, despite receiving the highest per capita foreign aid."

Again Socialism brings "great centralization of political power" and it never works.