Much of society’s political debate today focuses on our future, and what economic system is best suited for Americans.
Millennials have a more favorable view of socialism than past generations, as reported by the Washington Examiner on July 11, 2018. It fits with the mantra they have heard in public schools from day one. Capitalism is about greed and oppression. Socialism is fairer, and everybody happily shares. We then visit unicorns.
Socialism doesn’t work because individual greed doesn’t go away. I’m not sure how to make it simpler. The evidence is human nature, and all of human history.
You can’t name a society, group of people, or a time in history where everyone in society was happy with their “fair share.” Whether in the form of government control over the means of production, or utilized to enforce substantial wealth redistribution, someone in the process won’t be happy with either the confiscation, or their allotted share. There is a perception somehow that socialist greed is nobler, perhaps, than capitalist greed. Read Orwell’s “Animal Farm.”
Socialism always runs out of money. When incentives to produce or innovate are stifled, production, economic mobility and the ability to provide safety nets all suffer.
Capitalism, by contrast, is the economic system where the consumer is king. It has an altruistic nature. Entrepreneurs, and by extension employees, are tasked with finding ways to produce goods and services at a level and cost desired by consumers.
Consumers and producers both benefit when a product desired by consumers is brought to market at a price they are willing to pay. The innovative technology in your pocket came about through free market competition, not government mandate. No other economic system can rival capitalism in allowing for economic growth and mobility.
I recently interviewed a number of Wisconsin academic decathletes, and many mentioned how awakened they were in economics after studying the theories of John Maynard Keynes. Keynesian economics is the idea that if government takes money from one person and uses that money to pay someone to dig a hole, then pays yet another individual to fill that same hole, somehow that can be considered economic growth.
I asked these students if they studied other economists like Frederick Hayek, or Milton Friedman, and I received blank expressions. None had heard of Friedman’s famous “pencil” speech.
When confronted with socialism’s long history of global failures, liberals will call it “democratic socialism,” perceived to be “fairer” because a majority of those with less will vote to take from those who have more. Since accomplished by a vote, it must be fair. Our founding fathers painstakingly sought to form our government to protect us from the “tyranny of the majority.”
America already has a broad range of social programs, such as Social Security, Medicare, unemployment insurance and many welfare programs woven into the fabric of American life, and we need to be mindful of the pitfalls of an ever-expanding government.
Liberals point to Scandinavian nations as bastions of what may be called “social democracies” described in a Feb. 25, 2016, Foundation for Economic Education piece, with high levels of social programs without total government control of the means of production. Are Nordic countries successful?
My Scandinavian roots aside, there are problems arising in those countries as a result of unsustainable government spending.
Finland’s government collapsed in March. A March 8 Free Beacon story stated the government collapsed due to the rising cost of universal health insurance. A Feb. 20 Geller Report story talked about the failure of the two-year Finnish experiment with universal basic income having little effect on its goal to reduce unemployment.
Denmark has been touted as some social democracy utopia, but Danes are quick to rebuke those claims. Widely shared after U.S. Sen. Bernie Sanders touted Denmark as a model for socialism, the Danish prime minister stated, “I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy.”
Norway’s economy was described in the Economist on Oct. 8, 2015, as a “capitalist country, but dominated by state-owned enterprises”, where “oil and gas now account for about a quarter of Norway’s GDP.” Norway’s economy and wealth are driven by reliance on fossil fuels, which should anger liberals.
Scandinavian countries, in general, offer a higher level of social programs than America, but our funds used for national defense dwarf theirs. They don’t have to defend themselves, or the rest of the world. Few Danes can afford to own automobiles, but with the tiny nation comprised mostly of dozens of islands, it’s not surprising. America is far too large and diverse to use Denmark as a model for economics.
Scandinavia may be beautiful, but the extent of government dependence is unsustainable, and America would be wise to avoid the creep toward socialism on our own shores.