Posted tagged ‘Communism’

Drifting Towards Fascism

September 20, 2016

man drifting in a boat

First let’s define Fascism so we can begin at the same starting point. Fascism is an economic system where the state doesn’t own the means of production, but the state makes the rules that producers and consumers have to follow. There is a bureaucratic layer between businesses and politicians which plans the economy. It is crony capitalism on steroids.

Fascism places politicians and bureaucrats as the ultimate rulers aka decision makers. The individual has no rights or liberty except what the rulers say they have. Order comes from the state, (top down) not from the individual, (spontaneous order).

I saw a great chart (below) showing America’s drift toward Fascism, in an article titled, The Road To Fascism In Just Two Charts, at bawerk.net. I have always thought economic systems fit on a line where at one end no government exists, and at the opposite end there is total government control. Where an economic system is placed on this line depends on how much government intervention exists, or put another way, how little governmental intervention exists.

WHAT IS AN ECONOMY? WHAT IS SOCIAL FREEDOM?

An economy is what results when each individual is free to decide what to produce, consume, exchange and save in a world of scarce resources which have alternative uses. Simply put, you own what you’ve produced or what you’ve received in exchange for your production. It is your property and you have a right to do with it what you wish.

Production is the creation of wealth. Consumption is the destruction of wealth. Exchange is the increase of wealth as both parties place a higher value on what they received than what they’ve given up. Saving is the preference of consumption at some point in the future to consumption in the present. Savings is the basis for capital formation. Capital formation is what increases productivity. Increased productivity is the creation of larger amounts of wealth.

Each individuals decision on what and how much he will produce, consume, exchange and save according to what he  subjectively values in a world of scarcity is the essence of freedom.

In order to have economic freedom you have to have social freedom and in order to have social freedom you have to have economic freedom. In other words, economic freedom and social freedom are different sides of the same coin. Individuals are free to act. Each individual is responsible for the consequences of his actions if they bring harm to others or himself.

I have a quote by F. A. Hayek at the top of my web site. It is my favorite quote because it sums up the choice individuals have faced since the beginning of time:

F. A. HAYEK: “THE COORDINATION OF MENS ACTIVITIES THROUGH CENTRAL PLANNING OR THROUGH VOLUNTARY COOPERATION ARE ROADS GOING IN VERY DIFFERENT DIRECTIONS, THE FIRST TO SERFDOM AND POVERTY THE SECOND TO FREEDOM AND PLENTY.

Let’s take a look at the chart and see what it reveals.

true-political-axis

Zero Government intervention into the economy starts at the bottom left of the chart and moves upward and to the right as Government intervention starts to increase. Zero Social Freedom starts at the top right of the chart and moves downward and to the left as the level of Social Freedom starts to increase.

Communism, socialism, fascism and democratic socialism are on the top right of this chart. They are economic and political systems that strangle individual liberty. Their very nature means intervention into, or control of, what is produced, consumed, exchanged and saved.

Anarcho capitalism, free market capitalism, classical liberalism and our America constitutional founding are on  the lower left of the chart. They are economic and political systems that strangle Government and allow individuals the freedom to produce, consume, exchange, and save as they see fit.

What exists today is the middle ground of crony capitalism, crony socialism and other forms of government interventionism. This is the utopian middle ground that elites think mixes the best parts of both ends of the chart. They know that free market capitalism produces great amounts of wealth as seen by our standard of living. But the elites don’t like the way the wealth is “distributed” and want to use the force of government to make this distribution  “fairer” according to their idea of “fair”.

The elites attempt to redistribute wealth differently than it would exist in the free market, creates incentives that ultimately decreases the wealth that is being produced. It divides us into groups that can be pitted against each other by political opportunists.

These statements by Ludwig von Mises tell us all we need to know about the above chart:

The issue is always the same: the government or the market. There is no third solution.”

The middle-of-the-road policy is not an economic system that can last. It is a method for the realization of socialism by installments.”

Anti capitalistic policies sabotage the operation of the capitalist system of the market economy. The failure of interventionism does not demonstrate the necessity of adopting socialism. It merely exposes the futility of interventionism. All those evils which the self-styled “progressives” interpret as evidence of the failure off capitalism are the outcome of their allegedly beneficial interference with the market.”

CONCLUSION

We are in the chaotic middle. Our choice is to move towards freedom and free markets. It is going to take a lot of time and effort to educate enough people in order to tip the scales toward freedom. Is the cost too high? It’s your decision.

 

Related ArticleCapitalism vs. Crony Capitalism, at austrianaddict.com.

Related ArticleSocialism Sounds Great, at austrianaddict.com.

Related ArticleWhat Creates Wealth? Freedom, at austrtianaddict.com.

Related ArticleWe Can’t Recreate The Garden Of Eden, at austrianaddict.com.

 

Government Is Force.

July 9, 2015

Middle aged prisoners chains and cuffs over a brick wall - stock photo

George Washington: “Government is not reason, it is not eloquence, it is force, like fire it is a dangerous servant and a fearful master.

This quote by George Washington came to mind when I read a couple of articles this week about Greece and China.

GREECE

A Lesson From The Greek Crisis: Safe Deposit Boxes Are Not Safe, by Joseph T. Solerno, at mises.org. The Government will not allow people to withdraw cash from their safety deposit boxes. The Government, with the help of the banks, will then take the cash out of these safety deposit boxes, credit the persons checking account, and put the cash in ATM’s.

In an unrelated story, Home Safe Sales in Greece Have Boomed Over the Last 5 Years, at time.com. Some Greek citizens learned from what happened in Cyprus, and are trying to protect themselves from their Government. Unfortunately home robberies have also skyrocketed. This is the unintended consequence of the unintended consequence.

This brings to mind a quote by Thomas Jefferson: “The two enemies of the people are criminals and Government, so let us tie the second down with the chains of the constitution so the second will not become the legalized version of the first.

CHINA

Chinese stock markets have lost over 30% of their value in the last three weeks. The Chinese government created the stock market bubble in the first place by pumping money into the market through the use of margin debt. These central planners plans have run head on into economic reality, as the market is trying to liquidate and find a bottom. The central planners are now trying to keep this economic reality from happening. The Chinese government is attempting to cure the symptom instead of letting economic forces cure the problem the planners created. They are banning major share holders from selling stock for 6 months, freezing sales of half the companies in the market, blocked fund redemptions among other things.

Now the next step in this article, Utter Desperation: Chinese Police Vow To Arrest Malicious Short Sellers, at zerohedge.com. Yes the Chinese government is threatening to arrest malicious selling of stock. I wonder, what is the Governments definition of “malicious”? Do you think it is not defined because they want Chinese citizens to be afraid of even thinking about selling stocks? Does the Chinese government have a track record of abusing it’s citizens?

159409428_6759edf29b

Central planning by communists, socialists, or politicians and bureaucrats in a free market system, doesn’t work as the planners planned.

A quote by Ludwig von Mises comes to mind: : “Many think governments are free to achieve all they aim at without being restrained by an inexorable regularity in the sequence of economic phenomena …they maintain that the State is God.

WHAT ABOUT THE U.S.

Milder versions of propping up equity markets has happened in the U.S. over the last 15 years. Fed money pumping via  zero interest rates and quantitative easing are examples of central planners at work.

In this article, and short video: Rick Santelli Unleashed: China Is Not Doing Anything That The U.S. Has Not Already Tried, at zerohedge.com. Santelli says central planners are in control. But as we see from what is happening in Greece and China, they aren’t. China and Greece can’t even control their communist and socialist economic systems. Will our central planners plans end up any other way except broken?

Related ArticleCentral Planners Don’t See The Consequences Of Their Actions. Or Do They? at austrianaddict.com

Related ArticleA Look Over The Horizon At What Lies Ahead If We Continue Down The Central Planning Road, at austrianaddict.com.

Related ArticlePolitician’s “Affordable” Ideas Must Obey Economic Forces, at austrianaddict.com.