Posted tagged ‘Socialism’

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.

 

Must Reads For The Week 7/23/16

July 23, 2016

The Economics Of Trade vs. The Politics Of Trade Deals, by Mike Mish Shedlock, at davidstockmanscontracorner.com. Mr. Trump should read this. Excerpt from the article: “A genuine free trade agreement would consist of a single statement: “Effective immediately, all tariffs and subsidies, on all goods and services, are removed.” “Fair Trade” is a concoction by industries that seek or need protection via tariffs and import restrictions, to the damage of everyone else…..The irony in the “fair trade” argument is no jobs are saved by tariffs.

Venezuela Where Hyperinflation Meets Socialism And Price Controls, by Fabiola Zirpa, at economicpolicyjournal.com. Why can’t we learn from the mistakes of other countries? This is just the most recent example of the consequences when socialists try to centrally plan the economy. When we look at Venezuela today we can’t fathom that this could happen here and it probably couldn’t get this bad. But the question is; how much has our standard of living incrementally decreased, or not grown, because of the money printing that has taken place over the last two decades? We can’t quantify it. But we can say with certainty that we aren’t where would have been economically if the Fed hadn’t printed 4 trillion counterfeit dollars.

Minimum Wage Forces LA Diner Pann’s (est. 1958) To Stop Serving Dinner, at economicpolicyjournal.com. We can show story after story of the consequences of artificially raising the minimum wage above its market value. Jobs are lost. But somehow politicians get by with implementing these laws. It has to be because of the economic ignorance of our citizenry.

Interesting Fact Of The Day, Uber Completes 2 Billion Rides, by Mark J. Perry, at carpediemblog. It took six years for Uber to reach 1 billion riders. It took only six months to get its next 1 billion riders. In a free market the consumer wins. Consumers are voting for ride sharing and against the taxi monopoly. Big taxi can’t stop Uber, unless big taxi supplies a better service at a cheaper price.

Yoshi Launches “set it and forget it” Vehicle Refueling In San Francisco, by Lora Kolodny, at techcrunch.com. This is like “back to the future”. We went from full service gas stations (this was before the millennials time). To self-service gas stations. Now we’re going back to full service, except they drive to your house.

Startup Makes Investing Fee Free, opprotunitylives.com. This is like Uber except for trading stocks. Will the brokerage houses try to get government to stop this like the taxi cartel has tried to do with Uber?

The Unique Evil Of The Left, by Lew Rockwell, at mises.org. Excerpt from the article: “The left is the enemy of Diversity and the fanatical promoter of identity. Uniformity is stressed in all leftist utopias, paradises in which everybody is the same, envy is dead, and the enemy is either dead, lives outside the gates, or is utterly humiliated. Leftism loathes differences, deviations, stratification.”

Virginia Court Strikes Down Order Giving Felons Right To Vote, at new-ssentinal.com. Virginia Governor Terry McAuliffe, a former Clinton crony, attempted to mine 200,000 Democrat votes by restoring the voting rights of felons using an executive order. It was shot down by the Virginia Supreme court. I was shocked, shocked mind you when the Court said his executive order restoring voting rights to felons, “overstepped his authority”. This sounds familiar……? Didn’t the President have his executive order on immigration shot down by the Supreme Court for the same reason.

The Political Class vs. The Rest Of Us, by William L. Anderson, at mises.org. It is not R vs. D or any other groups the R’s and D’s construct and pit against each other. The Only Real Division Is THE POLITICAL CLASS VS. THE REST OF US! Until individuals realize this, “the era of big government will never be over”.

If The Public Shouldn’t Have Them, Why Does The IRS Need AR -15’s? at zerohedge.com. Great question.

Former Navy: The AR-15 Is A Citizens Best Defense Against Terrorism, at thefederalist.com.

 

Some Econ Homework

May 11, 2016

How You Don’t Cure Poverty, by Henry Hazlitt, at mises.org. Here are some excerpts from the article:

From the beginning of history sincere reformers as well as demagogues have sought to abolish or at least to alleviate poverty through state action…..The most frequent and popular of these proposed remedies has been the simple one of seizing from the rich to give to the poor…… The wealth is to be “shared,” to be redistributed,” to be “equalized.” In fact, in the minds of many reformers it is not poverty that is the chief evil but inequality….. all schemes for redistributing or equalizing incomes or wealth must undermine or destroy incentives at both ends of the economic scale. They must reduce or abolish the incentives of the unskilled and shiftless to improve their condition by their own efforts, and even the able and industrious will see little point in earning anything beyond what they are allowed to keep. These redistribution schemes must inevitably reduce the size of the pie to be redistributed. They can only level down. Their long-run effect must be to reduce production and lead toward national impoverishment.”

This brings us to the subject of minimum-wage laws. It is profoundly discouraging that in the second half of the twentieth century, in what is supposed to be an age of great economic sophistication, the United States should have such laws on its books, and that it should still be necessary to protest against a nostrum so futile and mischievous. It hurts most the very marginal workers it is designed to help…..I can only repeat what I have written in another place…… We cannot make a man worth a given amount by making it illegal for anyone to offer him less. We merely deprive him of the right to earn the amount that his abilities and opportunities would permit him to earn, while we deprive the community of the moderate services he is capable of rendering. In brief, for a low wage we substitute unemployment.

We come now to the final false remedy for poverty to be considered in this article—outright socialism. By “outright socialism” I refer to the Marxist proposal for “the public ownership and control of the means of production”…..Now the word “socialism” is loosely used to refer to…….the redistribution of wealth or income—if not to make incomes equal, at least to make them much more nearly equal than they are in a market economy. But the majority of those who propose this objective today think that it can be achieved by retaining the mechanisms of private enterprise and then taxing the bigger incomes to subsidize the smaller incomes.”

Why Private Investment Works & Government Investment Doesn’t, at Prager University.

When government tries to pick losers and winners, it typically picks losers. Why? Because in the free market consumers pick winners to leave the losers to Government.”

Another reason Government can’t out perform the free market is because it doesn’t have a tenth of the knowledge that exists in the free market. Also, in the market, when the individual takes the risk he knows he takes the loss if he is wrong. When the Government picks a loser it tries to keep it propped up by subsidizing it with tax dollars. The wasting of scarce resources is kept at a minimal level in the market, because the risk taker stops the unprofitable activity before too long. Resources are liquidated and put toward a more productive use according to consumers desires. Government has no such incentive to stop the nonprofitable activity. They continue wasting scarce resources long after the activity had proven unproductive. If Government bureaucrats were truly in the venture capital business, they would have gone bankrupt years ago.

Economics: It’s Simpler Than You Think, by David Gordan, at mises.org.   From the article:

“…. Skilled entrepreneurs succeed, but many in business fail. The market operates by sorting out of the successful from the failures by the test of profitability. Given this fact, it is as essential that the failures be allowed to fail as it is that those who succeed be allowed to keep their profits. Attempts to prop up failures disable the market.

This vital point can be used to answer a common objection to free trade. Many people object to free trade because, in some cases, foreign competition drives domestic companies out of business, causing unemployment. To the response that expanded trade creates jobs elsewhere in the economy, the reply often given is, what about the workers who do lose their jobs? They are often unable to secure new jobs as good as those they had previously. The fact that others are better off is small solace to them.”…….“In a free economy, capital migrates to talented entrepreneurs eager to pursue profitable opportunities. Innovations like the automobile, computer, and online retail services destroy jobs, but the process leads to better, higher-paying jobs … to create jobs in abundance, we must allow the free marketplace to regularly annihilate them.”

” According to Ben Bernanke, Timothy Geithner, and many others, only the massive bailouts of financial institutions in response to the collapse of the housing market saved the economy from disaster…in the financial crisis of 2008….. but it is essential to the proper working of the market to allow the businesses that had acted recklessly to fail. Had this been done, the economy could have quickly readjusted. “Capitalist societies can rebound from anything. In particular, they can bounce back from bank failures that do not exterminate human capital or destroy their infrastructure. An interfering government is the only barrier to any society’s revival, and that is why the global economy cratered amid all the government intervention in 2008.

 

Related ArticleHere is Some Econ Homework, at austrianaddict.com.

Related ArticleYour Economic Homework, at austrianaddict.com.

What Are Your Options When Both Political Parties Are Based On Socialist Ideals

April 19, 2016

This video, by LibertyPen, is an appearance Margaret Thatcher made on Firing Line in 1977, which was two years before she became Prime Minister of Great Britain. She was talking about ‘Capitalism and a Free Society’. The whole video is great but the part that really jumped out at me starts at 4:27. Mrs. Thatcher talks about the difference between American politics and British politics. Below is the money quote from the video. Oh how times have changed.

“I think in many ways American politics are very different because you have two parties based on a free society, or free enterprise society and economic freedom. We have one party based on that, one main party, and another one based on socialism.

Mrs. Thatcher’s statement about American politics couldn’t be uttered in 2016. Today we can safely say the Democratic parties ideals are in harmony, if not goose step, with socialistic ideals. And since around 2000, the Republican party has and is basing its actions on socialistic ideals, even though its platform doesn’t reflect its new direction. The inside the Washington beltway Republican establishment talks a good game when it comes to smaller government but its actions don’t back up its rhetoric. If what a person values is revealed by his actions, then we can safely say that both parties value ideals that are based on socialistic thinking.

Over the last seven years President Obama has increased the size and scope of Government with no opposition, and in some cases help, from the “small Government” Republican party. When both parties increase the power of Government, what are the options for people who understand individual liberty, the rule of law and free markets?

Since it is hopeless to change the Democrat party, your options are, either start a third-party, or take over the Republican party and purge it of the big government established leaders like Boehner, McConnell, McCain, Graham, Cantor et al. Since election cycles are every two years, this will take a long time. I think the third-party option has a higher cost in terms of time and credibility. Incrementally taking over the Republican party is the best option, and the seeds of this take over have already taken root around the country. How important is this job? This quote from F.A. Hayek spells it out.

F. A. Hayek: “The battle for freedom must be won over and over again. The socialists of all parties must be persuaded or defeated if they and we are to remain free men.

Where would we be today if the insurgency against big government hadn’t started in 2009 with the tea party and liberty groups? The gains by Republicans at the State and local levels (click here Republican Stranglehold On State Government) is a direct result of the grass-roots insurgency. The insurgency is led by people who believe in such radical ideas as individual liberty, free markets, and constitutional limits on government. It will take time for this limited government insurgency to trickle up to the Federal level. Senators Cruz, Lee, and Paul, along with the forty or so members of the freedom caucus that forced Boehner out of the House speakers position were born out of this bottom up change.

Bottom up change has a better foundation than top down change. Most peoples world view is based on the shifting sands of emotion not logic. Changing a persons vision of the world is difficult, which is why it happens at the individual level. It is personal. It starts and ends one conversation at a time, one person at a time, and it isn’t easy.

Just remember, as you start to walk through a tunnel, it gets darker and darker with every step. Just keep in mind that when it’s darkest, you are half way to your destination. Don’t give up. Keep moving forward, because you don’t realize how far you’ve traveled when you’re in the dark middle of the journey. Take some motivation from this quote by Ludwig vonMises.

Ludwig von Mises: “The history of mankind is the history of ideas. For it is ideas, theories and doctrines that guide human action, determine the ultimate ends men aim at, and the choice of the means employed for the attainment of these ends. The sensational events which stir the emotions and catch the interest of superficial observers are merely the consummation of ideological changes. There are no such things in rather misleading terms, a “turning point in history” is the coming on the scene of forces which were already for a long time at work behind the scene. New ideologies, which had already long since superseded the old ones, throw off their last veil and even the dullest people become aware of the changes which they did not notice before.

America’s Socialist Origins, by Prager University

March 31, 2016

Some of the first settlements in America were set up as socialist or collective societies. No one owned property. Everyone’s production was ‘given’ to the public store. These early settlements were examples of socialist ideas that Karl Marx popularized in this saying form the mid 1800’s ,”form each according to his abilities to each according to his needs“. These lab experiments didn’t work because, although everyone was willing to consume, not everyone was willing to produce. If these socialist ideals couldn’t work in small groups, where everyone knew each other and had the similar end of just surviving the next day, how can these ideas be expected to work in countries with tens of millions of people who don’t know each other and who desire a variety of ends?

Here is a video from Prager University titled,

AMERICA’S SOCIALIST ORIGINS

 

Here are some excerpts from my post, The Real Thanksgiving Story: I quote Richard J. Maybury.

“In the harvest feasts of 1621 and 1622, “all had their hungry bellies filled,” but only briefly. The prevailing condition during those years was not the abundance the official story claims, it was famine and death. The first “Thanksgiving” was not so much a celebration as it was the last meal of condemned men.”

“But in subsequent years something changes. The harvest of 1623 was different…….. In fact, in 1624, so much food was produced that the colonists were able to begin exporting corn.”

“What happened? After the poor harvest of 1622…..They began to question their form of economic organization.”…..in 1623 Bradford abolished socialism. He gave each household a parcel of land and told them they could keep what they produced, or trade it away as they saw fit. In other words, he replaced socialism with a free market, and that was the end of the famines.”

 

Related ArticlePrivate Property vs. Collective Ownership: Which Deals With Scarcity Better Than The Other, at austrianaddict.com.

Related ArticleWhy Socialism Won’t Work? Human Nature, at austrianaddict.com.

 

Milton Friedman Wins The Democrat Debate Against Hillary Clinton And Bernie Sanders

October 15, 2015

The first Democrat debate between Bernie Sanders and Hillary Clinton seemed like a debate between Karl Marx and Fidel Castro. Sanders truly believes that Marxist socialism will work, and Hillary just uses the Marxist rhetoric to win a position of power. The real winner in the debate was Milton Friedman who, in the video below, knocks Bernie and Hillary’s free lunch rhetoric out of the park.

SERFDOM OR FREEDOM

Bernie and Hillary tried to out do each other on what they will give away if elected. But, since Government doesn’t produce anything. It can’t give anything away unless politicians and bureaucrats try one or all of the steps listed below.

1)  They can force the person who produces the good or service to provide it for free.

2) They can confiscate money from citizens (taxes) to pay the people who produce the good or service.

3) If they can’t steal enough, they have to borrow money to pay the people who produce the good or service.

4) If they can’t do #2 or #3, they have to get the Federal reserve to print money to pay the people who produce the good or service.

Our Government has spent a little over a half a trillion (500 billion) dollars more than it has taken in taxes each of the last 3 years. These three years follow a three-year period in which it spent over a trillion more than it took in taxes in each year. So as you can see we have exhausted step 2 and are at full speed on steps 3 and 4.

Since no one will work for nothing when they have other options, step one is difficult to implement. Step two has its limits as revenue will start to decrease if taxes are too high. Step 3 syphons money from capital markets and moves it into consumption activities (which is what government spending is). If Government borrows too much, interest rates will go up, the cost of the debt will increase, and Government will have a hard time selling its debt. At this point step 4 will be implemented. The Federal Reserve will step in and buy U.S. T-Bills with electronically printed counterfeit money. Step four is how the Government can fund itself if 2 and 3 are maxed out.

These steps are not a part of a free society, they happen in a country that is heading toward a centrally planned Marxist society. If the government doesn’t own the means of production out right, it uses its force to control the privately owned means of production. This is where we are, and I think you can see the direction we are headed unless ‘we the people’ turn this around.

Related ArticleMilton Friedman, Moving Toward Serfdom, at austrianaddict.com

Related ArticleMilton Friedman: Market Failure vs. Government Failure. Which Has A Higher Cost? at austrianaddict.com.

Related ArticleThe Essential HAYEK. at austrianaddict.com.

 

The Model For Obama And The Pope? North Korea

October 2, 2015

The Burning Platform (click here) shows us that the Pope and President Obama would consider North Korea a perfect model for every nation to follow if we want to stop global warming. Electrical usage in North Korea has decreased since 1980, while South Korea’s electrical usage since 1980 is 14 times greater. We all know that electric power is produced by carbon based fuels, which emit CO2, which is used by plants along with water and sun light to make sugar for the plants and oxygen for us. Wait a second! Does using electricity produce oxygen?

 

DO AS I SAY, NOT AS I DO

I have a question for the Pope and the President. If everyone followed your examples and spent their days pontificating or bloviating about poverty; Who would produce all the stuff that you want us to give to the down trodden? It’s hard to give something away that doesn’t exist. Production comes before consumption. The Pope should know this from reading Genesis 4:19 “By the sweat of your brow you shall eat bread.” And President Obama should know this from reading Karl Marx, “From each according to his abilities, to each according to his needs“.

The people who rail against capitalism, do it under all the comforts that capitalism has produced. They are ignorant of the processes that allows them to do what they do, because they’re born in the middle of the story.

Political Cartoons by Nate Beeler

Here is a great article by Mark J. Perry at Carpe Diem Blog titled What Four Previous Popes Had To Say About Socialism. Needless to say they didn’t give socialism glowing reviews.

Related ArticleWhat Comes First Production Or Consumption, at austrianaddict.com.

Related ArticleWe’re All Born In The Middle Of The Story, at austrianaddict.com.