Mar32020

So You Think You Like Socialism

I am shocked by the rising support for the economic system called Socialism. Not limited to the whacko fringes of society any longer, many people I know who own businesses and friends both near and far support voting for a socialistic leaning candidate or going so far as to say they want the U.S. to adopt socialism in its entirety.

For those out there needing clarification and even those who think they know what socialism entails, here is the condensed Google description: "The term socialism refers to any system in which the production and distribution of goods and services is a shared responsibility of a group of people. Socialism is based upon economic and political theories that advocate for collectivism. In a state of socialism, there is no privately owned property."

Reread that last sentence. If the whole description wasn’t bad enough, the last sentence should rattle the teeth of those that truly understand the implication of "no privately owned property."

Democratic Socialism is another buzzword tossed around today but those two words strung together in actuality are like being a little bit pregnant. Socialism in its many versions has been tried repeatedly.  It has a dismal history.

Societies that vote it in usually end up trying to vote it out in a decade or two but like a cancer, once its established it’s hard to get rid of.

 

Thinking back to the era of McCarthyism where the word communist was almost synonymous with socialist, just mentioning you support such a thing could land you in hot water with your friends or employers. It was hated that much.

 

Boy do times change. Now 43% of Americans say socialism would be good for the country (Gallup Poll).  I knew there were some morons among us but 43%?

 

It boggles the mind.

 

In an "I told you so" sort of way, some part of me wants socialism to be adopted at the behest of all these people that support it so I can rub the egg off their faces when they find themselves complaining about mediocre services, having little spending money, and bitching about how broke they are while waiting in a long line for some basic supplies. Then I wise up and repeat the adage "it’s easy to vote yourself into socialism but hard as hell to get yourself out."

 

Supporters of socialism think almost everything they need to live will be free, no one will go hungry or without medical care and there will be no injustices in the world. Or something like that.

One only has to look at the extreme example of socialism to know it is far from the panacea it’s made out to be. In fact, even a little bit of socialism is like only having a little bit of cancer. Its bad news no matter where it is and its bound to get bigger if you allow it to exist at all.

 

There are of course many warnings and adages about socialism and they are highly warranted.

Utterances like "the problem with socialism is you eventually run out of other people’s money” and "socialism just spreads out the misery” illustrate what societies that have tried it eventually realize. It doesn’t work as promised and destroys economies with its flawed theories.

In an article entitled "why socialism always fails" by Mark J. Perry he lays out quite succinctly why this cure to all economic ills is anything but. Perry rightly identifies socialism's failure:  "because it’s a flawed system based on completely faulty principles that aren’t consistent with human behavior and can’t nurture the human spirit".

More precisely Perry nails it down to the underlying reason socialism’s "collectivism" always leads to failure:  "The failure of socialism in countries around the world can be traced to one critical defect: it is a system that ignores incentives.”

 

By failing to emphasize incentives, socialism is a theory inconsistent with human nature and is therefore doomed to fail. Socialism is based on the theory that incentives don’t matter! Yet they do, and even to most die-hard liberalists, when deprived of just payment or adequate services, they learn a harsh lesson. The dream has turned into an ever worsening nightmare.

Simply put, remove incentive and people will stop producing at their utmost capacity. The result is some work harder than others yet retain no extra earnings for that work. Some won’t work at all, and the output of a country without exception experiences a downward spiral of production.

 

Goods are rationed and the economic reality of "scarcity" raises its very noticeable and ugly head. One only needs to look at the long lines of people standing in line in socialistic countries to see the end result. Although lines for goods is usually constrained to very socialistic countries, a little bit of socialism rarely stays that way. It grows until the people finally put a stop to it and usually through the same type of protests that brought it about. Socialism is always defeated but only after many gullible societies fall victim to its lies.  For a while.

 

It is said you get the government you deserve.

 

Socialism supporters, eventually I fear you WILL eventually get your wish here in America but you will wish you hadn’t as you will get government you deserve, good and hard.

 

Marc Cuniberti hosts “Money Matters” on KVMR FM aired on 65 radio stations nationwide. He is a financial columnist for a variety of publications. Marc holds a BA in Economics from SDU with honors 1979. His website is moneymanagementradio.com and he can be reached at (530) 559-1214. Visit him on Facebook (FB) under Marc Cuniberti and also on the "Money Matters” and “Money Matters Investing in Community" FB pages. The views expressed are opinions only.