Posted on 09/08/2024 10:08:00 AM PDT by econjack
There's a lot of discussion these days about Capitalism versus Socialism as an economic system. Most Democrats, including Harris and other left-leaning people, favor Socialism. The key tool for them to bring this about is to tax the rich and give it to the poor to even out the distribution of income. That is a flawed solution to the problem.
First, it assumes that an equal distribution of income is a desirable goal. It is not. It's the human condition to want to improve one's lot in life. If the gov't makes everyone's income the same, it removes the desire to improve, innovate, and grow.
Second, such a policy provides an incentive for the rich to go elsewhere to escape the taxes that are used to redistribute income. The exodus from high-tax states (e.g., CA, IL) is proof, as is the Brain Drain from England in the 1960's and 1970's and the wealth migration from South Africa, Spain, Cuba, and elsewhere.
Finally, politicians have tried this scheme for decades yet the distribution of income figures have barely moved. Why? Because politicians say one thing but do another. Don't forget: it is the politicians who wrote the Tax Code and, if they were serious about penalizing the rich, who are also political donors, they would have already change the Code to accomplish that goal.
Instead, lets use Capitalism as the assumed economic system. First, it rejects the idea that society wants an equal distribution of income. Instead, it wants members of its system to enjoy a rising standard of living no matter what's happening to the distribution of income. As example will show the difference.
Suppose you and I are the only two people in the economic system. I have 90% of the income and you have 10%. Under Socialism, politicians pass tax plans that, let's assume, leaves me with 80% of the income and you now have 20% of the income. Note your gain only comes at my expense. That is, income redistribution is a zero sum game.
With capitalism, the rich invest in ways that create jobs and economic opportunity. Under this system, the size of the economic pie increases. Note what this means: Even if your share of the economic pie stays at 10%, your income and standard of living increases because of economic growth.
Also, as Thomas Sowell has shown, all people move between economic brackets through time. That is, when you're in high school flipping burgers, your in the lower 10% of the income distribution. Ten years later, you might be in the 30% bracket. When you're 50, you might be in the 80% bracket, and when you retire, it might drop down to the 60% bracket.
Socialism has never worked anywhere in the long run because income redistribute penalizes those who invest and create jobs, economic opportunity, and economic growth. The goal of an equal distribution of income means everyone's paid the same regardless of effort. The system stagnates for lack of economic growth and the system eventually dies.
Problem is, there will always be someone out there who’s poor. And it could be due to the fact that they have an addiction, Drugs, alcohol, cigarettes, gambling, etc. Or they are poor just because they don’t know how to budget, and handle money. I’m completely against any redistribution of wealth on these grounds alone.
Fifty million former socialists escaped their socialist homelands and illegally entered a free market America looking for “a better life.”
Theory: “From each according to his ability, to each according to his need.”
Reality: “We pretend to work, and they pretend to pay..”
Socialism plays on the inherent greed and jealousy of people. It also fosters so many incorrect and flawed ideas. Who are you to have so much when others have so little? We deserve to have your stuff because we need it. If you have a lot, you must have earned it off others and thats bad. You’re not paying your “fair” share. To have so much you had to cheat others out of what they deserved.
It also totally wipes out any charitable feelings people with “a lot” have, because they aren’t appreciated but are told they’re bad people for having so much and are the problem.
Its perpetual class warfare based on haves/have nots, which redirects attsntion away from the politicians who are pitting these groups against each other. Their entire system depends on it, socialism only can exist this way because its how their dialectic works.
It’s THE FREE MARKET vs. GOV’T COMMAND AND CONTROL.
The free market economy is the Wealth of Nations (Adam Smith).
Gov’t command and control is the Road to Serfdom (Friedrich Hayek).
(Patriots and conservative need to abandon the Marxist term “capitalism” and call the market economy free from gov’t interference what it is.)
And America never put up fences to keep people in. Socialist countries never put up fences to keep people out.
Thank you for your work.
Let me test my understanding of the basic concepts:
Capitalism - You can do anything you want with your money/wealth - even usury.
Socialism - You don’t really have any money/wealth - it belongs to whoever we say it does.
Both sound wrong, to me. Just intuitively I prefer the term “Free Market”, though maybe I don’t understand the terms being used.
There are many problems with socialism. The core problem (and it’s a fatal problem) is this: Who gets what is determined not by a producer/consumer agreement, but by some far-away committee.
Producer: I can deliver a dozen eggs for $3.25.
Committee: You can charge no more than $2.00.
Consumer: I have a large family. I need two dozen eggs a week.
Committee: Your allocation is eight eggs a week.
Who in his right mind thinks such a system could work?
Capitalism produces EVERYTHING Socialists wish to "redistribute."
Socialism can only exist as a parasite of capitalism.
“(Patriots and conservative need to abandon the Marxist term “capitalism” and call the market economy free from gov’t interference what it is.)”
Something else... They need to educate themselves and understand that “Corporatism” is NOT their dear “Capitalism” they support. The Corporatism also labelled as “Corporate Capitalism” is actually socialistic fascism and deserves absolutely zero support from misguided Capitalists. They need to realize that they are being hoodwinked by the corporations with that keyword “Capitalism”. The Corporate Communism is right now enslaving the world through socialism.
We are neither. We are fascist.
After WW2 it was asked ‘what made our enemies so formidable’, and things were adjusted to emulate that condition.
Eisenhower called it the ‘military-industrial complex’ but it’s really just the f-word.
socialism + statism = state ownership & control + universal wage and price controls + elimination of profits, private property, and competition + central planning + political incentives + collectivist duty & altruistic sacrifice + government monopoly + bureaucratic management + mob rule + force/tyranny + slave labor & forced labor + terror & mass murder = anarchy of production + economic chaos + inefficiency & waste + shortages + rationing + empty shelves + long waiting lines + black markets + technological backwardness + misery/suffering for the masses + riches, elitism, aristocratic privilege, and court society for the rulers/leaders
“The worst thing you can do for the poor is to make them comfortable in their poverty.”
Poor Richard’s Almanac
(AKA Benjamin Franklin)
Also, socialism fails because redistributed income fails to bring a sense of meaning to the recipient.
Income earned is meaningful because, well, it is deserved. It brings with it that wonderful feeling of pride because it is the result of something you have accomplished.
Income doled out, whether by the government or a family for nothing in return, brings with it a sense of shame because it is undeserved.
When you walk around a nice piece of property, drive your new car down a curvy road, or just get that first paycheck, it matters because it's the result of your long hours of work or even ingenuity at the job.
When you get a redistribution check, you know it's just a handout because someone thinks you are pathetic.
The essential notion of a socialist society is fundamentally force. If the government is the master, you ultimately have to order people what to do. Whenever you try to do good with somebody else’s money, you are committed to using force. Friedman
In debates with pinkos, I have consistently pointed out that any creature -human or otherwise- longing to be kept on a chain is defective.
To me, it all reduces to one simple concept: scaling.
People have ideas, create things. Then they figure out how they created the thing, and try to teach others how to create what they created. Then they start thinking about how they figured out how they create the thing, and try to teach others how to teach that.
At some point, some of those creative people noticed that people would give them things in return for their acts of creativity. This is how ideas, and the ability to have ideas, began to propagate through society.
This was the beginning of “scaling.” Because ideas are knowledge, and knowledge is information, and information is not subject to laws of conservation. Matter can be transformed, but not created or destroyed. Energy too can be transformed, but not created or destroyed. Yes, I know that Albert Einstein realized that matter and energy could be transformed into each other, but that was only a recent insight.
But information can be copied without degradation, at least once it’s put in the form of thoughts, and symbols. Ideas are always expressible symbolically, because thoughts can always be expressed symbolically. An idea in my mind can be turned into symbols (words, or drawings, or mathematical formulae) and conveyed to you, and if you have an educational background similar to mine, the same idea I have in my mind can suddenly take form, and live in your mind. And the fact that the idea is now present in your mind doesn’t degrade the quality of the idea in my mind; it’s still there.
If I give you an orange to eat, I no longer have the orange. But if I give you an idea, an insight, a piece of knowledge, I still have that idea; I didn’t have to give it up for you to have it.
Capitalism and communism are both ways of scaling ideas. They’re both ways of spreading knowledge, and of spreading the means to get more knowledge. The difference is in the details, and the details are the result of different concepts of how knowledge is created and propagated.
Capitalism is based on the idea that those who have ideas should benefit materially from those ideas. By directing resources to those who can have ideas, that small percentage of idea-having persons that can use those resources to have more ideas, and create more knowledge, can grow, and build, and nurture positive feedback loops. Knowledge begetting more knowledge. This is a powerful engine of progress, that has benefited all civilization, in every corner of the world. Capitalism is progressed organically, as a distributed, asynchronous system, redundant and fault-tolerant.
Communists look at “failings” of Capitalism and seek to scale awareness of those failings in order to take control of the flow of knowledge. The failings of Capitalism are mostly just the result of human nature, the human condition; talent isn’t evenly distributed, energy and character aren’t evenly distributed throughout society.
In effect, Communism is created to scale ignorance, by people who have learned to benefit from the utilization of ignorance. Capitalism has no use for idiots, but “useful idiots” are so essential to the Communist model that one of its most effective exponents actually coined the term.
I could go on quite a while more in this vein, but you get the idea.
I really do think Capitalism is right, and you should be able to do with your money whatever you want, as long as it doesn’t impinge on the rights of others. In a free market, usury can’t persist. However, I think it’s perfectly fair to charge different interest rates to different people. After all, not all people have the same creditworthiness.
A corporation free from gov’t interference is a free enterprise.
A corporation under gov’t control is “fascist”.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.