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Socialism by Degrees

Summary:
Is it a socialist law, when the government tells landlords that they may not evict tenants for nonpayment? In other words, landlords are forced to give free housing to nonpaying squatters. How about when the government taxes every landowner, to give out free education services to every child? Or when the government forces everyone to pay 16% of their income into a scheme that promises to pay them a pension in retirement? There is quite a variety of these programs. Each may be a small part, but they all implement part of the socialist vision for society. The institution of public schools is not, in itself, full socialism. However, it is a socialist program that is a step in the direction of full socialism. I often object to these types of wrongful government policies, on grounds

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Is it a socialist law, when the government tells landlords that they may not evict tenants for nonpayment? In other words, landlords are forced to give free housing to nonpaying squatters. How about when the government taxes every landowner, to give out free education services to every child? Or when the government forces everyone to pay 16% of their income into a scheme that promises to pay them a pension in retirement? There is quite a variety of these programs.

Each may be a small part, but they all implement part of the socialist vision for society. The institution of public schools is not, in itself, full socialism. However, it is a socialist program that is a step in the direction of full socialism.

I often object to these types of wrongful government policies, on grounds that they are socialist. And many times, someone airily waves his hand, and condescendingly accuses me of hyperbole. “Public schools are not North Korea,” they say, as if patiently correcting a child who confuses the concept of horse with saw-horse. That is true, of course, but equally of course, North Korea has public schools. A society with public schools is not necessary full socialism, but a fully socialist society includes public schools among all the socialist programs.

“Anyways,” they say, “this is just caring about people, it isn’t socialism.” Yeah, right. That leads to a question that you can’t usually address in the midst of such a talking-points-past-each-other-argument. What is socialism, anyways?

Socialism is based on the idea that people cannot be trusted to determine their own affairs, by reason. And, therefore, some people must be trusted to rule the affairs of all other people by force. It is when the government controls the means of production, and directs the provision of goods and services by a political process. The government does not care about revenues, costs, or profit. The government is a non-economic actor. This is argued to be a feature, not a bug. And by ignoring such greedy concerns, the government is allegedly able to deliver superior outcomes.

In practice, socialism means either that the government outright owns the means of production, or that it points a gun at the owners of the means of production. The former is the communist flavor of socialism, and the latter is the fascist flavor.

Note that, in fascism, the owners are allowed to make a profit. At least, if they are favored. So they lobby the government constantly. This does not alter the fact that the government is in control, or the fact that its means of control is brute force.

It is impossible for the government to deliver superior outcomes (as I proved in my dissertation). At best, it can squander (much) more resources than people would spend in a free market, to deliver goods that people want. Since it is far easier for most people to understand Bastiat’s “seen” phenomena than his “unseen”, they will say that it works. An example of this is the US Covid vaccination effort. It took a year and a half, and cost uncounted billions more, but the US government vaccinated about as many people for this virus, as get themselves vaccinated for influenza in a typical year.

Often, the government spends (or forces people to spend) resources delivering things that people don’t want. An example of this is the Turtle Tunnel, to let turtles cross Highway 27 in Tallahassee, Florida. More commonly, some people are happy to get a free benefit that other people must pay for, and the latter do not want it. Obamacare comes to mind as an example of this.

Finally, we should not ignore the fact that the government often does not deliver sufficient goods that people do want. Roads and bridges in most major cities come to mind.

The result of socialist policies is that people are impoverished. And the degree of impoverishment is proportional to the degree that socialist policies are imposed. North Korea is the most consistently socialist, and therefore the most miserable (and would be even more so, if not for subsidies from China).

A society can slide towards socialism by degrees. It is not capitalism all the way and only socialism when it finally arrives at North Korea.

Keith Weiner
Keith Weiner is CEO of Monetary Metals, a precious metals fund company in Scottsdale, Arizona. He is a leading authority in the areas of gold, money, and credit and has made important contributions to the development of trading techniques founded upon the analysis of bid-ask spreads. He is founder of DiamondWare, a software company sold to Nortel in 2008, and he currently serves as president of the Gold Standard Institute USA. Weiner attended university at Rensselaer Polytechnic Institute, and earned his PhD at the New Austrian School of Economics.

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