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Wednesday, February 24, 2010

The Dead Road of Socialism

It is no news to anyone that the world can often be unfair, that families lack the things they need and that people suffer and die unnecessarily in ways that could be avoided. The fundamental question is do we respond to such situations by working together on an individual and social level, giving donations to, participating in, and creating organizations that can help-- or do we try to solve the problem with the white elephant government programs approach of socialism?

The government centralized approach cannot be defended on the grounds of efficiency, because government programs are notoriously inefficient. They cannot be defended on the grounds of fairness, as a single giant program is far more likely to marginalize recipients with no other recourse than a diverse variety of programs. They cannot be defended on financial grounds, as government programs are more likely to run out of money, and less likely to have a real plan for dealing with resource shortfalls. And ultimately government programs draw their funding from the very same people who fund independent programs.  Yet they cannot use that money better or more efficiently.

The only defense for government programs is that they are comprehensive and mandatory. People can choose whether to contribute to charity, but they cannot choose to pay their taxes. This brings the element of wealth redistribution to the table, transforming voluntary contributions into mandatory entitlements. (Which this might seem like a way to maintaining funding sources, this only works until the government itself runs out of money, which Federal social spending programs are set to do.) But the real appeal of socialism is its supposed comprehensiveness. Socialism for the public is supposed to be a Fire and Forget sort of charity. Pay more taxes and the social problems are gone... the only problem is that they are not actually gone.

Regardless of whether government agencies or private charities are in the works, resources are still a finite quantity. And wealth redistribution has historically been a surefire way to kill resource generation. Breaking the cycle of economic growth and trying to artificially control it, produces much the same results as overfishing or hunting the wildlife in a region too widely to allow for a natural balance. Human endeavor, like any other natural process, renews itself through economic processes. Excessive taxation and government intervention break the cycle, leading to diminished resource generation and weaker economies.

The lure of socialism is that of the golden Utopia, a promised land in which the sun always shines, there are never any rainy days and there's enough of everything for everyone. In real life it doesn't work that way. Economies, like any other natural system, have upturns and downturns. There are losses and gains. Resources are finite and are generated through wise trade and reinvestment. In the rhetoric of the socialist utopian though, it never has to rain, all the days can be sunny, wealth is endless and only greed prevents it from being distributed equally by the wise and all-knowing government bureaucracy.

The problem is that a government bureaucracy is not any better at making decisions or distributing resources than individuals or organizational bureaucracies. Lack of self-interest does not lead to better decision making. Often it leads to worse decision making, because the average employee is not going to be a philanthropist. Government bureaucracy quickly turns into the art of sitting in a chair and occasionally dealing with people based on regulations drawn up by people too high up the bureaucratic food chain to actually deal with people. The goal of those higher up on the food chain is to either dispense a lot of services or to ration as few services as possible, depending on the available resources. The goal of those sitting in the chair is to get through the day with as little work as possible. The results are rarely pretty or very efficient.

The premise of socialism is bad because it assumes that the people on the bureaucratic food chain are better at making decisions for you, than you can for yourself. It is also bad because it uses rhetoric that pretends that it can treat finite resources as infinite, only to come up against the cold hard reality that resources are finite after all. Which is when the rationing finally kicks in.

To take in the current health care debate, medical resources are finite, because they are

1.) Highly in demand

2.) Highly expensive and difficult to produce

When you have resources that are both very much in demand and difficult to produce, demand will always exceed supply. Doctors and nurses, technicians, research scientists and pharmacists take time and money to educate and train. Not to mention the staggering scale of medical equipment and manufacturing facilities. All these involve a staggering outlay of resources that cannot simply be made infinite with a few flow charts. Nor is it possible to significantly change the amount of resources required to produce them without also diminishing the quality of the final product, resulting in the kind of medicine you see in Communist and Third World Marxist dictatorships.

You cannot significantly increase available medical resources, without also diminishing their quality. You also cannot significantly alter the distribution of those resources without draining the overall pool of available resources because centralization of resources employs them and consumes them far less efficiently. What you can do is empower people to help others. What you cannot do is disempower people without decreasing resources.

Socialism promises something for nothing, but that just means there's a bigger bill due at the end. Socialist programs do not create resources, they only exploit them. And despite all the rhetoric they are still only playing with limited resources, resources that they are far better at destroying, than creating. The greater their control becomes, the more resources they demand and the less resources there are available.

Suppose that we set sail and arrive at a new continent. Food becomes the issue of most immediate concern. The wild game is quickly hunted out and very soon, the food supply grows short. There are two options then, to centralize remaining food supplies under the hands of the government, which will also control agriculture. Or to let people keep their food, and advise them to use it carefully, share with the less fortunate and plant wisely. The scenario is not hypothetical. The residents of the first permanent English settlement in America, Jamestown, faced that dilemma. Only by abandoning centralization and embracing the free market, did Jamestown come to prosper. And the case of Jamestown was not unique. Early Americans repeatedly faced the choice between centralization and the free market, and repeatedly chose the free market, which is what made America a great and prosperous nation.

America prospered because it trusted the choices that individuals make, more than the choices that elites make. This premise was behind the American system of government, the American economy and the American way of life... or was. By the 20th century the assumption had become that most people were stupid, ignorant and too weak to resist their worst urges. The social advocates pushed everything from eugenics to prohibitionism as the solution. The Depression opened the door to true large scale government control, and it has never been shut since.

And since then the deficit has grown out of control, government has repeatedly demonstrated that it lacked the fiscal planning abilities of a not particularly bright five year old, America's industrial infrastructure came and went, and about the only growth industries remaining involve customer service for products made in China. As government spending continues to swallow individual income, eventually whatever remains will be sucked into the whirlwind as well. After all rising government spending and decreasing job growth collide in fairly predictable ways. Or to put it another way, you can get credit out of a stone, but you can't get blood out of a stone. And eventually the credit runs out, and all you have left is the stone.

The reason for this is that individual initiative repeatedly trumps government bureaucracy when it comes to using and generation resources better. Advocates of government centralization by contrast presume that most people are not very good at making use of their resources, requiring instead that they render it up to the government which will do a better job of it for them. This form of involuntary investment repeatedly produces negative results and it springs from the wholly irrational and elitist notion that people's wealth and choices should be administered not by them, but only by those who have been specially trained to administer them.

Individual initiative is the wellspring of democracy. It is also the most effective means to achieve prosperity while helping others. Rejecting individual initiative in favor of centralization also rejects democracy.

11 comments:

No Apology said...

...but they cannot choose to pay their taxes

SK - We have all been duped by the illegal "voluntary" income tax on wages, duped so badly that we really believe that employers and employees alike are bound to fork over 30-35% of wages to a corrupt government. I realize this blog is not the proper platform for such a discussion. I'm just saying...

Daniel Greenfield @ the Sultan Knish blog said...

no, I actually agree with you

Anonymous said...

The sad part is that maybe 95% of US citizens would not understand what you just explained. Hence our present state of the nation. Every day that goes by we seem to be heading to a less perfect union, perhaps the creator is using our nation as an example that even with the best intentions we cannot govern ourselves justly. It is a good thing that he created a path for our redemption that relies not on earthly government.

From a regular reader of your blog

Daniel Greenfield @ the Sultan Knish blog said...

the more people are taught to hold out their hands for government bread...

Morry Rotenberg said...

Why do people and governments keep repeating the same errors over and over again? Any study of history shows how collectivism and wealth redistribution by governments ultimately leads to economic and political collapse. If we can hold out for a little longer Europe will be the best example for us in the USA to be disabused of the perpetual socialist experiment. But I am sure that those on the left will say that the Europeans just didn't do it right.

Daniel Greenfield @ the Sultan Knish blog said...

greed, power and the old idea that all the problems in the world can be solved if you simply put the right messiah in charge of solving them through inspiration and tyranny

Anonymous said...

I'm a regular reader of you blog who comes for educational purposes. Thanks. I certainly can attest to the number of people who are uneducated in regards to what is happening slowly to their rights and their country.
If you mention socialism in regards to this President or his policies, they scoff, as if you are a fear monger or koolaid drinker. Living in Los Angeles can be unbearable. The people who vote in the democrats in California who impose socialist programs fail to link the bankruptcy of the state to such policies.
The outlook from here is bleak but I try to awaken someone each day regardless of outlook.

Anonymous said...

Is there a way out? Is the second revolution the only answer? These people are so embedded in every facet of our infrastructure. Schools, govt, judicial etc..

Do you ever see the threat ending without a cleansing of the rats? They are everywhere. The biggest rat sits in the highest office.

Keli Ata said...

Things must come to a head at some point. NYS might be close to it as Gov. Paterson is planning on withholding our state income tax refund checks.

If that doesn't motivate people that drastic changes are needed I don't know what will.

BTW: Call Paterson's office at 518-474-8390 and tell him not to withhold tax refunds.

Mikec said...

Socialism/humanism is a religion, it has as its core belief that we are all born equal and that man is god, but that adherents to this mythology must 'struggle' to make the shibboleths true. In common with other fundamentalist religions where a struggle is required to make mythology into existential truth, and where the ends always justify the means.

Destruction of the country is an acceptable result if it achieves a 'fair, just and peaceful (submissive) society' run by those who are a little bit more equal than the norm.

So far, only Pinochet has managed to stop socialism in its tracks, and then only by employing 'hit squads' to remove the tumour

Keli Ata said...

"Or to let people keep their food, and advise them to use it carefully, share with the less fortunate and plant wisely. The scenario is not hypothetical."


Whether ther result of the poor economy or an enterprising spirit more and more Americans are gardening--vegetables and fruits. Backyard produce gardens are becoming increasingly common.

That enterprising spirt is definitely a good thing for the country and can make people wake up to the realization that they can actually be self-reliant.

A variant of subsistence farming could really wake people up, energize them.

It worked for the early immigrants to the US. The fear of lacking the staples of life presented in the old countries, whichever countries they were, made them determined to survive on their own and that in turn motivated them to become successful in other areas.


I just find it very interesting that there's now a renewed interest in backyard vegetable gardens and canning, even among the middle class.

The working class have always done this.

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