Socialism Is a Deal with the Devil
America was founded on the principles of capitalism. But there are those who think communism is the solution for every problem, from bad weather to old Joe's dementia. In their book, In Their Own Words, Terry Turchie and Donagh Bracken document that organizations such as the Weather Underground, the Black Panther Party, Occupy Wall Street, Black Lives Matter, and The Democratic Socialists of American have been agitating for communism for decades. We've even got one senator who spent his honeymoon in the Soviet Union and a whole squad of congresswomen who openly support it now. They don't use the word "communism" very often, but their manifestos and stated goals are 100 percent aligned with that ideology. Instead, they use seductive terms like "social justice," "guaranteed income," and "equality."
Capitalism vests ownership of property (along with the means of production) with the private sector. Members of the community are allowed to operate for their own individual interests — and those individuals get to keep the profits from their work. Hence, hard work is rewarded. With hard work and initiative, anyone can succeed. So people tend to work hard. Domestic product (the total production of the community) is maximized.
But the rewards are unevenly distributed. The portion of the domestic product that each person receives is a function of his contribution, not his membership in the community. The end result is that members of a capitalist community earn unequal portions of a very large pie.
Communism vests ownership of property (and the means of production) with the commune — otherwise known as the state. Members of the commune are expected to work for the benefit of the commune — not themselves. Each is to contribute according to his ability and receive according to his needs. It sounds like perfect harmony — until observed in practice.
When all share equally in the rewards, hard work is irrelevant to the portion of the commune's production that each person receives. Everyone's portion of the domestic product is a result of his membership in the commune, not his contribution to it. Since hard work is not rewarded, people tend to not work hard. Total domestic product rarely exceeds sustainment levels. But equality of outcomes is maximized. Commune members earn equal portions of a small pie.
Conceptually, capitalism and communism are inherently incompatible economic systems — they function at opposite ends of the public/private ownership axis. Attempts to blend them are destined for failure.
Capitalism maximizes productivity but sacrifices equal results. It provides equal opportunity, not equal outcome. The reward achieved by each individual is dependent on his own initiative. To realize capitalism's full potential, community members must have freedom to exercise that initiative. Therefore, personal liberty is a requirement for capitalism.
Communism maximizes equal results (equal distribution of the domestic product) but sacrifices the productivity inherent in capitalism. It also requires that community members surrender their freedom. They are not free to exercise individual initiative. They are expected to serve the needs of the commune — whatever those may be. They are expected to be a contributing member of the hive.
Unfortunately, leftists have created an attractive narrative about communism. If one ignores its downside, communism sounds idyllic to a naïve mind — everyone sharing equally in the bounty of the commune. No class envy, no brutal competition, no "dog eat dog" business jungle — just equality. Never mind that one has to give up personal choice and freedom to live in such a community.
The leftists paint capitalism's unequal distribution of rewards as inherently evil. They prey on class envy, demanding that the "rich pay their fair share." Alexandria Ocasio-Cortez even declared that capitalism is "not a redeemable system." Of course, she ignores all metrics except equality.
The left then seduces everyone by offering an impossible compromise — which leftists assure us will provide the advantages of both capitalism and communism. They call it socialism. They assure us that socialism will provide the productivity of capitalism and the equal distribution of communism. We'll just allow capitalism to produce the wealth but force producers to redistribute wealth by regulatory or tax-and-spend schemes. They use terms like "ensuring a livable wage"; "protecting our most vulnerable"; "correcting social injustices"; or, as Barack Obama simply said, "spreading the wealth around." It is all a lie. Socialism is a deal with the Devil. Its promises are seductive, but it delivers only misery.
Striking a compromise between two incompatible systems does not achieve the best of both systems; it achieves the worst of both systems. Socialism promises the productivity of capitalism with the equality of communism. But it actually delivers the inequality of capitalism and the low productivity of socialism — just the opposite of its intended goals.
Socialism relies on redistribution (via regulation or taxation) to promote equality. But that redistribution is actually a disincentive to production. Redistributed money is money that could have been spent on more production, which is instead redirected to non-production. In capitalism, you spend money to make money. In socialism, you spend money not to make money — by redirecting it to non-producers. Therefore, the community doesn't produce as much product — or make as much money to redistribute.
As socialism redistributes wealth, less of the wealth is available to reward producers and expand production. Production stagnates, and domestic product declines. Declining domestic product results in less wealth for redistribution. Those who own property begin consolidating their holdings to maintain their own standard of living. As the pie gets smaller, they exert their influence to keep more of it. That causes the standard of living of those receiving the redistribution to decline.
Pressure for increased redistribution builds, with the community demanding more taxation and social spending. The government raises taxes and the regulatory burden on producers, but that only further chokes production. With each cycle of the death spiral, the rich get richer, the poor get poorer, and inequality proliferates.
The cycle continues until there is inadequate production to meet the redistribution demands. As Margaret Thatcher famously said, "the problem with socialism is that you eventually run out of other people's money." That's when the community has arrived at Venezuela. The rich are obscenely rich, and the poor are breaking into the zoo to eat the displays. The Venezuelan example is not atypical relative to other socialist attempts.
When a socialist community can no longer function, it has reached a fork in the road where there are only two choices:
- Recommit to capitalism and return to rewarding producers for their efforts.
- Commit to communism, seizing the means of production and vesting ownership of all property in the commune.
Socialism is merely a flowery invitation to move gradually toward communism, giving up our liberty in exchange for a life of subsistence. There are those who say it will never happen in America. Yet Obamacare was the first step toward seizing the means of production of health care. Senator Pocahontas Warren has proposed nationalizing every business with revenue over $1B. President Gremlin is reportedly considering seizing the energy sector's means of production — to save the planet. President Obama even proposed nationalizing pension programs, seizing our retirement savings and replacing them with a government stipend — taking the wealth we have earned and replacing it with the wealth we need. It can happen here if we aren't vigilant.
Socialist experiments can end in one of three ways.
- Poverty and starvation
- Enslavement to the state
- Return to personal freedom and the inequality that results
Jim Jones once told his followers that "God is socialism, and socialism is God." He said it just as Satan would have when offering a deal too good to be true. Jones offered his followers a socialist paradise but delivered a communist hell, in which he took everything they owned, enslaved them to the commune, and led 918 of them to slaughter. That's how his attempt at socialism ended.
Image via Max Pixel.