A Vortex of Inefficiency and Failure

evilSocialism promises us prosperity, equality, and security but delivers only poverty, misery and tyranny. The only equality achieved in a socialist society is equal misery for everyone except the ruling elite. Socialism’s failure can be traced to one critical defect – it ignores incentives, without which, the results are a spiraling cycle of poverty and misery.

Those who actually believe that profit is the evil of greed are as dangerous to America as the church of the Inquisition they despise.   Believing that profit, the lifeblood of business growth is evil is what drives the left  to destroy jobs. Far from evil, profit is the fuel that drives economic growth and provides an incentive for people to better themselves.

Under socialism, incentives play a minimal role, if any. A centrally planned economy without profit, where property is owned by the state, is a system without an effective incentive mechanism to direct economic activity, as evidenced throughout history.

Marxist may admit that many socialist countries fail but attempt to explain it away by claiming that it is not that socialism is deficient but rather that the social economies are not practicing “pure” socialism. To them, a perfect version, a pure socialist utopia works.   If perfection were even an option, the choice of economic and political systems would be irrelevant. In a world with “perfect” beings and “infinite” abundance, any economic or political system, be it socialism, capitalism, fascism, or communism would work perfectly.

However, the choice of economic and political institutions is crucial in an imperfect universe with imperfect beings and limited resources. In a world of scarcity it is essential for an economic system to be based on a clear incentive structure to promote economic efficiency.

The temptress of Socialism is constantly luring us with the offer of security for a little of our freedom. As the experience of this century has demonstrated, the bargain is tempting but never pays off. We end up losing both our freedom and our security.

Programs like socialized medicine, welfare, Social Security and minimum wage laws will continue to entice us because, on the surface, they appear to be expedient and beneficial. But, like all Socialist programs, in the long run they will fail.

As Margaret Thatcher so aptly reminded us, “…too many people have been given to understand that if they have a problem, it’s the government’s job to cope with it. ‘I have a problem, I’ll get a grant.’ ‘I’m homeless, the government must house me.’ They’re casting their problem on society. And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbor. People have got the entitlements too much in mind, without the obligations. There’s no such thing as entitlement, unless someone has first met an obligation.”

Basically  Thatcher is reminding us that government doesn’t create, government steals. What you get through entitlement programs was stolen from someone else.

The real choice we face is between imperfect capitalism and imperfect socialism. Given that choice, the evidence of history overwhelmingly favors capitalism as the greatest wealth-producing economic systems available. Capitalism nurtures the human spirit, inspires creativity and promotes the spirit of enterprise. But the main difference between capitalism and socialism is – Capitalism works.

Capitalism is the Golden Goose.  Socialism is the knife that kills it.

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