Tuesday, March 12, 2019

The Coming Battle Over Socialism

As you are already aware, many millenials have very positive ideas of what socialism is.  Items to use when trying to talk to junior in the basement.

1.  No European country is really socialist.  Socialism is defined in the Merriam-Webster dictionary as:
any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods
: a system of society or group living in which there is no private property
: a system or condition of society in which the means of production are owned and controlled by the state
Every European nation has a mixed economy, with most property owned by individuals or corporations.  Even countries like Sweden which has for most of its recent history been dominated by the Social Democrats, are not socialist.  Most socialist parties in Europe abandoned socialism for a mixed economy as socialism demonstrated its inability to provide the workers with a decent standard of living.  Only Britain's Labour Party has toyed with government ownership of the means of production: airlines; coal; steel and other heavy industries and even then, this tends to change as Labour and Conservative parties swap control.

The U.S. is also a mixed economy with significant government ownership of the means of production in some segments: Tennessee Valley Authority and Bonneville Power Administration being two large examples; Medicare in the case of health insurance and local government ownership of many hospitals.  But nearly every other industry in America is primarily or entirely privately owned: airlines; most public utilities; even the millennials' beloved Facebook, Apple, and Starbucks.

Like most European nations, our government engages in many forms of economic regulation.  Some of these were so obviously destructive to the interests of working Americans that Democrats pushed for deregulation, such as the airline shared monopoly destroyed in the late 1970s.  Many other regulatory processes are so clearly for the benefit of big corporations that neither Democrats nor Republicans are prepared to challenge them: minimum milk prices and farm price supports in general to keep food expensive for the benefit of the 2% of Americans who grow food (many of which are big corporations) and the detriment of the other 98%.  The poor are especially injured by this, because whether rich or poor, you need about the same number of calories.  Higher food prices hurt the welfare family a lot more than the Zuckerbergs.

2. Socialism does not have to lead to a totalitarian state.  But news media are a means of production, and even the most open-minded governments are unlikely to accept harsh (and especially if accurate) criticism without reining in government-owned media.  If the national government owned all the TV networks, local stations, newspapers, and magazines, would a supposed Nazi-like Trump not put his own people in charge?

3. Even aside from the confiscation of private property, socialism has one basic flaw: it lacks the signalling mechanism of pricing and demand to tell the managers of the economy what is wanted or needed,  The Soviet Union was famous for building consumer products that no one wanted because consumer demand and prices tell producers what is wanted.  Central planners seldom have a clue.  The Aral Sea environmental disaster is one of those examples of how socialism utterly failed: Soviet central planners decided diverting its water to grow cotton was more important than the fisheries and the health of the locals.

Do you want plain black coffee or one of your oversugared and overpriced Starbucks creations.  Imagine bureaucrats who drink black coffee trying to imagine what the masses want.  Do you think you will have a dozen Starbucks in your city--or even one?

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