Tag: Capitalism vs. Socialism

Q : Who is a socialist?

A : A person favoring socialism; Elizabeth Warren, Bernie Sanders, Cory Booker, Kamala Harris, Alexandria Ocasio-Cortez, and others. They favor government owning, or at least controlling the means of production. Socialism has also been used to refer to expanding already available social programs and potentially raising taxes to do so.

Q : What are examples of socialism?

A : Britain post-WW II. The government owned the steel mills, the railroads, and the mines. Of course, there was the Soviet Union, and there is Cuba, North Korea, and China. Today, there is Venezuela. And don’t forget Spain and Greece.

Q : The Venezuela story is really awful, what happened there?

A : In 1950, Venezuela had the fourth highest per capita income in the world, behind only the U.S., Switzerland, and New Zealand. Around 1958, the government started interfering with the economy with price controls, higher taxes, and restrictions on property rights. Then Hugo Chavez came to power in 1999. Benefiting from about one trillion dollars in oil sales during his 14 years in power, he launched massive social spending programs to secure votes. Today, the country with the world’s largest oil reserves suffers from a severely contracting economy, runaway inflation, despotism, mass immigration, criminality, disease, hunger and starvation with conditions deteriorating daily.

Q : Why does socialism fail?

A : All economic decisions are through centralized planning. Controlling all economic decisions for the millions in a country with a one-size-fits-all plan can’t satisfy the needs and wants of every individual. It is only by letting every individual pick and choose what each wants and can afford, has it proven time and again, country after country, that a free-market system is the best system of all for everyone. Anything less ends with economic distortions, waste, and worse. Leaders buying votes with massive spending programs to stay in power leads to unsustainable debt. Then there is government collapse, and then tyranny.

Q : Why do young people turn away from capitalism?

A : Some look at business people as greedy people who frequently bend the rules. When they gift charities saying they want to give back, people think they stole that wealth to begin with. And it doesn’t help when the heads of huge corporations (after laying off many) retire and take out millions. And the millennials, even if they find work, don’t pay much in taxes, yet they hear of health care insurance premiums going through the roof, and they think it only fair that the government give it to them free.

Q : What are the differences between socialism, communism, and fascism?

A : A matter of degree—socialism replaces capitalism’s innovative entrepreneurs and competition with centralized planning, while owning the means of production. Going all the way leads to communism and a tyrant in charge. When the allure of communism fades, it gives way to fascism. Hitler before, Putin today.

Read my book, Return to Capitalism, to learn more.

CAPITALISM

• Its foundation is the human mind, endowed by the creator. It is about discovering the unknown, creativity, and surprise.
• Capitalism offers individuals the possibility to become wealthy, so they have the means to invent and discover new things.
• Capitalism benefits individuals—all of them, the business owner and the worker.
• Anyone investing in his business to earn more is a capitalist, and the engine of capitalism is the entrepreneur who takes the new, rare, and expensive and makes it abundant and cheap.
• Capitalism requires a free marketplace without barriers to entry. Only in the private marketplace can wealth be created. Government is always an expense to the economy.
• Capitalism has lifted millions out of poverty and despair, given them prosperity and a better life, and allowed the human spirit to soar.
• The end result of capitalism is philanthropy or giving gifts back to society.

SOCIALISM

• A belief that everything to be known is already known, so the job is to redistribute, with the key feature being planning. This requires a large government that then destroys wealth. Debt increases until the government collapses.
• Socialism is about maintaining the status quo; there is no innovation or creativity.
• Socialism promises benefits to the group, but the promises are hollow.
• Socialism favors the worst people to rise to the top, and it always leads to tyranny.
• Socialism has caused the deaths of one-hundred million in the twentieth century.
• Socialism always fails because all economic decisions come from centralized planning, and one-size-fits-all economic decisions never satisfy the millions of consumers. The masses always prefer picking and choosing what meets their needs and what they can afford in a free and open marketplace.

 

Read my book, Return to Capitalism, to learn more.