Saturday, July 11, 2015

Let's understand just what socialism means to us

I need to get this off my chest: I'm both upset and amazed that a wacko like Donald Trump is polling second to a mainstream candidate like Jeb Bush in the race for the Republican nomination for President. I'm equally upset and amazed that a wacko like Bernie Sanders is polling second to a mainstream candidate like Hillary Clinton in the Democratic race.

The difference between the two relates to discipline.  Trump says whatever is on his mind with no concern for the repercussions.  (I won’t bother to recount his comments as they are well covered by the press.) 

Sanders, on the other hand, has so far delivered his thoughts with a lot of “message discipline”. 

Sanders is not a Democrat.  First elected to Congress in 1990 and as Vermont’s Junior U.S. Senator in 2006, he has been an Independent who caucuses with Democrats.  He is a self-declared “democratic socialist”. 

We know what the ‘democratic’ part of this definition means.  It means that, unlike the dictatorship that governed the socialist system of the Soviet Union, the electorate chooses its government.  However, I wonder if we know what a socialist is. 

Socialism is an economic system whereby the government owns the means of production.  Citizens lose the right to private property.  Investors (if there are any left) do not have the right to a return on their capital.

Anyone who thinks that socialism would be preferable to free-market capitalism is either ignorant or stupid.  And yet, Sen. Sanders is gaining traction.  What’s happening to the United States?  Have we lost our bearings? 

What we once described as the “profit motive” has been recast as “corporate greed”.  Greed, as we all know, is one of the seven deadly sins.  So, we have redefined something with enormous positive effects as something that is sinful.  

Capitalism and the profit motive have driven innovation from the 1690s, when the invention of the steam engine and steel plows made farms more productive, to the1870s, when the invention of both the automobile engine and distribution of electricity began an era of rapidly improving lifestyles, to the 1990s when the Internet boom created an interconnected world.

The result of all this innovation…

All this is the result of innovation driven by free-market capitalism. It would not have happened if we lived in a socialist system.

As for those who contend that capitalism exploits workers, I offer this:  Other things being equal – culture, geography, education, etc. – workers always thrive in a capitalist system where socialism fails to deliver.  Think of North and South Korea, Taiwan and Mainland China, or East and West Germany.

To be clear, it is the free enterprise, capitalist system that has led to a better life for Americans.  In its absence, you wouldn't have time to play with your kids or enjoy a glass of wine with your friends on Saturday night; you wouldn't be able to access the Internet from an electronic device in your pocket; and, you wouldn't be living in a climate controlled home.  You would be working hard and not reaping the benefits.  The benefit of your labor would go to the government.

Free-market capitalism is the surest path to prosperity. To describe it as corporate greed is doing all of us a disservice.  To consider voting for a socialist is the height of folly.



  1. John:
    This is perfect!
    That’s all I have to say.

  2. John,

    I realize this is your "blog", now you have resorted to name calling...(???) Stating definitions of political and economic systems that are based on your opinions not fact and distortions of facts to fit your opinions.

    I know I have come to expect much more from you and (even though it is just) a "blog" titled "Who Will Lead?".


    1. Bill,

      I am sorry if I have offended you.

      However, I don’t think I am guilty of defining economic systems according to my opinions and not the facts. I majored in economics in college and wrote my senior theses on “Comparative Economic Systems”. I am prepared to defend the post on the basis of facts and would be happy to engage in a respectful debate.

      Can you tell me what I have said that you think is untrue?

  3. Well put, as always. This country is in peril, based solely on the fact that the "silent majority" is strongly supporting that quick tempered, irrational buffoon Donald Trump.

  4. Once again I say – Calia for President. Matt Becker

    1. Thanks, Matt. To quote Calvin Coolidge: “I do not choose to run.”

  5. Andy Southern
    You better hope the Democrats win if the two main Republican candidates are Trump and Bush......
    Trump is an idiot who is not welcome in many parts of the world, and sadly Jeb will be thought of as "Brother of George" rather than "son of George".
    The writer once again does not grasp the difference between corporate greed and capitalism. Greed is taking more than you need. Capitalism rewards work. Current systems aren't rewarding work equally.
    I'm a capitalist, but I disagree with corporate greed which sees people charged too much for services that are effectively monopoly. Or syndicates. Both of which are anti-free market.
    If all markets were competition driven, we wouldn't have this situation.
    We've just had a legal case where someone was quoted as saying " I can fix the LIBOR rate by giving someone a Mars bar... ".

    If this is not greed, not anti capitalism, not anti free market, then what is?

    Bribery, syndicates, monopolies are corporate greed.

    1. The writer (me) doesn't agree that "Greed is taking more than you need". Who decides what we need? The government? An independent board of technocrats? If a business operates legally, and its leaders function in a moral and ethical way, why should there be a limit?

      I agree that we should limit monopolies, regulate businesses to protect society and workers. I also agree that corporate manipulation of legislation (as in the ACA and Dodd-Frank) is egregious.

      However, I contend that we are better off as a whole and individually with free enterprise than with a government that limits profits or compensation.

      If Buffet and Gates want to give the bulk of their wealth to the Gates Foundation, so be it. However, if they decide to keep it, who is to decide that it's more than they need?

    2. My grandfather had many things in his life right, in my opinion. He worked as a carpenter, a wheel wright, making wooden cog wheels for flour mills. He grew his own vegetables, raised chickens, had a small greenhouse he built himself. He took his dog to the pub every evening from 7-9pm and chatted with friends over a couple of pints.
      He often walked his dog through the fields and woodlands, by trout streams and thatched cottages, enjoying the flora and fauna.
      His was a very tranquil life, quiet, peaceful and he was very content, until he got a television. The adverts of the capitalistic world irritated him intensely, and he refused to watch the ‘other’ channel, tuning in only to the BBC which was free of ads. He said the ads just made people buy stuff they didn’t really need.

      Compare his life with most people today, and I’d say the great majority would be envious of him.

      I admire my nephew who lives on a coral island in the South Pacific. No electricity and few material things, yet he’s happy and stress free.

      So is capitalism all it’s cracked up to be? Do we really need all the aggravation it brings? Do we really need to ‘consume' all the crap we buy, then discard a week later? It fuels the economy, but is it really necessary for a happy life? Isn’t “the pursuit of happiness’ more important?

  6. Jason G. Ramage, MS, MBA, PMP, RBP
    I think it's a bit of a straw man to equate the two. Of course, the Occupy crowd may have felt this, but I think most people do in fact recognize the strengths of capitalism. And I would suggest that it's not the system itself to which people take exception, it's the manner in which people defend their personal greed under the banner of capitalism.

    There is nothing wrong with a company being successful, nor in someone achieving material wealth through his or her hard work. There is something very wrong, however, when the Walton clan can acquire personal fortunes of billions of dollars on the backs of millions of employees who can barely eke out a living and who are in many cases subsidized by the taxpayers (through Medicaid and other assistance programs). There is something enormously wrong with a system that allows billionaire sports team owners to get stadiums and arenas built with taxpayer funds when it has been shown that sports teams add little to no economic value to a city (See John Oliver's excellent rant on this subject).

    I'm a fan of capitalism. But far too many ardent "capitalists" have only succeeded aided and abetted by the very government over which they claim superiority.

    It does not make one a socialist or a communist or any other kind of -ist to be appalled by the gross wealth inequality we see today.

    1. I agree with everything you've said with the exception of your comment about the Waltons. Walmart employees are not indentured servants nor do they owe money to the company store. Their lot in life is the result of choices they have made and choices have consequences. If they want to improve their lives, there are choices they can make that may work in their favor. There are no guarantees.

    2. Jason G. Ramage, MS, MBA, PMP, RBP
      Ok, but I think it's a bit unrealistic to suggest that everyone who finds him/herself in a low-paying job in the retail or service sector simply make different choices and find better employment. That's not always an option, and in my opinion, is not a reason why they shouldn't be better compensated. I don't think a sales clerk at Walmart warrants a $70,000 annual salary, but neither do I think someone gainfully employed should have to rely on public assistance while the masters are accumulating more money than they know what to do with.

      Besides, even the fiscal conservatives on the right are now acknowleding that a solid conservative argument in favor of higher minimum wages can be made - namely because it lessens the need for public assistance.

    3. Unrealistic? Yes, definitely. But, people do make choices and they can make better ones.

  7. John W. Stevens, Jr.
    John C -- Great "Who Shall Lead" blog.

    The causes of failure in both Socialism and Communism are basically the same -- the resulting system always treats some as "more equal" than others.

    In a perfect, non-human, utopian society, where every worker truly is equal, puts forth equal labor, and applies equal skills and intelligence, perhaps these systems would, theoretically result in a perfect society where everyone's needs and wants are equally and fairly met.

    Unfortunately, humanity is not perfect, all workers are not equal, not all workers put forth equal labor, and not all bring equal skills and intelligence. Furthermore, looking historically at communist and socialist societies, it is apparent that those who are most successful in these societies are not even those who make the most beneficent contributions become more equal than others, but rather those who are most ruthless and brutal rise to the top and become "most equal," of all their comrades.

    Clearly, these societies are not without classes, regardless of what they profess. Can anyone say, with a straight face, that Stalin and Mao truly were equal to the 60 to 100 million workers they murdered during their reigns?

    Today a sizable portion of the American electorate has discovered that they can, in essence, vote themselves benefits, granted them by a government that steals from those who produce to give to those who do not.

    When I look at myself and at my life, it is clear to me that I earned what successes I have enjoyed and that I am responsible for my failures. While I may have allowed myself to be influenced at times in one direction or another, I am totally accountable for my state of existence today. Others who began life with more "advantages" than I have accomplished far less. Others who began life with fewer advantages than I have accomplished far more. America and the capitalist society in which we live today has been extremely successful in giving all Americans equal opportunity. But our system does not guarantee equal outcome.

  8. Eugene C. Holloway
    Isn't socialism about caring for the disadvantaged and being your brother’s keeper?

    When controlling the activities of the state, the voters need to consider what kind of government they want – not only for their short term benefit (e.g., a government that allows me to vote money out of my neighbor’s pocket into my own) but also for their long term benefit (e.g., a government that does not inhibit achievement or reward dependency). And they also need to consider the morality of their choice. The Christian ethic preaches that one should be his brother’s keeper. Does that mean you should choose to be your brother’s keeper, or does it mean that you should coerce (tax and force) your neighbor to be his brother’s keeper?

    Alexis de Tocqueville warned that democracy would last only until Congress learned how to bribe the people with their own money. In the promises of the political candidates of the two major political parties, we see that this practice has now become ingrained. Beginning early in the history of the Republic, but exploding into the welfare state launched in response to the last great world financial crisis (also spawned by the Federal Reserve’s mismanagement), the federal government has pursued policies intended to relieve people of their personal responsibility to exercise due care, and has tried to eliminate reality’s harsh incentives, which train people to raise themselves from poverty. Not only has this not worked as intended and created a moral hazard among the beneficiaries; it has also preempted charity, good will, and benevolence. It has substituted inflation, taxation, bureaucratic control, government mandates, and political power for the work of voluntary organizations, cooperative associations, and philanthropists, causing people to resent being forced to become their brothers’ keeper. Where coercion is substituted for the freedom to choose, the morality of benevolence, charity, and good will is rendered irrelevant.

    The ultimate moral hazard is the growing expectation that it is the role of government to bail people out of every sort of misfortune, stupidity, and vice—which, in logic, does nothing but encourage the growth of misfortune, stupidity, and vice. Correspondingly, it diminishes the role of virtue, morality, and benevolence in our culture.

    Socialism would substitute government coercion for individual virtue, morality and benevolence. History has shown that it does not work. It is the tool of demagogues, power seekers and tyrants.

    Consider the definitions and judge for yourself who is a socialist. In fact, you can find few politicians who are not. Control is their stock in trade. Leaving people alone is not what they do.

  9. Ralph Michalske, MBA

    You can count me in as a capitalist. However, this economic notion has its pitfalls. Greed is one. Recently another pitfall has shown up. Largely introduced by America, globalization works against capitalism. As we see today, labor is displaced from our continent to Asia and elsewhere. The capitalistic notion can not change this. Although he's tried, even President Obama can't change this. Donald Trump, the economist apprentice, thinks he can reverse globalization and bring jobs back to the US. This is a ludicrous notion that he has, among others.

    Throughout its short history, Socialism has never lost one job due to globalization. Russia and China are good examples. In fact, the workplace and economies of these countries has flourished with globalization while the US workplace and economy has gone into "slow growth".mode. According to economists, there is no relief on the horizon for this slow growth in the US. According to the economist apprentice, Donald Trump, he can bring US growth back once he becomes President. However, he gives no explanation how this will be done or how long it will take. Clearly, socialism wouldn't work for a real estate developer, like Donald Trump. He'd have to give up his helicopter and yacht, for one.

    Don't count the Sino-Socialistic states out. They have shown great economic growth recently. Their labor force is becoming a middle class and reaping the fruits of their labor. On the other hand, our middle class is contracting and merging with the lower class while those in the top 1% class grow their wealth. Life is good for these capitalists.

    1. Would you rather be a middle class citizen in the US or in a socialist country? Do you think middle class Chinese live better than middle class Americans? China has advanced its economy to the extent it has embraced capitalist ideas. That said, they are no longer growing at the same pace as they did during the decade following their admittance to the WTO. Their opportunity then was the result of having low cost labor. That's no longer the case. In addition, their technocrats have misallocated capital, they suffer from rampant corruption and the population in the interior regions of China live in abject poverty.

      Jobs will return to the US no matter who is president. Boston Consulting Group has identified several major factors that will lead to America's resurgence: low cost energy, superior transportation systems and lower cost of labor due to a lower regulatory burden than Europe. Here's a link:

      I wrote about this economic trend in an earlier post called The Ford Fusion and How the Media Got it Wrong.

  10. I am not at all upset that Donald Trump is polling well compared to Bush. Bush, Rubio, and Christie are all puppets and bring nothing useful to the table. There is really little difference between them and Clinton and if any of them emerge from the Republican party myself and many other independents and conservatives will stay home. The status quo in DC needs to be destroyed. No idea if Trump is the man for the job, but I know the Bushes and Clintons aren't gonna do it.

    Sanders emergence as a viable candidate is alarming. You say it well in your post, but people seem to not realize how America became great. Socialism is a cancer that will destroy this country as we know it. Misguided comments such as Eugene mistakenly believing that socialism is about caring for the disadvantaged. No Eugene, that is called charity. Socialism is very different. Greed is a pitfall of capitalism? Not quite. The greed of Microsoft, Oracle, and Google provide millions of jobs and make our nation stronger. They don't "overcharge" for products and services. They charge what the free market is willing to pay. I don't care what they make. The money belongs to the corporation, not me. If I am a shareholder, I worry about it. Do you care what Kanye West makes? Jim Carey? Lebron James? It's a lot and you shouldn't.

    Also, keep in mind, that the American economy is driven by small business that relies heavily on a free market that does not impose excessive restraints on them. These CEOs don't make a lot of money, some just barely survive, however, they employ the bulk of the US workforce. The further we go away from the core values of capitalism the more of these small businesses that will throw in the towel and that will spell disaster.

    Lastly, when we talk about socialism, we are talking about the means of production being turned over to the government. Perhaps the Sanders supporters have not had much experience with government, but there is virtually nothing they do efficiently and very few they do well at all. They are corrupt beyond imagination, inept, and, in many cases, incredibly naïve. These are dangerous combinations. Thanks Socialists, but I'll stick with the private sector.

    Sorry for the long post. Thanks for the blog John.