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Archives for Socialism (page 1 / 1)

Greedy Capitalists or Selfless Socialists?

Michael Lewis writes about Greece, a collectivist nightmare:

The Greek state was not just corrupt but also corrupting. Once you saw how it worked you could understand a phenomenon which otherwise made no sense at all: the difficulty Greek people have saying a kind word about one another. Individual Greeks are delightful: funny, warm, smart, and good company. I left two dozen interviews saying to myself, "What great people!" They do not share the sentiment about one another: the hardest thing to do in Greece is to get one Greek to compliment another behind his back. No success of any kind is regarded without suspicion. Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate. And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic life impossible; the collapse of civic life only encourages more lying, cheating, and stealing. Lacking faith in one another, they fall back on themselves and their families.

The structure of the Greek economy is collectivist, but the country, in spirit, is the opposite of a collective. Its real structure is every man for himself. Into this system investors had poured hundreds of billions of dollars. And the credit boom had pushed the country over the edge, into total moral collapse.

Contrast this to capitalism. When I see a well-off American, I can be reasonably sure that he got where he is through hard-work, thrift, and good luck. The vast majority of people in this land of cowboy capitalism are not cheating on their taxes, bribing the government, or lying.

Which society would you prefer to live in?

(Link and title idea from Russ Roberts.)

This entry was tagged. Capitalism Socialism

Goldberg, Smith, and Hayek on Socialism

I recently read two good articles, from Jonah Goldberg, on socialism.

Capitalism vs. Capitalists

If by "capitalist" you mean someone who cares more about his own profit than yours; if you mean someone who cares more about providing for his family than providing for yours; if you mean someone who trusts that he is a better caretaker of his own interests and desires than a bureaucrat he's never met, often in a city he's never been to: then we are all capitalists. Because, by that standard, capitalism isn't some far-off theory about the allocation of capital; it is a commonsense description of what motivates pretty much all human beings everywhere.

And that was one of the reasons why the hard socialism of the Soviet Union failed, and it is why the soft socialism of Western Europe is so anemic. At the end of the day, it is entirely natural for humans to work the system--any system--for their own betterment, whatever kind of system that may be. That's why the black-market economy of the Soviet Union might have in fact been bigger than the official socialist economy. That is why devoted socialists worked the bureaucracy to get the best homes, get their kids into the best schools, and provide their families with the best food, clothes, and amenities they could. Just like people in capitalist countries.

It's why labor unions demanded exemptions and "carve-outs" from Obamacare for their own health-care plans. And why very rich liberals still try their best to minimize their taxes.

The problem with socialism is socialism, because there are no socialists. Socialism is a system based upon an assumption about human nature that simply isn't true. I can design a perfect canine community in which dogs never chase squirrels or groom their nether regions in an indelicate manner. But the moment I take that idea from the drawing board to the real world, I will discover that I cannot get dogs to behave against their nature--at least not without inflicting a terrible amount of punishment. Likewise, it's easy to design a society that rewards each according to his need instead of his ability. The hard part is getting the crooked timber of humanity to yield to your vision.

To understand that last point better, consider these two quotes.

From Hayek's The Fatal Conceit:

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

From Adam Smith's The Theory of Moral Sentiments:

The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.

(Hat tip to Russ Roberts, for the quotes.)

Finally, here's Jonah Goldberg writing about What Kind of Socialist is Barack Obama?

By these lights, socialism is a very sophisticated, highly technical, and historically precise phenomenon that has nothing to do with the politics or ideas of the present moment, and conservatives who invoke the term to describe Obama's policies and ideas are at best wildly imprecise and at worst purposefully rabble-rousing. And yet when liberals themselves discuss socialism and its relation to Obama, the definition of the term "socialist" seems to loosen up considerably.

... But is it correct, as an objective matter, to call Obama's agenda "socialist"? That depends on what one means by socialism. The term has so many associations and has been used to describe so many divergent political and economic approaches that the only meaning sure to garner consensus is an assertive statism applied in the larger cause of "equality," usually through redistributive economic policies that involve a bias toward taking an intrusive and domineering role in the workings of the private sector. One might also apply another yardstick: an ambivalence, even antipathy, for democracy when democracy proves inconvenient.1 With this understanding as a vague guideline, the answer is certainly, Yes, Obama's agenda is socialist in a broad sense. The Obama administration may not have planned on seizing the means of automobile production or asserting managerial control over Wall Street. But when faced with the choice, it did both. Obama did explicitly plan on imposing a massive restructuring of one-sixth of the U.S. economy through the use of state fiat--and he is beginning to do precisely that.

As they say, read the whole thing.

The Result of Socialism: Only Healthy People Allowed

Australia has socialized its medical services. Australian friends tell me that providing basic medical care for free is the only fair and just thing to do. Well, how fair and just is this?

A German doctor hoping to gain permanent residency in Australia said Friday he will fight a decision by the immigration department to deny his application because his son has Down syndrome.

Bernhard Moeller came to Australia with his family two years ago to help fill a doctor shortage in a rural area of Victoria state.

His temporary work visa is valid until 2010, but his application for permanent residency was rejected this week. The immigration department said Moeller's 13-year-old son, Lukas, "did not meet the health requirement."

"A medical officer of the Commonwealth assessed that his son's existing medical condition was likely to result in a significant and ongoing cost to the Australian community," a departmental spokesman said in a statement issued Thursday by the Department of Immigration and Citizenship.

"This is not discrimination. A disability in itself is not grounds for failing the health requirement -- it is a question of the cost implications to the community," the statement said.

This is the end result of socialized medicine. Everyone will be judged based on how much they cost the community. Do you cost too much? Goodbye, nice knowing you. It's impossible to preserve individual human dignity and worth as long as the community has to pay for that individuals. Communities will quickly find ways to exclude the costliest people and include the cheapest people. A system that was supposed to remove the "indignity" of making people pay their own quickly degrades to a system that values people solely on the basis of a cost / benefit analysis.

Ironic, no?

Failed Economic Policies

Quote of the day.

Obama laughs off the charge of socialist behavior -- and to be fair, socialism isn't the precise term to affix to his ideas. It's more like Robin Hood economics. On a recent campaign stop, Obama joked that, by the end of the week, McCain would be accusing him "of being a secret communist because I shared my toys in kindergarten."

A funny line. But, of course, Obama's lofty intellect must comprehend the fundamental difference between sharing your G.I. Joe with a friend and having a bully snatch your G.I. Joe for the collective, prepubescent good. It's the difference between coercion and free association and trade. In practical terms, it's the difference between government cheese and a meal at Ruth's Chris.

Now, I'm not suggesting Obama intends to transform this nation into 1950s-era Soviet tyranny or that he will possess the power to do so. I'm suggesting Obama is praising and mainstreaming an economic philosophy that has failed to produce a scintilla of fairness or prosperity anywhere on Earth. Ever.

Major Redistributive Change

Obama, 7 years ago, lamented the fact that the Civil Rights movement wasn't able bring about more wealth redistribution.

If you look at the victories and failures of the civil rights movement and its litigation strategy in the court. I think where it succeeded was to invest formal rights in previously dispossessed people, so that now I would have the right to vote. I would now be able to sit at the lunch counter and order as long as I could pay for it I'd be o.k. But, the Supreme Court never ventured into the issues of redistribution of wealth, and of more basic issues such as political and economic justice in society.

To that extent, as radical as I think people try to characterize the Warren Court, it wasn't that radical. It didn't break free from the essential constraints that were placed by the founding fathers in the Constitution, at least as its been interpreted and Warren Court interpreted in the same way, that generally the Constitution is a charter of negative liberties. Says what the states can't do to you. Says what the Federal government can't do to you, but doesn't say what the Federal government or State government must do on your behalf, and that hasn't shifted and one of the, I think, tragedies of the civil rights movement was, um, because the civil rights movement became so court focused I think there was a tendency to lose track of the political and community organizing and activities on the ground that are able to put together the actual coalition of powers through which you bring about redistributive change. In some ways we still suffer from that. ...

I'm not optimistic about bringing about major redistributive change through the courts. You know, the institution just isn't structured that way.

Thinking about Immigration the Wrong Way

Two stories caught my attention this morning. First, the current immigration bill would create a work database for all Americans.

The so-called Employment Eligibility Verification System would be established as part of a bill that senators began debating on Monday...

All employers -- at least 7 million, according to the U.S. Chamber of Commerce -- would be required to verify identity documents provided by both existing employees and potential hires, the legislation says. The data, including Social Security numbers, would be provided to Homeland Security, on penalty of perjury, and the government databases would provide a work authorization confirmation within three business days.

Even parents who hire nannies might be covered. The language in the bill, called the Secure Borders, Economic Opportunity and Immigration Reform Act, defines an employer as "any person or entity hiring, recruiting, or referring an individual for employment in the United States" and does not appear to explicitly exempt individuals or small businesses. (Its Senate sponsors did not immediately respond on Monday to queries on this point.)

Why is this considered a good idea? One screw-up by the government and American citizens will be legally barred from working. What kind of controls will there be on this database? How will you challenge a denial of your work authorization? How will you know that someone in Washington didn't put you into the database out of sheer spite? This is a bad, bad, bad idea.

Secondly, Ed Morrissey relays the story of a sex slavery ring that exploited illegal immigrants.

The women came mostly from Mexico and Central America.

When they arrived in Minnesota, the women had their passports and other identifying documents taken away and they were forced into a world of prostitution. In one night, two women serviced more than 80 men in a south Minneapolis house.

Ed has a solution for this problem:

This is a horrific case, and one which points out the need for strong border control. The men conned the women into crossing the border, and then they took advantage of their illegal status to force them into prostitution.

Sure, these women were conned and controlled because they were not legally allowed to work or live in the United States. Preventing them from coming here at all would have prevented their enslavement. On the other hand, allowing them to enter legally would have also prevented their enslavement. Placing high barriers to immigration increases the chances that people will be "helped" across the border, then exploited. Placing low barriers to immigration allows people to come to the U.S. in search of a better life, without fear of future enslavement. Why are we so eager to choose the first path and not the second?

Building the Healthcare Business

George C. Halvorson, CEO of Kaiser Foundation Health Plan and Kaiser Foundation Hospitals wants to force you to buy healthcare. He doesn't care if you want healthcare or if you think you need healthcare.

"Anything short of an absolute single-payer system requires an individual mandate. If you don't have that, then people will make decisions about coverage that will result in far less than universal coverage."

"Individual mandate": code words meaning that the government will force you buy healthcare and fine you if you don't. "Far less than universal coverage": people might otherwise choose not to purchase health insurance.

The comments were made while Mr. Halvorson was discussing European style healthcare. Several European countries allow private insurerers to sell healthcare, requiring only that every citizen purchase a health insurance plan. This is the model of healthcare "reform" that Mr. Halvorson favors. I can understand why he would be in favor of "individual mandates" -- he heads up an organization that makes quite a good profit selling health insurance. I'm sure Kaiser would earn even higher profits if more people bought health insurance. On the other hand, no one should be forced by their government to make a private company richer.

Individual mandates: just say no.

America Imitates the Soviet Union

Let me share two jokes with you. The first is from the Soviet Union:

Three prisoners in the gulag get to talking about why they are there. "I am here because I always got to work five minutes late, and they charged me with sabotage," says the first. "I am here because I kept getting to work five minutes early, and they charged me with spying," says the second. "I am here because I got to work on time every day," says the third, "and they charged me with owning a western watch."

The second is from America:

Three prisoners were sitting in a U.S. jail, found guilty of "economic crimes" and were also comparing stories. The first one said, "I charged higher prices than my competitors, and I was found guilty of profiteering, monopolizing and exploiting consumers." The second one said, "I charged lower prices than my competitors, and I was found guilty of predatory pricing, cutthroat competing and under-charging." The third prisoner said, "I charged the same prices as my competitors, and I was found guilty of collusion, price leadership and cartelization."

Here's my question for you: should we be concerned that American citizens can now tell the same "it's only funny because it's true" jokes as Soviet citizens?

(Hat tip to: Hit and Run)

This entry was tagged. Humor Socialism

Squeezing Out the Lower Classes

Madison's liberals spend a lot of time talking about helping the poor and improving the lives of the poor. This is, bluntly, a load of hogwash.

The Capital Times published another article about Wisconsin Health Care for All and their plan to offer health care to everyone in the city of Madison. In this article, I learned that most of the group's members are former Kerry campaign members. They were, understandably, depressed after Senator Kerry's loss in the 2004 election:

"We decided that we wanted to keep working," said Barbara Spar, who teaches human resources management at Madison Area Technical College. "We wanted to be for something. We wanted to use our energy instead of being depressed."

They decided to use their energy to implement universal health care on a local level -- Madison, specifically. As I wrote previously, the group wants to implement their plan by requiring all businesses in Madison to pay a portion of their payroll into an insurance fund. Businesses that already provide healthcare will be exempt from this new "fee".

The group boasts that they have an economist as one of their leaders: John Kalfayan. Therefore, group members are certain that their plan will not hurt businesses in Madison or lead to layoffs. Quite possibly they're right. If they are able to implement their plan, I have every confidence that no existing businesses will close. Furthermore, I'm fairly confident that no one will be laid off as a result of this plan.

That's not to say that this plan will good for everyone. This is one small group of people that would be hurt by this plan: those who have few marketable job skills. As an economist, I would expect that Mr. Kalfayan is familiar with the idea of "marginal utility". Simply put, marginal utility is the value that someone gets from the last unit of something. Think of it this way: for a hungry man, a single burger has great value. A second burger would be appreciated, but a little bit less than the first burger was. A third burger would be okay, but he might not miss it if it wasn't there. A fourth burger might even be ignored. The fourth burger then has a much lower marginal utility than the first burger did.

The same principle holds true in business. As businesses hire more employees, each employee will have a lower marginal utility to the business. If it is too expensive to hire an additional employee (for instance, if the employer must provide healthcare in addition to minimum wage), the business may choose to make do with the employees they already have. Thus, while this healthcare plan may not cause any layoffs it will, quite possibly, prevent new jobs from being created.

There is another factor that will come into play. As employees become more expensive, businesses will choose to hire only the best employees. If this new "healthcare fee" causes the minimum wage to rise from $5.50 an hour to $5.94 an hour, the employer will only hire employees who can contribute more than $5.94 an hour to the bottom line. This means employers will only hire someone who is fully trained and competent.

What about less qualified applicants? What about people who might have had trouble holding down a job in the past or who have limited work experience or who simply require a lot of on the job training? The answer is simple: it will be much harder for them to find work. They will be passed over in favor of applicants who can justify the higher pay scale.

Implementing this healthcare plan would remove the lowest rung from the economic ladder. Implementing this healthcare plan would lead to businesses squeezing out applicants who are inexperienced or under-qualified. For these people, Wisconsin Health Care for All is not offering a choice of a job without healthcare benefits or a job with healthcare benefits. No, for these people, Wisconsin Health Care for All only offers the choice of a job with healthcare or no job at all. Which do you think a desperate man would prefer: a job without healthcare or no job whatsoever?

I know which option I would prefer. The simple fact of the matter is, this plan would neither help the poor nor make them better off. It is a purely cosmetic fix that will have large, hidden repercussions. While Madison's liberals will pat themselves on the back for the workers they've helped, they'll be completely oblivious to the people they've hurt.

I'd rather focus on why Madison's businesses can't voluntarily offer health insurance. I have a sneaking suspicion that it might have something to do with the fact that only four states in the nation have higher taxes than Wisconsin. Unfortunately, that problem will only be made worse by taking a new payroll "fee" from local businesses.