by
Benedict D. LaRosa

Previously
by Benedict D. LaRosa: The
Price of Infringement

When President
Clinton unveiled his national health care plan in 1993, known as
HillaryCare, Republicans opposed the details, but not the concept
of a government controlled health care system. The same is true
with the Obama health care plan of 2010. The Republican establishment
promises to repeal ObamaCare and replace it with something else.
Regardless of the details, the very concept of government imposed
health care represents a giant step toward socialism.

But don’t wait
for the President or members of Congress who favor such government
intervention in the marketplace to refer to their philosophy of
government as socialism, for that would alienate their targeted
constituency. Norman Thomas, the head of the Socialist Party of
the United States until his death, said:

The American
people will never knowingly adopt Socialism, but under the name
of Liberalism they will adopt every fragment of the Socialist
program until one day America will be a Socialist nation without
knowing how it happened.

The well known
writer and Fabian socialist, H.G. Wells, predicted in his 1908 book
New Worlds for Old:

Socialism
would cease to be an open revolution, and would instead become
a subtle plot. Functions were to be shifted from the elected representative,
to the appointed official; . . . a scientific bureaucracy appointed
by representative bodies which would have diminishing activity
and importance. . . . The replacement of individual action by
a public organization could achieve socialism without public support.

(The much maligned
term liberal, when applied to socialists is a misnomer, for classical
liberalism holds that the government which governs least governs
best, and attempts to maximize freedom.)

Socialists
argue that capitalism exacerbates the problems of poverty, environmental
degradation, expensive health care, alienating work, racial inequality,
inadequate housing, and a host of other ills. They are correct in
that our present economic system fosters these ills. Where they
go amiss is in calling this system free market capitalism. What
we have developed in recent history is not free-market capitalism,
but the socialism critics find so attractive.

Americans began
flirting with socialism as early as the Civil War when both the
U.S. and Confederate governments intervened in the economic lives
of their respective citizens to a previously unheard of degree.
Well-intended Americans advanced the socialist cause in a populist
revolt against the monopolists and crony capitalists of the late
19th century known as Robber Barons. The pace quickened with the
passage of the Federal Reserve Act and the income tax in 1913. With
America’s entry into World War I in 1917 came increased regulation
of commerce and industry. Franklin Roosevelt, who promised lower
taxes and less government during the 1932 campaign, spent his four
terms as President poking the heavy hand of government into everything
he could. H.G. Wells was so impressed with Roosevelt’s policies
that during his 1934 visit to the Soviet Union, he “tried to persuade
Stalin that Roosevelt’s New Deal was the beginning in America of
a movement toward socialism.” (H.G. Wells in Russia, Martin
Gardner, THE FREEMAN, May 1995, p.287). The pace has quickened
since then under both Democrat and Republican administrations.

There are two
ways to obtain goods and services: through force (slavery and plunder)
or free exchange (cooperation).

Free enterprise
is an economic and political system based on the private ownership
of property governed by the natural law of supply and demand. It
allows no governmental interference with free traders contracting
with each other in lawful activities. The form of government most
compatible with free enterprise is a republic where government is
charged, not with imposing the will of one segment of society on
everyone, but with protecting everyone from aggression and theft.

It was free
enterprise which broke the back of feudalism and mercantilism, and
ushered in the industrial age with its expansion of wealth and the
middle class. The civilizations which practiced it to a high degree,
experienced the greatest economic and social development. The Islamic
Empire is a good example.

At the collapse
of the inflation riddled, heavily regulated and indebted Roman Empire
in the late 5^th century, the Mediterranean world was
in economic chaos. Early in the 7^th century, the Arab
merchant, Mohammed, preached, among other virtues, a return to a
natural economic order following purported encounters with the Archangel
Gabriel. In short order, a nomadic people created the highest civilization
of its day, made the desert bloom, built magnificent cities in the
midst of desolation, and advanced medicine, architecture, mathematics,
philosophy, and the sciences to new heights.

America has
been the greatest beneficiary of a free economy in modern times,
and perhaps all history. Influenced by such free market thinkers
as Francis Bacon, John Locke, Algernon Sydney, David Hume, and later
Adam Smith, colonists undertook the hazardous voyage to the New
World to escape the controlled economies and oppressive political
systems of the Old World. As European governments tried to re-impose
control in the form of mercantilism, the colonists rebelled and
founded a republic based on natural law and its principles of limited
government, popular sovereignty, individual liberty, and free enterprise – one in which the individual gave power to the government, not
the other way around. They understood that men are born free to
go about their lives unmolested to the extent of not infringing
on the right of others to be secure in their persons and property.
They saw government’s role as protecting these rights by maintaining
law and order, and the general conditions which encourage people
to look after their own welfare through personal initiative and
responsibility. Supply and demand, not government edicts, should
determine the appearance of goods and services in the marketplace.

The free association
of individuals in an unplanned, spontaneous fashion proved the most
efficient means of organizing a society. Where there was a need,
someone filled it to the benefit of all concerned. In fulfilling
the needs of society, the individual filled his own needs, and contributed
to an integrated economy and a coherent community. Competition held
selfish drives in check while disciplining the quality of goods.
The market was impartial rewarding those who provided quality goods
and services efficiently and inexpensively, while punishing those
who didn’t. As a result, by the time of the French and Indian War
(1754-1763), Americans enjoyed a high standard of living, a very
productive economy, a large middle class, and the greatest personal
freedom on earth.

Hong Kong,
Taiwan, Singapore, and Korea are modern examples of free market
successes. Closer to home, Big Water, Utah offers another example.
In 1986, it became the first community in the U.S. to elect a libertarian
town council and mayor. (Libertarians are the philosophical descendants
of the classical liberals who founded this nation.) These officials
abolished property taxes, reduced regulations, and went to user
fees. It wasn’t long before property values skyrocketed, businesses
began popping up like weeds, and Big Water had the highest economic
development growth rate in Utah.

Socialism as
a form of government is immoral and as an economic system unworkable.
Like its sister forms of authoritarianism – democracy, fascism,
communism, etc. – it is characterized by the unlawful taking of
the property of some by force or the threat of force, and the giving
of it to others to whom it does not belong. These forms of government
elevate theft to a legal activity. (An honest thief doesn’t insult
your intelligence by telling you that he is relieving you of your
property for your own good.) Coercion is essential because it is
an unnatural system in which few would participate of their own
free will. These systems use government to enforce the collective
will rather than defend natural rights. They promise freedom, but
deliver bondage; the only freedom is from individual responsibility.
Though they consume large portions of the national income, they
leave people with empty promises of economic security. Socialism,
with its principle of to each according to his need and from each
according to his ability, reduces people to the lowest common denominator.
It teaches that the way to get ahead is to lobby and demonstrate
rather than work and create.

As an economic
system, socialism is a failure. The Plymouth colonists tried it;
starvation and death resulted. The survivors turned to free enterprise,
and the rest is history. Just prior to World War II, the socialist
governments of Italy and Germany raised the material standard of
living for their citizens temporarily, but at what a price. There
was no unemployment in the former Soviet Union – unless you were
unlucky enough to be politically incorrect – and little to buy.
Socialism converted naturally rich areas such as China, Russia,
Eastern Europe, South America, and much of sub-Sahara Africa into
economic basket cases, and is well on its way to doing the same
everywhere it operates. Since the fall of the Soviet Union, those
East European governments such as Poland, which have allowed the
free market to operate, have experienced prosperity and a rapid
increase in the standard of living. Even the Chinese Communist government
has turned to free-market capitalism, albeit in a limited form,
to grow itself out of the economic morass caused by decades of central
planning, with much success. Before the fall of communism in Rumania,
socialism caused such a shortage of home heating fuel that a popular
joke warned apartment dwellers not to open their windows for fear
the people on the street might catch cold!

Socialism doesn’t
work because it is flawed. What belongs to everyone belongs to no
one. It puts power over the lives of the many into the hands of
the few, and, as Lord Acton observed, power corrupts and absolute
power corrupts absolutely. No matter how well intended, the few
cannot resist rewarding their friends and patrons at the expense
of everyone else. Nor can they know the needs, aspirations, talents,
drives, motivations, and circumstances of those they regulate, or
how to satisfy them. Whereas free enterprise takes shortages and
produces abundance, socialism takes abundance and produces shortages.
In ignoring the Invisible Hand, it invites the Iron Fist.

Socialists
disguise themselves as philanthropists, but philanthropists give
away their own money, socialists that of others. Socialism is dressed
in the language of charity, but it is merely a power game designed
to acquire, concentrate, and retain power by the few over the many.

Despite what
socialists say, people do not flock to the Workers’ Paradises of
Cuba, North Korea, or any other controlled economy. Free emigration
would empty these lands as it was emptying East Germany prior to
its collapse. Cuba, for example, could not feed its own people or
otherwise maintain a viable economy even when it enjoyed massive
Soviet assistance. Those who look for a kinder, gentler socialism,
have a long wait. Socialism has no heart. It is an impostor which
leaves economic ruin and slavery in its wake. This is why England,
Ireland, Sweden, Israel, Peru, New Zealand, Australia, Japan, Nigeria,
Cambodia, China, India, and other countries are gradually turning
away from this disastrous system.

The free market
rewards efficiency and quality. It quickly punishes those who fail
to meet the needs of the consumer. Businesses seek more customers,
and produce more products or services. Under socialism, the tendency
is to restrict consumption and service. Consumers are discouraged
from using what are considered scarce resources and considered a
bother. Under socialism, you get long lines, terrible service, price
controls, rationing, little or no choice, and poor quality. The
only thing universal is suffering. Socialism transforms modern,
industrialized societies into backward, feudalistic ones.

So when you
see the rich getting richer and everyone else poorer, you can be
sure socialism, or some other form of authoritarian economic system,
is afoot. Winston Churchill put it well when he said: “Some regard
private enterprise as if it were a predatory tiger to be shot. Other
look upon it as a cow that they can milk. Only a handful sees it
for what it really is – the strong horse that pulls the whole cart.”

April
18, 2013

Benedict
LaRosa [send him mail] is
a historian and writer with undergraduate and graduate degrees in
history from the U.S. Air Force Academy and Duke University, respectively.
He is the author of Gun
Control: An Historical Perspective and other works.

Copyright
© 2013 by LewRockwell.com. Permission to reprint in whole or in
part is gladly granted, provided full credit is given.