Friday, June 11, 2010

The Magic of Socialism

First I will need to clarify the only difference between fascism and socialism is that a fascist state will let you own capital (on paper) and allow you to keep a larger piece of the economic action. The problem with fascism is the extreme regulatory system prevents a high level of prosperity.

Pure economic liberty has not been tried for any significant length of time. At some point members of the society will notice that some unfairness occurs, even if slight and demand tweaking from a free system to one a little less free. Then it is only a matter of time before fascism occurs. It is inevitable for the purely free economic system is labeled unworkable and the only direction allowed is towards more and more regulatory control. This regulatory control leads to poor decision making and large amounts of inefficiency which creates poor economic performance. Today, the United States is fascist state.

Since a system of pure economic liberty is not acceptable due to dogma and the fascist system is unable to provide enough prosperity to be labeled successful, even more control is demanded from the public leading to the government taking ownership. Please, keep this clear the government owns it, not you. If you owned it you could quickly decide GM is a poor investment and divest yourself of stock on the open market. Do not think Government Motors is going public anytime soon with the government's shares of the company. The government gets power over the entire industry for they will ultimately demand Ford and others follow their rules or else GM will get special favors from the government.

I hope this explains how socialism is inevitable once you eliminate economic liberty from society. Now I will explain to you the magical power that socialism has. It is a very amazing power.

We can look to the USSR to help reveal to us this power socialism has. A nation which spanned 7 time zones could not make enough toilet paper for its people. In the USSR, the grandparents' job was to stand in line in hope of finding food and other products to survive. They were not even shopping, but grabbing anything that by some stroke of luck made it before them. In fact, defectors from the USSR to the United States were so impacted by this behavior that they had a difficult time shopping in an American store. We had so many choices they couldn't handle it.

When buying milk was as simple as buying anything resembling it, whether or not it was rancid or curdled, a modern supermarket could be intimidating. Just look at milk aisle in your local store and you see whole milk, 2%, 1%, skim, chocolate flavored, strawberry flavored, banana flavored, egg nog, cream, half and half, buttermilk and more. That is pretty impressive, yet you still need to determine what size you want like half-pint, pint, half-gallon, gallon or 2 gallon multi-packs. When you add into the mix the 3 or more different brands each selling that massive array of milk products you have a mind boggling amount of choices. Prosperity does that. (Note: We are living off the prosperity of the past. Consolidation of most industries is occurring at a rapid pace. At some point we will have only a few companies doing dairy for the entire nation. That is much easier for the government to control. Maybe a monopoly will be allowed to occur before the nationalization of the industry, but that is inevitable in this system. Like I said socialism and to a lesser extent fascism is destructive to the economy, but as momentum in a physical system takes time to overcome, wealth takes time to disappear. Do not be mistaken the economic engine in the US is dying.)

Before the US was the bread basket of the world, the Ukraine was. When the Soviet government grabbed the farms, grain production dropped so severely that the ultimate economic result of the USSR was sealed. They went from having a surplus to sell the world, to needing to borrow money to buy grain from the world. The downward spiral was begun and collapse was impossible to avoid. Socialism killed the economic engine of the USSR immediately. It just took over 60 years for the USSR to die from that mortal wound.

Seeing what was going on in the USSR, China chose to turn away from socialism in order to save its people, but they merely moved back to a position of fascism. At some point, the people may demand socialism again unless they see a completely free economy as the good it truly is.

Europe is going broke. The United States is going broke. Central America and South America are going broke. All are debt ridden from socialist and fascist policies which destroy their economies.

What is the magic power of socialism and to a lesser extent fascism? Socialism has the power to impoverish an entire planet! It has failed the world over, again and again.

If socialism is inevitable in the absence of pure economic liberty and socialism creates poverty, then the only rational choice is pure economic liberty.

I will end this with a quote I find so revealing of the ultimate nature of socialism.

"We are not without accomplishment. We have managed to distribute poverty equally." -Nguyen Co Thatch, Vietnamese foreign minister

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