February 24, 2009

Socialism vs. Capitalism

Over the past few decades Western European countries have passed laws and taken other steps towards socialism (or Marxism). This, combined with globalization, has lead to increased pressure on the United States to become more socialistic. Although the ideas of socialism seem appealing, it's a fundamentally flawed system and it begins a slippery slope that falls into communism.

The idea of a Marxist society is very alluring. In today's world of freedom and fairness, the notion of everyone being completely equal, even if this means taking from the rich and giving to the poor, seems just; however, the defect in Marxism is obvious. It is dependent on a type of human nature that is hard to come by. For Marxism to work, very little greed and jealosy can exist and people must have a general feeling of charity and a willingness to work their hardest for the good of everyone. These are obviously not common traits. Marxism could also work if those who have the greatest abilities and those who work the hardest are satisfied with rewards equivalent to those with lesser abilities and those who don't work hard at all. This is also very unlikely. Marxism undoubtedly leads to free riding and slacking.

On the other hand, capitalism utilizes the willpower of individuals, especially entrepreneurs, to foment economic activity. Capitalism is based on the assumption that individuals operate based on self interest; however, by doing so they not only help themselves, but also propel others towards economic success. As Adam Smith put it, "by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for society that it was no part of his intention. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it."

The communist societies that have been or are being attempted are really not communist societies at all, although they try to be. The USSR, for example, attempted communism but ended up being way to totalarianistic--instead of everyone working for the benefit of the society, there was a group of individuals with TOTAL POWER (Joseph Stalin took this role for a quarter century). Today's China is the same way -- there is a centralized bureaucracy that calls all the shots. In both of these cases many people are forced to take part in the society against their own will. The Soviet Union obviously didn't work and China is becoming more prosperous only as they allow their economy to be more capitalistic. Taiwan, China's capitalistic counterpart, is years ahead of China on almost any measure of prosperity.

The fact is that people can't be forced to take part in communism. It simply won't work unless everyone is willing, and even then greed can easily lead to its demise. On the other hand, capitalism can work even if there are some who don't want to pull their weight -- the difference is that those that don't pull their weight will suffer the consequences. Just like in communism, capitalism will work better if everyone works hard to produce valuable products. Also just like in communism, a capitalist society where there exists charity and goodwill will eliminate preventable suffering of all individuals.

So why has France passed a socialistic labor law which makes it very hard to lay off workers? Why does Canada have government sponsered, free health care? Why do some American workers pay over a third of their income in taxes? Why do so many nations tax and then dole out excessive welfare checks?

It seems as though we are doing the very thing that history has proven doesn't work: forcing socialism. How can France expect its workers to work hard if it's nearly impossible to fire them? How can we expect welfare recipients to find jobs if it's easy for them to sit at home and get welfare? I know that there is a real need for welfare among some people, but there are others who smoke and drink and do nothing to better themselves. Socialism is forced on the rest of Americans when they are taxed and their money goes to such people. If this continues, Americans will become more and more lazy and our nation will degenerate to a quasi-socialist, nonproductive society.

The US is taking baby steps towards socialism. We may not be as far as France, and we're definitely not as far as China, but unless we reverse the current trend we will suffer the consequences.

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