A modern course in economics will not tell you what’s wrong with socialism

“Socialism” is an elastic term, with a different meaning and connotation for everyone, which lets every believer in a socialist future off the hook since they can always say that’s not what I have in mind and it’s not what I mean. Moreover, I leave out the politics which is what everyone normally thinks about, since every socialist state – except the one that socialists imagine in their minds and discuss in public before they set one up – is about milk and honey for everyone, equality for all, and happiness to the fullest extent that human life can create. It is a fantasy world entirely removed from the reality of life.

Here I will define socialism as a system in which the economy is directed by the government through some kind of centrally-determined plan, rather than the economy being allowed to run on its own by itself through the decisions made by the individual owners of businesses. Nationalisation, massive levels of public sector spending, price controls and heavy-handed regulation of whatever is left in private hands are the mainstays of a socialist economy. If all it were was the normal operation of an entrepreneurial-driven market economy then there would be no need to set up anything new. Since socialists never specify beyond pie-in-the-sky what they intend to do – only the outcomes they promise to achieve – the best we can do is see what is found in the socialist literature of the past and present, as well as the practice of various socialist states, also both past and present.

I will add that macroeconomics as it is now taught, which sees only a positive role for large levels of public spending and thinks that an economy is perennially in danger of a failure of demand because of decisions to save rather than spend, are nine-tenths of the journey towards an acceptance not only of socialism, but of its necessity. The role of government in managing the economy and filling in the expenditure gaps with its only massive levels of expenditures is mainstream theory taught all over the world.

The basis for the presentation is my belief that a modern course in economics, based on standard economic texts in which the standard economic theories are presented, will leave a student without an adequate understanding of why a socialist economy cannot work, and in many cases with no such understanding at all.

This is based on my observation that very few – whether an economist or otherwise – can explain why socialism inevitably leads to poverty, although anyone willing to look can see this is true. There are innumerable political and philosophical reasons for fearing socialist ideas:

  • centralised political control
  • extraordinary power granted to government
  • loss of political freedom
  • diminished personal responsibility
  • diminished independence
  • encourages sloth

The presentation is based on my just-published, “I, Mechanical Pencil” which has been put out by the CIS and which you can find a copy of here.

My approach to the presentation is first to list the six absolutely essential elements of an economy, the absence of any one of which will cause the economy to cease working other than in the most rudimentary way. These six are:

(1) entrepreneurs who make decisions for themselves
(2) an independent financial system
(3) an operating price mechanism
(4) business profitability as the major determinant of what is produced and how it is produced
(5) sound government regulation, and
(6) a robust defence of property rights.

(1) Entrepreneurs

Every productive enterprise must be run by someone. There are many decisions to be made, all of which require a constant ability for someone to respond both to opportunities that present themselves and the problems which are both frequent and inevitable. In a market economy, productive enterprises are run by individual members of the community who do so because that is how they seek to earn their incomes. No entrepreneur is a government employee, nor are they chosen by governments to run these firms. Instead, entrepreneurs are the individuals who truly care about the welfare of the business, partly because every mistake takes money from their pockets, but also because the business is their creation in the same way that a work of art is the creation of an artist.

Entrepreneurs are not mere managers nor can they be replaced by managers. They are the individuals for whom the business is their own, and which they spend their lives trying to shape into as good a business as it can possibly be. It is not just a job. It is a vocation.

Yet no text on economics discusses the role of the entrepreneur. You can do ancillary courses in which the entrepreneur is discussed, and these are almost entirely courses that focus on innovation. The actual superintendence of a business is seen as of almost no relevance to the operation of a firm.

It is also the entrepreneur who determines what will be produced, and is entirely responsible for the commercial introduction of innovation onto the market.

(2) An independent financial system

Similarly, finance is not discussed as part of the education of an economist. There is money, banking, interest rates and the role of saving that do get a run through, but the determination of which firms are determined to be potentially the most viable by those who make lending decisions is at most a paragraph worth of discussion.

More crucial, the very issue at stake in the decisions that go behind finance is the allocation of a nation’s available saving among all the alternative uses that savings might be channelled towards. And here there are two massive blunders which almost totally obscure what it taking place.

Saving is discussed almost entirely (perhaps entirely) as a flow of money. And in a standard macro analysis, it is made up of the difference between current income and current consumption: S = Y – C.

Then, beyond this, the level of saving is taken to be the sum of money that is generated during the course either of the quarter or the current year, but whatever period is chosen, the present, or near present is all that counts.

Thus, the very concept of saving is totally lost. What is actually being determined by finance decisions is completely misstated. Saving is not a sum of money, saving is that stock of productive assets (eg machines and buildings) and available labour that can be used to build additions to the nation’s capital stock. What those who provide finance actually do is determine to whom to give sums of money that allow particular businesses to purchase in the various forms of capital and labour with which they can complete their own investment projects.

More destructive still is the imbedded Keynesian belief that recessions are caused by excess saving. The entire and madly destructive theory that explains recessions as a sign of that savings levels are higher than businesses wish to invest has led to decisions across the world for governments to engage in largely wasteful and unproductive spending to soak up those savings, as if sums of money sitting in bank accounts or in some other way left unspent is evidence that our savings are being left unused.

The reality is that virtually every form of saving (capital equipment and labour) are owned by someone who does everything they can to ensure that the capital and labour they own (the labour is, of course, their own labour) are being put to work. There are periods of transition when capital and labour are idle – factories close and people lose their jobs for all kinds of reasons – but unemployed workers along with whomever owns the capital will do everything they can to find alternative forms of work. We systematically ruin our economies by following Keynesian models and prescriptions.

(3) An Operating Price Mechanism

This is the one that counts since it is both the most obscure but also the most important. This was the issue at the heart of the “socialist calculation debate” that went on from the 1920s and through until the 1950s and then ceased. No one, other than in a few classes here or there, is ever taught anything at all about any of this.

More to the point, in a world in which there are infinitely more uses for most of the resources that are available, and also many ways that any particular output could be produced, there is an absolute need to ensure that some means to choose the least resource-intensive means to produce each good or service. Unless you understand why a business cannot decide which way to produce using the fewest resources if there is no price system in existence, you will never be able to undermine socialism. Here is a made-up example for the production of a number of units of X.

X = 2A + 3B + 4C + 9D
X = 3A + 4B + 3C + 7D
X = 7A + 5B + 2C + 4D

All of these might be ways to make the same number of units of X but unless you know in a realistic way how much A, B, C and D cost, you cannot determine which way to produce at the lowest cost. These are not technical questions but entirely economic.

What is the relative value of a tonne of steel in comparison with a tonne of copper? Is it cheaper to build a wall out of plaster or out of wood? Only in a market system, where the producers of every single input have to price what they sell to earn a positive return on their outlays, can there even be an estimate made of which array of inputs would provide the lowest cost to the economy in providing the same utility to the buyer.

As in the above example, you will still get X irrespective of which combination of inputs is chosen, but some of those resources are rare and have other more valuable alternative uses. Without a price mechanism based on the proper relative valuation of the output, that can only be determined in a market setting by entrepreneurs, a central planner cannot even begin to decide how to go about producing anything.

And it has ever been thus in every attempt to introduce socialism. Every socialist economy immediately loses its bearings because it has no means to decide which alternative would use up a smaller proportion of the resource base of the economy, and if it cannot do that, it will choose means of production that will waste prodigious amounts of resources on each particular item so that fewer items in total can be produced.

There was a long debate over whether central planners could manufacture a reasonable facsimile of relative prices that happen naturally through entrepreneurial pricing on the market. It was at one time understood even among the defenders of socialism that an answer to this question was crucial if a socialist system was to function. And the fact is, that this issue was never properly resolved, as was evident by the collapse of the Soviet Union in the late 1980s.

The most astonishing example was the different standards of living in East and West Germany. The differences were immense since the East Germans could not even remotely maintain the same living standards, and this was even though they tried to determine costs by using the relative prices generated in West Germany and apply these to their own production techniques. But as close as they were both geographically and culturally, the relative price structure generated automatically in the West were near useless to the central planners in the East since they did not in any way reflect their own production costs.

(4) Business Profitability

For reasons that I will not explain here, but every economist is taught, the ideal model of the operation of an economy is described as PERFECT Competition, and is contrasted with all other forms which are described as Imperfect Competition. For some reason, the ideal form of market structure is one in which, as it says below, “no one earns a profit”.

Perfect Competition – No One Earns a Profit

In perfect competition, the market is the sum of all of the individual firms. The market is modelled by the standard market diagram (demand and supply) and the firm is modelled by the cost model (standard average and marginal cost curves). The firm as a price taker simply ‘takes’ and charges the market price (P* in Figure 1 below). This price represents their average and marginal revenue curve. Onto this we superimpose the marginal and average cost curves and this gives us the equilibrium of the firm.

Source

The conception to reach this conclusion is so entirely static that it is absurd to think of this as in any way representative of the operation of a market economy. The very existence of profit shows, so far as economics is concerned, that the economy is not running at peak efficiency. There are also questions of an improper distribution of income since in a truly competitive economy, and in the long run, a larger return than the absolute minimum somehow implies that the market is not functioning at its optimal level. All other market structures, which in reality represents about 98% of the economy, are inefficient because firms are able to adjust their level of supply to earn a profit above the efficient minimum. But the existence of profit, as defined within an economics text, is a negative.

(5) Sound Government Regulation

There are schools of economic thought for which the very notion that government regulations have any role to play is anathema. There is no doubt that there can be over-regulation, and we experience just that everywhere today. The principle seems to be that if someone can think of some negative potential in some action, that it will either be examined to death or forbidden. But the opposite principle is just as bad, that business should just be allowed to get on with things without any scrutiny or direction from government.

The point here is not just that regulation is essential, but that regulation must be limited to just those forms of control that will actually pass some kind of cost-benefit test. Here the issue for modern economics is not that there should be regulation. That is much of what an economics course now is – a discussion of market failure and the need to remedy the errors of the market. So in this instance, the point here is to recognise that some regulation is essential.

This is from Mises’s Human Action. And while it is clear that Mises is reluctant to state that there is such a role for governments because of the principle of give-them-an-inch-and-they-will-take-a-mile, nevertheless, he does accept that government does indeed have such a role.

There are certainly cases in which people may consider definite restrictive measures as justified. Regulations concerning fire prevention are restrictive and raise the cost of production. But the curtailment of total output they bring about is the price to be paid for avoidance of greater disaster. The decision about each restrictive measure is to be made on the ground of meticulous weighing of the costs to be incurred and the prize to be obtained. No reasonable man could possibly question this rule. (Mises [1949] 1963: 748)

Regulatory overkill has been a disaster for the functioning of our economies. I truly never understand how the entrepreneurial types I know put up with it. You would think that those who set the rules are doing so with the intent of killing businesses off.

(6) Property Rights

Socialist governments are notoriously opposed to the private ownership of the means of production. “Expropriate the expropriators” is the ancient expression. Nationalisation of the commanding heights of the economy and whatever.

Whether this is driven by envy or by some unstated economic rationale, the aim to achieve something described as “equality” is the mantra. The result is that those who produce are taxed to provide incomes to those who produce less or produce nothing at all. And in the socialist commonwealth, the levelling is complete, with the masses living in poverty and those at the top living upon the meagre levels of wealth the economy might be capable of producing.

If property rights are included in a standard text, it has escaped me. There is nothing in how modern economics is taught, with it abstract and often mathematical discussion of the operation of the various forces to produce the strangest economic notion of all – equilibrium – that anywhere mentions that only if the producers of capital believe they will maintain the ownership of what they have crafted, will that capital come into existence in the first place.

What is the technical term used to describe an anti-semitic socialist?

NAZI.

The rest is from Ace of Spades.

So The Alleged House Condemnation of Antisemitism Is Already Watered Down, and Now the Congressional Black Caucus and Progressive Caucus are Delaying It

As David Harsanyi wrote, the resolution which is supposedly a condemnation of antisemtism is so deliberately vague so as not to offend actual antisemites.

Democrats’ draft measure condemning anti-Semitism, which the House will vote on this Wednesday, is a useless and transparent attempt to distract from a serious problem. The melodramatic resolution mentions Alfred Dreyfuss, Leo Frank, Henry Ford, and “anti-Muslim bigotry”–because, hey, even when Jews are being smeared it’s about Islamophobia, but not once does it condemn Rep. Ilhan Omar or the strain of Jew-hatred she is helping normalize on the left. The resolution, teeming with useless platitudes, is one that even Omar could probably support.

But even that’s too much.

Even watered down to the point of saying nothing, it’s still too aggressive a statement for an idea — Jew-hating — that is all too popular in some communities.

I guess “GOAT” Farrakhan has some problems with the resolution.

Meanwhile, Alexandria Donkey-Chompers is defending Ilhan Omar’s antisemtism by making up Whataboutism situations that didn’t actually happen.

 

Are there degrees of ‘socialism’?

I had a brief query from a friend the other day:

This is probably a red-herring but I did wonder if there are degrees of ‘socialism’ in which some degree of government ownership and control of the means of production is acceptable but with private sector ownership and incentives the dominant force. I’m thinking of the so-called ‘mixed’ economy concept.

Here in NZ we are having a debate about how we should frame objectives for the economy, with a shift away from a predominant focus on growth (in GDP) towards a ‘well-being’ framework (currently being developed by the NZ Treasury. I don’t think most economists are persuaded by this but it’s politically appealing because it appears to offer more emphasis on distributional fairness and the environment.

Well, I do go on a bit, but the question is an interesting one and important. My reply, off the top of my head, but more consideration still needed.

Interesting issue since everyone who now declares themselves a socialist doesn’t define socialism in the same way. There are plenty of “socialists” who think socialism is a heavy duty form of the welfare state. It’s fantastically costly, and in rich economies like ours, we typically allow plenty of free riding which will eventually have to be paid for one way or another. We are ruining ourselves because we think we are richer than we are, to subsidise plenty of people who ought to be contributing to their own upkeep. But once you get into the various forms of attempting to create greater equality, you are in an endless spiral since you can never create enough of it since there are always going to be income differences, many of which have no cosmic justification but just are what they are.

We already do an incredible amount of redistribution from those with high incomes to those with lower incomes. But if you take from some who earn high incomes they will provide less output to the common pool. And funny enough, if you give to people with lower incomes, they too will provide less to the common pool. Very destructive of an economy based on personal incomes related to one’s own contribution to the total. In a bygone era, most individuals felt a responsibility to remain as productive as possible for as long as possible, so we invented a system of welfare to assist those who fell by the wayside. Now there are so many who sit by the wayside picking up whatever they can, and this is now made much much worse by the increasing numbers who never intend to contribute anything but intend to be subsidised merely for existing. You can call that socialism if you like. It is immensely destructive, but since we have so much productive capital to run through it may take a while before we really notice. By then, alas, it will be too late. An inbred lack of industriousness in the midst of a crumbling economic structure is what you have right now in California which has more people on welfare proportionately than any other American state. And as rich as they are, it will not survive another decade before some kind of collapse overtakes them. Already the productive are escaping to other states. Unfortunately they are taking their welfare mentality with them.

As for the more traditional forms of socialism, virtually no government now seeks to take over the commanding heights of the economy, other than idiots like in Venezuela. There it took around a decade for the full horror to manifest itself, but now that it has, everyone has backed off from that version, at least for the time being. The version we are in the midst of is what I think of as the “crony capitalist” version, which is based on governments squeezing the last dollar of tax revenue, plus whatever they can extort from their central bank money creation process, to direct spending in a politically advantageous direction. Australia is at the start of a fall in living standards that is in large part based on the notion that all public spending adds to demand and therefore is positive. Which is augmented here by a superstitious belief that bringing in many many migrants makes the economy rich because we have to build infrastructure and housing for them to live in. Quite insane, but if you really think economies are driven by C+I+G, you cannot see the problem until the economy finally does fall apart and even then won’t understand the problem although it will be right before their eyes. The RBA and Treasury keep expecting the economy to turn around, and are ever-amazed when it does not.

Jordan Peterson discusses the Nazis in comparison with communists

How does one make the moral distinction, he asks, between the Nazis and the comms with the speaker actually using the term “socialism”? The video shows his answer. But here’s a hint about his answer: I really really like what he says.

Which brings to mind this quote from John Stuart Mill which I ran across today:

Apart from the peculiar tenets of individual thinkers, there is also in the world at large an increasing inclination to stretch unduly the powers of society over the individual, both by the force of opinion and even by that of legislation. And as the tendency of all the changes taking place in the world is to strengthen society, and diminish the power of the individual, this encroachment is not one of the evils which tend spontaneously to disappear, but on the contrary, to grow more and more formidable. This disposition of mankind, whether as rulers or as fellow-citizens, to impose their own opinions and inclinations as a rule of conduct on others, is so energetically supported by some of the best and by some of the worst feelings incident to human nature, that it is hardly ever kept under restraint by anything but want of power; and as the power is not declining, but growing, unless a stronger barrier of moral conviction can be raised against the mischief, we must expect, in the present circumstances of the world, to see it increase.

He wrote that 150 years ago. Just think how much more applicable and terrifying all that is today. If you haven’t read On Liberty, you really should.

Socialist anti-semites

Racist anti-semitic socialists. Lots of people once thought being a Nazi was the height of political sense. Now they are often just called Democrats. That cover was published by Rolling Stone which is designed to appeal to those who are in and with it.

Just so you know who we are dealing with:

1) Rep. Ilhan Omar: Anti-Semitic to the Bone.

Rep. Ilhan Omar is once again under fire for using an anti-Semitic trope about the “dual loyalty” of supporters of Israel.

It’s beginning to look like her anti-Semitism is embedded so deeply that she has no conscious thought about Israel and Jews that doesn’t drip with Jew-hatred.

2) After years of infighting, the Democrats may finally have found an environmental consensus in the Green New Deal. From The Atlantic in an article that supports AOC and details her green agenda. Every bit of what they support requires total control of not just the economy but the whole of society.

I have no idea whether the Green New Deal will result in a federal climate law two or five or 10 years from now. The proposal clearly has momentum on the left. Since early November, I’ve seen the Green New Deal talked about as a story of Democrats in disarray, or as another example of the party’s turn toward socialism. Both analyses miss the mark. The Green New Deal is one of the most interesting—and strategic—left-wing policy interventions from the Democratic Party in years.

3) Rep. Tlaib Blows Up Cohen Hearing: It Was a ‘Racist Act’ for a Republican to Bring a Black ‘Prop’. Vile from head to toe, Tlaib goes beyond merely anti-semitic.

During today’s House Oversight Committee’s interrogation of former Trump fixer Michael Cohen, Tlaib suggested that Rep. Mark Meadows (R-N.C.) is a racist for bringing a black “prop” to the hearing [that is, she described Meadows’ black advisor as tokenism and only there to provide cover for the Republicans].

There is also a rundown here: Pelosi/Schumer Protect Jew Haters in Congress.

You think such sickening mindsets and policies cannot gather a majority? Nazis and socialists don’t get to take over because they promise to ruin the countries they are governing. They do, of course, and that is inevitable with socialism, but in the meantime there are a lot of lessons that get to be learned the hard way. Look at the picture from the cover of Rolling Stone and then compare them with this video of all the young, idealistic Nazis of the 1930s.

Socialism: promising prosperity but delivering poverty

“Need to put pencil to paper to tell what it will do to the economy.”

More here: Larry Kudlow: ‘We Have to Put Socialism on Trial’. But the point made is that no matter how good things are no one is fully satisfied. There is always a struggle and there are always others doing better than we are. Envy and dissatisfaction are everywhere and universal.

If logic worked, there would no longer be a single socialist in the world. So why are they still there and growing in number? Irrationality is rife, and there are many in the world who to advance themselves see leading the masses as their only way to power and wealth.

At the centre are the entrepreneurs who guide the individual units of a capitalist economy through their moment-by-moment attendance to the businesses they run. This is a passage about Tolstoy in an article on the novel that has great relevance:

In one essay, he retold a story about the Russian painter Bryullov, who corrected a student’s sketch. “Why you only touched it a tiny bit,” the student exclaimed, “but it is a completely different thing.” Bryullov replied, “Art begins where that ‘tiny bit’ begins.” Tolstoy elaborates:

That saying is strikingly true not only of art but of all life. One may say that true life begins where the tiny bit begins—where what seem to us minute and infinitely small alterations take place. True life is not lived where great external changes take place—where people move about, clash, fight, and slay one another—it is lived only where these tiny, tiny, infinitesimally small changes occur.

“All of life” includes the lives of those who run a business. Socialists argue that a central plan can replace the individual attendance of those who own, run, manage and earn an income from running a firm. But there, too, each of those “tiny bits” affects the whole. That is also part of why socialism must fail.

Socialists are no longer even embarrassed to say the word socialism in public

“Under the guise of Medicare for All and a Green New Deal, Democrats are embracing the same tired economic theories that have impoverished nations and stifled the liberties of millions over the past century. That system is socialism.”

And there is no disguising their intent, even if they disguise the truth, certainly from everyone else, but also often enough from themselves. From the Washington Post just yesterday: Five Myths About Socialism. These people are either deluded or evil. The aim is to remove or radically restrict the role of private entrepreneurs. The rest is pure gloss. See below, the entire column.

Socialism in the United States is prominent in a way it hasn’t been in decades. High-profile left-leaning politicians like Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) hold up socialist policies as solutions to the ills facing the nation, from the growing political influence of the “top 1 percent” to the lack of universal health care. Meanwhile, critics, including President Trump, say socialism leads inexorably to tyranny and poverty. But the important debate isclouded by many misconceptions.

MYTH NO. 1
Socialism is a single coherent ideology.

Socialist groups may have different names (“democratic socialists” and so on), but the distinctions between them are an illusion, columnist Jenna Ellis wrote in the Washington Examiner last year : All are “precursor[s] to full-blown Marxist-Leninist communism.” And according to an editorial in Investor’s Business Daily, “All forms of socialism are the same.” Many attacks on socialism, as well as polls gauging its surprising popularity, take for granted that it’s a unified philosophy amenable to a crisp judgment.

Yet socialism has multiple meanings and interpretations, which have to be disentangled before a discussion about its merits can begin. One distinction centers on whether socialism is a system that must supplant capitalism or one that can harness the market’s immense productive capacity for progressive ends. Karl Marx, who predicted that historical forces would inevitably lead to capitalism’s demise and to government control of industry, was the most famous proponent of the first type of socialism. An impatient Vladi­mir Lenin argued instead that rather than waiting for history to run its course, a revolutionary vanguard should destroy capitalism.

Other socialists, however, did not accept the violent, undemocratic nature of that course, although they agreed that capitalism was unjust and unstable. The left’s role, in the view of these “democratic socialists” — the Czech-Austrian theorist Karl Kautsky, for instance — was to remind citizens of capitalism’s defects and rally popular support for an alternative economic system that would end private ownership and assert popular control over the means of production.

Although Sanders and Ocasio-Cortez embrace the term “democratic socialist,” the policies they advocate place them much closer to yet another socialist tradition: social democracy. Social democrats say it is possible and desirable to reform capitalism. This tradition dominated the post-World War II European left and influenced the American Democratic Party, most notably during the Progressive era and the New Deal, inspiring Social Security, unemployment insurance and the eight-hour workday.

MYTH NO. 2
Socialism and democracy are incompatible.

In a speech last month on the crisis in Venezuela, Trump argued that socialism “must always give rise to tyranny.” Socialism is a “pseudo-science . . . enforced by political tyranny,” wrote the Heritage Foundation’s Lee Edwards in December.

Communists reject democracy, of course, but other socialists have strongly supported it. In many parts of the world, including Europe, they were the most consistent advocates of democratization. Eduard Bernstein, for example, one of the fathers of social democracy, described democracy as “both a means and an end. It is a weapon in the struggle for socialism and it is the form in which socialism will be realized.” Conservatives, on the other hand, thought of democracy as “despotism of the multitude,” in Edmund Burke’s phrase, and liberals like Alexis de Tocqueville and John Stuart Mill were resistant to expanding the franchise as well, because giving workers too much power would threaten the economic elites necessary for social stability. Only organizing and pressure from parties of the left broke liberal and conservative resistance to democracy in Europe.

After the Russian Revolution, a commitment to democracy became a key distinction dividing socialists from communists. The Bolsheviks split off from the Socialist International in 1919 because socialists would not to commit to overthrowing capitalism by “all available means, including armed force.” And after World War II, socialist and social democratic parties became mainstays of democratic systems in Europe.

MYTH NO. 3
All socialists want to abolish markets and private property.

Cass Sunstein, a liberal law professor, writes that once voters realize socialism means government ownership of “the nation’s airlines, hospitals, restaurants and department stores,” they will sour on it. Socialism leads to the “seizure of private property, and the dictating of individual behavior,” asserts Charlie Kirk, founder and executive director of Turning Point USA.

But on this question, too, the traditions vary. Communists, when in power, have done away with markets and private property. Democratic socialists say that in principle they hope capitalism will disappear over the long run, but in the meantime they advocate piecemeal changes in the ownership and control of economic resources — bank nationalization, for instance. (Democratic socialists have never fully held power anywhere, so their programs remain largely theoretical.) And social democrats have focused on redistributing the fruits of markets and private enterprise rather than abolishing them. Most of the policies advocated by politicians like Sanders, Ocasio-Cortez and Sen. Elizabeth Warren (D-Mass.) — including universal health care, free college education, and higher wealth and income taxes — are clearly achievable within a capitalist system.

MYTH NO. 4
When socialism is tried, it collapses.

“Socialism . . . will always fail,” wrote Mark J. Perry, a professor of economics at the University of Michigan at Flint and a scholar at the American Enterprise Institute, in March 2016. The Hoover Institution’s Paul R. Gregory offered a primer on “Why Socialism Fails” in January 2018.

Communism certainly failed, but social democracy has arguably been the single most successful modern ideology or political movement. Stable European democracies arose after World War II because a social consensus married relatively free markets and private ownership of the means of production with expanded welfare states, progressive taxation and other forms of government intervention in the economy and society. Without the impressive economic results generated by the market, the huge improvements in living standardsin the West after the war would not have been possible; the 30 years after 1945 were Europe’s fastest period of economic growth ever. But without the welfare state, the benefits of growth would not have been distributed so widely: Inequality declined dramatically during the postwar decades.

Moreover, the parts of the world considered to be the most “social democratic,” like the Scandinavian countries, are successful by almost any measure: Growth is strong, unemployment is low, their economies are consistently ranked as highly competitive, and the quality of life is extremely high.

MYTH NO. 5
Socialism offers a ready-made solution to numerous current problems.

Socialism’s advocates today promote it as a near-panacea. It’s a possible  “answer to the climate catastrophe,” writes a commentator in the Guardian. It “would remedy the systemic deprivation of people of color,” says Connie M. Razza, director of policy and research at the think tank Demos. It would go far beyond political reform to reshape the “basic structures that disempower people and keep them in wage slavery,” says Julia Salazar, a New York state senator and democratic socialist.

But many of today’s democratic socialists lack clear plans for what they want to put in capitalism’s place and how this new economic order would generate the growth, efficiency and innovation necessary to achieve redistribution and raise living standards. Nor is it clear that democratic socialists have realistic plans for dealing with other vexing social controversies, such as anxieties over immigration. Some argue that many current problems can be solved by new versions of policies that worked during the mid- to late 20th century, like a Green New Deal; more government spending on health care, education and infrastructure; and higher taxes.

Republicans insist that these initiatives would destroy growth and turn the United States into a tyrannical economic basket case like Venezuela. True, conservatives made similar claims in the past about major government initiatives like Social Security and Medicare. But it is surely legitimate to press advocates of increased government spending on how they would pay for these programs. The economist Paul Krugman, for example, who is sympathetic to many social democratic policies, has criticized those on the left who argue that these programs can be subsidized by simply printing or borrowing money.

What distinguished the postwar era was the combination of rising growth and equality. If socialists want to convince Americans, Europeans and others that they have the best solutions to contemporary problems, they need to show that their policies can generate substantial wealth and resources as well as, simultaneously, a more equitable distribution.

An Obnoxious Crackpot

But because you and I know she’s a nutter doesn’t mean everyone does. She has friends and followers, you see, which leads to this warning: America is in dire danger with economic illiterates gaining power. Here’s the picture from the post. You can read the text yourself.

With people like her everywhere, the centre is moving far, far to the left. Could half the American population really be this stupid?

And just for an added bonus: Venezuela was my home, and socialism destroyed it. Slowly, it will destroy America, too. A train wreck coming for us all.

And one more bit to make you appreciate how potentially hopeless resistance is.

Although showing sense here, she apologised later.

Why were either of these stories national news?

The news judgment of the major media organisations in the United States is deeply impaired, indeed it is near enough mad and the people who report such stories along with those who believe them on no evidence at all are troublemakers with no good in mind that I can see.

Both of the graphics are taken from somewhere else.

In what normal universe could such insignificant stories be national news, even if they were true. Even if the events unfolded exactly as the media first reported, what difference would it make in a country of 350,000,000 if there were isolated individuals like the ones described. There are vile and disgusting people everywhere. But these events did not occur as reported. The media lied and distorted the truth and mis-stated the facts as they were actually known.

The abomination even beyond the negligence of those in the media who reported these stories is in the hunger among the left for examples of what are now almost non-existent kinds of people, especially among those who had voted for the American president. That is, there are no racists and no homophobes in any numbers, and wherever they may be, they have no political influence whatsoever. Yet the left needs them to exist so that they can show what superior people they are. But all that is shown is they are gullible fools, who will believe anything no matter how farfetched the stories might be.

But do you want to know what it’s really about. This is what it’s really about:

Filled with hate and nothing to contribute to a sane society.

“Illegal and treasonous”

This is no messing around nor are they vague accusations. Why is this not Front Page News day after day? Is it because the media and a large proportion of the Congress are co-conspirators. Here is more of the story but in an out of the way website: Trump accuses Sessions, Rosenstein, and McCabe of ‘illegal and treasonous’ plot to overthrow him. But the tweets are genuine and the President could not be more clear or direct. You really do need to wonder why this is not the first item in every newscast. If this were in any way a sign that PDT had gone off the deep end it would be. Since the evidence is now so overwhelming that this is actually what took place, why does everyone just seem to do their best to hide this attempted coup in the midst of the American democratic system from view. Does no one really care?

If this was illegal and treasonous, why aren’t these people being arrested? The icy calm in the midst of it, where this is said by the President but no one says or does anything, not even responding to what he said, is bizarre. And there’s nothing I can see at Drudge, Instapundit or Breitbart. It’s a mystery, a complete mystery.