Copyright by John T. Reed

Why don’t they understand that socialism does not work?

Ever since I became old enough to figure out that socialism doesn’t work—at around age 22—I was perplexed that liberals still want it. Why don’t they see capitalism is better and that economic freedom is necessary for all the other freedoms?

People who work for the government do not have freedom of speech. They are afraid they won’t get promoted or may lose their pension and other benefits. Similarly, a nation that gets all its health care from the government is a nation that is afraid to criticize the government out of fear that they or their relatives or friends may be retaliated against by the rationers.

Joseph Schumpeter

Joseph Schumpeter was a Harvard economist. He invented the phrase “creative destruction” to describe the effect of entrepreneurs. He also said entrepreneurs and their innovations were the engines of prosperity Liberal Harvard economist John Kenneth Galbraith said Schumpeter was the most sophisticated conservative of the twentieth century. Schumpeter was the subject of the 2007 book Prophet of Innovation by Thomas K. McCraw.

Schumpeter was the polar opposite of John Maynard Keynes. Both were born in 1883. As a young professor in Europe, Schumpeter was perplexed by me at intelligent leftists not recognizing that capitalism was infinitely superior to socialism as a way to organize a society and an economy. Indeed, one of my Harvard Business School section mates, Michael Rothschild, wrote the book Bionomics which says capitalism is analogous to the way the plant and animal kingdoms are organized and operate. In other words, capitalism is the all-natural, organic way of organizing living things.

Schumpeter finally figured it out. As have I reading about him and seeing other evidence of it.

Social justice

The left does not care which system produces the most prosperity or freedom. They want power. Dictatorial power. They are not in favor of anything. They hate capitalism because it lets the “wrong” people win. People like Sam Walton, founder of nonunion Wal-Mart. He was the richest man in the world for a while. His company is still the biggest in the U.S.

The left does not want maximum prosperity for all. They want all rich people who disagree with them to be stripped of their money. They understand that this will impoverish all but the government apparatchiks. That is what they want. They plan to be government apparatchiks. The left wants to wipe off the face of the earth anyone of whom their side is envious.

Journal editorial

The 11/10/09 Wall Street Journal has an editorial titled “Confessions of an ObamaCare backer.” It is about remarks recently made by leftist John Cassidy of the New Yorker magazine.

Cassidy, the Journal said, “let the mask slip” briefly and revealed the “real political motivation” behind ObamaCare. I add that the same motives are behind cap and trade and a great many other leftist initiatives. The green movement is nothing but the red movement in disguise.

Cassidy continues:

The Obama Administration…is creating a new entitlement program, which, once established, will be virtually impossible to rescind. [The reason is] making the United States a more equitable country

The Journal says the “…purpose is to further redistribute income by putting health care under government control, and in the process making the middle class more dependent on government. As the party of government, Democrats will benefit over the long run.”

The Journal says this explains why the Democrats are not afraid of angering the public by going against their will and even losing many purple district seats in the 2010 election. They figure if they can get this law enacted, they will be like drug dealers living off a nation of entitlement addicts within the next ten years and the few losses in 2010 will be irrelevant ancient history as the U.S. becomes a one-party nation.

The nation is going bankrupt because of Medicare, Medicaid, and Social Security, but there are no Americans who want to reform any of those three programs. Indeed, the mere suggestion of such reform is the “third rail of American politics.” Even the slightest criticism of any of those programs dooms the Republican who dared to suggest it. The Democrat program is to make their party platform in its entirety the third rail of American politics. And there is no indication whatsoever that they will not succeed after the push they got from George W. “TARP” Bush and the Wall Street plutocrats in 2008.

More Cassidy:

Putting on an amateur historian’s cap, I might even suggest that some subterfuge is historically necessary to get great reforms enacted.

Translation: Our noble end of turning America into a Democrat party dictatorship justifies our means, namely, lying about our motives.

Rush and Sean

The main guys who have figured this out and who are condemning it for what it really is are Rush Limbaugh and Sean Hannity. I have trouble finding fault with Limbaugh. Hannity, on the other hand, is not quite smart enough to hold the position he does, and he admits using tedious repetition of his propaganda phrases, like “unrepentant terrorist Bill Ayres,” to brainwash his listeners and viewers. He is also often incorrect, for example, with regard to his worship of Ronald Reagan. Reagan’s actual record is far more mixed than Hannity understands or admits.

You can measure the preeminent effectiveness of these two men by how hard Obama and his people are trying to stifle them through proposals to bad mouth them and to censor them through misleading proposals like the one to require local ownership of radio and television stations.

The problem with these two men being the main leaders in our nation against what the Democrats are trying to do is they are both ratings-seeking entertainers. They do, indeed, maximize their ratings by their mixture of humor and exaggeration, relative to other entertainers or headline news-type programs, but they simultaneously limit their audience in the wider population. Most importantly, their entertainment focus causes the majority of American to not take seriously the evidence they present and the logical conclusions they draw from that evidence.

I am a libertarian, not a conservative or a Republican.

The solution to all this is a third party. The libertarian ideas are generally the right ones. I do not endorse their actual platform in its entirety. It includes stuff like opposition to the draft and recreational drug regulation.

Are the Libertarians as a party poised to start winning elections? Not at all. They are talkers, not doers. They almost never elect a Congressman, let alone a president so they do not really have the organization or skills to win a majority. They have the ideas. I think most Americans today are actually libertarians but they either do not realize it or refuse to admit it. My mom was a Catholic, but I call her a social Catholic. I think she was actually an atheist based on knowing her for 47 years, but she would have vehemently denied that out of fear of it harming her relationships with her friends and relatives—who were probably also actually atheists. People who do not admit to being libertarians are afraid it might adversely affect their social status.

But ultimately, socialism does not work. Ultimately, the Democrats, with plenty of help from Republicans, will bankrupt the country. Best guess as to when? 10 to 20 years.

Harvard economist Kenneth Rogoff just came out with a new book This Time Is Different: Eight Centuries of Financial Folly. On Charlie Rose on 11/10/09, he was asked how long until the irresponsible U.S. government fiscal policy (taxing and spending) triggers a catastrophe. He said something like, “Probably five years. Sooner than 20.”

When that happens, the public will turn to a third party. Unfortunately, no third party is currently ready to turn that support into electoral victory in Congressional and presidential elections.

John T. Reed