Leading the Revival of Individualism & Self Reliance

Posts

Once Democratically Chosen, There Is No Reversing Socialism.

/in /by

Almost every conceivable form of “socialism” was tried over the last 100 years. There has been Marxian socialism in the form of Soviet-style fully nationalized economies with strict and comprehensive five-year government central planning. There was national socialism in the Germany of the 1930s and 1940s, with private enterprise placed under total government control with Nazi four-year central planning. There was Mussolini’s Italian fascism, under which private businesses and workers were forced into cartels and trade unions with government oversight and command of prices, wages, production, work conditions, and trade. There was British “democratic” socialism under the post–World War II Labor-party government, with nationalized industries, socialized health care, and central planning. There was a French version under the name of “indicative” planning, under which the government manipulated prices and production incentives to direct capital and labor where the central planners thought they should go. There have been government planning through regulations and redistributions of wealth through fiscal policy. This regulatory-redistributive model of government oversight and directing of social and economic outcomes grew out of the discovered and admitted inescapable limits and shortcomings of more-direct government planning and control of economic affairs.

Costs and Consequences of Socialism-in-Practice

The human cost experienced from the extreme forms of socialism-in-practice goes beyond most of our imaginations. Tens of millions of people — ordinary, unarmed, and innocent men, women, and children — were starved, tortured, shot, or worked to death in slave-labor camps in the name of building that bright and beautiful paradise on earth that the communists, fascists, and Nazis all promised would belong to those they had designated the righteous and justly deserving social class, national group, or racial tribe. British democratic socialism foundered on the discovery that even in a democracy, government socialist planning entails imposing commands on everyone that succeed in only making life stagnant, dull, and poor for most in society. Indeed, this is how we have ended up with highly regulated economies combined with often-extensive networks of income redistribution and social safety nets.

A Green New Deal Means Central Planning

Now additional voices for a new socialism are on the public scene, such as the recently elected Democratic-party representative from New York, Alexandria Ocasio-Cortez, who is also a member of the Democratic Socialists of America. Even before being sworn in to the House of Representatives in early January 2019, she and others presented a proposal for a special and select congressional committee for the preparing and implementing of a Green New Deal.

Make no mistake, this is a plan for the introduction of comprehensive government planning over every facet of American social and economic life. Arguing that the world is facing an environmental Armageddon due to global warming, the time for doing nothing or relying upon carbon taxes to reduce use of fossil fuels or business regulations to influence how private enterprises produce  goods and services, they say, is behind us.

A Carbon-Free Road to Social Justice

This must be done in conjunction with commitments and goals for “social, economic, racial, regional, and gender-based justice and equality.” Labor unions must have a prominent place, with the ability to direct wages and employment conditions for workplace justice in the pursuit of a post-carbon economy. The federal government should take equity positions — that is, total or partial direct ownership — in businesses, industries, and sectors of the economy as a means to hit the target of radical environmental change.

The goal is to have a “100 percent” fossil fuel–free economy within 10 years. All businesses and residential structures will have to be dramatically made over to environmentally friendly renewable sources of energy. Where and what is produced will have to be commanded by the federal government for both industry and agriculture.

At the same time, this grand and comprehensive central planning of American society to save the planet can also serve as “an historic opportunity to virtually eliminate poverty in the United States and to make prosperity, wealth and economic opportunity available to everyone participating in the transformation” of the country.

The Hubris of Our Would-Be Central Planners

The hubris just oozes from every presumption according to which these American central planners just know what needs to be done and why everyone else must cheerfully, enthusiastically follow the commands of our would-be national-socialist führers. The plan for this Green New Deal shows its totalitarian premise in each of its proposed elements. No corner of the economy would be exempt from the green planners’ control. Every human association and status in society would be subject to modification as determined by the social-justice warriors in power.

Once Democratically Chosen, No Reversing Socialism

But what happens to democracy after that? What if “the people” have second thoughts in election years 2022 or 2024 or 2026 or 2028? What if other voices challenge the premises and the policies of the Green New Dealers? If planetary existence and social justice for all time are at stake, can our democratic socialists allow the fickle and wrong-headed voting decisions of some of the people to alter the collectivist course that has been taken?

Surely, it would be irrational to permit the central plan to be dismantled, to backslide into chaotic and petty profit-motivated self-interest, to undo all that the revolution had been attempting to achieve. The socially just people’s will could not be allowed to be reversed because of some people’s misinformed and misguided voting whims under the influence of sinister interests swaying them against their true and real interests.

Oh, we have heard all this before, and no doubt, if they were to come to power, we would hear it all once more. But, but … it can’t happen here! Think again. The logic of central planning undermines the institutions and the spirit of liberty. By concentrating power and decision-making in the hands of those in government, socialist central planning first weakens and then eliminates autonomous centers of choice and association.

Property Rights and Personal Choice

One of the most essential aspects of private property rights is that it creates potential centers of control and discretion outside of the clutches of those in political authority. Private property in functioning free markets enables sources of employment and income independent of the government. The individual does not have to worry about loss of a government job, or his government-supplied income and benefits, or his chances for personal betterment due to any disagreement with or peaceful opposition to the policies and practices of the state.

Competitive, free markets provide avenues for a plethora of ways for multitudes of people to simultaneously follow diverse ends with alternative means considered better than those selected by others in society. Mistakes and second thoughts concerning what goals and purposes to pursue and how best to do so may be modified in many different ways by different people at different times, without needing to persuade or gain the electoral agreement of enough others through a voting process.

Central Planning Means Centralized Decision-Making

But this is exactly what our new American socialists are impatient with and want to do away with. There needs to be one master hierarchy of values, with one centrally guiding and implemented master plan to bring it to fruition, with all in the society accepting and making their own personal wishes and desires subordinate to it.

What they really want is a version of “democratic centralism” — that is, an inner circle of people ideologically motivated by the same general collectivist purposes and ideals who bargain over and divide the social spoils for the identity-politics-based factions and interest groups that they, respectively, represent, with no interference from the ignorant “reactionary” and supposedly race- and gender-bigoted individuals and groups who don’t understand the nature of a real “people’s democracy.”

The role of these uninformed masses, who must be constantly subject to government “re-education,” is to produce the wealth and output that the Green New Deal planners need to pursue their power-lusting dreams. And don’t worry, if they cannot plunder enough wealth through taxation to cover the costs of their social-engineering schemes, they say they will turn to the Federal Reserve to create all the paper money they will need to pay for all that they want to do. Welcome to the possibility of a Venezuela-style hyperinflation on the back of a stagnant economy built on the political insanity of those who claim to know how everyone should live under the central planners’ agenda for a new, carbon-free world.

These are dangerous ideas that threaten anew the foundations and functioning of what remains of personal freedom and free enterprise in the United States. The Green New Dealers’ self-righteous fanaticism and ideological enthusiasm for a collectivist America should not be underestimated. Understanding their misguided political assumptions and the damaging economic consequences that would follow from their coming to power is essential if a “green” road to serfdom is to be avoided.

 Richard M. Ebeling, an AIER Senior Fellow, is the BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel, in Charleston, South Carolina. This article appeared at AIER.org and has been edited for length.

The “Green New Deal”: Green Socialism Is Still Socialism.

/in /by

Upon taking control of the U.S. House of Representatives the first thing America’s Marxist Party did was to propose a Soviet-style, communistic destruction of American capitalism labeled a “Green New Deal.”  The Party chose as its spokesperson for this totalitarian venture a young woman named Sandy Ocasio who grew up in one of the wealthiest enclaves in America, Westchester County, New York, but who decided to lie about this to get into politics by calling herself “Alex from the Bronx.”  Sandy sounds like a poorly-educated-but-well-indoctrinated young communist with a ninth-grade mentality.  She proudly labels herself a “democratic socialist” but as Ludwig von Mises explained, there really is no difference between communism and socialism: they are both attacks on private property and economic freedom.  She seems clueless about just about everything she talks about in public, whether it is the Constitution, especially the economy, the structure of government, history, etc.  This is the person the American Marxist Party has chosen as its front person in its proposal to destroy American capitalism, prosperity, and the American dream forever—and to give itself totalitarian control over virtually all aspects of American life.

The first thing to understand about the proposed “Green New Deal” is that the first New Deal not only failed to end the Great Depression but made it more severe and longer-lasting.  Its only “success” was in creating endless patronage opportunities and levers of political bribery and extortion for the Democratic Party, opportunities that the Republican Party happily embraced whenever it could to expand its own power and wealth in the succeeding decades.  The proposed Green New Deal would do the same, only many orders of magnitude worse.

Failure of the First New Deal

At the outset of the Great Depression, 1929, the unemployment rate in America was 2.9% according to U.S. Dept. of Commerce statistics.  Unemployment reached its peak in 1933 at 24.9%.  There was a bit of a recovery as mal-investments were liquidated, but it only dropped the unemployment rate to 14.3% by 1939.  It rose to 19.0% in 1938 and was still 14.6% in 1940, on the eve of American entry into World War II.  Personal consumption expenditures were still lower in 1940 ($71.9 billion) than in 1929 ($78.9 billion).  All of this despite eight years of unprecedented New Deal “stimulus spending,” regulating, controlling, subsidizing, lending, inflating, price-controlling, and taxing.  The New Deal was an utter failure to the American people.  Economists Richard Vedder and Lowell Gallaway estimated in their book, Out of Work, that the unemployment rate was eight percentage points higher in 1940 than it otherwise would have been without New Deal minimum-wage and pro-union legislation alone.

Nor did World War II end the Great Depression.  It ended high unemployment only because some 16 million men were sent overseas during the war.  Sending a man to die in a foxhole in Germany is not the same as that man going to work in his own country and returning home to have dinner with his family every evening, contrary to Keynesian folklore about how the war supposedly “ended the Great Depression.”  The average American family back at home was even worse off because of the massive diversion of resources from the consumer and business side of the economy to the government’s military infrastructure.  The production of new automobiles and other products was made illegal, food was rationed, and everyone sacrificed even more.

The Great Depression did not really end until after the war was over and the army was demobilized, returning billions of dollars of resources to the private sector. Federal government expenditures fell from $98.4 billion in 1945 to $33 billion in 1948.  As a result, the year 1946 was the most prosperous year in all of American history in terms of the growth of the private components of GDP:  private consumption and investment spending increased by 30% in that one year; no other year has ever been remotely close to that growth rate. Keynesian economists predicted another Great Depression because of the two-thirds reduction in federal spending while the exact opposite happened.  That should have discredited Keynesianism forever, but the Washington establishment just ignored or lied about this fact, as it does to this very day.

It took some seventy years, but the “mainstream” of the economics profession finally caught on to this truth, a truth that was recognized by Austrian School economists all along.  In an August 2004 article in the prestigious Journal of Political Economy by Harold Cole and Lee Ohanian entitled “New Deal Policies and the Persistence of the Great Depression” the authors concluded that “New Deal . . . policies did not lift the economy out of the Depression . . . the abandonment of these policies coincided with the strong economic recovery of the 1940s” (emphasis added).

Nevertheless, the New Deal was a political power bonanza for FDR and his fellow Democrats.  According to a 1938 Official Report of the U.S. Senate Committee on Campaign Expenditures it was routine for the Roosevelt administration to demand that recipients of government make-work jobs, of which there were millions, register and vote as Democrats.  As Jim Couch and William Shughart wrote in The Political Economy of the New Deal, “The distribution of the billions of dollars appropriated by Congress to prime the economic pump was guided less by considerations of economic need than by the forces of ordinary politics.”  For example, the nation’s number one economic problem was the South, but since the South was solidly Democratic it received relatively little New Deal spending compared to other regions where FDR needed the votes.  And, “The states that gave Franklin Roosevelt larger percentages of the popular vote in 1932 were rewarded with significantly more federal aid than less-supportive constituencies.”  What else would anyone expect?

American socialists have always searched for deceptive euphemisms for socialism with which to disguise their totalitarian plans for the rest of us.  “Liberal,” “progressive,” “economic democracy,” “liberation theology,” “social justice,” and “industrial policy” are just a few examples.  “Green New Deal” is the latest manifestation of this political con game.

What has been proposed is nothing less than the destruction of the fossil-fuel-based energy industries which have long been the lifeblood of capitalism.  All houses and businesses are to be “upgraded” in terms of their energy use by thousands, or tens of thousands, of government bureaucrats who would presumably go door to door to enforce the state’s energy-use mandates.  There are vague promises of replacing the entire power grid with “renewable energy sources” such as windmills and solar panels.  It all sounds very much like a middle-school paper assignment for an “environmental ethics” class.  I would not be surprised to learn that Sandy Ocasio took such a class and wrote such a paper in the Westchester County public schools.

The entire U.S. economy would be “planned” by a fifteen-member congressional committee, Soviet style.  There is no acknowledgment at all of the failures of socialist planning everywhere else in the world; of the well-known economic reasons for these inherent failures; or of the fact that all the countries of the world that touted “planning” in the twentieth century have abandoned it, and for good reason.  It is a recipe for turning America into a Third World economic hellhole, in other words, to be completed “in ten years” according to the published plan.  Free-lunch economics pervades the plan, promising everyone a job and a “living wage” and of course, an end to economic inequality through ever more income redistribution schemes.  But not to worry, say the Marxist planners, it will all be paid for by the Fed, a new system of “government banks,” and higher taxes.  Simple.

 

Thomas J. DiLorenzo is professor of economics at Loyola University, Maryland. This article first appeared at mises.org.

Write for CFI