Tag Archives: Socialism

Why Social Democracy is Failing Europe, by Alasdair Macleod

Socialism and freedom cannot coexist. From Alasdair Macleod at mises.org:

There is a certain tension in the phrase, “social democracy,” and the description of someone as a social democrat. Social in this context is socialism by the state. A democrat supports the freedom for individual electors to express and defend personal interests in regular plebiscites. The two positions are incompatible.

At this point we should note that in economic terms there is little philosophical difference between European socialism and communism. Both seek to relieve capitalists of the means of production in favor of the state, either by ownership or control. Marx himself saw socialism as a temporary phase on the way to full communism. However, we all know from experience that communism fails by impoverishing everyone except a coterie of leaders. The same problem of the state’s inability to calculate prices, other than with reference to labor costs, and to foresee what consumers require on the morrow bedevils both socialism and communism. The principal difference between the two is the speed at which economic disintegration takes place, tied to the rate at which the socializing state removes personal freedoms and destroys wealth.

Social democrats assume that moderate socialism does not lead to those outcomes, which is a mistake1. They are deceived.

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What if America Tried Capitalism, by Bill Bonner

Every form of socialism that fails is not “true” socialism, and in fact it’s often mistakenly called “capitalism.” Meanwhile, true capitalism has worked everywhere it’s been tried. From Bill Bonner at internationalman.com:

It’s no secret that socialism – in all its forms – doesn’t work very well.

You soon run out of other people’s money. And people don’t always want to give up their money readily. Or let you boss them around.

Inevitably, the more ambitious your plans, the more people you need to kill.

Reform Capitalism

But today, we turn our attention to those who say we need to “reform” capitalism to save it.

In this category, we lump all those who claim to support free markets – such as most of today’s Republicans and Democrats – but still think they can make them work better, with trade barriers, phony tax cuts, fake money, fake interest rates, regulations, controls, etc., etc.

Journalist Edward Luce, for example, writing in the Financial Times, explained that we need to “save American capitalism from itself.”

Whenever you read somebody in a newspaper suggest that “we need to,” you can be almost sure that the next words are nonsense. This is no exception.

“The question America’s financial and tech elites must ask,” Luce continues, “is ‘what price social peace?’”

Circuses are not enough; the mob wants more bread. And after having cheated them out of trillions, Luce thinks we should at least toss them a few crumbs.

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Nearly Everyone Is a Socialist Now, by Alasdair Macleod

Socialism is ubiquitous, and even much of what is termed “capitalism” is actually socialism. From Alasdair Macleod at goldmoney.com:

The expansionary phase of the global economy is almost certainly ending. A combination of excessive debt and trade protectionism is likely to become economically and politically destabilising. If, as seems increasingly likely, the world is destined for another credit and economic crisis, the colour of the political establishment will shape outcomes. This article examines the political scene and concludes that socialist puppet-masters will use the opportunity in an attempt to crush capitalism.

Introduction

In 1975, I watched from the Strangers’ Gallery the debate in the House of Commons when the Referendum Act for membership of the Common Market was in its second reading. It was to be the first referendum ever held in the UK, and as one would imagine was contentious for that reason. The Labour government of the day had laid an act before Parliament for a referendum to ratify the European Communities Act of 1972, in other words, the UK’s membership of the Common Market.

The debate was not about membership, but the precedent of holding a referendum and its potential to undermine parliament’s sole right to take decisions on behalf of the people. In those days, MPs made proper speeches, not the time-limited five or so minutes permitted by Mr Speaker. A debate of this sort was worth listening to.

I was struck by the similarities of argument put forward by the two greatest parliamentary orators of the day. Michael Foot was the doyen of the extreme left in the Labour Party, and Enoch Powell was said to be on the extreme right (he wasn’t – he was a staunch free marketeer: more on this to follow). From their different perspectives their arguments were almost identical, and both spoke eloquently without notes.

Foot had a distinctive style we see less of nowadays. He was an old-fashioned socialist rabble-rouser, with his arguments and timing honed to perfection on the hustings. His was the traditional Labour campaigning style; a throw-back to pre-war socialist tub-thumping. He was, at that time, the best exponent of this type of oratory in Parliament, made all the more credible by his unwavering belief in the Marxist cause.

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In Defence of Free Markets, by Alasdair Macleod

Despite it’s unrivaled record as the freest and most productive and prosperous economic system, people whisper the word capitalism, if they say it all. Even the author of this article uses the term free markets, not capitalism. Socialism, despite its terrible record, is hailed as humanity’s salvation. From Alasdair Macleod at goldmoney.com:

Why is it that no one defends free markets, and socialism, despite all the evidence of its failures, comes back again and again? Unsurprisingly, the answer lies in politics, which have always led to a boom-bust cycle of collective behaviour. Furthering our understanding of this phenomenon is timely because the old advanced economies, burdened by a combination of existing and future debt, appear to be on the verge of an unhappily coordinated bust. But that does not automatically return us to the free markets some of us long for.

Cycles of collective behaviour

Throughout history there have been few long-lasting periods of truly free markets. Contemporary exceptions are confined to some small island states, forced to be entrepreneurial by their size and position vis-à-vis the larger nations with which they trade. The governments of these islands know that the state itself is not suited to entrepreneurship. Only by the state guarding the freedom of island markets and the sanctity of property rights can entrepreneurs serve the people in these communities and create wealth for all.

This is not the normal condition for larger nations. Before the Scottish enlightenment which nurtured David Hume and Adam Smith, the benefits of free trade were barely understood. Since then, the wealth created by free trade and sound money has nearly always been the springboard for detrimental change. Sometimes a political strongman, like Mao or Lenin dictates to the people what they can and cannot do. Alternatively, a leader courts popularity by taxing heavily the few for the alleged benefit of the masses. This is the model of welfare states today. Debasement of the means of exchange is an extension of these socialising policies, furthering the transfer of personal wealth to the state.

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Socialism Isn’t Free

https://www.theburningplatform.com/2019/03/29/socialism-isnt-free/

“Toto, I Don’t Think We’re in Kansas Anymore”, by Jeff Thomas

Under the weight of creeping socialism that’s incorrectly identified as capitalism, the economy will collapse. Capitalism will be incorrectly blamed, but it will soften people up for creeping to become galloping socialism. From Jeff Thomas at internationalman.com:

Recently, an American colleague commented to me, “We no longer live in a democracy but a dictatorship disguised as a democracy.”

Is he correct? Well, a dictatorship may be defined as “a form of government in which absolute authority is exercised by a dictator.”

The US today is not be ruled by dictatorship (although, to some, it may well feel that way.)

But, if that’s the case, what form of rule does exist in the US?

At its formation, the founding fathers argued over whether the United States should be a republic or a democracy. Those founders who later formed the Federalist Party felt that it should be a democracy – rule by representatives elected by the people. Thomas Jefferson, who created the Democratic Republican Party, argued that it should be a republic – a state in which the method of governance is democracy, but the principle of governance is that the rights of the individual are paramount.

He argued that, “Democracy is nothing more than mob rule, where fifty one percent can vote away the rights of the other forty nine.”

At that time, Benjamin Franklin has been credited as saying, “Democracy is two wolves and a lamb voting on what to have for dinner.”

Very well stated.

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Baby Boom to Baby Bust–The Crisis in Socialism, by Martin Armstrong

Socialism being essentially a Ponzi scheme, it will run out of suckers–the productive young who are expected to pick up the tab for the unproductive and the old. That day is arriving sooner than you might think, thanks to declining birth rates. From Martin Armstrong at armstrongeconomics.com:

There is a real crisis in the fertility rate which has fallen to such a low level that all the socialism going forward will simply collapse. What used to be the Baby Boom is now being called the “Baby Bust,” which means that in all first-world countries there is a real crisis for they have insufficient children to maintain their population size. This has been one excuse for allowing the refugees into Europe. As the population dwindles, all the social programs are collapsing for they were NEVER designed properly from the outset. They are based on a Ponzi scheme where they rely on taxing a growing younger population to service the benefits of the older generation. This was the entire scheme behind Obamacare. Force the youth to buy insurance they do not need to reduce the cost for the elderly.

These findings were a huge surprise to those in government. They did not think it was even possible. The joke is that we will have more grandparents than grandchildren. A study published in the Lancet followed trends in every country from 1950 to 2017. During 1950, women were having an average of 4.7 children in their lifetime. The fertility rate all but halved to 2.4 children per woman by last year. They compared countries in Africa, such as Niger, where the fertility rate was 7:1 compared to countries like Cyprus where couples had just one child meaning that would be a 50% decline in population.

Even in Britain, the fertility rate has dropped to 1.7, which is similar to most Western European countries. Anything below 2 children per couple means a net population decline. This data clearly warns that the Ponzi scheme set up first in the New Deal of the Great Depression is no longer sustainable. The cost of childcare has skyrocketed and the rise in taxation has forced women to work, making childcare mandatory, but not affordable for 2 or more children. This creates an unsustainable future for taxation.