Recently, while visiting Cuba, President Obama said that we shouldn’t worry about Capitalism on Socialism, but just “choose what works.” Um, okay. Well, we know what works, and it isn’t Socialism.
Why is this so? It is important in this dumbed down age to be able to articulate why Capitalism is superior to Socialism. To the young and to the poor, Socialism sounds very enticing. A lack of worry, no struggle, no pain. Your needs met regardless of whether you work to meet them. An “Iron Rice Bowl.” The reality is far different. In China the promise of an Iron Rice Bowl turned into fifty million dead of starvation. Oppression killed tens of millions more. The same story unfolded in the USSR, Cambodia, North Korea, etc. etc. In Venezuela today we see the breakdown of their economy leading to shortages, unrest, and oppression – again.
“Why can’t Socialism work?” the true believers ask. Maybe it just hasn’t been done correctly, or by the right people? The truth is Socialism can’t work for a very basic and simple reason – it goes against human nature. It tries to break the sociological equivalent of the law of gravity: that each human being will seek their own good (which most often includes the good of their family.)
Capitalism succeeds and prospers because it aligns self-interest with the interests of others. Under Capitalism, one can only succeed and prosper by meeting the needs of others. You must make a product, or perform a service, that people need or want and are willing to pay for. By exchanging their money for this product or service, an individual makes a rational choice that MAKES THEIR LIFE BETTER.
In exchange for their “money,” their store of value, they now have food to eat, or clothing to wear, or a roof over their head. Their standard of living has improved. Only by providing these need and wants can an entrepreneur in a Capitalist society make a profit. The incentives are aligned so that, only by doing good for others, the capitalist does well for himself. The importance of incentives cannot be overstated.
Under Socialism, the incentives are reversed. Now, instead of giving to others – providing a product or service – the incentive becomes forcibly taking from others that which they have which you do not. If one is to receive without producing, what value is there in producing? And if one is a producer taxed more and more heavily the more productive one becomes – again, what value is there in that? The incentive becomes doing the least possible labor in exchange for goods. Relationships between the citizenry will always become adversarial because it is based on who is taking and who is receiving. Rather than mutually beneficial arrangements, jealousy, envy, and resentment reign. Because government becomes the arbiter of who gets what, large commercial interests focus their efforts on pleasing the government rather than pleasing their customers.
This is where industry begins to break down. The more producers are punished, the less, of everything, that is produced. The less that is produced the more prices rise, and the more unavailable products become. It’s a vicious cycle which has played out repeatedly.
Socialism pretends to appeal to the best in human nature, but in fact it appeals to the worst. The historical evidence of the last hundred years is crystal clear. Socialism is failure. It leads to misery, poverty, and oppression. Argue with people that claim to support Socialism (or Communism – they are one and the same for all practical purposes) and explain to them why it can’t work here – or anywhere.
And check out his NPR documentary, which lays out the history of collectivism and all of its failures.