Reprinted from International Man
The free-market system is, in one sense, equal. Anyone with ideas, abilities or ambition has the opportunity to improve upon his lot in life. Therefore, at any given time, there are people in a free-market society who are at every level of economic success â€“ some on their way up, some on their way down.
Beginning in the early 19th century, some philosophers argued that this system is in another sense, unequal, as there are many people who do not possess those new ideas, do not have unique abilities and/or have a lesser ambition. They argued that the free-market system is a decidedly imperfect concept for this reason, and they were correct. They asked, â€œIs it not possible to create a system in which all could prosper, rather than a select few?â€
The trouble with socialism is not in the basic objective. The trouble is that no one has actually come up with a workable means to achieve the objective. The philosophers who created the socialist approach settled for a plan that does not answer the question at all. It does, however, seek to diminish and discourage those with ideas, abilities and ambitions, in order to lower them to the level of those who do not possess these attributes. The net result is an entire society that operates on a lower level, eliminating advancement for all concerned, as well as for society as a whole.
There is one exception to this lack of advancement, however. Instead of the free-market system, which has opportunity for anyone to increase his position, socialism has, at its core, the leaders â€“ the people who enforce the equality. They tend to be a relatively closed group who enjoy a far higher standard of living, in addition to enjoying far greater freedom of choice. (Equality for some; not for others â€“ back to the original problem.)
Friedrich Von Hayek, in his book, â€œThe Road to Serfdom,â€ states:
The choice open to us is not between a system in which everybody will get what he deserves according to some absolute und universal standard of rightâ€¦ but between a system where it is the will of a few persons that decides who gets whatâ€¦.
The Great Lie of Socialism
In order for socialism to appeal to the masses, a great lie has been put forward: the concept of the â€œhavesâ€ and the â€œhave-nots,â€ or the â€œrichâ€ and the â€œpoorâ€. Most any socialist will refer to these categories regularly and is unlikely to characterise himself as â€œrich.â€ Even celebrities, with incomes in the seven-figure range will never refer to themselves as â€œrich.â€ Rich is equated with â€œevil.â€ Therefore, a businessman who may earn under $100,000 per year is â€œone of the greedy rich,â€ whilst a celebrity whose annual income is in the millions is â€œone of the people.â€
How, then, is â€œrichâ€ defined by those of a socialist bent? Well, in fact, it is unlikely that any socialist has ever put a number on it, but there is a decided trend to suggest that, if my neighbour has more than me, he is rich. Further, there is often the inference that my neighbour needs to be taken down a peg by the authorities. Perhaps a new tax on the rich, or a higher percentage of tax will work. (Of course, should I become more prosperous next year, the bar will need to be raised, so that I, once again, am below the level that may be characterised as rich.)
For this reason, the terms are kept vague, as no political aspirant who espouses socialism could ever succeed if he actually put a dollar value on â€œrich.â€ In practice, the term does not refer to a specific level of income, but to an attitude about the method of government. Only merchants, businessmen, bankers, etc. tend to be categorised as rich.
It is this very vagueness that gives socialism its appeal. In practice, socialistic proposals from leaders do not truly raise anyone up. They, instead, seek to drag others down. Those citizens who respond supportively to such proposals are those whose thinking is subjective enough that they imagine that all those to be dragged down will be â€œthose above my economic level â€“ not me.â€
This Great Lie is an intoxicant â€“ something we can take to assure us that, whatever our personal shortcomings, be they a lack of talent, a lack of ambition, or even outright laziness, our peers who do not share these shortcomings will not be allowed to excel. We will not be bypassed by others and made to feel small.
Socialistic philosophy claims that the free-market system is a top-down system, engineered to hold down the little man. It claims that, in order to protect the little man, a bottom-up system is necessary and socialism is that system. Yet, the opposite is true. Under socialism, the decision as to what is produced comes from the small enforcer-class, not from the entrepreneurs. It is therefore a top-down society, directed by an Elite.
In a free-market society, the decision as to what is produced is not (as socialist philosophy claims) determined by the entrepreneurs, it is determined by the masses, since they will only buy what they actually want. The free-market system is therefore a bottom-up system, which, interestingly, is the very object which socialism purports to create, but does not.
As stated by Ludwig von Mises in his book, â€œHuman Action: A Treatise on Economics,â€
The entrepreneurs and capitalists are not irresponsible autocrats. They are unconditionally subject to the sovereignty of the consumers. The market is a consumersâ€™ democracy.
The Enduring Nature of the Socialist Concept
Considering all of the above, why, then, does socialism continue to appeal to so many people? In a word, resentment. It is easy for us to build up a resentment for the landlord who appears once a month, wanting to take our hard-earned money from us. Or the merchant who demands more for his goods than we feel is affordable. Or the employer who pays us for our labour, whilst paying himself more than he pays us.
Somehow, in our vanity, we imagine that these acts are â€œunfair,â€ simply because we wish to be paid more for our services and charged less for the goods and services provided by others. Over time, these people grow large in our perception as â€œthe greedy rich,â€ who somehow are holding us down â€“ keeping us from attaining a higher economic standard. We grow to detest those who have achieved more economically than we have, even as we envy their achievements. We may not wish to invest the money and hard work necessary to become a merchant, landlord or employer, but we do become jealous of the fruits they have earned from their efforts.
This resentment makes us easy marks for those political hopefuls who say, â€œElect me and Iâ€™ll eliminate the disparity between the haves and have-nots. Iâ€™ll legislate rent control. Iâ€™ll demand employment benefits. Iâ€™ll create price controls.â€ For those who are short-sighted enough to fail to understand why there will always be those who have more than we do, these promises seem not only plausible, but entirely justified. They promise Equality for All. The trouble is, they do not deliver equality, they merely do away with the bi-products of ideas, abilities and ambitions and replace them with the arbitrary policies of an enforcer class.
If I can leave the reader with one thought regarding the concept of social engineering to achieve equality, it would be this:
Socialism claims to be the great equaliser. However, it does not lift those at the lower levels to a higher economic level. Instead, it takes from those that have achieved a higher economic level, discouraging their ideas, abilities and ambitions, assuring a form of lower equality for all, through the elimination of the motivation to achieve.
He began his study of economics around 1990, learning initially from Sir John Templeton, then Harry Schulz and Doug Casey and later others of an Austrian persuasion.