Jim Driver: Consumerism (‘capitalism’) makes; socialism takes
Have you ever wondered how to respond to someone who believes in socialism? If so, this might help.
Today, there are two primary competing economic ideologies; one is “Capitalism” and the other is “Socialism.”
Capitalism can be described as system that uses surplus wealth to fund the risks taken by an entrepreneur when trying to bring to the market a new product that will create a “good” for society.
If consumers decide that they want that product, the entrepreneur is successful, and that new “good” creates new “wealth.” If consumers decide that the product is not worth the wealth they have available to exchange for it, then the entrepreneur has failed and no “wealth” is created. This is how “capitalism” creates “wealth;” and it is the underlying principle behind the idea of “free trade.”
Wealth is what you own. Money is only a means of exchange. The value of money can be manipulated, but the value of what you own cannot. Since “free trade” relies on the consumer to make the decision to voluntarily buy (exchange wealth), then it is the consumers who are really in charge of economic decisions; therefore, I believe the word “consumerism” should be used instead of “capitalism.”
Consumers reward entrepreneurs that bring new products to the marketplace that either add value to their labor or make life easier. The reward that consumers give to entrepreneurs is a measure of the usefulness of their new product. The more useful the product, the greater the reward. In other words, entrepreneurs that get rich from their efforts should be thanked, not vilified.
In contrast to consumerism, socialism relies on a planned economy, regulated by so called “experts” who believe that they can anticipate and manage all of the needs of their citizens. The goal of socialism is equality for all. The government can then provide everybody with a living wage, health care and freedom from all of the adversities of life. The idea behind all of this is that the government should be a safety net for all of its citizens.
Does that ideology work?
For wealth to be distributed, someone has to create that wealth. Who will that “someone” be? Obviously, it will be the citizens, not the government.
Since wealth can only be created by work, who will decide what work will be done, and who will do the work? Will that work be mandated by the government, or will it be voluntary? Who gets to decide, the government, or its citizens?
Under socialism, productive citizens must share their productivity with less productive citizens. Why would anybody work hard to create wealth if they have to give some of that wealth to someone else? I think that the answer is very few.
History tells us that socialism has always failed to meet the needs of society because there is no incentive for entrepreneurs to create wealth. Socialists may say that it is a moral duty to use the wealth that consumerism (capitalism) creates in order to correct the inequities of society. But they forget that charity always come from the hearts of its citizens, not the government. The government can only give you something that it first takes from someone else; and that is not charity.
Since socialism does not create wealth, then socialism cannot exist without consumerism. In the end, “socialism” deprives citizens of their freedom because it must enlarge the government to have the power to enforce its economic ideology. This power is always used to take away the freedom of its citizens.
For the government to provide equality for all of its citizens, it must take wealth that is created by its most productive citizens and give that wealth to its less productive citizens. That guarantees equal poverty for all.
Our Founders studied the history of failed governments. They did so to understand how to avoid the mistakes of other nations. They understood that the government will always try to acquire more and more power at the expense of its citizens, so they formed a new kind of government with a Constitution to restrict its powers. Our government was only given those powers its citizens thought necessary to preserve their freedoms. All other power were to be retained by people.
We seem to be at a crossroads in our country. Our citizens need to be very careful about which path they take.
Make sure that you are an informed voter before you vote in November.
Jim Driver lives in Rough and Ready.
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