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Jim Driver: Do we really want socialism?

Jim Driver
Other Voices

What do most socialists actually believe? One of the best answers I’ve seen to that question comes from “Socialism: An Economic and Sociological Analysis” written by Ludwig von Mises, an Austrian economist.

In Chapter 33 “The Motive Powers of Destructionism,” Mises writes:

“To the socialist, the coming of Socialism means a transition from an irrational to a rational economy. Under Socialism, planned management of economic life takes the place of anarchy of production; society, which is conceived as the incarnation of reason, takes the place of the conflicting aims of unreasonable and self-interested individuals. A just distribution replaces an unjust distribution of goods. Want and misery vanish and there is wealth for all …

This is how our contemporaries see socialism, and they believe in its excellence. It is false to imagine that the socialist ideology dominates only those parties which call themselves socialist or — what is generally intended to mean the same thing — “social.” All present-day political parties are saturated with leading socialistic ideas.”

How can anyone who does not know who I am, where I live, what I want, or what I need, decide for me?

After reading this, I can understand why a person might logically believe that everyone could benefit from the coordinated production of goods if the state planned all economic issues.

But here is the problem: who decides?

How can anyone who does not know who I am, where I live, what I want, or what I need, decide for me? Obviously, they cannot.

We do not have unlimited resources, so we must make sure that our limited resources are allocated to our most pressing needs.

Recorded history tells us that in normal times the “market place” has always done a remarkably good job in directing the best use of our limited resources; as a result, we have created an enormous amount of surplus wealth! If that were not the case we would still be living as “Hunter Gatherers.” So the answer to the previous question is that we really should rely on the market place for wealth creation; not an arbitrarily State planned economy.

When discussing wealth creation, it’s important that we understand that there are two kinds of wealth (remember, money is not the same thing as wealth): wealth consists of consumable goods (things that quickly perish) and durable goods (things that can be used over a long period of time). The value of perishable goods diminishes over time, while the value of durable goods usually increases over time. The value of any good is reflected by the amount of money people are willing to pay for that good.

Most people have little understanding of the role that money plays in economics: money is only a measure of exchange.

We exchange money for scarce resources. The value of that exchange is proportional to the scarcity. Water is usually relatively cheap, while diamonds are usually very expensive. But, if you happen to be in a desert where water is almost nonexistent, water can be more expensive than diamonds.

When surplus wealth is generated, future generations can cope with unforeseen losses. This gives society a cushion to sustain it when thing go wrong, in other words, wealth accumulation is a very good thing!

Since surplus wealth is often regarded as “capital,” why is it that “capitalism” is considered a “bad” word?

I believe that “capitalism” should really be called “consumerism” because it is the consumer who directs the allocation of scarce resources. When consumers buy what they want, the amount of desired goods will increase. When consumers reject what they do not want, businesses fail and unwanted goods are not produced. So it is the consumer who really drives economic prosperity.

It seems to me that the socialists intend to use our enormous surplus of wealth for the benefit of the present generation with no thought for future generations, and this, I believe, will destroy all of our previously created surplus wealth. If that happens, it could push all societies back to a subsistence level of existence. In other words, poverty for all!

Now, more than ever, each and every one of us needs to become better educated regarding sound economic principles so that we can expose socialism for what it really is: an economic ideology that consumes the capital that consumerism creates.

I recommend reading the principals of Austrian economics, which can be found at http://www.mises.org for a more realistic understanding of what creates wealth.

Jim Driver lives in Rough And Ready.


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