Why capitalism is so great, part two

In part one, I talked about the greatness of capitalism, and tried to show sort of a mathematical way of proving it. Capitalism likely improves the outcome of economic trades made by people versus trades authorized by, or restricted by, or controlled by, the government. A little improvement here and there, over millions of transactions a day, over millions of people, over thousands of days, yields a huge dividend to society. It sort of reminds me of the difference between getting 5% interest or 10% interest. They sound almost the same, but if you invest a lot of money over many years, the difference ends up being substantial because of compounding and the time-value of money.

Capitalist societies improve the lives of their citizens light years ahead of socialist societies.

At its core, then, capitalism is about freedom. Freedom of choice, freedom to pursue whatever job or career path you want (to maximize potential earnings, if that is important to you), freedom to make a lot of money and (mostly) keep what you make, and freedom from someone like Elizabeth Warren enforcing her belief that the factory owner "didn't build that."

Socialism seeks to convince people that the state, or society, is actually the cause of individual success and achievement, and therefore state control is fine. Restricting freedom is fine, because others deserve to share in your success so the state can reduce your freedom (by taking more of your money) to force that sharing.

The ultimate "forcing of sharing" is higher taxes. This is fundamentally why conservatives believe in low taxation. They aren't being "greedy," they believe that it is inefficient and "socialist" to force more sharing than is absolutely necessary to run the government. And it is why we believe in minimalist government because that maximizes individual freedom, both economic and social. (Social freedom is giving people more choices and more money to do as they want.)

Most people realize the evils of socialism through its "social engineering" rules. Socialism is not just bad economic policy, it is also bad governing policy. It assumes that people are not adults and can't make their own decisions, and that the state must act like everyone's parent. This is probably why The Left hypes all of these doomsday scenarios like the "global warming" hoax...because if we have a doomsday coming up, it justifies society's control over individual choice. We have other doomsday scenarios too. Just one example is the "obesity epidemic," used to justify society's control over what we eat. This was used by Michelle Obama to "fundamentally transform" our school lunch menus, such that some kids stopped eating healthy foods because socialist control does such a terrible job and often has many unintended consequences.

So even if we look at Warren's factory owner and, in that particular case, maybe the argument could be made that the state deserves a larger share of those profits. Let's say a special road had to be built in order to accommodate the needs of the factory. The socialist solution is not to tax the factory higher but to use the factory example to tax everyone higher.

Socialists use government services to justify raising taxes. Let's say the fire department is likely to incur additional costs above normal to watch over the factory. If so, then make those costs apparent during the permitting process so the factory owner can decide in advance if he still wants to invest in the factory. But going for a big general tax increase based on his success is not fair and terrible policy. It makes future entrepreneurs more wary because they can't calculate their return on investment with a government inconsistent and out of control as far as tax policy is concerned.

If capitalism has freedom as its core value, what does communism or socialism have? It has government control, or restrictions to freedom. Socialism at least requires voters to elect their masters, while the communists just take and keep control through force.

Because of this, socialism tends to be milder but more insidious. There are no illusions about what is going on in communist China. I'm sure people in China fully realize their freedoms have been greatly curtailed and they are too scared to do much about it. Do people realize the same thing (but to a slightly lesser degree) is going on in parts of Europe? How about in Massachusetts?

In Massachusetts, we have a form of socialized medicine, which has been called Romneycare. Thousands of people have "health insurance" paid for by the state. I don't know if people's out of pocket costs are outrageous like under Obamacare, but I do know that the costs are eating up the state's budget. At some point, taxes will need to be raised significantly to keep providing billions of dollars in subsidized or free medical care to everybody. When our politicians start trying to convince people to pay more in taxes while continuing to reelect them, I'm sure we will hear about our deteriorating roads and bridges, and how more money is needed for the children. Those needs are red herrings to the underlying reasons for higher and higher state budgets. The real reason is "entitlement" spending.

Next, I will examine a couple of socialism examples and why they hurt our society.

PART THREE, Why Socialism is Terrible: http://www.actonforum.com/blogs/allenn/why-socialism-terrible

Fiscal Conservatism 902



THE VERY FIRST ARTICLE IN THIS SERIES and a list of all articles:

Introduction: http://www.actonforum.com/blogs/allenn/political-philosophy-fiscal-conservatism

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