The free-market economy in the U.S. and throughout the world is an indisputable historical success. Never have so many lived so well [i]
We are the envy of much of the world because this material prosperity is even more pervasive in the U.S. [ii] Fundamental to this achievement is the unhindered access by everyone to an education and unlimited opportunities to succeed in a job, trade, profession or business of choice, unfettered mobility, and our system of personal freedoms, as well as rule of law. Is it any wonder that we continue to attract immigrants? Yet, no system is perfect and there are inevitable dislocations, which must be expected. However, integral to our way of life is an ethic of social responsibility. This is reflected in our many charitable and social welfare programs, which provide a safety net for those in need. While, their effectiveness should be subject to regular review, their existence is unquestionably a part of the American psyche. It is, therefore, puzzling to hear that we have some barbarous system of hyper-capitalism and that socialism is the answer.
The term Democratic Socialism may sound noble; but it is anything but virtuous in practice. It’s just a paper-thin disguise for old-fashioned socialism. Instead of government ownership of the means of production, it substitutes the term social ownership. Instead of central planning, it uses the term decentralized planning. The language used is designed to obfuscate, rather than elucidate, but the result is the same; no private ownership of property and a planned economy. Bereft of property and under the intimate economic control of some planning apparatus, how is this anything other than slavery?
The contrived slogan about eliminating so-called income inequality is also misleading, in practice. Indeed, it is ironic to hear some politicians, who are millionaires and part of the 1 percent, speak about the so-called evils of income inequality. One self-proclaimed Democratic Socialist even jokes about having a best-selling book that enabled his own financial success. However, the socialist dystopian vision they urge be adopted does not permit or incentivize people to earn more. Instead, it’s about taking income from others so that everyone earns less.
In this regard, I can’t help but reflect on the stark difference between our traditional American work ethic and the ethos that infected the former Soviet Union. Life was relatively better during the period of Glasnost under Premier Gorbachev, as compared to what had previously been the case. Yet, this was not the perception of the person on the street in Moscow, at the time. When asked about improving conditions, like having newly available appliances, it was not unusual to hear the response that life was still no better, because a neighbor had more [iii]. Is this disreputable attitude the source of the vapid slogan about income inequality? Is it all just a matter of malignant jealousy?
The Bible addresses this extremely negative impulse in the Tenth Commandment [iv]. It enjoins us not to covet another’s spouse, house, property or anything else he or she possesses. The prohibition is not about desire in the abstract, such as wanting the same good things that another might possess. The sin is in wanting to take those very things away from someone else.
Human nature is complicated. Each of us is a bundle of traits, experiences, desires, and skills. G-d also granted us free will and the ability to harness these qualities and sublimate them in support of some positive and gainful activity. This is a fundamental part of our mission on this world.
The U.S. free-market system enables this to occur, by embracing our humanity, incentivizing positive behavior and reinforcing it with rewards. There is nothing wrong with everyone freely striving to earn more and rewarding people for their creativity, ingenuity, or working harder or better. Why is sameness a worthy object? Why not celebrate those who achieve and, instead of being jealous and trying to deny them the fruits of their success, seek to emulate them? Isn’t that an essential part of the American way?
The socialist vision, in stark contrast, appeals to the base instinct of malevolent jealousy. Rather than enabling everyone to be raised up, by working harder and better and earning more, it just takes from those who have earned more, so everyone will ostensibly have equally less. Socialism also doesn’t trust people to make their own decisions in a free-market. It insists on control through some planning apparatus, which makes the decisions that really matter in people’s daily lives. Yet people, with the same human foibles, are put in charge of the planned economy, without the behavioral and other checks and balances implicit in the free-market system. Is it any wonder that those entrusted with absolute power are inevitably corrupted by it? Moreover, absent being perfect, omniscient, and all-powerful, why would they be any better at making decisions about our lives than we would?
The plain and simple answer is that they aren’t; the world is just too complicated. Consider, the reality of the pervasive famine that ensued and the many millions who died [v] from hunger, as a result of Stalin’s planned economy and so-called Scientific Socialism. Similarly, Mao’s planned economy and socialism, called the Great Leap Forward, which caused tens of millions of people to die from starvation [vi]. These epic man-made tragedies were avoidable. They are the unfortunate but predictable results of a planned economy and socialism. The Venezuelan people are just the latest victims.
The socialist system is inherently and fatally flawed and it is pure folly to suggest otherwise. It is not about how the plan is executed or who’s in charge. The economy and the interactions of humanity with it and each other are just too numerous and complex to be encompassed, let alone efficiently and effectively directed, in real-time, by a human designed plan; but, more on this in my next post.
Leonard Grunstein, a retired attorney and banker, founded and served as Chairman of Metropolitan National Bank and then Israel Discount Bank of NY. He also founded Project Ezrah and serves on the Board of Revel at Yeshiva University and the AIPAC National Council. He has published articles in the Banking Law Journal, Real Estate Finance Journal, and other fine publications. To read more of his reports — Click Here Now.
[i] See ‘A global tipping point: Half the world is now middle class or wealthier’, by Homi Kharas and Kristofer Hamel, at Brookings, dated September 27, 2018.
[ii] See ‘Where do you fit on the global income spectrum?’, by Leslie Shapiro and Heather Long, in the Washington Post, dated August 20, 2018.
[iii] See ‘An American Family in Moscow’ by Jerrold and Leona Schecter (1975).
[iv] Exodus 20:14 and Deuteronomy 5:18.
[v] See The Man-Made Famine of 1932-1933 in Soviet Ukraine, by Bohdan Krawchenko (Conflict Quarterly, Spring 1984), Kazakhstan: The Forgotten Famine, by Bruce Pannier, Radio Free Europe, Radio Liberty, dated December 28, 2007 and How Stalin Hid Ukraine's Famine From the World, by Anne Applebaum, in Atlantic Magazine, dated October 13, 2017.
[vi] See China’s Great Famine; the true story, by Tania Branigan, in the Guardian, dated January 1, 2013; After 50 Years of Silence, China Slowly Confronts the ‘Great Leap Forward’, by Helen Gao, in The Atlantic, dated May 29, 2012; Remembering the Biggest Mass Murder in the History of the World, by Ilya Sonim, in the Washington Post, dated August, 3, 2016; and Mao’s Great Leap to Famine, by Frank Dikotter, in the New York Times, dated December 15, 2010.
© 2021 Newsmax. All rights reserved.