Problems with Socialism – Episode 372
What is the problem with getting everything for free? Isn’t that what socialism promises? Join Felice Gerwitz and Jeff Diest from the Mises Institute as they delve into this question.
We appreciate the totally unexpected and special offer by Jeff Diest who promised to send our listeners a special book!
“Tuttle Twins ” For younger children on economics
“Economics” by Henry Hazlitt. This book was written in the 1940s.
Today Felice welcomes the president of the Mises Institute – Jeff Diest.
Jeff Diest on Twitter here
Website: Mises Institute
Jeff takes an active role in what is happening in our culture. Not necessarily a political role. He thinks we ought to organize our society around civil institutions, around families, and around markets because markets in my view are, are cooperative.
Jeff states in this interview: I believe the marketplaces represent people coming together and doing things voluntarily and that a lot of people worry about what they think of as free-market fundamentalism. Regardless of our own particular viewpoints, we can start to agree when we look at the 20th century and what’s unfolding in the 21st, that government is really not the best boss for us. And certainly not a faraway government in Washington DC that purports to rule over 330 million people with exceedingly diverse interests. We’ve become far too centralized in DC, and with the Supreme Court and with federal preemption of state law and that sort of thing. So long story short, I’m someone who had an opportunity to meet Ron Paul a long time ago when I was an undergraduate in college and just became interested in markets and economics as a result.
We probably have some diversity of opinion on what we believe, but the point I want to make today is that we have to educate ourselves and be able to talk to people who think differently than we do, which is very important. And, and be civil about it, which is another thing that is very important. What concerns me, Jeff is the problem with socialism.
Ludvig von Mises was a giant of economics in the 20th century and to an extent, folks on the left and even some folks on the right tried to underplay or dismiss his contributions in the 20th century. But that’s really been largely rectified. I think now, even his strongest critics would say that he was a very, very influential figure. And, and for our purposes today, he wrote a book in the 1920s called “Socialism.” And it remains today, maybe one of the most readable and most accurate criticisms of a centrally planned economy. What would later unravel in the former Soviet Union? What would later bring into turmoil Nazi Germany, which affected his life in Vienna, Austria, very much. And ultimately as a Jew, he fled Vienna to Munich for a period and then ultimately to New York City, which is how he became you know, a de facto American later in his life.
So he wrote, “Human Action,” (Free PDF on the Mises website here) which is one of his most important books a couple of decades later. And he wrote it in English, which was not his first language and it’s really the comprehensive treaty or treatise, I should say for modern free market economics. So he was a very influential guy, but more importantly someone who really understood what socialism was and what it could evolve into up close. And someone who tried to caution the world about it.
And I guess the question for our audience today is whether we listened and whether we’ve done the work to read and study history and really understand what socialism, materials and you know. Earlier we were talking off the air that sometimes conservatives are a little dismissive towards the threat and saying, oh, come on, America will never become socialist. And that might sound right in the sense that we’re not on the cusp of nationalizing whole industries.
We are going to have private ownership businesses and, and stock markets presumably for quite some time. But socialism is more than that. When we talk about ownership, what we really mean is control. So when we think about how the government controls industries, how the government controls business as an individuals, even though it doesn’t necessarily own those businesses the measure of control and the degree of control has been growing and growing and growing throughout the 20th century. And it’s increasing now. So when we look at, let’s say, the slate of Democratic candidates for the 2020 presidential election you know, the things that they advocate are absolute socialists. They want more and more control regulations, taxes, et cetera, over private industry. So if we, if we step back and look at the United States today, we could say that America is socialist in its educational system because so much of it is government ride.
You could say America’s socialist in its healthcare system because so much of it is government run or controlled by legislation like Obamacare. You could say the same about law. You could say the same about banking. You could say the same about energy. So there are, there are industries in America, fast industries that basically dance to the tune of the US federal government. So even though we’re not socialist in the sense that we still have nominally private businesses. We are becoming more socialists slowly but inexorably. So that’s a concern. And I don’t think it serves us well to, to just be dismissive of that. I think when the left tells us who they are, we ought to listen.
I agree. And, and I feel that people are saying why are many of the young people buying into this and why do they think it’s so great? I feel that our education system has done a great job in changing the opinions of our children. I remember reading a book in the early 90’s about data mining the information of our school kids. (“Educating for the New World Order, by B.K. Eakman – the true story about how Anita Hoge won a case against the US government before it went to court and she could make her case public!)
Anita Hoge (Follow her on Twitter: https://twitter.com/HogeAnita) She is still fighting today trying to change the system. The goals of the schools have been and they still are to this day to change our kids’ opinions. So, when you get to the point where we are today almost 40 years later, you have what we find in the high schools and colleges. The opinions many kids have in the public and private schools are not in alignment with their parents at all!
With socialism people no longer bear responsibility as much for their actions, and when people no longer enjoy the success of their actions as much, then that kills incentives. And if there’s one thing economists tend to agree on, maybe only one thing, it said incentives do in fact matter. And so when, when people like Bernie Sanders or I hate to say it, your local teacher at a public high school wax on about socialism being a happy, healthy thing that just wants to care about people and make the world more fair. They’re trying to impress upon young people the idea of socialism being Denmark or Sweden or something like that. They don’t want to talk about the former Soviet Union. They don’t want to talk about Venezuela, they don’t want to talk about China.
So what a lot of people don’t understand of course, is history. Americans in general, not just young people, don’t know much about the rest of the world or even our own country. And, and beyond that we don’t know or understand much about economics. So this leaves the population ripe to this idea that well, socialism is just about being kind and providing a social safety net and having free health care and lots of good affordable housing and you know, free college education, these sorts of things. But it’s not that big bad a form of socialism, you know, outright communism that we had in the former Soviet Union. It’s going to be a nice soft kind of thing. And, and you know, that can actually work for a period if you have a population that’s very hardworking and that has a lot of inherited capital culturally and otherwise, like some of the Nordic countries.
But over just a few a generations, socialism always devolves into something where instead of being egalitarian, you end up with a very, very, very segregated ruling elite at the top and everybody else doing worse and worse with rationing and shortages and a lower standard of living. So it’s not rocket science. Even a lot of people on the left admit that markets work and that creates more prosperity. The question is just whether or not young people will attempt to overturn what we think of as American capitalism is as jaundiced and impure as it might be. Whether they really want to overturn that in exchange for at the least a style of European social democracy or maybe something beyond that.
So it’s our job to counter, especially for those listening who homeschool. It’s our immediate task to counter what people are hearing from their peers, from their teachers– even from mainline churches. This is a full-scale war. This is a multi-front war. That culture is arrayed against us. And so part of the cultural war is fighting back against the idea that socialism is benign.
Elites in this country are not simply financial elites. That’s certainly a big part of it. But there are also elites in the sense of media and academia and government who aren’t necessarily personally wealthy. So when we talk about who controls things, we don’t need to get into conspiracies. All human beings exhibit self-interest. So the idea that people who are sort of running things in any society would like to continue running things doesn’t require any conspiracy mindedness. It just requires an honest assessment of human behaviors.
If we look at a lot of the institutions controlled by the United States, in the 20th century, we should rejoice that they’re being challenged and questioned. And some of them are crumbling. People are no longer view the Ivy Leagues and the products of the Ivy League as they once did. People no longer view the US Congress and the US Senate as these noble institutions. The same with the Supreme Court. The same with a lot of nonprofits, with media institutions. So it’s good.
It’s good that we’re questioning elites because anti-elitism is warranted. They screwed things up. I mean, if elites had done a good job in the 20th century, we’d have better foreign policy and diplomacy. We’d have a better dollar. We’d have a better healthcare system, we’d have a better education system. When I hear populism blamed or the idea that anti-elitism is unintellectual or something like that, I always, I always want to ask the person, well, what is it that the elites were doing so well that we should stay the course? I mean, there’s a reason why Brexit happened.
There’s a reason why Trump won. These events didn’t occur in a vacuum because everything was going so swimmingly and Hillary Clinton was going to be the next version of technocratic rule. There’s a reason all this happened. And so our job is to understand it and, and also to offer some alternatives, not just to moan and complain. And homeschooling is a great alternative. I don’t view homeschooling as dropping out or sequestering your kids or anything like that. I view it as a very affirmative and positive choice for people who understand that they have a choice and that they’re responsible for their children’s education upbringing. And it’s not enough to just sort of turn those kids over for seven hours a day to a bunch of strangers who don’t necessarily have their or your best interest in mind.
So I, I think homeschooling is, is one of the most revolutionary acts by which one can strike a blow as a society and culture and a government seems oppressive. So Kudos to you and your audience because I know it’s not easy. It is a tough, tough road and it involves a lot more work than just dropping your kid off at school. And, and it’s the most important thing because there’s nothing more important than education is as much as I dislike some of the things our government does, I don’t think revolutions generally work out best for anybody. So I think our revolution has to be intellectual and it certainly starts right at home.
It’s socialism versus freedom and you know that this state is not the best to organize society. The government, if you believe in it at all, ought to have a very small role as a referee and a judge perhaps, and not much else that it ought not to be an active participant in society like it certainly has become, or what I’m talking about at first, the US Federal Central Government. So what at animates the left today is the doctrine of egalitarianism. And that has really become a religion unto itself. And socialism is a part of that.
Socialism is sort of the economic and political end of that, but egalitarianisms bigger–it is a religion. When people question egalitarianism you know, even pragmatically and you ask “Gee Whiz, when you raise the minimum wage because you think it’s going to help the poorest workers, it actually dislocates some and causes a lot of them to lose their jobs and they’re made worse off.” The reason you get such a vitriolic or emotional response is because you have challenged something that is an article of faith on the left.
Egalitarianism is not necessarily a rational worldview or mindset because of course, it’s so at odds with human nature and human experience. So it’s rude, but it’s very powerful. I mean, the idea of creating a more equal society is a very, very powerful and effective narrative. And we can understand why it works and why it holds appeal, especially with young people. It tugs at the heartstrings. So the fact that it produces the opposite of what it purports is something that requires some critical thinking and taking a few more steps and doesn’t always lend itself to sound bytes.
Like, well, let’s have medicare for all. Well, Gee Whiz, that sounds great. What’s the cost as opposed to what? So, you know, we have to, we have to appeal to the segment of the population that’s willing to go a little deeper and think a little harder. And, and I don’t think we should shy away from that.
Well, I think you have to get hyper-local, you know, hen something sounds philosophical or sounds overwhelming or daunting, I think you have to start at home and then work outward in concentric circles. So I would love to see people a lot more concerned about their town or their region. Then, you know, the Federal Government and America at large. I’m not a big fan of taxes, but if I have to pay them, I’d rather pay 80% to my state and 20% to Washington DC instead of the other way around. I think things can be improved locally. I think that that locally you can make a bigger difference get involved with education or schooling or whatever it might be. So there’s more to life than just the national politics. There are all kinds of things happening and below that. And, and I think you start with figuring out your own family situation and, and moving out from there. I mean, that’s, that’s the most important thing. No question.
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