There Ain’t No Free Lunch
I’ve written on this topic before, but with the rise of socialist politicians like Bernie Sanders and others, it’s time to revisit. He has been running as a Democratic Socialist, which he’s been adamant isn’t the same thing as a Communist.
First, some definitions. For those who slept through high school social studies, capitalism and socialism are two of the main economic theories for how a society should be run. At the far left end of the spectrum is communism, total control of all business and services by the government. In its purest Marxist form, all property, even homes, belong to the state. In exchange for work, citizens are allotted food, education, health care, and all other necessities of life. The communist ideal, of course, exists nowhere in reality.
At the other end of things is pure unregulated “lassaiz-faire” free market capitalism where everyone must look out for themselves. The resulting marketplace provides opportunities for success…and failure. The only places close to this arrangement are where authority has completely failed, such as Libya, Somalia, and the like.
Our system here in the USA leans toward that direction, but there’s far more governmental control and regulation than most people realize. Still, there’s enough room for a kind of social or economic Darwinism to take place so that the gap between winners and losers can be breathtaking. A Michael Bloomberg or Bill Gates can wind up being worth more than entire countries while millions of people struggle for food and shelter each day.
The reaction against this income gap is what is fueling Bernie’s rise. Many of his biggest fans are college kids facing student loans. No surprise they’re attracted to the idea of having those loans erased.
Here’s the problem though: if this generation slept through economics class, they downright flunked math. There’s simply not enough money at the top end of the pile to pay for everything. Even if we confiscated every penny from every billionaire (or even millionaire), it wouldn’t begin to pay for all the promised benefits we’ve heard about in campaign speeches.
And then there’s human nature: faced with such massive tax hikes, you can certainly bet corporations and individuals will move their assets to other countries. If students no longer pay off their loans, expect colleges to become much choosier with their admissions. Examples of failed socialist experiments abound: Venezuela is only the most recent.
Is there room for improvement in our economic system? Always. But we should be aware of junking the whole thing in favor of a proven failure.
There Ain’t No Free Lunch