Do You Really Understand Socialism?

Declaring that you are a socialist is all the rage these days. Thirty plus Democratic candidates are saying they are influenced by it to some extent. Unfortunately most people and many politicians don’t understand the real goals of this ideology, and they use the terminology incorrectly.

Socialism has different connotations, some relatively bland and some extreme. The important thing to note is that socialist countries don’t have a sterling reputation for longevity or success. Voters should learn to appreciate the pros and cons of this type of government before the 2020 elections.

One definition of socialism follows. “Socialism is an economic theory of social organization that believes that the means of making, moving and trading wealth should be owned or controlled by the community as a whole. In Marxist theory, it is a transitional . . . [a] social state between capitalism and communism.” The government is involved in every aspect of socialistic societies. Members of these societies are totally dependent upon the entitlements granted by political leadership.

The difference between capitalism and socialism is that capitalism encourages innovation and individual achievement, while socialism promotes equality and fairness at the expense of exceptionalism.

In a communist society the working class owns everything, and everyone works towards the same communal goals. Supposedly there are no wealthy or poor people. Nothing is obtained by working overtime or more than what is required. Communism frequently results in low production, mass poverty and limited advancement. Typically communist regimes are totalitarian.

Capitalism is the opposite of communism and socialism, where limitations don’t exist and reward comes to those who perform. In capitalistic societies, owners are allowed to reap the benefits of excess production, and competition occurs naturally, which fosters advancement. Capitalism tends to create a sharp divide between the most ambitious and hard working citizens and everyone else. Usually this results in a divide between the wealthiest and poorest citizens.

The trend in the Democratic Party is leftward towards socialism. It’s a potentially dangerous phenomenon if it goes too far. Yet the minimization of the gap between the affluent and the middle class is a noble objective.

Problems arise when politicians cannot agree how to achieve income equality. Socialists have no qualms with burdensome taxation on the rich, which in effect transfers wealth from one group to another. This tactic is anathema to conservatives.

The populist approach has appeal to a growing number of Americans because raising taxes will not affect them personally even as it weighs heavily on the largest wage earners in the country.

Capitalists would say it’s good when ambitious and hard-working people move ahead of their peers. Who really wants to work in a society that doesn’t reward innovation and sweat? Socialists denigrate this perspective and say that inequality is inevitable with capitalism. It is evil, even if advancement is a function of job performance and effort.

As an example let’s consider health care. Liberals are clamoring for universal, one-payer (government) health care, a noble objective with certain provisos. The most important consideration is affordability. Can our nation afford to give every citizen free, efficient and quality health services? The simple answer is no.

The current system, which supports needy people, retired citizens and all others not covered by employer plans, is effectively bankrupting the country. So any proposal to expand this entitlement is not feasible without massive adjustments to tax rates and cut back of other government spending.

The most popular adjustment proposed by progressives is higher tax rates on the most wealthy among us. Keep in mind affluent people represent only about 1% of the population. But uninformed liberals think the answer to all questions of affordability can be resolved by overtaxing this small group. One percent citizens would not be able to fund extraordinarily large deficits even if taxes were 100%.

So how can the nation make strides in affording health care to those who cannot afford it? For one thing, those that are in a position to pay for health care should continue to do so, including American companies who are now paying all or part of their employees health care costs. Why take these plans away from so many insured people and put it into the hands of government bureaucrats thereby creating greater deficits?

Liberals say that everybody should have equal access to the best health care, and it’s not fair for affluent people to have preferred access just because they can pay for it.

Not only do liberals want coverage for all, they want services to be equal. So if someone is prepared to pay for better services and doctors, it is irrelevant and would not be permitted.

The real answers lie in costly bureaucracy, gouging by pharmaceutical companies, cheating by patients and doctors, etc. There is so much fat and waste in the system, but liberals ignore it and want to raise taxes instead. The amount of savings from just eliminating cheaters is monumental. The RAND Corporation estimates that about $100 billion is lost each year from health care cheaters.

Another simple solution is to enable everybody to have insurance, and not revamp the entire health care insurance infrastructure. Obamacare was an attempt to do this. Rather than expanding Medicaid to more needy people, Obamacare demanded that every American be insured, even if they did not want coverage, with one-size fits all plans. In essence the government wanted to pay for unhealthy Americans by forcing other Americans to buy expensive insurance.

It’s going to be a long road to income inequality. S

But socialism is not the answer. Our country is built upon creativity, innovation, risk-taking and grit. America will be stronger if all classes of people are more prosperous as one group.

 

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