OPINION:
Recent polls indicate 62% of Americans under the age of 30 “feel favorable toward” socialism. They are the future, which makes this a big problem.
New York Rep. Alexandria Ocasio-Cortez (AOC) and Vermont Sen. Bernie Sanders both identify as “democratic socialists,” along with other members of The Squad, including Reps. Ilhan Omar of Minnesota and Rashida Tlaib of Michigan. Moreover, New York State Rep. Zohran Mamdani made headlines with his successful win as New York City’s Democratic mayoral primary as an avowed socialist.
What they have in common is a disdain for capitalism, the wealthy and limited government. Unironically, they have grown their incomes substantially by accumulating government power and its accompanying wealth by preaching the evils of free markets. They are selling a free lunch. They extol the virtues and benefits of universal healthcare, free daycare, free college and even a reprieve from existing student loans. They want to dismantle systemic inequalities and force the rich to pay for it all.
Socialism sounds appealing on paper, especially to younger generations who are just starting their lives and careers. But what is socialism?
Socialism in economics pertains to ownership, as does capitalism. These words have taken on a life of their own in the culture and, in an important way, have lost their original meanings.
Socialism is an economic system characterized by public ownership of the means of production. Capitalism entails private ownership. If we own something privately, we decide how to allocate our resources for the present and the future, which is motivated by private property rights, market prices and the consequences of profits and losses.
When we collectively own resources, we must appoint someone to make allocative decisions on our behalf, and that is the government, which has the monopoly of force.
The evils of socialism are well documented, as is the economic argument for its infeasibility. The failure of socialism to deliver prosperity is a feature, not a bug, which Nobel laureate F.A. Hayek astutely argues in his book “The Fatal Conceit”: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”
Any viable system must also reflect more profound truths about human nature and the world, from communism to fascism to capitalism. The realities include the fallen and finite nature of human beings, as well as our limited knowledge and abilities and that we live in a world of scarcity.
God, in his infinite wisdom, created us to be interdependent. We need each other, and we must find ways to cooperate as well as to learn and improve our conditions. Regardless of the economic system, we cannot flourish alone.
Socialism treats individuals as homogenous agents, who can be moved around on a chessboard to achieve the desired ends of the planner. This is Hayek’s point. Planners are often assumed to possess both the knowledge and benevolence needed to allocate resources, but they lack both. Socialism eliminates private property rights and places resource allocation decisions in the hands of a bureaucracy. In doing so, it eliminates the mechanisms for cooperation and wealth creation.
Capitalism, too, suffers from a knowledge problem and a benevolence problem; however, by decentralizing resource allocation decisions, it leverages the local knowledge captured by market prices, yielding both cooperation and wealth creation.
Moreover, it is immoral to steal from the rich and redistribute that wealth in the form of “free” stuff. For a choice to be moral, it must be made from the free will of the person. If I choose to give someone money to help pay for their medical bill, that is a moral choice born from my freedom to make it. Compulsory giving made by threat from the government is not moral, but not only that, it doesn’t make the good in question “free.” For example, Canada has universal “free” healthcare, and patients wait on average 28 weeks from a referral from a general practitioner to a specialist, which is the longest wait time in history and up almost 200% since 1993, according to a study by the Fraser Institute.
Someone always pays because there is no such thing as a free lunch. In a capitalist system, earning income means you have served others well. Taxing billionaires more will mean fewer billionaires, not more stuff. It will also mean less innovation, which means less wealth for everyone else. Capitalism is the most impressive and profound poverty alleviation program the world has ever known. It is predicated on human dignity and free choice. It cannot solve all our problems and will not save our souls, but it is the best economic system for stewardship and love of both neighbor and stranger we’ve ever known.
• Anne Rathbone Bradley, PhD, is the George and Sally Mayer Fellow for Economic Education and vice president of academic affairs at The Fund for American Studies, as well as a professor at the Institute of World Politics.
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