As with all proponents of socialism or marxism, their rhetoric is sculpted to paint the image of the big bad businessmen exploiting the poor defenseless worker. It draws all those protection instincts in all of us out to
stand up for the little guy. It's very effective. It fills us with this noble and justified Robin Hood mentality. That's why although all the doctrines have been proven time and again not to work, it still lures millions of people in by it's promise of equality and prosperity for all. It infects our minds with this fantasy utopia that clouds our ability to see things rationally.
When you begin to understand what Adam Smith called "The Invisible Hand" as understood by economists and what Amity Shlaes called "The Forgotten Man", you start to see how detrimental socialism can be to a society. It rides on the back of the working class touting blame for their injustices on capitalism when nothing could be further from the truth.
Why it seems so simple and acceptable is because it shows you a 2-dimensional distortion. You think that if you just take a bunch of money from the really rich people and give it to the poor then everyone wins and all is well. After all, the rich have too much anyway and they can spare to give it away. It sounds right on the surface but that's only because you are ignoring among many other things, what is not seen. This has been explained exhaustively by great minds countless times. In order to understand it you have to think in a way that may seem at first to be counter-intuitive. I suggest "The Broken Window" by Frederic Bastiat. In it's absolute simplicity he explains what is not seen.
Whenever in the interest of one group you take from another, everyone loses in the long run. The examples of this is nearly endless and would take novels to explain in detail, so I will try to be as brief as possible which for me is next to impossible.
Someone might say "Well these businessmen are filthy rich, they can afford to pay their workers more. They make all these billions in profits." and you would easily agree with them because that seems to be obvious. Let's say you do this by forcing him to raise the wages. Now the businessman is forced to pay a higher wage than before. Because almost all of his profits either go back into the business to hire more people and expand the business or invested in other capital that can be produced or lent, he must figure out a way to counter this burden. Here are a few of his options: 1. He can pass the burden to the consumer by raising prices which hurts everyone, but only if all other producers were also forced to raise their wages, if not then he can't raise his prices because no one will buy his product when they can get it cheaper down the street, he'll go out of business and everyone will lose their job. If he produces a raw material then when his prices increase the people that buy the material from him to make their product must also counter the burden by raising their prices. If you put a price fix on them then it becomes less profitable to produce that product and competition leaves that market and less is produced for everyone. 2. He could fire employees to make up for the loss creating unemployment which will also in turn force him to produce less for the consumer. 3. He would undoubtedly be forced to cease hiring which hurts everyone, but that wouldn't fix his problem so he could cut his investments so all the people that would get loans to buy tractors or whatever they need for their business or employees would be hurt. These are only a few examples, there are plenty more. "Well what about the money he blows on his yacht?". You mean the money he spent to buy a yacht from the company that employs thousands of people to produce yachts that buy materials to make yachts from countless companies that employ hundreds of thousands of people? Yeah, if his personal earnings covered the higher wage difference for all his employees which it wouldn't, then everyone that benefits from the money he spends on his luxuries are all worse off.
It reminds me of the luxury tax they tried to impose on yachts. In 1991 they decided that to generate revenue to counter the recession they would put a tax on luxury boats over $100,000. "Get those greedy capitalist pigs!). So what happened? Simple, the millionaires just bought their yachts from Venezuela where there was no tax and dozens of boat manufacturers went belly up and thousands lost their jobs. Cheers to ya Mr. Marx!
A lot of people say that social economic planning is needed for such a large and complex global economy but the exact opposite is true. In a small village where a small group of people could understand and control all the necessary decisions and rationing to ensure survival for everyone, it would be beneficial. To think though, that a panel of bureaucrats could possibly understand and efficiently manipulate all the complex inner-workings of an economy of 6 billion people is simply absurd.
When you intervene in the market and restrict competition through regulation you allow corporations to create monopolies that distort real wages and prices and you're left with crony capitalism or corporatism which results in fascism. It's a result of interventionism which is a tool to take a capitalistic society and turn it into a socialistic one.
There are so many more facets that would need to be examined to prove my point, but for my first blog I figure that's not a bad start. I'm sure there are a bag full of grammatical errors and should be thoroughly proofread, but it's "quittin time" so like a fat kid playing dodge ball, I'm out!
Lonnie
