Tag Archives: Socialism

Can’t We All Just Have A Utopian Style Economy?

Some time back I told a group of ten year olds that I had hidden a bag of candy.  I passed out maps that I assured them would lead to the treasure, but I purposely withheld the beginning point.  They began walking around, turning this way and that, counting their steps, as they each dutifully followed the map .  Not one of them asked for that key piece of information that would have unlocked it.  This surprised me for some reason.  In the end no one found the candy. So I ate it myself… In front of them.

There is a lesson here in economics.  Where one begins in the study of economics will determine where he ends up.

When most hear the word “economy” they think of the availability of jobs, money and so on.  But the starting point of economics is man, namely, answering the question, how will he act, good or not so great, under given circumstances?  With this answer in hand it then attempts to answer another question, how do we enlist our fellow man to participate in our own benefit?

While capitalism begins with the more negative view that man is only interested in himself, and from selfish motives will work, improvise, innovate, trade, think, risk, explore and other things that make for a good economy, communism is based on an assumption that man is more altruistic. It assumes he will do these same things with the same zeal in return for his fair share of resources, however much some wealthy, innately-benevolent leader decides that is.

That this hasn’t ever worked is a testament to the faultiness of communism’s premise.  That it will ever be attempted  is a testament to the validity of capitalism’s premise regarding man’s condition… well, that and his resilience to the truth regarding that sad condition.

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Filed under Economic Science, Economics, Equality, fairness, Harsh Reality, Human Nature, Morality, Work, Worldview

How Did It Ever Come To Be That You Get Your Healthcare Through Your Employer?

The late Milton Friedman explains this quite well:

“We have become so accustomed to employer-provided medical care that we regard it as part of the natural order. Yet it is thoroughly illogical.  Why single out medical care?  Food is more essential to life than medical care.  Why not exempt the cost of food from taxes if provided by the employer?  Why not return to the much-reviled company store when workers were in effect paid in kind rather than in cash?

The revival of the company store for medicine has less to do with logic than pure chance.  It is a wonderful example of how one bad government policy leads to another.  During World War II, the government financed much wartime spending by printing money while, at the same time. Imposing wage and price controls.  The resulting repressed inflation produced shortages of many goods and services, including labor.  Firms competing to acquire labor at government-controlled wages started to offer medical care as a fringe benefit.  That benefit proved particularly attractive to workers and spread rapidly.”

Pay particular attention to Friedman’s point that printing money and imposing price controls caused shortages.  Why is that?   If you don’t know, it is my hope that if you’re reading these short posts for awhile, in time, such will be second nature.

H/T The Nullspace

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Filed under Business, Economic Science, Economics, Government, Human Nature, Milton Friedman, Pay, Politics, Work

What Are The Extremes?

Socialism has an emotional appeal. The Utopian society envisioned by socialist is one in which resources are shared more evenly. The extreme view would be that all resources are shared exactly even. In such a world no one person would possess any more resources than any other person… even the king. The extreme opposite is how I think socialists see capitalists. In this world all resources are controlled by a few while the rest must become their slaves in order to partake in life giving resources such as food and housing.

I’ve yet to encounter a socialist that thinks the extreme view of socialism should exist. But at the same time I’ve yet to meet a socialist that doesn’t think we are headed toward the other extreme. The question being answered in our current elections, then, is just where between these two extremes should a society exist? But while this question is the one that our society seems to be attempting to answer, it, in the end, is the wrong question.

The reality is that things are never quite so simple as the divvying up of resources. There are many more factors in play than who ought to get what? These factors can all be summed up under the heading of “The Condition of Man”. Under this heading are factors such as emotion, greed, laziness and morality… to name a few. Ignoring these factors, or rejecting that there is a higher order through which these factors must be seen, will end in convoluted economic policies that will, in the end, determine who gets the larger share of resources rather than if they will be shared evenly.

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Filed under Economic Science, Economics, Equality, fairness, Government, Harsh Reality, Human Nature, Morality, Politics, Worldview