Except in war-time, Washington matters little to the comfort and safety of responsible Americans. Washington does matter, however, as the major source of impoverishment, harassment, and jeopardy. Our Founding Fathers never intended it to be this way.
The last thousand years have been defined by revolutions that freed peoples throughout the civilized world. Yet at the end of the millennium, citizens of democracies secured by those revolutions find themselves under governments far more encompassing than those they replaced. Nowhere is this more apparent than in the United States, where the world’s most limited government was founded in 1787 as a republic of sovereign states. Since that time, Americans have acquiesced to the unlimited expansion of their central government and relinquished the rights of states, communities, and individuals.
Since this social transformation was voluntary (democratic government, at least in theory, is controlled by the ballot box), we must ask: What would persuade American citizens to surrender their cherished freedoms, heritage, and institutions? The answer lies in the general body of myths upon which socialism was founded, particularly its economic myths.
Socialism’s unifying economic myth posits that inequality of income and wealth is unjust and socially inefficient. This requires us to disregard the fact that the free market has been the source of the superior material well-being of democratic societies, and that inequality of wealth is the necessary incentive and consequence of the entrepreneurial successes that generate this bounty.
The socialist goal of economic equality has been a powerful recruiting tool among the less fortunate. It has led to an unprecedented concentration of power in the hands of self-appointed elites who propose to distribute other people’s money and property in the name of “social justice,” an oxymoron which simply means government confiscation and plunder of productive citizens’ rights, property, and income.
The myth that capitalist profits are the fruits of the exploitation of labor enabled socialists to organize the labor movement and recruit soldiers for the left. Yet the United States had the highest wages in the world before unionization.
The percentage of productive value received as wages has been remarkably stable in the private sector of the U.S. economy (outside of manufacturing). While unions have been successful in raising employees share of the wealth in manufacturing, they have lost jobs as export markets shriveled and lower-priced foreign goods replaced domestic products. Before the union movement, the United States had a sizable export surplus in manufacturing. Today, it has a huge (and growing) trade deficit in manufactured products.
The rapid disappearance of the middle class is considered further proof of inequality and exploitation of labor. But an analysis by Robert Rector and Rea Hederman of the Heritage Foundation shows that these income statistics are misleading. Their study, “Income Inequality: How Census Data Misrepresent Income Distribution,” argues that if you take into account non-cash welfare benefits, taxation, work-force participation, and workweek variations, the purported income inequities disappear. To the extent that “hollowing-out” is a reality, it is due primarily to the decline in high-wage manufacturing jobs, lost to overseas producers as a result of high-wage union jobs and excessive income taxes.
Perhaps the most persuasive economic myth of socialism is the inherent instability of the capitalist system. While Americans suffered relatively brief recessions and banking panics before the 1930’s, the Great Depression caused a crisis in national confidence. This made the leftist myth believable.
John Maynard Keynes argued that the Great Depression was due to the fact that, during periods of rising income, consumers save too much and spend too little, causing subsequent economic downturns. This provided the justification for the socialist claim that only centralized economic planning and regulation could ensure continued prosperity. The prescribed cures were economic stabilizers such as monetary controls, progressive taxation, deficit spending, ever-rising government expenditures, and inflexible union wages.
In fact, the excessive expansion and then relentless contraction of the money supply by the Federal Reserve precipitated the Great Depression and broke the banks, resulting in economic collapse. The plethora of New Deal programs could not restore prosperity nor end the Depression without employing the economic solution of last resort: war.
Long-term consumption versus savings data does not confirm the heart of Keynesian mythology. Even Keynes’ short-term analysis was myopic. The foundations of Keynesian economics are thus seriously misleading. The market mechanisms of free enterprise will ensure economic prosperity; government intervention cannot.
A further corollary of the inequality theory is the myth that exploitation causes poverty, and poverty causes crime. Such was the motivation behind Lyndon Johnson’s Great Society, which transformed America into a socialist welfare state.
What the Great Society programs in fact proved was that subsidizing single motherhood broke down the family, thereby increasing poverty. Marriage rates dropped by a third, and crime rose as a result of family breakdown. Only the elderly showed real reduction in poverty, and that was because, by 1993, government social-welfare expenditures averaged an absurd $20,000 for every senior citizen, regardless of means, adding serious weight to the crushing burden of taxation on families.
Crime is primarily an economic choice; to the extent that it is cultural, it can only be remedied by two-parent families, work, and individual responsibility. Grime is not the result of poverty; rather, it is a principle cause of impoverishment, as criminal young males do not qualify for good jobs or become married fathers, as businesses flee high crime areas, and as drugs and gangs rule the streets and schools.
Socialism holds that government can remedy social injustice by playing Robin Hood. “Justice” is the philosophical defense for the progressive income tax, capital- gains taxes, estate taxes, and double taxation of corporate incomes. But without outright government confiscation of capital, capital cannot truly be taxed. The econometric studies of Gary and Aldonna Robbins have shown that returns on all U.S. capital after taxes and inflation have been reasonably constant over the post-World War II period, despite wide swings in tax rates and inflation. Virtually all taxation of capital is paid for by those who purchase goods and services. A wide range of econometric studies conclude that inflation, taxation, and deficit spending reduce potential investment capital, resulting in lower incomes for all Americans.
The inescapable conclusion is that government robs from all to beggar the middle class and to worsen the poverty it proposes to cure. Predictably, only government and its lackeys prosper.
Another widely accepted socialist myth is that the state is the most efficient provider of social services. Since government usually allows no competition and subsidizes the services it provides from general tax revenues, this illusion is hard to dispel. In addition, our government goes to great lengths to hide taxes from those who pay them (as with half of the Social Security tax). Thus, government’s services are perceived to be free or low cost.
All of these myths are but subsets of the ultimate goal of socialists: the perfection of mankind through an equality of outcomes socially engineered by government. Socialists believe that equality of prosperity can be attained by the noble inspiration of social justice alone. Gone would be the loathsome forces of capitalist greed, tribal and family ties, simplistic religious faith, and private prosperity’, all replaced by the equality of the Utopian socialist state.
What is far more likely to happen is what has occurred repeatedly to civilizations throughout history; The excessive taxation of the productive classes for the benefit of the unproductive, as government confiscates the productive surplus and squanders it, will undermine first the culture and then the prosperity of our society. The rule of law will be replaced by the rule of the lawless. What inevitably will follow is a return to a primitive despotic society and an equality of misery—the only realistic way to achieve an equality of outcomes.
Leave a Reply