Why Socialism is Here to Stay - Jeff Thomas

“[T]he government has to take resources from someone before it can dole them out to others. This act of taking destroys an economy. The more you take from the productive members of society, the less productive they become. That’s the primary lesson of the history of socialism.”

The above quote is from Porter Stansbury – from his book, America 2020. It states a concept that I’ve described for years, but Porter states it more succinctly than I ever have. In particular, it negates the argument by many “progressives” that, even if they don’t recommend full-on socialism, they believe in getting “just the right mix” of socialism and capitalism to create the ideal system.

Unfortunately, as viable as this concept may sound, even moderate socialistic national policies result in moderate deterioration of the system. It’s not unlike being “just a little addicted” to heroin.

It may be argued that, “That’s different. With heroin, the addict will always end up wanting more and he’ll become even more dependent.” Exactly so – and that’s unquestionably true for socialism as well. Once the concept of “free stuff” is part of a nation’s governing system, the desire for more free stuff will inexorably rise.

And, of course, historically, we have seen that governments always step up to the plate whenever the demand for more free stuff is suggested. But why should this be so? Wouldn’t a more conservative government be less likely to proffer entitlements than a more liberal government?

Actually, no. To believe this is to misunderstand the very nature of governance. Those who are governed like to believe that their government exists to serve them, and all political leaders are quick to encourage this perception. However, amongst themselves, political leaders fully understand that they exist primarily to feed off of and dominate the electorate. Of course, they can’t actually admit this, but, regardless of party affiliation, that is their very raison d'etre .

In a free-market society, a government is not especially necessary. It may be needed to defend the country if it’s invaded, or, arguably, it may be useful in creating a national currency, building national highways, etc. (But even these needs may be argued.)

A free-market society is beneficial, as it creates prosperity. It enriches the population with both money, goods and services. It also rewards those who are the most productive. However, it does tend to leave behind those that are less productive, and here’s where political leaders find their opportunity to cash in.

Let’s say we have a country that’s made up of five voters, with their respective net worths as follows:

Voter A: $1

Voter B: $10

Voter C: $100

Voter D: $1,000

Voter E: $10,000

If I were running for office and declared that no one should own more than $10, I would not be elected, as most voters would quite rightfully regard me as a threat. But if I were to declare that “the greedy rich” have too much money and should be required to “give some back,” I might get all voters except Voter E to vote for me.

Why should this be so? Because no one thinks of himself as being amongst “the greedy rich”. For the man who is worth $1,000, the greedy rich are those who are worth $10,000 or more. But, likewise, the man worth $100 thinks of the greedy rich as those worth $1000 or more. Human nature dictates that we don’t see ourselves as greedy, so it’s not too difficult for politicians to convince us that those who have more than us are greedy. Further, once we’re convinced of this, it’s not too difficult to fool us into believing that the greedy rich have, in some way achieved this wealth by swindling us out of it. And, now that you mention it, yes, we would like to have some of it back, thank you.

So, any population becomes an easy target for leaders who promise to take from the rich and “give back” to the less rich, like a modern-day Robin Hood. But what of that claim that “just the right mix” of socialism could take some away from the rich, but leave prosperity intact? Well, here’s why that will never happen in any country…

Political leaders, as stated above, do not exist to serve the populace, they exist to feed off of and dominate them. They cannot do this without the wealth of the electorate passing through their hands. The more of the electorate’s wealth passes through their hands, the greater the amount that can be skimmed off to both enrich themselves and increase their power. (Only in Uruguay does the President leave office driving the same Volkswagen he did when he took office.)

And so, it’s the nature of governments (whether they claim to be either conservative or liberal) to seek to increase the size of government annually (requiring ever-more revenue to pass through their hands) and to take an ever-greater part in the hands-on distribution of the nation’s wealth. All governments will do all they can to grow themselves, as it’s very much in their interest to do so. All governments will, regardless of their party rhetoric, continually pursue a greater level of socialistic policies. In this regard, political parties are interchangeable.

So, where does that leave the individual voter? Well, the vast majority will vote for the candidate whose rhetoric most closely follows his own ideals, but he will surely be the loser as a result. (Campaign rhetoric almost always proves to be a lie.)

The choice, really, is whether the individual is living in a jurisdiction where he believes the government has already become so socialistic that he’s a net loser, rather than a net recipient. Beyond this point, his future can only be on a downward trajectory.

This is a most unpleasant conclusion to come to grips with, as it informs the individual not only of his current situation, but the rest of his life. In standing back and observing his entire future from a greater vantage point, he realises that, increasingly, he will be beating his head against the wall if he remains where he is.

Those who internationalise, do so with the understanding that, if they choose one country because it’s the most ideal to do banking in and choose another because it’s the most productive to invest in, they will prosper. At some point, they additionally realise that it’s also beneficial to apply that logic to their choice of country of residence.

Throughout the life of anyone who advances himself, there’s a tendency to change neighbourhoods from time to time, to attain a better quality of life. Yet, most people drop this logic as soon as they reach the borders of the country they were born in. In truth, the decision to move beyond national borders to choose a neighbourhood – one where the system has not deteriorated to the point that it’s dramatically usurping the wealth of the individual – is not such a great leap. In truth, it’s relatively easy to do.

In much of the former “free world”, socialism is here to stay, but the individual citizen needn’t be. He may vote with his feet and move to a better neighbourhood.

The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.