Socialism Revealed: Why Socialism's Issues Have Never Permitted Success In A Real Economy

By Phillip J Bryson

Socialism Revealed summarizes the history of socialist thought and socialist economic theories. It also reviews the attempts to develop socialist economies in the Soviet Union and the bloc countries, China, India, and in West European democratic countries. Finally, it reviews the economic implications of policies under discussion by democrats an

• Language: English
• Publisher: Stratton Press
• Release date: Jun 8, 2020
• ISBN: 9781648950513

Book preview

Preface

In 1961, I was living in Berlin when the wall was built! I saw the concrete, the barbed wire, and read in newspapers of the people shot trying to escape to West Berlin and freedom. Later, I returned home to the United States to continue my studies, hoping to find out why a country must build a wall to keep its people from fleeing. Those studies launched me on an academic career. For over forty years, I researched socialist systems, spent sabbaticals and research time living in West Berlin, in communist East Berlin (in Karlshorst), and in Marburg, Munich, and Duisburg Germany, Vienna, London, and Moscow. I published many articles in academic journals and several books on specialized aspects of socialist economic systems.

In November of 1989, I attended a conference in West Berlin at the Reichstag, the former and future German parliament. During the week of the conference, the Communist Politburo in East Berlin announced on the radio that the wall was open. So I was present at the construction of the wall and almost thirty years later for the opening and the subsequent demise of the wall.

After I retired, I had time to respond to then President Obama’s announced plan for his presidency (i.e., to transform our country completely). After having read about his background, his interest and training in Marxism, his profession as a community organizer (as these people see it, a community organizer is one who helps prepare and empower community members for the future socialist order), I felt the need to do some writing on the economic system of socialism so that millennials and their parents could become more informed about the implications of socialism and why the system simply doesn’t work. I wrote a book entitled Socialism: Origins, Expansion, Decline, and the Attempted Revival in the United States about the economics of socialist society, how it is organized, and how it functions. The book is over nine hundred pages because it addresses all aspects of the subject. First, it reviews the original ideas of socialists and sometimes the ancient ideas in socialism’s history before the advent of Karl Marx. It also investigates the countries that have adopted socialist, or Marxist-Leninist, theories—the Soviet Union, some of the Soviet bloc countries, India, and China.

That former book also reviewed the attempt to establish socialist economies in the democratic countries of Western Europe in the century after Marx. The nationalization of industry and the centralization of economic decision-making proved ineffective in Europe. These are key items in the Marxian or in other serious definitions of socialism. Its abject failure was enough for Europe; socialist sentiment remained, but socialism as an economic system was finished. No responsible political party continued to advocate the takeover of the private sector by the government. Thus, although many socialists remained on the scene, serious, genuine socialism had disappeared.

The current Sanders socialists in the United States have not learned the lesson of the Europeans and the other places where socialism has left nations disappointed, if not destroyed. The democratic socialists and Bernie Sanders remain advocates of otherwise extinct socialism; the thorough-going version of socialism is quite implicit in the senator’s presentations, and the people associated with Senator Sanders’s presidential campaign have expressed themselves very much in favor of the Chávez/Maduro approach to nationalization and central direction of the economy. Elimination of private property is a plank in the platform of American socialists.

Finally, the book investigates socialism in the United States, discussing the reasons why historically it always failed at the ballot box; Franklin D. Roosevelt introduced a number of socialist policies and President L. B. Johnson passed the legislation undergirding the American welfare state. Such policies were revisited with the presidency of Barack Obama. One can laud the good intentions of socialists, but this book explains why socialism has never succeeded and why President Obama’s transformation of the US economy cannot succeed as envisioned. When the effort fails, the socialism remaining will be a dictatorial, military nightmare for the impoverished inhabitants of the deceived country.

The book Socialism received excellent reviews. I appreciate Stratton Press’s permission to republish some of them as part of the introduction to this book. I was pleased that Kirkus Reviews wrote that the scope of Bryson’s treatment is dizzying, the erudition nearly unbelievable, and his scholarly rigor impressive… This is a magisterial work, encyclopedic and astute.

At the same time, the Pacific Book Review made the following statement: This book is a good choice not only for those curious about socialism but for anyone who wants to learn more about general economics and market theory. I recommend this book because it offers such valuable information in clear, easy to understand prose. I was reassured by this statement that I had met my goal to write a book of scholarly quality without constructing it in language suitable only for professionals and specialists.

There remained that the book (originally designed to be three volumes) was long and full of information designed to demonstrate authoritatively its assertions and conclusions. And I became convinced that millennials, the cohort in the United States that has become convinced that socialism must be delightful, do not read books so much as the blogs and blurbs that appear on their devices. So I thought the next logical step was to put the book’s discoveries and conclusions into a much abbreviated form. I decided to write this brief book, which summarizes and updates Socialism.

The Fatal Problems of Socialism

The mission of this book is to point out clearly and concisely why the socialist economic system doesn’t work. The system faces two primary tasks: First, to take over completely the private sector—the private economy—with its nearly forty million small businesses and over five million corporations. In socialism, the government aspires to own and manage the economy completely. But detailed management of millions of workers, consumers, and firms would be impossible even for the huge bureaucracy in Washington, DC, which can scarcely manage the governance of this country, without adding the detailed direction of the entire economy to its daily duties. This lesson has been learned not only by the bureaucracies and politicians of the Soviet Union, China, India, and other classically communist systems. In West Europe, where socialists found a democratic form of governance acceptable, they tried merely to nationalize the key industries, which Lenin called the commanding heights of the economy. That also turned out to be too ambitious a task wherever it was tried.

The second task of socialism is to tax money away from those who have it and to give it to those who do not. These twin methods—nationalization and income redistribution—constitute socialism. But historically, when nationalization failed to work, there was nothing left for socialism but redistribution.

Nationalization and economic planning and centralization attempt to replace millions of individual, private economic plans with one overreaching, overly ambitious government plan. That exercise becomes a bureaucratic nightmare; planning agencies are unable to incorporate or quantify the innumerable economic variables involved. After the post-World War II planning failure, socialism had exhausted its unique organizational initiatives.

Socialism does not exist on the basis of redistribution alone simply because the nonsocialist political parties have also adopted income redistribution as a part of standard welfare policies. Can you imagine a political party asking for votes because it favors having the government provide infrastructure for the economy? What political party doesn’t? Simply advocating redistribution and welfare policies, there was nothing left to distinguish a socialist party in the economic realm. Socialists could only advocate more redistribution than other political parties. This they have done, sometimes to the extreme of endangering the nation’s fiscal future.

The Huge Financial Problem that Socialism Ignores

Socialism provides many subsidies, but there will never be enough funds to take care of all social needs over the long haul—the funds required to take care of a whole country from cradle to grave are far more than the total incomes of all the rich. If we taxed away their entire incomes, receipts would not be enough to fund Medicare for All, let alone all the proposals (including the Green New Deal) socialists were promoting in the 2020 electoral campaign. Further elaboration and clarification of this issue will be undertaken below.

In any case, national fiscal disaster waits at the end of the socialist road. And there are additional unintended consequences of socialism. Dependence, frustration, and the loss of dignity and freedom are also the consequences of the tyranny required to establish and maintain control of the socialist system over time. A look at Venezuela today shows that socialism’s consequences can include poverty, hunger, hyperinflation, tyranny, and violence. Venezuela has become a battleground between a starving populace and an oppressive regime.

Why Redistribution Stops Economic Growth and Produces an Equality of Poverty

Society’s very wealthy and even its relatively affluent households are continually saving for their future, for their retirement, and to leave something for their children. These savings form a pool of money available to individuals and firms willing to pay interest and wanting to invest in new industrial equipment, new innovations, new technologies, and the things that produce new jobs and economic growth for the whole economy. If society decides to confiscate through socialistic taxation all those savings for the purpose of free education, free medical care, a universal income (regardless of whether or not the recipient is employed), new green housing, etc., all the funds available for investment and growth are simply consumed. They disappear. It’s like eating the seed corn!

The resources consumed in socialist programs totally eliminate savings and investment for new innovations, new firms, new technologies, new factories, and equipment—and economic growth screeches to a halt. In the meantime, consumers, who get what they need through subsidies, no longer have an incentive to work hard, get training and education, save, and build for a bright future. They are prepared to relax and share an equality that turns out to be one of stark poverty. The Romans wanted to give the masses cake and gladiatorial games. The socialists wish to provide food stamps and devices with games.

Borrowing Money for Current Socialist Expenditures

But that’s not all! In the United States, if there is not enough money for a social project, the government simply borrows in the Obama fashion (viz., at his inauguration, the national debt was $10.626 trillion. On January 20, 2017; when he left office, it was $19.947 trillion). A large and growing share of our budget goes for paying the interest on our loans, which is rapidly approaching $500 billion per year. And when the government can no longer meet its payments, the whole financial system collapses.

Printing Money

If the government follows the socialist idea of simply printing money, as Venezuela has done, one will fairly soon have to pay a million dollars for a loaf of bread. The Europeans have nightmares about (stemming from a history of) hyperinflation. On occasion, the EU must put pressure on countries like Spain, Italy, Greece, Portugal, and Ireland as they start to drift toward insolvency and financial collapse. Venezuela is even further down the socialist financial path than Europe.

Consider Now the Loss of Freedom in Socialism

The rebuilding period in Europe after the Second World War followed the general disillusionment Europeans had for capitalism. After all, just before that war, the Great Depression had convinced many that capitalism couldn’t succeed. After the war, socialist governments were voted in all over Europe. In a short number of years, however, it became apparent that successful socialism and central economic planning were an illusion. Friedrich Hayek and others observed how the socialist attempt to implement economic planning and tight control over their formerly market economies leads to a loss of freedoms. The Nobel Prize–winning Hayek called this the Road to Serfdom.

Socialists take over because of their loathing of markets and capitalists. They confiscate the property and wealth of the so-called bourgeoisie, the wealthy and affluent, then they install an economic planning regime in which a large government bureaucracy makes all the decisions. A dictatorship of the proletariat has the task of maintaining control and preventing a counter-revolution by those who don’t want to give up all their wealth, property, and businesses to the government. People also complain about the arbitrariness and extreme inefficiency of central economic planning. Then when the party’s media have to control thought and speech in the face of the growing discontent of the proletariat and the absolute hostility of the former bourgeoisie, we find ourselves on the way to a propaganda exercise, the first step toward a virulent dictatorship. The Europeans of the postwar era avoided this outcome by simply voting out the socialist reorganization before it became fully entrenched and after it became apparent that socialism was failing to restore healthy economies. Thus Europe quickly returned to the market economy and what was later styled the golden age of capitalism.

In Europe, as reported in-depth in Socialism, it rapidly became apparent that the democratic economic planning experiments contributed nothing to economic recovery and growth. When the democratic countries returned to capitalism, their economies boomed.

What Is My Objective?

I hope this brief volume will give encouragement to the talented and creative young people struggling with student debt and young careers. Many others who are often discouraged about their future financial prospects also need reason for hope. Many have struggled with joblessness and low wages. But there is hope in this wonderful country as employment opportunities have increased surprisingly in the last two years. It will also become increasingly possible for people to get education and training and to qualify for jobs and productive careers. Many are striving to seize the opportunity to work and to make something of their lives.

Socialism offers to subsidize us with someone else’s money and with government goodies to take care of us. Many Americans already realize that happiness does not come from a handout—it comes from having worked and succeeded in making something of our lives. And Americans want that. As the economy has recovered in the past couple years, people have been fleeing the welfare rolls, anxious to go back to work.

Finally, all of us need to learn what socialism is and be aware of the hazards it presents to our nation’s treasury, to our personal freedoms, and to our prosperity.

Contents

Preface

Chapter 1: Socialism Grows Out of Capitalism

Issue 1: The Origins of Socialism

Issue 2: Who Are the Socialists Today?

Issue 3: How Does One Become a Socialist?

Issue 4: From Socialist Love to Marxist Loathing

Issue 5: What Is the Market System Called Capitalism?

Issue 6: The Corporation in US Capitalism

Chapter 2: Farewell to Capitalism in Private-sector and Public-sector Socialism

Issue 7: Communitarian Experiments in America

Issue 8: Bureaucracy in Market and Socialist Economies

Issue 9: The Failure of Central Economic Planning in the USSR

Issue 10: Why and How Genuine Socialism Has Disappeared

Chapter 3: The Revival Attempt Begun by President Obama

Issue 11: Was Barack Obama Our First Socialist President?

Issue 12: Economic Policy in American Socialism

Issue 13: Social Policy and Noneconomic Issues in Socialism

Issue 14: Combating the Socialist Bureaucracy

Issue 15: The Failure of the American Welfare State

Issue 16: The American Taxpayer and the Opioid Crisis

Issue 17: Demographic Winter and the Future of Socialism

Issue 18: Science, Socialism, and the Future of Mankind

Issue 19: What Kind of Socialists Are the Antifa?

Issue 20: Corporations and Their Stakeholders: The US Business School Contribution to Socialist Indoctrination

Chapter 4: Socialism after the Obama Era: Bernie, AOC, and the Millennials

Issue 21: What Is Democratic Socialism?

Issue 22: Open Borders and American Socialists

Issue 23: Democratic Socialists: We Need Swedish and Scandinavian Socialism

Issue 24: Senator Sanders and the Right to Free Health Care

Issue 25: Socialist Spending Plans and Alexandria Ocasio-Cortez

Issue 26: The Ideal Solution to the Problem of Socialism

Issue 27: What Groups in America Support a Socialist Society?

Chapter 1

Socialism Grows Out of Capitalism

Issue 1: The Origins of Socialism

Early Ideas

Long before the days of Adam Smith, idealist philosophers had been seeking an egalitarian economic system that would relieve the plight