By Rob Meyne
- Feb. 21, 2022
- 4-min read
As we have discussed in this space, most public policy decisions involve a distinct choice between alternatives that either decrease or increase freedom for our citizens. Invariably, expensive national programs that are purported to benefit Americans do so at a high cost of reducing our freedom while increasing the size and power of government..
On a broad scale, the major policies advocated by the more conservative of U. S. political parties, the Republicans, tend to protect our constitutionally guaranteed freedoms. The more leftist of the major parties, the Democrats, generally promote actions that place more power and resources in government, particularly Washington.
There are several prominent Democratic leaders and officeholders who embrace socialism and proudly claim that moniker for themselves. On the GOP side, there are none. You could hold a meeting of Republican Socialists in a phone booth (remember those?) and have room left over for an adult manatee. (In some cases, that animal might be a significant upgrade over the incumbents!)
One can argue about the extent of the ideological differences in the two parties but cannot dispute its existence. The parties are neither as similar, nor as different, as many claim. However, depending on what you value – freedom, for example – you cannot make a coherent argument there is no difference.
That said, our own views on socialism are not a function of the party that seems more comfortable with it. The arguments we put forth apply to governmental mandates, power, and control, whatever or whoever its source.
A few decades back, I made a presentation to the Peoria, Illinois, Chamber of Commerce. A topic was about the economic collapse of the Soviet Union – the supreme example of a socialist-Marxist economy.
The most interesting study of the Soviet economy was performed several years before the Soviet collapse. The idea was to estimate the value created by the Soviet economy/production system. The approach was simple: the value of raw resources would be compared to the value of goods produced. The raw resources include ores, forest products, farm products, etc. These could be valued at international prices to calculate the value of inputs into production.
The products would be valued at the prices at which they were sold. The excess value of products over services would tell how much value the economy produced. That is crucial, because the difference is the basis of how much income is generated in the process and thus available for myriad other uses.
The results were shocking. The value of goods produced in the socialist economy was less than the value of the resources used! The Soviet economy took resources of “X” value and turned them into products or services that had a value of “less than X.”
It would literally have been better to shut the economy down and sell the raw resources on the international market than to produce something with them. People who worked in manufacturing, for example, could have simply stayed home, on permanent vacation, with their hands wrapped around a glass of vodka, and everyone would have been better off!
A friend of mine, a student from Russia, attended the presentation with me. Afterwards, I told him that I was sorry about what I said about his home country. He took no offense. In fact, he told me a story about a factory in his hometown. It produced sledgehammers.
At the time, like most factories in Russia, the demand for the factory’s product was very low. They were understandably thrilled when approached by a Japanese company that ordered a huge number of sledgehammers.
The factory people were over the moon excited. They wanted to show their product in the best possible light, so they wrapped each hammer in nice paper, placed it in a brightly colored box, and shipped them to Japan.
A few months later, representatives from the Japanese company came to my student’s hometown to place another order. The factory workers, so very proud of their product, took the Japanese on a tour of the factory. Afterwards, curiosity overtook them. They asked the Japanese why they ordered so many sledgehammers. The Japanese, who were not always the most diplomatic bunch, said, “We knock the heads off the sledgehammers and use the wood for stair rails in new houses.”
It would have been more profitable for the Russians to sell the raw wood to the Japanese than to make them into sledgehammers. For various reasons (usually governmental restrictions) they couldn’t just do that. And people had to have jobs. So, sledgehammers had to be made, the value of the wood effectively reduced, the iron completely wasted, and the shipping more expensive than necessary.
That anecdote conformed to the results of the study. If you buy into socialism, you buy into inefficiency, lower incomes, and less freedom.
It is no wonder places like Russia/the U.S.S.R. set five-year plans, goals for production of various goods and services, and then consistently fell short of them. There are no nations that have growing economies, where the citizens benefit financially, and where the nation protects and values individual freedom.
Again, “democratic socialism” is like “free slavery;” it does not exist. It’s a contradiction in terms. It doesn’t matter how many new and clever phrases leftists use to try to pretend their old, failed ideas are actually new. They are not. They have never worked anywhere they have been tried. And they never will.