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10/22/2008
Lasee: On Socialism
A colleague of mine once said, “We’re all heading toward Socialism.” The demand for more and more public services and the demand for more and more government intervention in our daily lives. This is pushing us further and further into a centrally planned, government controlled – socialist – state. Our federal government is now taking ownership of some major companies “for the economy’s good.” The good of all of us.
Many of us intuitively understand that socialism does not work. Half a century ago, an Austrian-born economist wrote a book that explains why.
Friedrich A. Hayek, while living in England during World War II, realized that the increased government control during wartime would likely pose a threat to the basic freedoms of the Western world.
In response to that potential threat, Hayek wrote “The Road to Serfdom.” Although paper was in short supply in 1944, the book went through six printings in 16 months, and was translated into several languages.
The book’s point is simple: a society based on individual decision-making works because the very nature of that society creates efficiency and protects freedom. A controlled economy does neither.
In our society it’s mostly individuals who make decisions, not so much the controlling agency. (It’s that way for now, yes; we’re still hanging on.) Individuals making decisions (in seeming chaos) is what makes up a free market. This free market drives our economy. It’s messy, and it works.
In a centrally planned society, a central planner (committee?) takes over the decision-making power, which, in a capitalist society, belongs to individuals. This central planner (committee) decides how many people make what kind of shoes, how many buildings of certain types are needed, etc.
Hayek wrote, “When all the means of production are vested in a single hand, whether it be nominally that of ‘society’ as a whole or that of a dictator, whoever exercises this control has complete power over us.” It doesn’t matter what the individual wants: what matters is what the central planner thinks we need. We all become tools of society (the collective).
Why doesn’t central planning work? Because it’s not possible for one person or committee to be aware of local conditions in Green Bay, Los Angeles, and Miami all at the same time, much less those in Europe and Asia. And, have good judgment on all things at all times. Some may even think they are too big to fail.
In a capitalist society, the kinds and numbers of shoes that are made is determined by the people who buy the shoes. That creates efficiency – individual shoemakers get the message faster that they’re making a product nobody wants. Central planning takes longer and they may decide the people need shoes whether they like them or not.
Capitalism also protects freedom, by removing the controls a centrally planned society places on individual choice. “It is only because the control of the means of production is divided among many people, acting independently that we as individuals can decide what to do with ourselves,” Hayek wrote.
The capitalist system is messy, imperfect, and does need constraints to enforce contracts impartially, to protect individuals and to protect the weak from the strong. And it requires the rule of law to make it work.
While the rule of law is not always perfect, the rule of the central planner is subjective and is subject to more corruption. This makes it more unfair to more people.
Click here for a PDF version of “The Road to Serfdom.” I urge you to read it. It’s a quick and easy read, and you’ll be amazed at how valid it still is today. I find it interesting that nearly all college graduates have to read Karl Marx and most have never heard of this book. Now, that is unfair.
Frank Lasee is a Republican and represents the 2nd Assembly District.
COMMENTS
I am an Obama-supporting Democrat who agrees with everything you've written. But I would also stress that it's the competition of capitalism that drives Yankee ingenuity.
That's why no-bid contracts to Halliburton, the lack of anti-trust enforcement of the past decade, and the Reagan-Bush debt make me particularly angry. If a company is so big that it can't fail without destroying our economy, and if the government continually bails it out, then we in effect have socialism. If the Big Three automakers were actually the big 10 or 20, then they would have been able to match the superior technology of Toyota and Honda. Heck, we'd probably be driving hovercraft by now. And the government bails out the Big Three, too.
Finally, I don't like the idea of high taxes, but that ship has sailed. The original sin was already committed by Reagan ($3 trillion debt) and both Bushes (now at $10 trillion). Maybe Obama will take a cue from Clinton and actually reduce our debt. But to paraphrase Ross Perot, if there is a way to pay down the debt without raising taxes, "I'm all ears."
Brian Bartel (Wed Oct 22 11:34:49 2008)
Mr. Bartel conveniently leaves out liberals who want more and more taxes. I would suggest you look more closely at Mr. Obama. He talks alot but says little.
Randy Williamson (Wed Oct 22 19:41:58 2008)
"HEADING towards Socialism"!?! We've been there since the 1930s, when the idea that government was "the answer" gained ground. Both Rep's and Dem's think in these terms today; it's taken for granted that the government needs to have all the answers, all the solutions.
How unlike the founding fathers, who thought more in terms of government being the PROBLEM.
emily matthews (Thu Oct 23 15:00:01 2008)
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