THE HUMBLE LIBERTARIAN

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Tuesday, March 17, 2009

Is America Socialist? Is America Moving Toward Socialism?

Socialism is defined in the following ways:

  • Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy. [1]
  • The stage in Marxist-Leninist theory intermediate between capitalism and communism, in which collective ownership of the economy under the dictatorship of the proletariat has not yet been successfully achieved. [1]
  • A theory or system of social reform which contemplates a complete reconstruction of society, with a more just and equitable distribution of property and labor. [2]

Is America socialist? Given the above definitions, and given America's present condition, it would be hard to say that America isn't socialist and it would be an ignorant falsehood to claim that America is a free market, capitalist country. In a Nov 2008 article entitled "What is Socialism? Is Barack Obama Socialist?" I wrote:

I must ask what it means for us to own our property. When a government can control, appropriate, distribute, and dispose of a very significant amount of its citizens' property without their individual consent, is it not the operating premise that government owns everything and that you use your property only with government's tacit consent, and only as long as government doesn't presently wish to revoke your rights to this or that portion of your property? In such a society government presumes to be lord of all and the law of the land is "render unto Caesar whatever he says is his."

Can anyone disagree that the situation described above is America's present condition? That our government can control, appropriate, distribute, and dispose of its citizens' property without their individual consent? If you doubt it, then a brief review of the American government's involvement in its economy is in order:


Quantity and Price Controls
The US federal, state, and local governments have imposed myriad controls and restraints on the free exchange of value between consenting individuals. We presently have wage controls as modest (though still harmful) as the Federal minimum wage of $7.25 and as steep as the average of $55 an hour (recently down from $70) that United Auto Workers members have been able to garner from an auto industry that is forced to accept the union's terms because it is illegal for employees of American auto companies to work for less than the wages that the UAW has bargained for.

Price ceilings on a state and local level govern the price of rents for apartments, electricity, gasoline, and insurance premiums among other things. Preventing prices from rising naturally to meet market conditions causes shortages and decreased quality as suppliers and capital markets produce less of the good in question because the government controls have damaged its profitability. Price ceilings on insurance premiums in Florida are the reason that State Farm dropped 1.2 million homeowner policies in Jan 2009, leaving Florida homeowners vulnerable to the next hurricane that destroys their property.

The government also imposes tariffs and import quotas on all kinds of imported goods like sugar cane from the Caribbean and steel from Europe, driving up the price of these goods for American businesses and consumers and hurting American exports by encouraging similar policies in other countries. In addition, government subsidies of various industries wreak havoc with market forces and create wasteful surpluses and artificially low prices. The surpluses (of subsidized corn, for example) typically get dumped in foreign markets where they flood the market and bankrupt local farmers.

Regulations
American citizens and businesses drown in a sea of regulations navigated by hundreds of powerful regulatory agencies. Think our economy isn't centrally planned and controlled? Think again. Just examine this list of United States federal agencies and what they regulate and control. It's astounding. Most of America's major industries are tightly regulated and controlled by the federal and state governments. Among them are agriculture, mining, logging, manufacturing, the food industry, retail and wholesale distribution, telecommunications, education, medicine, banking, energy, housing, transportation, the labor market, securities exchange, and the market for capital- which is the backbone of our economy.

In addition to controls and regulations targeted at these specific industries, there are state and federal laws that regulate (and harm) business activity in general, like the penalties businesses are forced to pay if they don't provide health insurance to their employees, which strains the cost structures of small businesses and discourages creation of new start-ups as well as new jobs by existing businesses. Then there's Sarbanes-Oxley and the millions in annual compliance costs it imposes on publicly listed corporations, and the disincentive it creates for successful companies to list on American stock exchanges.

Then there are the anti-trust laws that the federal government uses to prosecute (or did I mean to write "persecute") businesses for the crime of success. Under these laws, if a business prices above its competition, it can be prosecuted for monopolistic pricing. If it prices below its competition, it can be prosecuted for aggressive pricing to bankrupt its competitors. And get this- if it prices the same as its competitors, it can even be tried for price collusion. The laws are such a vague, tangled mess that no successful business can be safe from them or possibly comply with them all.


Taxes
Remember the kind of measly taxes that the American colonists fought a revolution to end? The kind of taxes we pay in America today are beyond the wildest dreams (or worst nightmares, more like) of our patriotic forebears. Federal, state, and local taxes of all kinds confiscate American wealth to subsidize redistributive entitlement programs, unnecessary and destructive wars, and the bloated mess of regulatory agencies referenced above.

The average American family pays 40% of its earnings in taxes. So if you're average, you work for the government from January 1 to May 26. Only on May 27 do you start working for yourself. How does that feel, comrade? (On a side note, since we're on the topic of working for the government- did you know that the federal government is the largest employer in the United States with 2,300,000 military employees and 2,600,000 civilian employees?)

Among other taxes and fees, Americans pay personal income taxes, corporate taxes, capital gains taxes, estate taxes, sales taxes, Social Security and Medicare taxes, self-employment taxes, property taxes, and fees of all kinds to register everything from your car to your marriage.


Conclusion
Recall or reread the definitions of socialism above, and then decide for yourself whether America is socialist based on the information provided in this article.


End Notes:

1. socialism. (n.d.). The American Heritage® Dictionary of the English Language, Fourth Edition. Retrieved November 22, 2008, from Dictionary.com website: http://dictionary.reference.com/browse/socialism

2. socialism. (n.d.). Webster's Revised Unabridged Dictionary. Retrieved November 22, 2008, from Dictionary.com website: http://dictionary.reference.com/browse/socialism