• Tag Archives Socialism

  • Millennials Reject Capitalism in Name – but Socialism in Fact

    Posted on by Azrael Comment

    “In an apparent rejection of the basic principles of the US economy,” writes Max Ehrenfreund at the Washington Post, “a new poll shows that most young people do not support capitalism.”

    Notice the intimation that capitalism is the system we already have — not, as pro-capitalist philosopher Ayn Rand called it, the “unknown ideal.” But Ehrenfreund takes a half step back from the implication: “Capitalism can mean different things to different people.” Nevertheless, he concludes, “the newest generation of voters is frustrated with the status quo, broadly speaking.”

    So we’re not entirely sure what “capitalism” means to those surveyed, but we think it has something to do with the system we currently live in. Young dissatisfaction with the status quo is probably a good thing, but the labels used in simplistic survey questions — and in headlines — just add ever more confusion to discussions of economic freedom.

    As I wrote about my anti-capitalistic youth in “Why Students Give Capitalism an F,”

    “Capitalism” was just the word we all used for whatever we didn’t like about the status quo, especially whatever struck us as promoting inequality. I had friends propose to me that we should consider the C-word a catchall for racism, patriarchy, and crony corporatism. If that’s what capitalism means, how could anyone be for it?

    But even advocates of economic freedom are divided on the word capitalism. Some see it as the correct name for the system we support, including individual liberty, private property, and peaceful exchange. Of particular significance to Austrian economist Ludwig von Mises, the term “refers to the most characteristic feature of the system, its main eminence, viz., the role the notion of capital plays in its conduct” (Human Action, chapter 13).

    In other words, the profound abundance that the market has produced for all of us is the result of private investment and economic calculation.

    Others point out that the term was coined by the enemies of the free market, and that it has too long a history as the designation for cozy business-government partnerships and legal privilege for the rich and powerful. (See FEE contributor Steven Horwitz’s “Is the Name ‘Capitalism’ Worth Keeping?“)

    Both sides seem to agree, however, that the word has too many divergent connotations to be used usefully without explanation. Unfortunately, that means we have to spend a lot of time explaining what we don’t support.

    Zach Lustbader, a Harvard senior involved in conducting the recent poll, told the Post, “You don’t hear people on the right defending their economic policies using that word anymore.” When they do use the word, it is to stand against “crony capitalism,” according to the 22-year-old student.

    I wish, in his discussion of the problems with the word capitalism, Lustbader hadn’t fallen back on the even more problematic classification of people on the right, but if we put aside that quibble, I can say that his experience matches my own. When I encounter the words capitalist or capitalism used without qualification, it is most often by those who oppose the free market — and assume an audience that shares that bias.

    Other polls of 18-to-29-year-olds show not just antipathy to the word capitalism but also generally positive feelings about the word socialism. But the results tell us more about semantic reflexes than they do about specific positions on economic policy.

    In the Harvard poll, only 27 percent said the government should play a substantial role in regulating the economy. Doesn’t that imply that 73 percent support relative economic freedom, no matter what terminology the respondents embrace? Even if millennials don’t reject socialism as a dirty word, just 30 percent believe in a large government role in reducing income inequality. Even Keynesianism, stripped of its label, fails to garner support: a mere 26 percent think government spending can effectively increase economic growth.

    “It is an open question,” Ehrenfreund writes, “whether young people’s attitudes on socialism and capitalism show that they are rejecting free markets as a matter of principle or whether those views are simply an expression of broader frustrations with an economy in which household incomes have been declining for 15 years.”

    So we’re back to the idea that capitalism stands for whatever people perceive to be wrong with the economic status quo. That leaves us with the considerable task of explaining how government interventions, not free markets, got us into the current mess, and how only greater economic freedom can get us out.

    But we can take heart from poll results that reveal skepticism toward greater government involvement in the economy: between two thirds and three fourths are dubious of the government’s ability to fix anything. That’s a start.

    Source: Millennials Reject Capitalism in Name – but Socialism in Fact | Foundation for Economic Education


    📂This entry was posted in News and Politics 📎and tagged

  • Bernie Sanders and the Fraud of Democratic Socialism

    Posted on by Azrael Comment

     
    With his recent strong showing in the Iowa caucus, Senator Bernie Sanders now deserves to have his policy ideas examined seriously by admirers and critics alike.

    Sanders has policy positions on dozens of important issues but two stand out: One, Sanders is a self-described “democratic socialist” and two, he has argued repeatedly that the rich don’t pay their fair share of taxes. Presumably, in a Sanders Administration, there would be more “socialism” and higher taxes on the “rich”.

    What is democratic socialism? From my training in economics, socialists believe that free-market capitalism is a failed system and that it should be replaced by government ownership of the means of production. This means that all important decisions concerning the production of output and the direction of investment should be made by the State. The “democracy” part of the definition implies that democratic institutions such as a constitution and elections would be preserved.

    Does Bernie Sanders really believe that democratic socialism makes sense? Probably not, for a number of reasons. First, many economists accept that socialism fails in both theory and practice; it is not a coherent economic system. It fails in theory because if all of the “means of production” are nationalized, there would be no intelligent way for government planners to decide which factor combinations are the cheapest or which outputs and investments would tend to maximize consumer welfare. The economy would literally be at sea without a rudder.

    To see why this is so, we must understand that under free-market capitalism, prices and profit incentives guide resources into uses that consumers prefer relative to alternatives. But in socialism, where the crucial factors of production (such as capital and land) are owned by the State, there are no meaningful price signals or profit and loss incentives to ensure that scarce resources are used efficiently and not wasted. And this so-called economic calculation problem is not made any easier by arguing that the government would be “democratic” or that it’s intentions are to help the poor.

    Second, socialism (or near socialism) in practice has been an economic disaster wherever it’s been seriously tried. Most of the socialist experiments (Cuba, 1960-2016) have ended up confiscating wealth, wasting capital, destroying incentives, and impoverishing the great bulk of the population. And don’t believe for a minute that it’s a lack of democracy that has doomed socialism or the so-called Cuban experiment. No way. It’s the rejection of private property, of the free market price system, and of open competition between business organizations that have made socialism unworkable.

    Sanders is NOT a democratic socialist (although why he insists on that label is troubling) but is, instead, a “social democrat.” Social democrats or progressives accept (grudgingly) the basic institutions of capitalism (the price system, stock markets, etc.) but want numerous social programs for the unemployed and poor and want increased regulation of large corporations and banks. Fine, but notice that there is nothing terribly radical about any of those ideas; they have been around for decades. Hillary and Bernie may quibble loudly about health care reform but it’s a debate well within the progressive mainstream of the Democratic party.

    The Sanders view that the rich should pay their “fair share” of taxes might inspire a more radical agenda if we just could determine what Bernie means by “fair share.” (I suspect it simply means more taxes.) According to 2013 IRS data, individuals with adjusted gross income (AGI) of $250,000 or more filled just 2.4% of all tax returns yet they paid 48.9 % of all taxes; their average tax rate was 25.6%. By contrast, people with incomes of $50,000 or less paid just 6.2% of all taxes and their average tax rate was just 4.2%. Since the average federal tax rate on the “rich” is already 6 times the average tax rate on the (relatively) poor, one wonders what theory of fairness Bernie Sanders has in mind.

    The Democratic Party’s leading candidates for president both have embraced progressivism with a bear hug.

    Bernie Sanders and the Fraud of Democratic Socialism – Ron Paul Liberty Report


    📂This entry was posted in News and Politics 📎and tagged

  • Millennials Don’t Know What “Socialism” Means

    Posted on by Azrael Comment

    Young people don’t know what socialism is.

    Recent polls have suggested that millennials are far more positive to socialism than older cohorts. For instance, the Pew Research Center found that 43 percent of 18-29 year olds had a positive reaction to the word socialism, compared to 33 percent of 30-49 year olds, 23 percent of 50-64 year olds, and 14% of 65+. The older you get the more you hate socialism.

    Perhaps not. A new Reason-Rupe report on millennials finds that young people are more favorable to the word “socialism” than a government-managed economy, even though the latter is lessinterventionist. Millennials don’t like government intervention in the economy when you spell it out precisely, rather than use vague terms like “socialism.”

    In fact, a 2010 CBS/New York Times survey found that when Americans were asked to use their own words to define the word “socialism” millennials were the least able to do so. According to the survey, only 16 percent of millennials could define socialism as government ownership, or some variation thereof. In contrast, 30 percent of Americans over 30 could do the same (and 57% of tea partiers, incidentally).

    Millennials simply don’t know that socialism means the government owning everybody’s businesses. They don’t understand that socialism means the government owns the banks, the car companies, Uber, Apple, Facebook, Amazon, etc. They don’t even want the government taking a managerial role over the economy, let alone nationalizing private enterprise.

    In fact, millennial support for a government-managed economy (32%) mirrors national favorability toward the word socialism (31%). Millennial preferences may not be so different from older generations once terms are defined.

    Millennials’ preferred economic system becomes more pronounced when it is described precisely. Fully 64 percent favor a free market economy over an economy managed by the government (32%), whereas 52 percent favor capitalism over socialism (42%). Language about capitalism and socialism is vague, and using these terms assumes knowledge millennials may not have acquired.

    Millennials didn’t grow up during the Cold War in which the national enemy was a socialist totalitarian regime like the Soviet Union.  Since this time, the terms “socialism” and “capitalism” may have taken on different meaning in the minds of millennials. For instance, socialism could imply protecting the vulnerable from the vicissitudes of capitalism, and capitalism could mean government favoritism instead of a free market.

    Furthermore, critics of the president keep calling Obama a socialist. Millennials like Obama,  (52% still approve of him) and thus perhaps the critics’ constant barrage of socialist name-calling has bolstered millennials’ opinion of the word, rather than tainted Obama’s image.

    Source: Millennials Don’t Know What “Socialism” Means – Hit & Run : Reason.com


    📂This entry was posted in News and Politics 📎and tagged