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Globalism: Persuading the Individual to Stop Being an Individual

If society understood the reality of collectivism instead of the promise of collectivism then their support for collectivism would vanish.

The elite globalist leaders selling collectivism know this to be true and so they have had to rebrand collectivism as Globalism. Songs are written about globalism – John Lennon’s classic song “Imagine” is the globalist anthem. The successful marketing of collectivism requires the names to change from already rejected Communism and faltering Socialism (think Venezuela) to the promise of a New World Order renamed GLOBALISM that disingenuously pledges social justice and income equality.

Globalism is the new word for the old lie about collectivism – that surrendering individual rights and national sovereignty will deliver social justice and income equality.  

Philosopher Ayn Rand understood the sinister nature of collectivism and and wrote extensively about socialism/communism and how it persuades the individual to stop being an individual:

“Socialism is the doctrine that man has no right to exist for his own sake, that his life and his work do not belong to him, but belong to society, that the only justification of his existence is his service to society, and that society may dispose of him in any way it pleases for the sake of whatever it deems to be its own tribal, collective good.” 

The Islamization of Europe and the West demonstrates how mass social indoctrination toward collectivism leads to cultural suicide and the death of the individual.

Ayn Rand writes:

“When you consider socialism, do not fool yourself about its nature. Remember that there is no such dichotomy as “human rights” versus “property rights.” No human rights can exist without property rights. Since material goods are produced by the mind and effort of individual men, and are needed to sustain their lives, if the producer does not own the result of his effort, he does not own his life. To deny property rights means to turn men into property owned by the state. Whoever claims the “right” to “redistribute” the wealth produced by others is claiming the “right” to treat human beings as chattel.”

Europe’s surrender of its national sovereignty began after WWII with the 1957 Treaty of Rome that created the European Economic Committee (EEC) which eventually became the European Union(EU) of today. Internationalizing Europe’s sovereign nation states into the EU left the United States as the single greatest obstacle to one-world government.

Macron’s victory in France is a victory for collectivism at the expense of French sovereignty and French individualism represented by Marine Le Pen. It is a surrender to postmodern moral relativism, and historical revisionism designed to destroy democracy and its incomparable individual rights and freedoms. The question is WHO benefits from Macron’s victory?? The globalist elite of course. Socialism (total government control) is the death of democracy and is the prerequisite for internationalizing nation states and the imposition of one-world government Globalism. The greatest single obstacle to one-world government is the nation state. National sovereignty is to a country what individual sovereignty is to a human being.

The left-wing liberal agenda seeks to destroy the socio-political capitalist infrastructure of America and transform it into a dependent European-style socialist state with cradle to grave control by the government. Their strategy is to destroy American democracy by dismantling the supporting American institutions of family, religion, and education that promote independence, adulthood, individualism, and ego strength – the same qualities that made America great.

Ayn Rand warns us:

“Socialism is not a movement of the people. It is a movement of the intellectuals, originated, led and controlled by the intellectuals, carried by them out of their stuffy ivory towers into those bloody fields of practice where they unite with their allies and executors: the thugs.” 

American education, our elementary schools, middle schools, high schools, and universities, are a specific target and field of practice. The anarchists, socialists, and hippies of the 60s have become the teachers and professors now indoctrinating their students toward collectivism. The problem, of course, is that these narcissistic intellectuals have never lived under collectivist tyranny – they are armchair pundits living in subjective reality. Anyone interested in the objective reality of collectivism should be listening to those who have escaped from its tyrannical rule.

The entire narrative of the Left is designed to induce regression through educational indoctrination and the media – as Hillary Clinton famously remarked they need “an unaware compliant public.” Unaware and compliant are the hallmarks of childhood. The pitch might sound good to a childish mind who is seduced by candy from a stranger but the adult mind understands the sinister end-game. Once the public is entirely dependent on the government they lose all individual rights and national sovereignty as the socialized state becomes part of the internationalized one-world government. The doors of the car lock and there is no escape – only exploitation and enslavement.

One-world government is the big lie of the 21st century. It promises redistribution of wealth and social justice. What it delivers is unapologetically described in chilling detail by globalist elite English aristocrat Lord Bertrand Russell in his 1952 book The Impact of Science on Society.

The left-wing liberal lemmings are the useful idiots who are too arrogant to understand that they are participating in their own destruction. They have been indoctrinated to believe they are fighting for “social justice” when in fact they are helping to establish the dystopian nightmare of one-world government where there is no middle class, no upward mobility, no national sovereignty, and no individual freedoms. There is only the ruling elite and the enslaved population who service them.

The left-wing liberal lemmings in Europe and in America should take a break from marching and “resisting” and start reading Bertrand Russell’s The Impact of Science on Society written in 1952. They will learn that their script was written 65 years ago by the globalist elites who dreamed of one-world government – a binary socio-political system of masters and slaves.

The globalist elite’s New World Order was their self-serving answer to the Malthusian problem of the earth not having enough resources to sustain the population growth. Tavistock Institute was exported to America with the purpose of indoctrinating Americans via education and the media – particularly television – the greatest vehicle for mass social engineering ever invented. The Hollywood glitterati and the protesting hoards should take a pause and understand there is no place for them in the New World Order – they are simply useful idiots who will be destroyed.

The aristocratic Lord Bertrand Russell and the late David Rockefeller had no moral problem with eliminating the useless eaters any more than Hitler with exterminating Jews, Islamists with exterminating infidels, or the Chinese Emperors with burying their concubines alive to service them in the afterlife. The point is elitism is supremacist – there is no egalitarian respect for human life only the pretense of humanitarian considerations. The Left and the Islamists have common cause in trying to destroy America from within – but it is the globalist elites who finance and disingenuously facilitate both groups because the social chaos they each engender is a prerequisite for imposing globalist one-world government. For the globalist elite whether in Europe or in America, the Left and the Islamists are BOTH useful idiots.

Socialism will never provide social justice – it will only provide the pathway to one-world government where no individual rights or self-determination exist. Socialism strips the individual of his selfness and transforms that individual into property of the state. The individual who willingly forfeits his selfness for socialism has been successfully persuaded to stop being an individual. Socialism is not a free ride it is slavery.

Your Socialism is Bad and You Should Feel Bad by Daniel J. Mitchell

I’m tempted to say that statism is sort of like a cult. Proponents of socialism and other big-government ideologies have a dogmatic zeal that blinds them to reality.

For instance, no nation has ever become rich with big government. But that doesn’t stop leftists from advocating in favor of higher taxes and more coercive redistribution.

They are equally capable of rationalizing that economic misery in places such as Greece and Venezuela has nothing to do with bad policy, and you can even find a few zealots willing to defend basket cases such as Cuba and North Korea.

So long as they don’t burn me at the stake for my heretical views, I guess I won’t get too agitated by their bizarre fetish for statism.

But I will periodically mock them. And that’s the purpose of today’s column. We’ll start with this nice comparison between a capitalist grocery store and a socialist grocery store. I have no idea, by the way, if the lower image actually is a supermarket in a socialist country, but let’s not forget that a real-world version of this comparison is one of the reasons there’s no longer an Evil Empire.

But the bad news about socialism is not limited to economic deprivation for the masses.

The system also leads in many cases to totalitarianism (see this article by Marian Tupy, for example).

Venezuela is a particularly poignant example. Once the richest nation in Latin America, it now is an economic laggard and also is a cesspool of oppression.

Which makes this set of images from Reddit‘s libertarian page both funny and sad.

As you might expect, Milton Friedman had some very pointed observations on this topic.

The really good part starts shortly before 2:00. He explains very clearly that socialism is based on force and coercion.

I’ve saved the best for last.

The PotL sent me this collection of risky temptations and it perfectly captures the attitude of many statists. No matter how many times socialism has failed, they never learn the appropriate lesson. It just hasn’t been tried by the right people, they tell us. Or been imposed in the right circumstances.

So they want us to give it one more try, just like a person with no willpower will eat one more bite of chocolate.

Which is the same message you find here, here, and here.

Incidentally, this analysis not only applies to socialism, as technically defined, but it also applies to redistributionism. Which is definitely more benign, but nonetheless produces bad results.

The bottom line is that statism is a recipe for stagnation and free markets are a route to prosperity.

Republished from International Liberty.

Daniel J. Mitchell

Daniel J. Mitchell

Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.

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Karl Marx’s Flight from Reality by Richard M. Ebeling

Though it may seem strange, Karl Marx was not always a communist. As late as 1842, when Marx was in his mid-20s, he actually said he opposed any attempt to establish a communist system. In October 1842, he became editor of the Rheinische Zeitung [the Rhineland Times], and wrote in an editorial:

The Rheinische Zeitung … does not admit that communist ideas in their present form possess even theoretical reality, and therefore can still less desire their practical realization, or even consider it possible.

In 1843, Marx was forced to resign his editorship because of political pressure from the Prussian government and ended up moving to Paris. It was in Paris that he met his future lifelong collaborator, Friedrich Engels (who already was a socialist), and began his deeper study of socialism and communism, leading to his full “conversion” to the collectivist ideal.

Feuerbach and the Worship of Man Perfected

From his student days in Berlin, two German philosophers left their imprint upon Marx: George Hegel (1770-1831) and Ludwig Feuerbach (1804-1872). From Hegel, Marx learned the theory of “dialectics” and the idea of historical progress to universal improvement. From Feuerbach, Marx accepted the idea of man “perfected.” Feuerbach had argued that rather than worshiping a non-existing supernatural being – God – man should worship himself.

The “true” religion of the future should, therefore, be the Worship of Mankind, and that man “perfected” would be changed from a being focused on and guided by his own self-interest to one who was totally altruistic, that is, concerned only with the betterment of and service to Mankind as a whole, rather than only himself.

Marx took Feuerbach’s notion of man “perfected” and developed what he considered to be the essential characteristics of such a developed human nature. There were three elements to such a perfected human being, Marx argued:First, the Potential for “Autonomous Action.” This is action undertaken by a man only out of desire or enjoyment, not out of necessity. If a man works at a blacksmith’s forge out of a desire to creatively exercise his faculties in molding metal into some artistic form, this is free or “autonomous action.” If a man works at the forge because he will starve unless he makes a plow to plant a crop, he is acting under a “compulsion” or a “constraint.”

Second, the Potential for “Societal Orientation.” Only man, Marx argued, can reflect on and direct his conscious actions to the improvement the “community” of which he is a part, and which nourishes his own capacity for personal development. When man associates with others only out of self-interest, he denies his true “social” self. Thus, egoism is “unworthy” of a developed human being.

And, third, the Potential for “Aesthetic Appreciation.” This is when man values things only for themselves; for example, “nature for nature’s sake,” or “art for art’s sake.” To view things, Marx claimed, only from the perspective of how something might be used to improve an individual’s personal circumstance is a debasement of the “truly” aesthetic value in things.

Capitalism Keeps Man from Perfection

Feuerbach believed man was “alienated” from himself when he was not “other-oriented.” To change from self-interest to altruism was mostly a state of mind that man could change within himself, Feuerbach argued. Marx insisted that the problem of “alienation” was not due to a person’s “state of mind,” but was conditioned by the “objective” institutional circumstances under which men lived. That is, the political, social, and economic institutions made man what he is. Change the social order, and man would be changed. “Capitalism,” Marx declared, was the source of man’s alienation from his “true” self and his human potential.

How did this “alienation” manifest itself?

Capitalism, Marx declared, was the source of man’s alienation from his “true” self and his human potential.

First, there is the Stifling of Autonomous Action. In the marketplace, forces “outside” the control of the individual determine what is produced and how it is produced. The individual “reacts” to the market, he does not control it. Thus, market forces are external constraints on man. He responds to the market out of “necessity,” not out of free desire.Furthermore, to enhance production and productivity, man is “forced” to participate in a division of labor to earn a living that makes him an “appendage” to a machine, a “slave” to the machines owned by the “capitalists” for whom he is “compelled” to work.

Second, there is Diminished Other-Orientedness. In the market, the individual sees others only as a means to his material ends; he trades with others to get what he wants from others, merely in pursuit of his own self-interest. Work is not considered a communal “cooperative” process, but an antagonistic relationship between what the individual wants and what is wanted by the one with whom he trades.

Third, there is Limited Aesthetic Appreciation. In the market, people see nature, resources, and the creations of man not as things to be intrinsically valued in themselves, but as marketable objects – as means – to personal ends. Acquisition of things – possessiveness – becomes the primary goal of economic activity for making a living.

Communism’s Liberation of Constrained Man

Communism, through collective planning, would make work an “autonomous” act, rather than “constrained action.” When democratically regulated by the workers as a whole, Marx asserted, collective planning would emerge from the desires of all the members of society as their communal choice and consent. It would be consciously planned and directed through the participation of all the members of society, thus generating an “other-oriented” sense of a “common good” for which all worked.

No one would be forced and constrained to do what another made them do in the division of labor anymore. Indeed, communism would free men from the “tyranny” of specialization. In Marx’s words, from The German Ideology (1845),

In communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow; to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticize after dinner, just as I have a mind.

In this new communist world, no one will have to work at anything he did not like or want to do. In addition, under communal planning, production would rise to such a height of productivity that the work day would be shortened to the point that each person’s time would be free to do only the things he enjoyed doing.

Selfishness would be eliminated as a human trait, and altruism would become the dominant trait.

Communism would also enhance social consciousness and other-orientedness. All that was communally produced would be distributed on the basis of “need” or “want.” No longer would scarcity impose constraints on man’s desires. As a result, the urge for “possessiveness” and acquisition of “things” would diminish and finally disappear. Selfishness would be eliminated as a human trait.Others would no longer be viewed as “competitors” for scarce things, but as social collaborators for attaining “higher” ends of social importance. Altruism would become the dominant trait in man.

In addition, communism would result in the flowering of aesthetic appreciation.

Man would not create so he could earn a living, but for the pleasure of the activity itself. Work would not be a source of “alienation” but an activity reflecting the free – the “autonomous” – desires of man for the “beautiful.”

Communism would liberate man in all ways and all things, said Marx:

With a communist organization of society, there disappears the subordination … of the individual to some definite art, making him exclusively a painter, a sculptor, etc. … In a communist society, there are no longer painters, but only people who engage in painting among other activities.

With the end of capitalism and the arrival of communism, there would come a heaven on earth. There would be enough of everything for all. Man would be freed from working for survival, he would be unchained from the division of labor, he would be liberated to follow whatever gave his heart pleasure. With Communism, man becomes like God – free and powerful to do whatever he wants.

Marx’s Denial of Self-Oriented Human Nature

Let me suggest that what Marx was objecting to – revolting against – was human nature and the existence of scarcity. Man can never escape from or get outside of being an individual “ego.” We exist as individual human beings; we think, remember, imagine, choose, and act as distinct and unique individual men and women.

Our experiences are our experiences; our thoughts and beliefs are our reflections and ideas; our judgments and valuations are our estimates and rankings of things of importance to us. Even when we try to put ourselves in another person’s shoes, to try to sympathize, empathize, and understand the meanings, experiences, and actions of others, it is from our perspective and state of mind that we do so.It is the individuality of the person in these and other facets of our distinct nature and character as conscious, conceptualizing creatures that make for the unique differences and diversities of our minds as self-oriented human beings. This is the source of the creativity and plethora of possibilities that can and have emerged from seeing the world in the distinct and different ways of self-oriented and self-experiencing people when pursuing their own improvement. As they consider what is most advantageous for themselves and others they “selfishly” care about, they support and encourage an institutional setting of peaceful and voluntary market association.

Marx’s Denial of the Reality of Scarcity

Marx also objects to the reality of the necessity to have to produce in order to consume and to have to view one’s own labor as a means to various ends, rather than simply being somehow provided with all that we want and our labor being “free” to be used as a pleasurable end in itself.

Likewise, he revolts against men viewing each other as a means to their respective desired ends rather than as purely human relationships, a “club” in which all get together and freely associate for “good times” with no concern for how or who provides the things without which good times cannot occur.

Nor can he abide men looking upon nature and man-made objects as the means or tools of producing the necessities, amenities, and luxuries of life, with the assignment of a “money value” to a house, a work of art, a waterfall, or a sculpture being “dehumanizing” for Marx.

However, the only reason such things are given values by people in society is that they are wanted but also scarce and because the means to achieve them are scarce as well. As a consequence, we must decide what we consider to be more or less valuable and important to us since all that we would like to have cannot be simultaneously fulfilled at the same time.

Marx’s hatred for the division of labor is an outgrowth of this worldview. Man is seen as somehow less than whole by specializing in a task and selling both his labor and his fraction of the total output to achieve the ends and goals he considers more important than what he has to give up in return.

Marx’s Misconception of Action and Choice

The entire Marxian conception of man, society, and happiness can be conceived, therefore, as a flight from reality. It can be seen in Marx’s distinction between “autonomous action” and capitalist “choices.”

“Action” is, in fact, nothing more than choice manifested: we undertake courses of action only after we have decided what it is we wish to do. That is, we decide which among the alternatives available to us we shall try to bring about, and which shall be set aside for a day or forever because not everything we desire can be had, due to the constraints of nature and the existence of other human beings.

Marx talks of people fishing in the morning and hunting in the afternoon – does that not mean that the person’s time is scarce? Is he not “frustrated” that he cannot do both at the same time, or be in two places at once?

“Action” is, in fact, nothing more than choice manifested.

If every man is to be “autonomously free” to hunt and fish whenever and to whatever extent he desires, what happens when the various members of the community wish to kill the forest animals or catch the fish at such a rate that they are threatened with extinction? Or what if several people all want to fish from the same place along the river or lake bank at the same time, or from the same “cover” position while out hunting?Marx might say that a “societal orientation” on the part of everyone would result in some form of “comradely” compromise. But is that not just other language for “mutual agreements,” “trade-offs,” and “exchanges” concerning the use and disposal of scarce resources – the disposition of the communal property rights among the members of society?

There is no certainty that all of the members of such a society will always like the communally agreed-upon outcomes, with some of them considering themselves “exploited” for the benefit of others who have out-voted them. And, therefore, they may be “alienated” from their fellow men and from nature even in the communist paradise to come.

Nor can there simply be the idea of art for art’s sake or nature for nature’s sake.

Resources for art and gifts of nature (unless cultivated to expand them) are always limited. The use of forests for primitive contemplation versus industrial use versus residential housing would still have to be made in Marx’s magical communist society. And, certainly, not everyone in the bright, beautiful communist society may agree or like the decisions that a majority of others in the blissful societal commune make about such things.

The paint for the artist’s pallet is not in infinite supply, so some art would have to be forgone so other art might be pursued; similarly with the ingredients going into the manufacture of paints versus being used for other things. To assume that men would never conflict over how to dispose of these things is to escape into a complete fantasyland.

Also, it is a physical and psychological fact that men differ in their relative capacities and inclinations in terms of various tasks needing to be performed. It is a physical and psychological fact that men tend to be more productive when they specialize in a small range of tasks as opposed to trying to be a “jack-of-all-trades.”

The Reality of Communism Versus the Reality of Capitalism

As a result, the division of labor raises both the productivity and the total production of a community of men, standards of living rise, leisure time can be expanded, and more variety and quality of goods can be produced.

Indeed, it has been free market capitalism that has provided humanity over the last 200 years with that actual relative horn-of-plenty wherever a fairly free rein has existed for self-interested individual action in pursuit of profit in associative relationships of specialization based on the peaceful use of private property.

Capitalism has been the great liberator of ever more of mankind from poverty, want, and worry. It has freed people from the hardship and drudgery of often life-threatening forms of work. The free market has shortened the hours of work needed to generate levels of material and cultural comfort for a growing number of people and provided the longer, healthier lives and increased leisure time for people to enjoy the wealth that economic freedom has made possible.The “de-alienation” of man from his everyday existence, in the sense that Marx talked about it, has also, in fact, been brought about through the achievements of capitalism. It has relieved more and more of mankind from the concerns of mere survival and subsistence through the capital accumulation and profit-oriented production that has raised the productivity of all those who work and expanded the available supply of useful goods and services. The free market has enabled people to have the means to fulfill more of the enjoyments and meanings of life as ends in themselves.

Furthermore, as Austrian economist F. A. Hayek and others have pointed out, the advantage of the free market system is precisely that it does not require all of the members of the society to agree upon and share the same hierarchy of goals, ends, and values. Each individual, under competitive capitalism, is at liberty to select and follow their own purposes and pursue happiness in their own way. Using each other as the voluntary means to their respective ends in the arena of peaceful market exchange allows a much larger diversity of outcomes reflecting differences among people than if one central plan needs to imposed on all in the name of the interests of a collectivist community as a whole.

Marx’s flight from reality, on the other hand, was the wish to have everything capitalism, the division of labor, and competitive exchange can produce, but without the cost of work, discipline, specialization, and selecting among alternatives. It is like the cry of the child who refuses to accept the fact that he cannot have everything he wants, right there and then and, instead, expects someone or something to provide it to him and everyone else in a blissful fairyland of material plentitude.

Richard M. Ebeling

Richard M. Ebeling

Richard M. Ebeling is BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel in Charleston, South Carolina. He was president of the Foundation for Economic Education (FEE) from 2003 to 2008.

New Board Game ‘Socialism’ parodies Monopoly, satirizes Hillary Clinton

PHILADELPHIA, PA /PRNewswire/ — What would America look like under Socialism? Startup Company, Diogenes Games says they don’t know, but developed a satirical version of Monopoly to find out. They call it SOCIALISM: The Game.

The small startup is proud to announce the commencement of a Kickstarter campaign to promote their parody tabletop game “SOCIALISM”.

A hilarious sendup of the classic board game Monopoly, SOCIALISM: The Game has a radically different goal than the original – the object of the game is to achieve total fairness and equality through the renting and selling of property under a modern, progressive, and populist public policy. The game is over when everyone has $300or less, and uses caricatures of Hillary Clinton and Bernie Sanders to replace the game’s original mascot, Rich Uncle Pennybags.

“We discovered that our game was a fun way to hypothesize what might happen if trends in public policy, trends that have recently entered mainstream political debate, were extrapolated to their logical conclusions in the capitalistic world of Hasbro’s real estate trading game Monopoly,” said John Elliott, CEO and founder of Diogenes Games.

Elliott says the results “aren’t pretty,” but thinks that they just might change the way people think about campaigns, elections, and politics in general. One of the ways the game accomplishes this is through an “enlightened” rulebook that contains sarcastic-yet-realistic changes:

  • There’s no more “banker” – all dealings are with the Federal Directorate of Redistributive Services
  • You don’t “go to jail,” you “go to rehab”
  • You don’t have title cards, you are granted a public “concession” to manage a property
  • No more hotels; public “housing towers” are the highest and best use
  • Chance and Community Chest? Nope. “Fat Chance” and “Communism Chest”

The “Fat Chance” and “Communism Chest” cards also reflect the satirical nature of the game, with gems like “Advance to income tax” and “Bernout! Power grid fails on a cloudy windless day. Flick the lights off, pay the player on your right $100 for a black market generator.”

After months of development, design, and play testing, the game is currently in production and is expected to ship in June, if not sooner.

SOCIALISM: The Game on Kickstarter: https://www.kickstarter.com/projects/333308942/socialism-the-game

SOCIALISM: The Game Website: https://www.SocialismGame.com

EDITORS NOTE: This game is political satire, or is it?

Civil War: America’s Enemies Hiding in Plain Sight

Russian born American writer and novelist Ayn Rand wrote, “The uncontested absurdities of today are the accepted slogans of tomorrow. They come to be accepted by degrees, by dint of constant pressure on one side and constant retreat on the other – until one day when they are suddenly declared to be the country’s official ideology.”

Janie Johnson posted the above photo of Black Lives Matter (BLM) protestors on her Twitter page. Janie wrote, “On [the] bottom of the signs is the inscription: revcom.us. To see who printed them, go to: .”

The organization that printed these BLM posters is the Revolutionary Communist Party, USA (RCP-USA). The stated strategic approach of the RCP-USA is to:

“Fight the Power, and Transform the People, for Revolution…to take up a revolutionary viewpoint and revolutionary values and morals as they join with others to resist this system’s crimes and build up the basis for the ultimate all-out revolutionary struggle to sweep this system away and bring in a whole new way of organizing society, a whole new way of being…to become emancipators of humanity.” [Emphasis RCP-USA]

The RCP-USA signs brought to mind several banners carried by BLM protestors in Ferguson, Missouri.

FergusonPalestine

Robert Spencer in his November 2014 column Islamic supremacist groups connect their jihad to Ferguson riots wrote:

In the photo above (thanks to Kay), Leftist demonstrators relate the strife in Ferguson to the “Palestinian” jihad. And Pamela Geller has a great deal of information on how Islamic jihadists and supremacists, including the Hamas-linked terror organization CAIR, have tried to co-opt the Ferguson riots as part of their own jihad. Most noteworthy is the active presence in Ferguson of “Palestinian” jihad activist Bassem Masri.

The connection between Ferguson and “Palestine” (and the global jihad in general) is clear: both the Islamic supremacists and the Ferguson rioters think that the American system is corrupt and must be brought down.

isis banner ferguson

Islamic State banner carried by Black Lives Matter protestors in Ferguson, Missouri. Photo: CNN

In a November 2014 column Ferguson: The beginning of an American Intifada I wrote:

This spiral of death and destruction scenario is used across the globe to incite riots, mayhem and violence. It is used to recruit those with real or perceived grievances against those in authority. It is being used by the Islamic State to recruit in Ferguson, Missouri.

Ferguson is the beginning of the American intifada in the black community. This same strategy is being used by terrorist organizations like HAMAS, Hezbollah, Boko Haram and al Qaeda. Grab the headlines and make your point via political violence. The problem is the narrative is routinely false, even based upon lies, but by the time the facts are presented it is too late. The damage has already been done.

Lessons learned from Ferguson:

  1. Appeasement of the protesters leads to more violence.
  2. Coalitions of outside organizations including radical homosexual, Muslim and minority groups makes for a deadly mix.
  3. The targets are the law and law enforcement. The demand is for two legal systems, one for minorities and one for whites.
  4. The creation of no-go zones where police and firefighters cannot or will not go due to the threat of violence.
  5. The manipulation of the media in the name of “equality” and “social justice” to create a scenario where a radical agenda may be furthered that denies both.
  6. The use of violence even when blacks, like President Obama, call upon their fellow blacks to be non-violent.
  7. The creation of a atmosphere where law enforcement officers will hesitate to enforce the law or ignore the law in order not to become a target.
  8. Lawlessness with an anarchist’s political objective – to destroy the status quo.

A race war is upon America because some minorities want it more than they want to be Americans.

I fear that these groups will once again come together in Cleveland to disrupt the Republican National Convention and Donald Trump’s nomination. This Red/Green/Rainbow alliance has already showed itself at Trump rallies. The Red/Green/Rainbow alliance is emboldened and becoming more violent.

These protestors want to bring a civil war to America in order to fundamentally transform the country. 

America is a land of laws and requires order. Protest if one wishes but to become violent demands police action and people, organizations and institutions to be held accountable.

We shall see what happens in Cleveland. Stay tuned.

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Shakedown Socialism: Second edition, improved and expanded

The positive response to my first book was overwhelming. Many readers on Amazon praised Shakedown Socialism for its insights, style, and originality, regretting only that it was too short. By popular demand, I have republished it with more relevant material and a new, more attractive cover.

Shakedown SocialismHere is one such review:

I’ve bought books on Amazon for a while but never felt the need to write a review before. This is not a typical anti-socialist book at all. None of the familiar rhetoric you might be expecting. While not an academic work by any means, the author makes some of the most compelling arguments I’ve ever read, and from an angle you seldom think about. His anti-union argument is so perfect, I will be repeating it in conversations for the rest of my life. Some serious mental ammunition for arguments with any unfortunate, collectivist-leaning friends you may have. Even if they refuse to read it, the images (on practically every page) might catch their attention if you can get them to flip through it. Do not click off this page without buying this book.

It inspires me to write and publish more books, and I already have a few good ideas.

For more information, see the updated and improved ShakedownSocialism.com.

You can look inside the new edition, read the reviews, or even buy the book on Amazon.

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If you are a fan and would like to support the author and the People’s Cube, buy it directly from the printer at CreateSpace – the price is the same, but I’ll be getting a bigger royalty.

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But if you really want to support the author, order an autographed copy!

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If you like to read on Kindle or any other tablet, there’s an eBook:

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Here’s a fun promotion of the first edition: The Best Book Promotion Ever!

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EDITORS NOTE: To learn more about Shakedown Socialism and The Peoples Cube click here.

Socialism Is Harder than You Think by Scott Sumner

Suppose you wanted to switch to socialism — what would be the ideal place to do so? You’d want a country with extremely high quality civil servants.

That would be France.

You’d want a country where socialism is not a dirty word, and capitalism is.

That would be France.

You’d want a country with the Socialist party in power, a party that was committed to enact the ideas of Thomas Piketty.

That would be France.

So how did things work out in France, when they tried to adopt a Bernie Sanders/Thomas Piketty approach to taxes?

IN THE eyes of many foreigners, two numbers encapsulate French economic policy over the past decade or so: 75 and 35. The first refers to the top income-tax rate of 75%, promised by François Hollande to seduce the left when he was the Socialist presidential candidate in 2012. The second is the 35-hour maximum working week, devised by a Socialist government in 2000 and later retained by the centre-right.

Each has been a totem of French social preferences. Yet, to the consternation of some of his voters, Mr Hollande applied the 75% tax rate for only two years, and then binned it. Now he has drawn up plans that could, in effect, demolish the 35-hour week, too.

Mr Hollande’s government is reviewing a draft labour law that would remove a series of constraints French firms face, both when trying to adapt working time to shifting business cycles and when deciding whether to hire staff. In particular, it devolves to firms the right to negotiate longer hours and overtime rates with their own trade unions, rather than having to follow rules dictated by national industry-wide deals.

The 35-hour cap would remain in force, but it would become more of a trigger for overtime pay than a rigid constraint on hours worked. These could reach 46 hours a week, for a maximum of 16 weeks. Firms would also have greater freedom to shorten working hours and reduce pay, which can currently be done only in times of “serious economic difficulty”. Emmanuel Macron, the economy minister, has called such measures the “de facto” end of the 35-hour week.

At the same time, the law would lower existing high barriers to laying off workers. These discourage firms from creating permanent jobs, and leave huge numbers of “outsiders”, particularly young people, temping.

For one thing, it would cap awards for unfair dismissal, which are made by labour tribunals. Laid-off French workers bring such cases frequently; they can take years and cost anything from €2,500 to €310,000 ($2,700 to $337,000) by one estimate.

Unfortunately, while France is moving away from these polices, the US is like to move some distance in their direction. Of course there are differences. Our minimum wage is still lower than in France, and our top income tax rate is closer to 50% in states like California and New York. But all the momentum is with the socialists, who are especially numerous among the younger voters.

Socialist ideas are superficially appealing. Paul Krugman (who favors very high income tax rates on the rich) often says that reality has a liberal bias. Actually, reality has a neoliberal bias, and if you don’t take incentive effects into account, you may end up disappointed.

Back in the US, Sander’s single payer approach also has problems:

A costing of Mr Sanders’s plans by Kenneth Thorpe of Emory University, using more conservative assumptions, found that the plan was underfunded by nearly $1.1 trillion (or 6% of GDP) per year. If Mr Thorpe is right, higher taxes will be required to make the sums add up. In 2014 Mr Sanders’ own state, Vermont, abandoned a plan for a single-payer system on the basis that the required tax rises would be too great.

Vermont is one of the most liberal states in the union. Now think about the fact that they gave up on the idea, despite it having been previously approved and signed into law. Then think about the concept of rolling out a multi-trillion dollar plan at the federal level, soon after the only experiment at the state level failed to get off the ground.

Is that evidence-based liberalism, or wishful thinking?

This post first appeared at Econlog.

Scott SumnerScott Sumner

Scott B. Sumner is the director of the Program on Monetary Policy at the Mercatus Center and a professor at Bentley University. He blogs at the Money Illusion and Econlog.

Why Students Give Capitalism an ‘F’ by B.K. Marcus

bernie sanders half of a sign socialismNot only are young voters more likely to support Democrats than Republicans, they are also more likely to support the most left-wing Democrats. In recent polls of voters under 30, self-declared democratic socialist Bernie Sanders beats the more mainstream Hillary Clinton by almost six-to-one.

Former professor Mark Pastin, writing in the Weekly Standard, acknowledges some of Clinton’s flaws as a candidate, but concludes that “the most compelling explanation” for young Democrats’ overwhelming preference for Sanders “is that young voters actually like the idea of a socialist revolution.”

I’m embarrassed to confess that when I was a young voter, I probably would have been among the “Sandernistas.”

I don’t think Pastin is right about the revolution, though. Much of Sanders’s success in defanging the word socialism is in pairing it with an emphasis on democracy, as George Bernard Shaw and the Fabians did in an earlier era. Democratic socialists — at least among my comrades — preferred the idea of evolutionary socialism, and we tried hard to distance ourselves from the revolutionary folks.

Whether by evolution or revolution, however, what we all sought was less competition and more cooperation, less commerce and more compassion. Above all, we wanted greater equality.

“When I asked my students what they thought socialism meant,” Pastin writes, “they would generally recite some version of the Marxist chestnut ‘from each according to ability and to each according to need.'” That sounds about right, but add to that the assumption that it’s government’s job to effect the transfer.

My father, gently skeptical of my politics, pointed out a problem confronting American socialists: we tended to imagine ourselves on the receiving end of the redistribution — rob from the rich and give to the rest of us. “However poor we may think we are in the United States,” he told me, “we would have to give up most of what we now have in order to make everyone in the world equal.” This was strange to hear from someone always behind on the rent and facing ever-growing debt.

Pastin makes a related point: “I’ve always thought that socialism appealed to students because they have never not been on the receiving end of government largesse.”

As an informal test of his students’ egalitarian beliefs, Pastin “would offer to run the class along socialist principles, such as the mandate to take from the able and give to the needy.” Specifically, he proposed subtracting points from the A students and transferring them to those who would otherwise earn lower grades.

Even the most ardent socialist students balked at this arrangement. In fact, according to Pastin, the highest-performing students were both more likely to be self-declared socialists and more likely to meet his proposal with outrage: grading, they argued, should be a matter of merit.

Is it pure hypocrisy on the part of these rhetorical radicals, or is there a logical consistency behind this apparent contradiction in their values?

Trying to recall the details of my own callow political folly, I seem to recall three main issues behind my anti-capitalistic mentality:

  1. “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?
  2. Even when we left race and sex out of the equation, our understanding of commerce was zero-sum: the 1 percent grew rich by exploiting the 99 percent.
  3. For whatever reason, none of us imagined we’d ever be business people, except on the smallest possible scale: at farmer’s markets, as street vendors, in small shops. Those things weren’t capitalism. Capitalism was big business: McDonald’s, IBM, the military-industrial complex.

I don’t know how many of today’s young socialists hold these same assumptions, but a question recently posted to Quora.com sounds like it could have been written by one of my fellow lefties in the 1980s: “Should I drop out of college to disobey the capitalist world that values a human with a piece of paper?” (See Praxis strategist Derek Magill’s withering advice to the would-be dropout.)

Even if a different array of confusions drives the radical chic of millennial voters, what is clear is that they see American capitalism as rigged. “Crony capitalism,” from their perspective, is redundant — and “free market” is an oxymoron. They’re not necessarily opposed to meritocracy; they just don’t see what merit has to do with the marketplace.

Grading that would penalize the studious to reward the slackers is obviously unfair, and a sure-fire strategy to kill anyone’s incentive to do the homework. It’s not that the socialist students are applying the principle inconsistently; it’s that they don’t see what merit has to do with commerce. Some of that may be intellectual laziness, some is the result of indoctrination by anti-capitalist faculty, but much of it is also based in the reality of America’s mixed economy.

Not only have young voters spent most of their lives sheltered from the productive side of the commercial world, schooled by men and women who are themselves deliberately insulated from the marketplace, but time spent in the reality of the private sector is hardly an education in what the advocates of economic freedom have in mind when we talk about the free market.

If my own experience is any guide, today’s democratic socialists will have to spend a lot of time unlearning much of what they’ve been taught.

Pastin’s informal experiment is an illuminating first step, and it’s a powerful way to expose the conflict between his students’ understanding of merit and the socialists’ understanding of equality. But there’s also a danger in comparing the economy to the classroom. By offering his grade redistribution as an analogy for socialism, Pastin seems to imply that the merit-based grade system better resembles a free market. But that’s silly.

For one thing, studying hard for your next exam may improve your own GPA, but it probably doesn’t help your classmates. In contrast, an unhampered marketplace makes everyone better off, however unequally.

More significantly, in a free economy, there is no one person in the role of the grade-giving professor. In the absence of coercion, power has a hard time remaining that centralized. Yes, wealth can be seen as a kind of grade, but in the free market, an entrepreneur’s profits and losses are like millions of cumulative grades from the consumers. A+ for improving our lives. F for wasting time and resources.

That kind of spontaneous, decentralized, self-regulating prosperity is every bit as radical as the visions of young socialists, minus the impoverishing effects of coerced redistribution. It’s almost certainly not what they imagine when they say they oppose “capitalism.”

B.K. MarcusB.K. Marcus

B.K. Marcus is editor of the Freeman.

Why the Holocaust Should Matter to You by Jeffrey Tucker

People tour the nation’s capital to be delighted by symbols of America’s greatness and history. They seek out monuments and museums that pay tribute to the nation state and its works. They want to think about the epic struggles of the past, and how mighty leaders confronted and vanquished enemies at home and abroad.

But what if there was a monument that took a different tack? Instead of celebrating power, it counseled against its abuses. Instead of celebrating the state and its works, it showed how these can become ruses to deceive and destroy. Instead of celebrating nationalist songs, symbols, and stories, it warned that these can be used as tools of division and oppression.

What if this museum was dedicated to memorializing one of history’s most ghastly experiments in imperial conquest, demographic expulsion, and eventual extermination, to help us understand it and never repeat it?

Such a museum does exist. It is the US Holocaust Museum. It is the Beltway’s most libertarian institution, a living rebuke to the worship of power as an end in itself.

I lived in Washington, DC, when the Holocaust Museum was being built, and I vaguely recall when it opened. I never went, though I had the opportunity; I remember having a feeling of dread about the prospect of visiting it. Many people must feel the same way. Surely we already know that mass murder by the state is evil and wrong. Do we really need to visit a museum on such a ghastly subject?

The answer is yes. This institution is a mighty tribute to human rights and human dignity. It provides an intellectual experience more moving and profound than any I can recall having. It takes politics and ideas out of the realm of theory and firmly plants them in real life, in our own history. It shows the consequences of bad ideas in the hands of evil men, and invites you to experience the step-by-step descent into hell in chronological stages.

The transformation the visitor feels is intellectual but also even physical: as you approach the halfway point you notice an increase in your heart rate and even a pit in your stomach.

Misconceptions

Let’s dispel a few myths that people who haven’t visited might have about the place.

  • The museum is not maudlin or manipulative. The narrative it takes you through is fact-based, focused on documentation (film and images), with a text that provides a careful chronology. One might even say it is a bit too dry, too merely factual. But the drama emerges from the contrast between the events and the calm narration.
  • It is not solely focused on the Jewish victims; indeed, all victims of the National Socialism are discussed, such as the Catholics in Poland. But the history of Jewish persecution is also given great depth and perspective. It is mind boggling to consider how a regime that used antisemitism to manipulate the public and gain power ended up dominating most of Europe and conducting an extermination campaign designed to wipe out an entire people.
  • The theme of the museum is not that the Holocaust was an inexplicable curse that mysteriously descended on one people at one time; rather the museum attempts to articulate and explain the actual reasons — the motives and ideology — behind the events, beginning with bad ideas that were only later realized in action when conditions made them possible.
  • The narrative does not attempt to convince the visitor that the Holocaust was plotted from the beginning of Nazi rule; in fact, you discover a very different story. The visitor sees how bad ideas (demographic central planning; scapegoating of minorities; the demonization of others) festered, leading to ever worsening results: boycotts of Jewish-owned business, racial pogroms, legal restrictions on property and religion, internments, ghettoization, concentration camps, killings, and finally a carefully constructed and industrialized machinery of mass death.
  • The museum does not isolate Germans as solely or uniformly guilty. Tribute is given to the German people, dissenters, and others who also fell victim to Hitler’s regime. As for moral culpability, it unequivocally belongs to the Nazis and their compliant supporters in Germany and throughout Europe. But the free world also bears responsibility for shutting its borders to refugees, trapping Jews in a prison state and, eventually, execution chamber.
  • The presentation is not rooted in sadness and despair; indeed, the museum tells of heroic efforts to save people from disaster and the resilience of the Jewish people in the face of annihilation. Even the existence of the museum is a tribute to hope because it conveys the conviction that we can learn from history and act in a way that never repeats this terrible past.

The Deeper Roots of the Holocaust

For the last six months, I’ve been steeped in studying and writing about the American experience with eugenics, the “policy science” of creating a master race. The more I’ve read, the more alarmed I’ve become that it was ever a thing, but it was all the rage in the Progressive Era. Eugenics was not a fringe movement; it was at the core of ruling-class politics, education, and culture. It was responsible for many of the early experiments in labor regulation. It was the driving force behind marriage licenses, minimum wages, restrictions on opportunities for women, and immigration quotas and controls.

The more I’ve looked into the subject, the more I’m convinced that it is not possible fully to understand the birth of the 20th century Leviathan without an awareness of eugenics. Eugenics was the original sin of the modern state that knows no limits to its power.

Once a regime decides that it must control human reproduction — to mold the population according to a central plan and divide human beings into those fit to thrive and those deserving extinction — you have the beginning of the end of freedom and civilization. The prophets of eugenics loathed the Jews, but also any peoples that they deemed dangerous to those they considered worthy of propagation. And the means they chose to realize their plans was top-down force.

So far in my reading on the subject, I’ve studied the origin of eugenics until the late 1920s, mostly in the US and the UK. And so, touring the Holocaust Museum was a revelation. It finally dawned on me: what happened in Germany was the extension and intensification of the same core ideas that were preached in the classrooms at Yale, Harvard, and Princeton decades earlier.

Eugenics didn’t go away. It just took on a more violent and vicious form in different political hands. Without meaningful checks on state power, people with eugenic ambitions can find themselves lording over a terror state. It was never realized in the United States, but it happened elsewhere. The stuffy academic conferences of the 1910s, the mutton-chopped faces of the respected professorial class, mutated in one generation to become the camps and commandants of the Nazi killing machine. The distance between eugenics and genocide, from Boston to Buchenwald, is not so great.

There are moments in the tour when this connection is made explicit, as when it is explained how, prior to the Nazis, the United States had set the record for forced sterilizations; how Hitler cited the US case for state planning of human reproduction; how the Nazis were obsessed with racial classification and used American texts on genetics and race as a starting point.

And think of this: when Progressive Era elites began to speak this way, to segment the population according to quality, and to urge policies to prevent “mongrelization,” there was no “slippery slope” to which opponents could point. This whole approach to managing the social order was unprecedented, and so a historical trajectory was pure conjecture. They could not say “Remember! Remember where this leads!”

Now we have exactly that history, and a moral obligation to point to it and learn from it.

What Can We Learn?

My primary takeaway from knitting this history together and observing its horrifying outcome is this: that any ideology, movement, or demagogue that dismisses universal human rights, that disparages the dignity of any person based on group characteristics, that attempts to segment the population into the fit and unfit, or in any way seeks to use the power of the state to put down some in order to uplift others, is courting outcomes that are dangerous to the whole of humanity. It might not happen immediately, but, over time, such rhetoric can lay the foundations for the machinery of death.

And there is also another, perhaps more important lesson: bad ideas have a social and political momentum all their own, regardless of anyone’s initial intentions. If you are not aware of that, you can be led down, step by step, to a very earthly hell.

At the same time, the reverse is also true: good ideas have a momentum that can lead to the flourishing of peace, prosperity, and universal human dignity. It is up to all of us. We must choose wisely, and never forget.

Jeffrey A. TuckerJeffrey A. Tucker

Jeffrey Tucker is Director of Digital Development at FEE and CLO of the startup Liberty.me. Author of five books, and many thousands of articles, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.  Follow on Twitter and Like on Facebook. Email.

Does Democracy Lead to Socialism? by B.K. Marcus

Presidential candidate Bernie Sanders has brought “democratic socialism” out of the shadows of fringe ideologies and into the spotlight of mainstream American politics. Nevertheless, many find Sanders’s self-description perplexing. Is socialism seriously still in play? Didn’t the horrors of the 20th century finally bury that ideological monstrosity?

No, that’s communism you’re thinking of. To quote the Democratic Socialists of America (DSA),

Socialists have been among the harshest critics of authoritarian Communist states. Just because their bureaucratic elites called them “socialist” did not make it so; they also called their regimes “democratic.”

If the communists weren’t really socialists, then what the heck does socialism mean?

The basic definition of socialism, democratic or otherwise, is collective ownership of the means of production. The DSA website says, “We believe that the workers and consumers who are affected by economic institutions should own and control them.”

But the DSA keeps the emphasis on democracy:

Democratic socialists believe that both the economy and society should be run democratically — to meet public needs, not to make profits for a few. To achieve a more just society, many structures of our government and economy must be radically transformed through greater economic and social democracy so that ordinary Americans can participate in the many decisions that affect our lives.

Socialism, then, as the democratic socialists understand the term, is just the logical consequence of the democratic ideal:

Democracy and socialism go hand in hand. All over the world, wherever the idea of democracy has taken root, the vision ofsocialism has taken root as well.

On this point, at least, many in America’s free-market tradition would agree.

Anti-democratic Anti-socialists

Ludwig von Mises may have been the most radical classical liberal in 20th-century Europe, but when he came to the United States, Mises found himself at odds with American libertarians who felt that his liberalism didn’t go far enough.

Some of these disagreements would strike most of us as highly abstract, such as the question of whether or not the philosophy of freedom is based in natural law or utilitarianism. But at least one practical point of contention was the issue of majoritarian democracy. Mises had defended both capitalism and democracy in his book Liberalism. American libertarians such as R.C. Hoiles and Frank Chodorov shared Mises’s appreciation of the free market but were far less sanguine about majority rule. The harshest language came from Discovery of Freedom author Rose Wilder Lane:

As an American I am of course fundamentally opposed to democracy and to anyone advocating or defending democracy, which in theory and practice is the basis of socialism.

It is precisely democracy which is destroying the American political structure, American law, and the American economy, as Madison said it would, and as Macauley prophesied that it would do in fact in the 20th century. (Letter from Lane to Mises, July 5, 1947; quoted in Mises: The Last Knight of Liberalism)

Why would Lane argue that democracy is “the basis of socialism”?

Majority Fools

Voting turns out to be a particularly bad way to make economic decisions. Mancur Olson’s book The Logic of Collective Action wouldn’t appear for another 18 years, but some version of his thesis was probably already familiar to Lane and her radical allies. Olson argues that majority rule separates the benefits and the costs of decision-making.

Elections aren’t just a poll of everyone’s opinion; they are organized campaigns by different groups fighting for their interests. A voter doesn’t go into the booth having studied the controversy in question. He or she brings to the polls an impression of an issue based on how different organized groups have presented their cause during massive advocacy campaigns prior to Election Day. Every such campaign is a case of a special-interest minority trying to persuade a voting majority.

And it’s not a level playing field, to borrow one of the political left’s favorite metaphors. Olson explains how the incentive for group action decreases as the size of a group increases, meaning that bigger groups are less able to act in their common interest than smaller ones. Small groups can gain concentrated benefitswhile the rest of us face diffuse costs.

The textbook example is sugar tariffs (“or what amounts to the same thing in the form of quota restrictions against imports of sugar,” as former Freeman editor Paul Poirot put it). Why is Coke sweetened with corn syrup in the United States and with sugar everywhere else in the world? Because sugar is cheaper everywhere else, while the US government keeps sugar artificially expensive for Americans. The protections responsible are a huge benefit to a small group of domestic sugar producers (and, as it turns out, also to corn growers) and a burden on the rest of us.

Ignore the corn-syrup issue for a moment and pretend that Coke is still made with sugar. Let’s imagine that government price supports make each can of Coke, say, 5¢ more than it otherwise would be. That difference adds up, but at the moment you’re buying the can of soda, it’s an irritation, not a hardship. Even if you bother to figure out how much extra money you have to spend on sweet drinks each year, the figure probably won’t be enough to stir you to petition the legislature to repeal the sugar lobby’s protections. In fact, the loss isn’t even enough to prompt you to learn the cause of the higher price.

That’s what economists mean when they talk about diffuse costs. (And the Coke drinker’s very reasonable cluelessness about the cause of his lost nickel is what economists call “rational ignorance.” See “Too Dumb for Democracy?” Freeman, Spring 2015.)

On the other hand, the sugar producers will make billions from lobbying and campaigning to explain why their favorite barriers are good for the economy.

Take this example and multiply it by all the special interests seeking government favors. Even if you do understand what’s going on, even if you know how this hurts the economy and consumers and yourself, it’s not like there’s ever one plebiscite, a big thumbs-up or thumbs-down for free trade in sugar. Every issue is addressed separately, and every issue faces the same logic of collective action we see in the case of the sugar. (And as with the case of sugar, where the corn industry has its own interests in promoting higher sugar prices, many issues have multiple special-interest groups with their own reasons for supporting socially harmful policies.)

Now replace agribusiness in this example with teachers unions or the AARP or anyone else who benefits from a government program, even if that program hurts the rest of us.

The democratic system is rigged from the outset to favor ever more interference from ever-bigger government. From this perspective, Rose Wilder Lane doesn’t seem quite so polemical for equating democracy and socialism.

Democratic Socialists for Crony Capitalism

But is big government the same thing as socialism? The DSA denies it. They insist that they prefer local and decentralized socialism wherever possible. How long an elected socialist would keep his hands off the bludgeon of central power is a reasonable question, and a chilling one, as is the question of how long asocialist democracy would honor the civil liberties that the DSA claims to support.

But even if we reject the DSA’s claims as either naive or fraudulent, there is still a compelling reason to reject the equation of big government and socialism.

Government doesn’t grow to serve the poor or the proletariat. Democracy spawns special interests, and special-interest campaigns require deep pockets. None come deeper than the pockets of established business interests.

Real-world capitalists, despite the rhetoric of the socialists, rarely support capitalism — at least not in the sense of free trade and free markets. What they too often support is government protection and largess for themselves and their cronies, and if that means having to share some of the spoils with organized labor, or green energy, or the welfare industry, that’s not a problem. Corporate welfare flows left and right with equal ease.

“Democratic socialists,” according to the DSA, “do not want to create an all-powerful government bureaucracy. But we do not want big corporate bureaucracies to control our society either.”

If that’s true, then democratic socialists should aim to reduce both the size of government and the scope of democratic decisions. Unfortunately, they’re headed in the opposite direction — and trying to drag the rest of us with them.

B.K. MarcusB.K. Marcus

B.K. Marcus is editor of the Freeman.

The Myth of Scandinavian Socialism by Corey Iacono

Bernie Sanders has single-handedly brought the term “democratic socialism” into the contemporary American political lexicon and shaken millions of Millennials out of their apathy towards politics. Even if he does not win the Democratic nomination, his impact on American politics will be evident for years to come.

Sanders has convinced a great number of people that things have been going very badly for the great majority of people in the United States, for a very long time. His solution? America must embrace “democratic socialism,” a socioeconomic system that seemingly works very well in the Scandinavian countries, like Sweden, which are, by some measures, better off than the United States.

Democratic socialism purports to combine majority rule with state control of the means of production. However, the Scandinavian countries are not good examples of democratic socialism in action because they aren’t socialist.

In the Scandinavian countries, like all other developed nations, the means of production are primarily owned by private individuals, not the community or the government, and resources are allocated to their respective uses by the market, not government or community planning.

While it is true that the Scandinavian countries provide things like a generous social safety net and universal healthcare, an extensive welfare state is not the same thing as socialism. What Sanders and his supporters confuse as socialism is actually social democracy, a system in which the government aims to promote the public welfare through heavy taxation and spending, within the framework of a capitalist economy. This is what the Scandinavians practice.

In response to Americans frequently referring to his country as socialist, the prime minister of Denmark recently remarked in a lecture at Harvard’s Kennedy School of Government,

I know that some people in the US associate the Nordic model with some sort of socialism. Therefore I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy.

The Scandinavians embrace a brand of free-market capitalism that exists in conjunction with a large welfare state, known as the “Nordic Model,” which includes many policies that democratic socialists would likely abhor.

For example, democratic socialists are generally opponents of global capitalism and free trade, but the Scandinavian countries have fully embraced these things. The Economist magazine describes the Scandinavian countries as “stout free-traders who resist the temptation to intervene even to protect iconic companies.” Perhaps this is why Denmark, Norway, and Sweden rank among the most globalized countries in the entire world. These countries all also rank in the top 10 easiest countries to do business in.

How do supporters of Bernie Sanders feel about the minimum wage? You will find no such government-imposed floors on labor in Sweden, Norway, or Denmark. Instead, minimum wages are decided by collective-bargaining agreements between unions and employers; they typically vary on an occupational or industrial basis. Union-imposed wages lock out the least skilled and do their own damage to an economy, but such a decentralized system is still arguably a much better way of doing things than having the central government set a one-size fits all wage policy that covers every occupation nationwide.

In a move that would be considered radically pro-capitalist by young Americans who #FeelTheBern, Sweden adopted a universal school choice system in the 1990s that is nearly identical to the system proposed by libertarian economist Milton Friedman his 1955 essay, “The Role of Government in Education.”

In practice, the Swedish system involves local governments allowing families to use public funds, in the form of vouchers, to finance their child’s education at a private school, including schools run by the dreaded for-profit corporation.

Far from being a failure, as the socialists thought it would be, Sweden’s reforms were a considerable success. According to a study published by the Institute for the Study of Labor, the expansion of private schooling and competition brought about by the Swedish free-market educational reforms “improved average educational performance both at the end of compulsory school and in the long run in terms of high school grades, university attendance, and years of schooling.”

Overall, it is clear that the Scandinavian countries are not in fact archetypes of successful democratic socialism. Sanders has convinced a great deal of people that socialism is something it is not, and he has used the Scandinavian countries to prove its efficacy, while ignoring the many ways they deviate, sometimes dramatically, from what Sanders himself advocates.

Corey IaconoCorey Iacono

Corey Iacono is a student at the University of Rhode Island majoring in pharmaceutical science and minoring in economics.

Will a ‘Socialist’ Government Make Us Freer? by Jason Kuznicki

“Socialism” is a weasel word.

Consider that the adjective “socialist” applies commonly — even plausibly — to countries with vastly different ex ante institutions and with vastly different social and economic outcomes. Yet Canada, Norway, Venezuela, and Cuba can’t all be one thing. Does socialism mean substantial freedom of the press, as in Norway? Or does it mean the vicious suppression of dissent, as in Venezuela?

We need more clarity here before we decide whether socialism is a worthwhile social system, and whether, as Will Wilkinson recommends, we ought to support a socialist candidate for president.

An approach that clearly will not do is to apply the term “socialism” to virtually all foreign countries. Shabby as that definition may be, some do seem to use it, both favorably and not. The result is that “socialism” has grown popular largely because a lot of people have concluded that the American status quo stinks. Maybe it does stink, but that doesn’t endow “socialism” with a proper definition.

Let’s see what happens when we drill down to the level of institutions.

Now, we might personally wish that the word “socialism” meant “the social system in which the state owns the means of production and runs the major industries of the nation.”

This is a workable definition: It has a clear genus and differentia; it includes some systems, while excluding others; and it’s not obviously self-referential. It’s also the definition preferred by many important political actors in the twentieth century, including Vladimir Lenin.

Lenin’s definition was not a bad one. But it’s far from the only current, taxonomically proper definition of socialism. As Will Wilkinson rightly notes, socialism also commonly means “the social system in which the state uses taxation to provide an extensive social safety net.”

And yet, as Will also notes, “ownership of the means of production” and “provision of a social safety net” are logically independent policies. A state can do one, the other, both, or neither. Of these four possibilities, there’s only one that can’t plausibly be called a socialism — and not a single state on earth behaves this way!

Better terms are in order, but I know that whatever I propose here isn’t going to stick, so I’m not going to try. Instead I want to look at some of the consequences that may arise from our fuzzy terminology.

One danger is that we may believe and support one conception of “socialism” —only to find that the agents we’ve tasked with supplying it have had other ideas all along: We may want Norway but get Venezuela. Wittingly or unwittingly.

Before we say “oh please, of course we’ll end up in Norway,” let’s recall how eager our leftist intelligentsia has been to praise Chavez’s Venezuela — and even declare it an “economic miracle” — until the truth became unavoidable: The “miracle” of socialism in Venezuela turned out to be nothing more than a transient oil boom. Yet leftist intellectuals are the very sorts of people who will be drawn, by self-selection, to an administration that is proud to call itself socialist.

There’s some resemblance to a “motte-and-bailey” process here: they cultivate the rich, desirable fields of the bailey, until they are attacked, at which point they retreat to the well-fortified motte. The easily defensible motte is the comfortable social democracy of northern Europe, which we all agree is pretty nice and happens to have quite a few free-market features. The bailey is the Cuban revolution.

This motte-and-bailey process does not need to be deliberate; it may be the result of a genuinely patchwork socialist coalition. No one in the coalition needs to have bad faith. An equivocal word is all that’s needed, and one is already on hand.

Even when we look only at one country, the problem remains: We may only want some institutional parts of Denmark — and we may want them for good reasons, such as Denmark’s relatively loose regulatory environment. But what we get may only be the other institutional parts of Denmark — such as its high personal income taxes. (Worth noting: Bernie Sanders has explicitly promised the higher personal income taxes, while his views on regulation are anything but Danish.)

Will thinks that electing someone on the far left of the American political spectrum could be somewhat good for liberty, but I’m far from convinced. Remember what happened the last time we put just a center-leftist in the White House: By the very same measures of economic freedom that Will uses to tout Denmark’s success, America’s economic freedom ranking sharply declined. And that decline was the direct result of Barack Obama’s left-wing economic policies. We got a larger welfare state and higher taxes, but we also got much more command-and-control regulation.

Faced with similar objections from others, Will has already performed a nice sidestep: He has replied that voting for Sanders is — obviously — just a strategic move: “Obviously,” he writes, “President Bernie Sanders wouldn’t get to implement his economic policy.” Emphasis his.

To which I’d ask: Do you really mean that Sanders would achieve none of his economic agenda? At all? Because I can name at least two items that seem like safe bets: more protectionism and stricter controls on immigration. A lot of Sanders’s ideas will indeed be dead on arrival, but these two won’t, and he would be delighted to make a bipartisan deal that cuts against most everything that Will, the Niskanen Center, and libertarians generally claim to stand for. Cheering for a guy who would happily bury your legislative agenda, and who stands a good chance of actually doing it seems… well, odd.

There is also a frank inconsistency to Will’s argument: The claim that Sanders will make us more like Denmark can’t be squared with the claim that Sanders will be totally ineffective. Arguing both is just throwing spaghetti on the wall — and hoping the result looks like libertarianism.

Would Sanders decriminalize marijuana? Or reform the criminal justice system? Or start fewer wars? Or spend less on defense? Or give us all puppies? I don’t know. Obama promised to close Guantanamo. He promised to be much better on civil liberties. He promised not to start “dumb wars” or bomb new and exotic countries. He even promised accountability for torture.

In 2008, I made the terrible mistake of counting those promises in his favor. We’ve seen how well that worked out.

It’s completely beyond me why I should trust similarly tangential promises this time around — particularly from a candidate like Sanders, whose record on foreign policy is already disturbingly clear. None of the rest of these desiderata have anything to do with state control over our economic life, which would appear to be the one thing the left wants most of all. (Marijuana: illegal in Cuba. Legal in North Korea. Yay freedom?)

Ultimately, I think that electing someone significantly further left than Obama will not help matters in any sense at all, except maybe that it will show how little trust we should put in anyone who willingly wears the socialist label. The only good outcome of a Sanders administration may be that we’ll all say to ourselves afterward: “Well, we won’t be trying that again!”

Now, I am prepared to believe, exactly as Will writes, that “‘social democracy,’ as it actually exists, is sometimes more ‘libertarian’ than the good old U.S. of A.” That’s true, at least in a few senses. Consider, for instance, that Denmark isn’t drone bombing unknown persons in Pakistan using a type of algorithm that can’t seem to deliver interesting Facebook ads. (One could say that, as usual, Denmark is letting us do their dirty work for them, with their full approval, but I won’t press the point.)

Either way, that’s still a pretty low bar, no? Meanwhile, there remains plenty of room for us to imitate some other bad things — things that we aren’t doing now, but that Denmark is doing, like taxing its citizens way, way too much. The fact that these things are a part of the complex conglomerate known as northern European social democracy doesn’t necessarily make them good, exactly as remote control assassination doesn’t become good merely by virtue of being American.

In short: Point taken about social democracy. At times, some of it isn’t completely terrible. But that only gets us so far, and not quite to the Sanders slot in the ballot box.

Jason KuznickiJason Kuznicki

Jason Kuznicki is the editor of Cato Unbound.

What Marx Got Right about Redistribution – That John Stuart Mill Got Wrong by Alan Reynolds

The idea that government could redistribute income willy-nilly with impunity did not originate with Senator Bernie Sanders. On the contrary, it may have begun with two of the most famous 19th century economists, David Ricardo and John Stuart Mill. Karl Marx, on the other side, found the idea preposterous, calling it “vulgar socialism.”

Mill wrote,

The laws and conditions of the production of wealth partake of the character of physical truths. There is nothing optional or arbitrary about them. … It is not so with the Distribution of Wealth. That is a matter of human institution only. The things once there, mankind, individually, can do with them as they like.

Mill’s distinction between production and distribution appears to encourage the view that any sort of government intervention in distribution is utterly harmless — a free lunch. But redistribution aims to take money from people who earned it and give it to those who did not. And that, of course, has adverse effects on the incentives of those who receive the government’s benefits and on taxpayers who finance those benefits.

David Ricardo had earlier made the identical mistake. In his 1936 book The Good Society (p. 196), Walter Lippmann criticized Ricardo as being “not concerned with the increase of wealth, for wealth was increasing and the economists did not need to worry about that.”

But Ricardo saw income distribution as an interesting issue of political economy and “set out to ascertain ‘the laws which determine the division of the produce of industry among the classes who concur in its formation.’

Lippmann wisely argued that, “separating the production of wealth from the distribution of wealth” was “almost certainly an error. For the amount of wealth which is available for distribution cannot in fact be separated from the proportions in which it is distributed. … Moreover, the proportion in which wealth is distributed must have an effect on the amount produced.”

The third classical economist to address this issue was Karl Marx. There were many fatal flaws in Marxism, including the whole notion that a society is divided into two armies — workers and capitalists. Late in his career, however, Marx wrote a fascinating 1875 letter to his allies in the German Social Democratic movement criticizing a redistributionist scheme he found unworkable.

In this famous “Critique of the Gotha Program,” Marx was highly critical of “vulgar socialism” and considered the whole notion of “fair distribution” to be “obsolete verbal rubbish.” In response to the Gotha’s program claim that society’s production should be equally distributed to all, Marx asked,

To those who do not work as well? … But one man is superior to another physically or mentally and so supplies more labor in the same time, or can labor for a longer time. … This equal right is an unequal right for unequal labor… It is, therefore, a right to inequality.

Yet Marx offered a glimmer of utopian hope about the future in which things would become so abundant that distribution would no longer be a matter of concern:

In a higher phase of communist society … after the productive forces have also increased with the all-around development of the individual, and all the springs of cooperative wealth flow more abundantly — only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banner: From each according to his ability, to each according to his needs!

That was not a prescription but a warning: For the foreseeable future Marx knew nothing would work without work incentives. If income were equally distributed to “those who do not work,” why would anyone work?

Contemporary public economics — “optimal tax theory” and the newest of the “new welfare economics” — also teaches that to tax a man “according to his abilities” would give able men a very strong incentive to use their skills to hide their earnings (and therefore their abilities) from tax collectors. This predictable response to tax penalties on high earnings is confirmed by economic research on the elasticity of taxable income.

Distributing government spending “to each according to his needs” must likewise give potential recipients a strong incentive to exaggerate their needs. People who got caught doing that used to be called “welfare cheats” and considerable cheating still goes on in food stamps, Medicaid, etc. The Earned Income Tax Credit, for example, gives low-income working people an extra incentive to not report cash income from tips, casual labor or illicit activities.

In The Undercover Economist, Tim Harford rightly notes that “when economists say the economy is inefficient, they mean there’s a way to make somebody better off without harming anybody else” (called “Pareto optimality”). But argues that Nobel Laureate Kenneth Arrow figured out a way to efficiently redistribute income with “appropriate lump-sum taxes and subsidies that puts everyone on equal footing.” As Harford says, “a lump-sum tax doesn’t affect anybody’s behavior because there’s nothing you can do to avoid it.”

Unfortunately, Harford says “an example of a lump-sum redistribution would be to give eight hundred dollars to everybody whose name starts with H.” That simply shows that if the subsidies were not ridiculously random then the subsidies will affect behavior and will not be lump-sum. The government could collect a lump-sum tax of $800 from every adult and then send a lump-sum subsidy of $800 to every adult with no net effect, for example, but why do that? If the government tried to tax people on the basis of abilities or to subsidize on the basis of needs, even Marx knew that would have a terrible effect on incentives.

The whole idea was curtly dismissed by another Nobel Laureate, Joseph Stiglitz, in his 1994 book Whither Socialism? (p. 46): “The ‘old new welfare economics’ assumed that lump-sum redistributions were possible,” wrote Stiglitz; “The ‘new new welfare economics’ recognizes the limitations on the government’s information.”

The reason governments cannot simply take money from some people according to how able they are, and give it to others according to how needy they are, is because people who were aware of that plan would not be foolish enough to accurately reveal their abilities and needs.

Actual taxes and transfer payment distort behavior in ways that undermine economic progress and commonly produce results (such as trapping people in poverty) that are the opposite of their stated intent.

This post first appeared at Cato.org.

Alan ReynoldsAlan Reynolds

Alan Reynolds is one of the original supply-side economists. He is Senior Fellow at the Cato Institute and was formerly Director of Economic Research at the Hudson Institute.

Why Bernie Sanders Has to Raise Taxes on the Middle Class by Daniel Bier

Willie Sutton was one of the most infamous bank robbers in American history. Over three decades, the dashing criminal robbed a hundred banks, escaped three prisons, and made off with millions. Today, he is best known for Sutton’s Law: Asked by a reporter why he robbed banks, Sutton allegedly quipped, “Because that’s where the money is.”

Sutton’s Law explains something unusual about Bernie Sander’s tax plan: it calls for massive tax hikes across the board. Why raise taxes on the middle class? Because that’s where the money is.

The problem all politicians face is that voters love to get stuff, but they hate to pay for it. The traditional solution that center-left politicians pitch is the idea that the poor and middle class will get the benefits, and the rich will pay for it.

This is approximately how things work in the United States. The top 1 percent of taxpayers earn 19 percent of total income and pay 38 percent of federal income taxes. The bottom 50 percent earn 12 percent and pay 3 percent. This chart from the Heritage Foundation shows net taxes paid and benefits received, per person, by household income group:

But Sanders’ proposals (free college, free health care, jobs programs, more Social Security, etc.) are way too heavy for the rich alone to carry, and he knows it. To his credit, his campaign has released a plan to pay for each of these myriad handouts. Vox’s Dylan Matthews has totaled up all the tax increases Sanders has proposed so far, and the picture is simply staggering.

Every household earning below $250,000 will face a tax hike of nearly 9 percent. Past that, rates explode, up to a top rate of 77 percent on incomes over $10 million.

Paying for Free

Sanders argues that most people’s average income tax rate won’t change, but this is only true if you exclude the two major taxes meant to pay for his health care program: a 2.2 percent “premium” tax and 6.2 percent payroll tax, imposed on incomes across the board. These taxes account for majority of the new revenue Sanders is counting on.

But it gets worse: his single-payer health care plan will cost 80 percent more than he claims. Analysis by the left-leaning scholar Kenneth Thorpe (who supports single payer) concludes that Sanders’ proposal will cost $1.1 trillion more each year than he claims. The trillion dollar discrepancy results from some questionable assumptions in Sanders’ numbers. For instance:

Sanders assumes $324 billion more per year in prescription drug savings than Thorpe does. Thorpe argues that this is wildly implausible.

“In 2014 private health plans paid a TOTAL of $132 billion on prescription drugs and nationally we spent $305 billion,” he writes in an email. “With their savings drug spending nationally would be negative.”

So unless pharmaceutical companies start paying you to take their drugs, the Sanders administration will need to increase taxes even more.

Analysis by the Tax Foundation finds that his proposed tax hikes already total $13.6 trillion over the next ten years. However, “the plan would [only] end up collecting $9.8 trillion over the next decade when accounting for decreased economic output.”

And the consequences will be truly devastating. Because of the taxes on labor and capital, GDP will be reduced 9.5 percent. Six million jobs will be lost. On average, after-tax incomes will be reduced by more than 18 percent.

Incomes for the bottom 50 percent will be reduced by more than 14 percent, and incomes for the top 1 percent will be reduced nearly 25 percent. Inequality warriors might cheer, but if you want to actually raise revenue, crushing the incomes of the people who pay almost 40 percent of all taxes isn’t the way to go.

These are just the effects of the $1 trillion tax hike he has planned — and he probably needs to double that to pay for single payer. Where will he find it? He’ll go where European welfare states go.

Being Like Scandinavia

Sanders is a great admirer of Scandinavian countries, such as Denmark, Sweden, and Norway, and many of his proposals are modeled on their systems. But to pay for their generous welfare benefits, they tax, and tax, and tax.

Denmark, Norway, and Sweden all capture between 20-26 percent of GDP from income and payroll taxes. By contrast, the United States collects only 15 percent.

Scandinavia’s tax rates themselves are not that much higher than the United States’. Denmark’s top rate is 30 percent higher, Sweden’s is 18 percent higher, and Norway’s is actually 16 percent lower — and yet Norway’s income tax raises 30 percent more revenue than the United States.

The answer lies in how progressive the US tax system is, in the thresholds at which people are hit by the top tax rates. The Tax Foundation explains,

Scandinavian income taxes raise a lot of revenue because they are actually rather flat. In other words, they tax most people at these high rates, not just high-income taxpayers.

The top marginal tax rate of 60 percent in Denmark applies to all income over 1.2 times the average income in Denmark. From the American perspective, this means that all income over $60,000 (1.2 times the average income of about $50,000 in the United States) would be taxed at 60 percent. …

Compare this to the United States. The top marginal tax rate of 46.8 percent (state average and federal combined rates) kicks in at 8.5 times the average U.S. income (around $400,000). Comparatively, few taxpayers in the United States face the top marginal rate.

The reason European states can pay for giant welfare programs is not because they just tax the rich more — it’s because they also scoop up a ton of middle class income. The reason why the United States can’t right now is its long-standing political arrangement to keep taxes high on the rich so they can be low on the poor and middle.

Where the Money Is – And Isn’t

As shown by the Laffer Curve, there is a point at which increasing tax rates actually reduces tax revenue, by discouraging work, hurting the economy, and encouraging tax avoidance.

Bernie’s plan already hammers the rich: households earning over $250,000 (the top 3 percent) would face marginal rates of 62-77 percent — meaning the IRS would take two-thirds to three-quarters of each additional dollar earned. His proposed capital gains taxes are so high that they are likely well past the point of positive returns. The US corporate tax rate of 40 percent is already the highest in the world, and even Sanders hasn’t proposed increasing it.

The only way to solve his revenue problem is to raise rates on the middle and upper-middle classes, or flatten the structure to make the top rates start kicking in much lower. You can see why a “progressive” isn’t keen on making more regressive taxes part of his platform, but the money has to come from somewhere.

The bottom fifty percent don’t pay much income tax now (only $34 billion), but they also don’t earn enough to fill the gap. Making their taxes proportionate to income would only raise $107 billion, without even considering how the higher rates would reduce employment and income.

The top 5 percent are pretty well wrung dry by Sanders’ plan, and their incomes are going to be reduced by 20-25 percent anyway. It’s hard to imagine that there’s much more blood to be had from that stone.

But households between the 50th and the 95th percentile (incomes between $37,000 to $180,000 a year) earn about 54 percent of total income — a share would likely go up, given the larger income reductions expected for top earners. Currently, this group pays only 38 percent of total income taxes, and, despite the 9 percent tax hike, they’re comparatively spared by the original tax plan. Their incomes are now the lowest hanging fruit on the tax tree.

As they go to the polls this year, the middle class should remember Sutton’s Law.

Daniel Bier

Daniel Bier

Daniel Bier is the editor of Anything Peaceful. He writes on issues relating to science, civil liberties, and economic freedom.

Tech Sector Bears Brunt of Capital Taxes, Random Regulation by Dan Gelernter

According to our president’s final State of the Union, we’ve recovered from the economic crisis and now enjoy the strongest, most durable economy in the world. Obama does acknowledge that startups and small businesses may need some help, so he wants to reignite our “sprit of innovation” — which he plans to do by putting Vice President Biden in charge of curing cancer.

But the problem facing startups is not a lack of innovation. We are being killed by the economy, which, for those of us who have to live in it, is not good at all. Young entrepreneurs may have spent last year working hard, innovating and building, only to find their companies are worth less now than when they started.

The market is adjusting downwards. Valuations are sinking. The investors I’ve spoken to feel the Fed’s free-money policy has created a dangerous over-valuation of companies and stocks and, now that the rates are coming back up, the air is being let out. 2015, they say, was a tough year because we knew this was coming. 2016 is going to be even tougher.

There is something else weighing on the minds of entrepreneurs and investors alike — regulatory uncertainty. No startup can deal with compliance by itself — not even software companies with no physical products to sell. Startups have to hire lawyers and compliance experts to help them, and this is money we’re not spending on product development or marketing or making our prices more competitive.

The way Obamacare is being implemented, for example, makes our hair white. The rules seem to change with bureaucratic whim; various parts of the law are suspended by executive order. How will we comply next year, and what will it cost? Nobody knows.

In the meantime, the Democratic candidates for President are proposing large hikes to the capital gains tax, which increases effective risk for investors and depresses valuations. Will these hikes ever take place? We don’t know, and that uncertainty carries an additional price.

We’re already seeing more investors decide to weather the storm on the sidelines, keeping an eye on their current affairs and declining to invest in companies they would have snapped up a year ago. A tech startup with a working product will find it harder to raise money today than it would have two years before with nothing but a concept. Not only are we faced with a weak market now, the trend is even more disturbing.

The problem is easier to diagnose than to repair. As an entrepreneur, I’d like to see less regulation and lower taxes. And not just lower taxes on the companies themselves, but on the people who can afford to invest in them. This may come as a surprise, but it’s the hated “one percent” that invests in startups and helps entrepreneurs’ dreams come true. When taxes cut deeper into the pockets of the wealthy, it most negatively affects us — the entrepreneurs and the people we would have hired — not the wealthy.

Regulation remains erratic, and the policies of the next administration cannot be foreseen. 2016 is going to be a hard year for the startup. Investments will continue to decline until investors see a stable market. And they’re not looking at one right now. Companies will die as a result, and not for lack of innovative ideas.

Dan Gelernter

Dan Gelernter is CEO of the technology startup Dittach.