Socialism 101

The following excerpts comes from the ebook Capitalism: A Treaty on Economics by George Reisman. Keep the excerpts in mind when thinking about Obamacare:

Capitalism has planning—the planning of each and every person who participates in the economic system.

The most fundamental fact about socialism is that government ownership of the means of production constitutes an attempt to make intelligence and initiative in production a monopoly of the state.

Socialism simply prohibits all of the independent planning of millions of free, self-interested individuals that is required to run an economic system in a rational and ordered way.

It follows from the powerlessness of the plain citizens that the government of a socialist country is not and has no reason to be interested in anyone’s values but those of its rulers.

Under socialism, economic development is possible only under the kind of tyranny and mass murder practiced by Stalin.

Now the way socialism is to achieve a price system is by dividing the socialist economy up into separate sections or firms. Each will be assigned a balance at the government’s central bank. The government will set prices for all goods and services. At least on paper, these firms will then buy from and sell to each other; they will also sell to consumers and pay wages. They will pay interest on capital to the government’s central bank and even to other enterprises, and they will record profits and losses.

Self-interest, operating under the freedom of competition, is the driving force of price determination under capitalism. Government control of prices thwarts this driving force.

“Market socialism” wants the socialist government to place capital in the hands of firms and individuals who will have absolutely no incentives of ownership, and then to give them discretion as to its investment. It wants the government to delegate its responsibility for investment to them, by giving them capital and then telling them to go and make believe they are capitalists.

In sum, the essential facts are these. Socialism must commence with an enormous act of theft. Those who seriously want to steal must be prepared to kill those whom they plan to rob. In effect, the Social Democrats are mere con men and pickpockets, who engage in empty talk about pulling the “big job”—socialism— someday, and who flee before the first sign of resistance by their intended victims.

If socialism is not to be achieved by open force, the only other way it can be achieved is behind people’s backs—i.e., by fraud—which is the method of price and wage controls. This was the route chosen by the Nazis.

Since a socialist economic system functions in a state of continuous chaos and chronic crisis, it is very easy for any given official to be singled out and blamed for some disaster caused by socialism’s anarchy of production.