Why Politicians Win (And Workers Lose) Under Socialism

Tyler Durden's picture

Authored by Hans-Hermann Hoppe via The Mises Institute,

Socialism leads to the politicization of society. Hardly anything can be worse for the production of wealth.

Socialism, at least its Marxist version, says its goal is complete equality. The Marxists observe that once you allow private property in the means of production, you allow differences. If I own resource A, then you do not own it and our relationship toward resource A becomes different and unequal. By abolishing private property in the means of production with one stroke, say the Marxists, everyone becomes co-owner of everything. This reflects everyone's equal standing as a human being.

The reality is much different. Declaring everyone a co-owner of everything only nominally solves differences in ownership. It does not solve the real underlying problem:  there remain differences in the power to control what is done with resources.

In capitalism, the person who owns a resource can also control what is done with it. In a socialized economy, this isn't true because there is no longer any owner. Nonetheless the problem of control remains. Who is going to decide what is to be done with what? Under socialism, there is only one way: people settle their disagreements over the control of property by superimposing one will upon another. As long as there are differences, people will settle them through political means.

If people want to improve their income under socialism they have to move toward a more highly valued position in the hierarchy of caretakers. That takes political talent.

Under such a system, people will have to spend less time and effort developing their productive skills and more time and effort improving their political talents.

As people shift out of their roles as producers and users of resources, we find that their personalities change. They no longer cultivate the ability to anticipate situations of scarcity to take up productive opportunities, to be aware of technological possibilities, to anticipate changes in consumer demand, and to develop strategies of marketing. They no longer have to be able to initiate, to work, and to respond to the needs of others.

Instead, people develop the ability to assemble public support for their own position and opinion through means of persuasion, demagoguery, and intrigue, through promises, bribes, and threats. Different people rise to the top under socialism than under capitalism. The higher on the socialist hierarchy you look, the more you will find people who are too incompetent to do the job they are supposed to do. It is no hindrance in a caretaker politician's career to be dumb, indolent, inefficient, and uncaring. He only needs superior political skills. This too contributes to the impoverishment of society.

The United States is not fully socialized, but already we see the disastrous effects of a politicized society as our own politicians continue to encroach on the rights of private property owners. All the impoverishing effects of socialism are with us in the U.S.: reduced levels of investment and saving, the misallocation of resources, the over-utilization and vandalization of factors of production, and the inferior quality of products and services. And these are only tastes of life under total socialism.

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Cognitive Dissonance's picture

While socialism clearly doesn't 'work' for the little people, neither does crony capitalism. Western society just has further to fall before joining Venezuela at the bottom.

MalteseFalcon's picture

The politicizing of the economy destroys the economy.

The politicizing of culture destroys culture.

The politicizing of sex destroys sex.

Etcetera.

Time to shrink the political class e.g. government, academia and media.

 

Ghordius's picture

well said, Cog

but no, I do not agree completely. a tiny bit of socialism is exactly what helps and "works" for the "little people"

and I have an example from insurance

just recently, I had to look into the books of a friend's daughter that was overwhelmed by his demise and how to manage her inheritance

I went in, and fixed a few things, and... cancelled nearly all her insurance policies, where legal. to her questions, I explained why: before inheriting, she was "little people". now, she could bear the possible losses that go with most policies, except the very big ones, for which insurance is quite cheap, btw

the same is for "safety nets", the same health insurance, etc. etc.

the problem is a philosophical/religious one. some people really believe (fine for me, even if I do not agree) that everything is pre-ordained (including what I call "Calvinism Light"). and other believe that if nobody is left dying in the gutters, then people will go libertine and stop working hard, etc. etc.

for me, statism is measurable: in percentages of GDP spent by government (at all levels, mind)

for me, socialism is measurable, too: in percentages of GDP spent for social spending

and crony capitalism too... it's often most of the rest of state expenditures. sure, this leaves the whole thing of tax rebates, red tape that favours only Big Biz and a lot of other things and laws out, but there is the core of all three

a moderate, sensible "Bismarckian" pension system works for the "little people"

moderate, sensible "single payer" healthcare system (like the British NHS) works for the "little people"

not so for the "Mises club" that authored this article. they somehow want to go back to pre-1840 standards

the hardest political discussion is always about how much. there, comparisons are necessary. hence your "Venezuela, clearly too much", to which nearly everybody except hard-core communists would agree

rondellio's picture

Bad example on health: check the mid Staffs scandal in UK NH: 2 800 "excess deaths".  You can also look at, eg, the "contaminated blood scandal" (sang contaminé) in France.

The little people suffer terribly under this socialised medecine, bc they have no choice: they are stuck with these inferior service providers.  Not so the rich.

You're bad on your facts but even worse in your attitude: it is entirely possible that the author of this article cares at least as much as you Ghordius, about the little people. Naturally he has a different solution but that is bc he has a better intellect.  

An important  indication of your intellectual failure is that you have not distinguished between the provision of a good/service, and the payment for it.


lucitanian's picture

"The little people suffer terribly under this socialised medecine"

Bullshit. The national health system in UK, Portugal or wherever, works for most of the people most of the time. your "excess deaths" scandals, or other short comings are favorite targets especially for the tabloid press.

All the people have a doctor, medicine and treatment if and when they need it irrespective of their financial position. Yes, it is not perfect, yes, it can be improved, but it works well for 99.99 percent of the population.

Health is a social issue. If people are ill but cannot go to the doctor because they cannot afford to they either make their own illness worse and more expensive to treat, or cause illness to spread.

Your for profit system in US means that health care and medicines cost double than most of the developed world. Your life expectancy is diminishing. You're over medicated, and addled by unnecessary procedures, by lawyer-ed up specialists and their insurance companies that face more malpractice suits per capita than any country in the world.

Choice is not the problem, there's plenty of choice in European health systems, and if you can afford it and want private care its also available. But you are obviously talking through your hat, and are not a little-people, otherwise you wouldn't be promoting for profit private medicine and health care, and trying to deny the effective and excellent health care provided to hundreds of millions of people in other developed countries at affordable national health premiums.  

 

 

logicalman's picture

US pays more than just about anywhere for 'healthcare'

US ranked #37 in healthcare.

Personally, I think healthcare should begin at a personal level.

Eat well & exercise, it will reduce your healthcare costs more than any political/corporate fiddling about.

Healthcare should be a safety net, not a way of life, IMHO.

VWAndy's picture

 Are you sure we are not at the peak of a dead cat bounce?

landauer's picture

A prism works perfectly at bending light. All other isms only bend people. And bendy people are just bent.

John McElroy's picture

In a capitalistic system one goes into business earn wealth.  In a socialistic system one goes into government to gain wealth.  Do you know any financially challenged politicians?

new game's picture

http://www.zerohedge.com/news/2017-01-23/common-sense-part-2-addressed-i...

date 1/23, but since trumps flip flops, becoming safe to say, hope fading...(IF HOPE WAS EVER A CHOICE or OPTION).

spooz's picture

Now you know how progressives felt about Obama.  When he came up with the crony capitalistic Obamacare system, dumping the "public option" while making sure the insurance industry and Big Pharma were taken care of, the writing was on the wall

nmewn's picture

He tried to destroy it, I thought that's what you socialists wanted (it's destruction) so you could GET TO a bureaucracy run & taxed "health care" system. 

Is it even possible for you people to keep your stories straight?

And I will remind you, rights aren't taxed, so y'all are gonna have to come up with a better narrative that fits into that whole meme.

That oughta keep you guys busy for a while  ;-)

spooz's picture

We "socialists" wanted Medicare for All. Notice that those who have Medicare in this country are very satisfied with their health care.

Instead we got Obamacare, the usual crony capitalist plan that the establishment hacks on both sides of the aisle prefer.

Being taxed to support a benefit that everybody enjoys, like health care, is much less painful than being taxed to subsidize corporate cronies whose profit motives make providing LESS care for MORE out of pocket the main goal. Crappy low cost plans with high deductibles are NOT progressive.

nmewn's picture

Anyone who QUALIFIES for Medicare gets it now. 

Is it the "progressives" (socialists really but whatever, you've never fooled me) hope & dream to have everyone in America reliant on .gov in some fashion and how do you explain the bureaucrat run VA? 

spooz's picture

Everyone should qualify for medicare.  I consider health care to be a basic human need that any civilized country should provide to citizens (along with things like roads, bridges and ports, broadband service and education). 

Also, you sure have a big basket for your "socialists".  Do you really see no difference between the USSR and the Nordic counties? Uruguay seems to be doing just fine with its "pragmatic socialism".

https://www.tni.org/files/publication-downloads/tisa-en-2.pdf

There would be no need for a VA if we had Medicare for All.

 

nmewn's picture

You only "need" health care when you are sick or injured, you just "want" someone or something else to pay for it and you "want" to have .gov put a gun to someone else's head to get the money. 

Now that we've resolved the question of whether or not you are no better than someone hiring a hit man I guess we're done. 

spooz's picture

Your logic is faulty, so "we" haven't "resolved" ANYTHING with your comment. 

Most people don't know if or when they will "need" health care until its too late. Nobody knows who will be unlucky enough to have an accident, get cancer or contract a MRSA infection in the locker room.

 And those who ignore basic preventive medicine, like the need to control blood pressure with generic pharmaceuticals (which should be first line of defense, and provided at cost to the health care system), often do so because they can't afford high copays and deductibles.

Paying taxes that you know will provide you with basic health care is not "putting a gun to someone else's head" unless you are ignorant of how much of a gamble you take in assuming that you or someone you love will never need it.

Or maybe you don't love anybody.  Maybe you are one of those "rugged individualists" who has no social needs.

It is not hard to see what the evolutionary reasons for social pain might be. Survival among social mammals is greatly enhanced when they are strongly bonded with the rest of the pack. It is the isolated and marginalised animals that are most likely to be picked off by predators, or to starve. Just as physical pain protects us from physical injury, emotional pain protects us from social injury. It drives us to reconnect. But many people find this almost impossible.

 

It’s unsurprising that social isolation is strongly associated with depression, suicide, anxiety, insomnia, fear and the perception of threat. It’s more surprising to discover the range of physical illnesses it causes or exacerbates. Dementia, high blood pressure, heart disease, strokes, lowered resistance to viruses, even accidents are more common among chronically lonely people. Loneliness has a comparable impact on physical health to smoking 15 cigarettes a day: it appears to raise the risk of early death by 26%. This is partly because it enhances production of the stress hormone cortisol, which suppresses the immune system.

https://www.theguardian.com/commentisfree/2016/oct/12/neoliberalism-crea...

Shemp 4 Victory's picture

 

In a capitalistic system one goes into business earn wealth.  In a socialistic system one goes into government to gain wealth.

In an American system, one goes into business to buy politicians who will legislate against one's current and potential competitors, to ride a gravy train of unearned wealth.

Ghordius's picture

that's a variation of the "Two Cows" Joke, isn't it?

  • Socialism: You have two cows. The government takes one and gives it to your neighbour.
  • Communism: You have two cows. You give them to the government, and the government then gives you some milk.
  • Fascism: You have two cows. You give them to the government, and the government then sells you some milk.
  • Capitalism: You have two cows. You sell one and buy a bull.
  • Nazism: You have two cows. The government takes both and shoots you.
  • Oligarchy: No, those aren't your two cows. Buy milk!
Citizen_x's picture

 

When we were children,  if someone made the best product, they succeeded in capitalism.  Somewhere around circa 1970's, if business bought a law, that their competitors could not comply with,(EPA, FTC, FDA) those purchaser"s won the war of market share by attrition.(Modern Global Capitalism)  Funny how that affected the middle class standard of living and government borrowing.(Debt Bonds)  The timelines match-up year for year.

     "In an American system, one goes into business to buy politicians who will legislate against one's current and potential competitors, to ride a gravy train of unearned wealth."

 

Not exactly, more like: One goes into public service to cash in.  As opposed to the old paradigm: One did well in business and later goes into public service to give back.

new game's picture

slackers stay slack with envy. no substitute for laziness. oh, we are NOT equal, just look around and talk to afew fellow humans.

yooo

To Hell In A Handbasket's picture

The Mises Institute just pumps out the opposite end of the propaganda spectrum. IMO it takes a balance. Some with outright free markets at work. Some with regulated capitalism and some with socialist aspects. I've never bought into the all, or none model.

HillaryOdor's picture

Exactly!  It takes a good balance.  For example, you wouldn't want to be too extreme in your quest for health.  If you eat right and exercise too much then you are just going to be too healthy, and that won't be fair for all the unhealthy people out there, so you have to balance it out.  Add in a little bit of cancer, not too much, just the right amount.  Then when you have that perfect balance between fitness and cancer your life will be optimized.  I've never bought into this being all healthy model.

Especially when you make the cancer democratic.  Democratic cancer just works.  The will of the people, deeply informed as they always are, ensures that cancer, as long as it is democratic cancer, will be the best for you and all of society.

Ghordius's picture

+1. free markets sounds good. the problem is... not all markets are created equal

for some products and services, there is literally no need for any regulation. some other... are natural monopolies or oligopolies

further, every market needs some kind of "redress to justice", some... standard

today, I can buy cowboy boots made from alligator leather from Australia. everything from there to here is somehow covered by legal and commercial standards, and that's why it's possible in the first place, and I get boots of a size and quality I can accept

without those standards, we would face many more oligopolies, and their oligarchs, all entrenched in "moats", be them costs to compete made higher by commercial maneuvering to the "crony capitalism" of legal red tape laws, etc. etc.

sometimes, the Mises Institute sounds like this is natural. well, it is. the question is more... is it fair?

hence the old US anti-trust laws, for example. hence the "cut them in pieces" of monopolists of old

hence... standards

Crazed Smoker's picture

Socialism and the growth of government has been good for women... so  far- the average woman pays no net tax in her life and draws significantly more on entitlements and services than she pays into government.

RadioFreeMarket's picture

Another excellent commentary from HHH. All would do well to read his excellent books 

youngman's picture

Well lets just see how many cars Maduro will produce out of that GM factory he just stole.....and the quality of them......should be a hoot....I cant wait for jeramy..that British bloke to do a show on the new Venesuela car.....the peoples car....one color..one price...but you have to be a Communist to own one...and to be granted by your overlord.....on your knees

new game's picture

the yugo chavez, just helping with the nameplate...

Deep Snorkeler's picture

Our American way of life is not sustainable

because the ecological basis and economic structure

upon which it depends are rapidly deteriorating.

DisorderlyConduct's picture

Both systems suffer from the same disease although the cause is different. Both systems assume an ideal human that does not exist. At least not in aggregate, which is what both systems rely upon.

Socialism assumes that ideal humans will work just as hard for each other as for ourselves. Problem is we're not bees.

Capitalism assumes that ideal humans will self-determine without overreaching into others' property or rights. Problem is we're not Ayn Rand.

insanelysane's picture

My thoughts exactly.  Tens of thousands of years of human history would indicate that 20% of humans behave properly with the remaining 80% being in different levels of gray.  See world conquest, imperialism, Vikings, Mongols, Huns, slavery, indentured servitude, Foxconn Employee Manual, ...

Jack Offelday's picture

Governmental ownership of the means of all production and distribution (and land) is a libtard's definition of eutopia. In the words of Orwell's 1984... it's doublegood.

G-R-U-N-T's picture

Perfect example is Maduro shutting down GM! Yeah, kill investment while increasing unemployment, enriching himself and his grunts. Isn't this what Ivanka and her appendage believe in, hoping to influence Daddy while throwing the people that elected him under the bus??? Sorry, I didn't vote for Donalds adolescent minded children!

Madcow's picture

Liberals realized long ago that starving people eventually stop complaining. 

https://www.wsj.com/articles/many-poor-venezuelans-are-too-hungry-to-joi...

 

bluez's picture

This is all stupid poppycock. A reasonable degree of socialism is needed now, and always has been. You don't have to choose between manipulative socialism and vicious austerity. You must seek a balance, just as you must for most things in life.

mary mary's picture

"The government which governs least governs best."

Government is like alcohol.  A little bit is helpful.  But it is easy to get addicted to it, and then it uses up not only all of your resources, but all of the resources of all of your family members.  Just substitute:

welfare/warfare for alcohol;

bankers, the MIC, the MSM, politicians, lawyers, welfare professionals, and welfare cheats for you; and

the working class for your family members.

BigFatUglyBubble's picture

reasonable degree of socialism is needed now

What (and how) specifically needs to be socialized and not privatized, in your opinion?

spooz's picture

Single payer health care, like the rest of the developed world enjoys.

The majority of the US supports it, including 46% of Republicans who are in favor of expanding Medicare to all Americans.

https://www.washingtonpost.com/opinions/sorry-republicans-but-most-peopl...

markovchainey's picture

The majority of Americans are morons. 

lucitanian's picture

Obviously! They keep telling themselves they live in a democracy, keep voting (some of them anyway), and keep getting screwed by the same old Ponzi scheme of the power elite. One day they will use the little freedom they have left to think for themselves, organize, discover cooperation and solidarity, but that would mean taking on a social and "communal" responsibility beyond the "me" which has allowed the elite to keep them divided.

But, there are people commenting on this site who would call that a social revolution based on a class of people who are united only by seeing themselves as being exploited by an elite.  Ya, quite Marxist isn't it?

spooz's picture

"One day" cannot come soon enough.  So many lives lost while neoliberalism/globalism plays itself out:

https://www.bloomberg.com/news/features/2017-04-18/young-white-america-i...

mary mary's picture

"As people shift out of their roles as producers and users of resources, we find that their personalities change."

I would say that as the economy becomes more Socialistic, we find that people with more "manipulative" personalities become more powerful, and people with more "inventive" personalities become depressed. 

That is, no person's personality changes, but, rather, one personality group is advanced above another.

I bet we won't find many engineers, mathematicians, and scientists rioting at Berkeley.  Or given time off with pay to "protest Donald Trump" by "hi-touch companies actually selling propaganda while pretending to sell tools".

MPJones's picture

Socialism is a far worse cancer than described here: it removes the responsibility of creation from those controlling and enjoying the products of this creation. The irresponsible parasitic leaders of such a system take production for granted, so responsibility for wealth creation disappears. Once most wealth has been stolen and consumed and most capital misallocated this type of system implodes and dies. Venezuela is a current example, the USSR a recent one and the EU a future one.

lucitanian's picture

I wish you would read the symptoms you write about as it might be applied to the monopolist class that has run the US since its inception :

"The irresponsible parasitic leaders of such a system take production for granted, so responsibility for wealth creation disappears.....wealth has been stolen and consumed and most capital"

Adding only that (((debt))) has been created to insure continuity for enumerable generations......

You are a prisoner of a capitalist system, that you cannot distinguish from socialism or communism. But, you have been well indoctrinated and trained to use terms and imagine demons you do not even understand or recognize.

insanelysane's picture

I believe you are referring to Corporate Socialism; see auto manufacture, airlines, railroads, oil, military weapons, ...

lucitanian's picture

No, certainly not Corporate Socialism,

The signatories of the declaration of Independence:

about 1/3 of them were slave owners including 2 out of the three writers: Thomas Jefferson who owned over 150 slave and Ben Franklin the second owned two house servants. Of the 56 signatories ten were confirmed Freemasons : William Ellery, Benjamin Franklin, John Hancock, Joseph Hewes, William Hooper, Thomas McKean, Robert Treat Paine, Richard Stockton, George Walton, William Whippl.

Domination by elitists goes way back."We hold these truths to be self-evident, that all men are created equal." Great words!