By Nick Baum
WEDNESDAY – 3/27/19
“Those who ignore history are doomed to repeat it,” Is a phrase usually quoted by history teachers to their loud students in elementary or middle schools, but it seems as if we need to bring it to the typical American college campus. A Gallup poll conducted last summer shows that 51% of Americans aged 18 to 29 view socialism favorably, compared to 45% that favor capitalism favorably. That’s right, the same economic system that was incorporated into the name of the Soviet Union and Nazi Germany, the system that led to Venezuela’s economic downfall and their currency being worth less than of World of Warcraft, the system that led to the starvation and high crime rates of Cuba, is now being supported by millennials. Why? Because despite the time of record low unemployment rates and record high GDP and stock market earnings, millennials have to cope with the same wages despite a higher, increasing cost of living around them.
Millennials feel like as a result, socialism, or at least democratic socialism, can help cure some of these symptoms by ensuring opportunities and care for all, rather than the “wealthy elite”. The only problem(s)? It has never worked before, it has led to the deaths of hundreds of millions of people, it submerges an entire country into poverty, the rich and corporations flee to other countries, and thousands if not millions of jobs are lost. But let’s take a step back, what is the difference between socialism and democratic socialism? Can both ideologies seriously led to this same dystopian outcome? In reality, socialism is the much more sinister of the two, as requires more authoritarianism and government control, which could easily lead to corruption. Democratic socialism also requires more government control but with more aspects of a democracy, but let’s get in more detail.
Socialism is the ideology of the government seizing the economy and people’s wages, and distributing them accordingly. It doesn’t matter if one works harder than the other, everybody gets paid the same amount. This is why socialism never works, because the salaries of the wealthier hard workers are made the same as people who work at their local Burger King. Speaking of large corporations, socialism forces companies often supplying hundreds of thousands of people with jobs to leave due to high taxes, taking their jobs with them. The same can be said for the rich, as they can take advantage of their wealth and leave the country once taxes get too high. The rich and wealthy have lots of money to invest and donate to charity, so countries with socialist like policies such as Venezuela or even Brazil have become poorer and more crime ridden due to the lack of money circulating.
That brings up another good point that as the country is purged of its wealth and resources, money must still be printed to demand. The result? A very high inflation rate and a dollar bill that’s worth almost nothing. Take the Weimar Republic (present day Germany) in between the years 1921 – 1923; After the end of World War I, national leaders declared themselves as a “free socialist republic”. Combine that with their already weak financial state and millions of dollars having to be paid off in reparations, caused their already weak currency to plummet in value. Soon, workers would have to be paid in wheelbarrows full of stacks of money and extra dollars would be swept away in the streets like mere litter. In fact, kids were encouraged to play with money and make kites out of them, all because one Reichsmark was worth virtually nothing. This is another horror of socialism. Under capitalism, there wouldn’t be any crushing taxes driving away opportunities and suppliers, so wealth can be welcomed in. These companies can help invest in the local economy, which in return would help create more educated workers for their company and gain attraction. A socialist would argue that a corporation would be playing the role of the state, but one that understands economics can counter that when a corporation has added options, it will help invest in the community around it and help promote its workforce.
A socialist will never tell you how Newark managed to thrive despite hard times through the investments of Prudential. They will never tell you how Ford and General Motors have helped Detroit into its renaissance. They’ll only want to tell you the bad side of giant corporations, how some of its employees struggle with minimum wage while the “evil, greedy” CEO relaxes, getting paid millions in their salary. Socialists tend to forget that the rich CEO had to study very hard, manage his time well to get good grades, get into a good college and work even harder there, make smart investment and future career decisions, and take risks. The minimum wage worker isn’t necessarily lazy, but he/she could’ve studied harder, maybe invested a bit, set out for a career in a low demand industry, or something else, as there are many factors.
A main point where socialists and capitalists disagree is whether wealth is inherited or not. Capitalists argue that through hard work, dedication, and smart decision making, more likely than not you can succeed in life. Socialists argue that the biggest factor in determining wealth is through inheritance, and that anyone born into a low-income household will most likely stay that way no matter how hard they try. Socialists argue the same can be said for an upper-class citizen born into it. No matter how little they work, they will always have more than the rest. This is kind of ironic, as socialists say that in order to justify this, the incomes of all individuals must be leveled. What is funny is that the basic level of income will most likely be under the poverty line, and in this case there is absolutely no way to exceed out of that same line, because no matter how hard you try, the big, evil government will take your earnings and distribute it to less hard workers.
To the average independent reading this, socialism must sound extreme, and so an alternative option has been presented, democratic socialism: Mixing in aspects of a democracy with programs that would be deemed socialist, to create a thriving country where those in poverty can easily manage to lift themselves out of low-income. How can that happen? By making certain services like healthcare and college free and accessible to citizens of any income. Well, they aren’t exactly free, it’s all taxpayer funded. Bernie Sanders’s College for All Act would cost the government around $70 billion. Medicaid and Medicare cost the government over $1.2 trillion, and with a growing population, both of these yearly expenditures would keep on growing. These policies get their cash by taxing the rich, of course, because they’re wealthy and successful. In fact, the entire socialist ideology is to hate the man more successful than you. The Green New Deal suggests the highest tax bracket be 70%. That’s right, 70% of all earnings you make would go to the government, stripped away from you. Truth is, taxes have even been higher than that, but many wealthy citizens found ways to bypass this, mostly illegally. Even if the tax is enforced more strictly and there isn’t a way to skip it, the wealthy that get charged this rate, most of which own corporations or at least supply the economy with jobs, will move out of the country along with their jobs, and we’ve already seen why that’s not good.
Hating somebody that is more successful than you is called jealousy, and it’s common in most socialists and democratic socialists. Inheritance does play a factor in determining wealth, but it isn’t the biggest factor. A study by the Brookings Institution shows that individuals in poverty have a 75% chance of lifting themselves into the middle class or higher by simply maintaining a full-time job, have a high school degree or equivalent, and waiting to marry and have kids until you’re older than 21. Individuals that live in poverty that don’t listen to any of the three rules listed, only have a 7% chance of lifting themselves out of poverty. In other words, the goal to achieving wealth is patience. Making smart choices, smart investments, smart savings, and overall smart decisions, will give you more in the long run than thinking just in the present.
It should be evident by now that capitalism is the most efficient economic system of the two (or three). It is a system that recognizes hard work, risks, and long-term thinking. It is a system that gives anyone a chance to achieve their dreams and earn more money. But more importantly, it is a system of winners and losers. We have to accept that we can’t all win under capitalism, and that the less hard working and the lazy will be less successful and poor. Poorer citizens might be hard working in their careers and jobs, but that’s because the millionaire relaxing in his pool in his mansion estate worked very hard for the past twenty years building his company, while the poorer man wasn’t patient and thinking about the long term, deciding to ignore schooling and the importance of education, and is now being rushed, making sandwiches at a Subway. At the current moment, the poorer man is working harder than the rich man, but it’s because the rich man worked hard for years of his life, and has finally paid it off with relaxation and later retirement.
To summarize it up, capitalism is a system of unequal amounts of wealth, while socialism is equal amounts of poverty. Except, of course, for the wealthy government, that has grown in size from the large expenditure. The wealthy elite will be favored and earn more, and that is true wealth inequality. Capitalism has silently benefited every first world country, and while some might have the policies and services that democratic socialists call for, we need to realize the sky-high taxes and small population that is within these countries. Policies like free health care and college benefit smaller populations because it simply means less taxes. More rich people are willing to stay, and those countries can benefit from wealth and a higher shot and becoming more successful. In all honesty, I’d love to see college or healthcare become free, just don’t put it at the expense of the hard working and more successful. It’s a shame that socialism is growing in popularity, primarily with young people, but those that have lived at the time of the Soviet Union, Nazi Germany, and Castro-ruled Cuba, know the true fate that is hidden within socialism.
Sources: USA Today, FiveThirtyEight, Gallup, Borgen Magazine