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The Resurrection of Discredited Ideas

August 31, 2015 in Economics

By Richard W. Rahn

Richard W. Rahn

Would you call yourself a “socialist”? Webster’s dictionary defines socialism as “a theory or system of social organization which advocates the vesting of ownership and control of the means of production, capital, land, etc. in the community as a whole.”

Modern-style socialism was born during the French Revolution — with the Conspiracy of Equals. In his classic work “Heaven on Earth” about the rise and fall of socialism, Joshua Muravchik, wrote: “Once empowered, socialism refused to yield its promised rewards. The more dogged the effort to achieve it, the more the outcome mocked the humane ideals it proclaimed. Yet for a century and a half, no amount of failure dampened socialism’s appeal. Then suddenly like a rocket crashing to earth, it all collapsed. Within a couple of decades, socialism was officially repealed in half the places where it had triumphed. In the other half, it continued in name only.”

It was an ideology that claimed well over 100 million innocent lives in the 20th century. It denied people basic economic and personal freedoms, including the right to own property, and the ability to respond to incentives to better their own lives. Even in theory it could not work, as Ludwig von Mises and F.A. Hayek so clearly explained — that without market-determined prices, there was no way to know the relative value of anything, so productive resources would be misallocated. There was also no room for innovation. The best that could be hoped for was increasing economic stagnation, a loss of individual liberty, and political repression — which is exactly what happened in practice.

Yet, Sen. Bernie Sanders proudly calls himself a socialist and is welcomed in the Democratic Party presidential primary. He appears to have perhaps more than a million supporters. It is hard to conclude anything other than these people are ignorant of (even recent) history and are incapable of clear thinking. North Korea and Cuba are the best-known remnants of classic socialism. Only the willfully blind think these places are anything other than economic and moral disasters. Members of the press have no problem attacking far more minor policy idiocies from other candidates — so why is Mr. Sanders given a free pass on the core of his beliefs?

For more than two centuries, people who are economically literate have understood the benefits of free trade, which is based on two indisputable propositions. The first is the greater the …read more

Source: OP-EDS

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