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- America’s Fiscal History: From Liberty to Paternalism - September 23, 2021
Many of us grew up watching movies about Dracula — Nosferatu, the Undead. Fearful of the sunlight that could burn him into cinders, Dracula lived in a coffin filled with his native Transylvanian soil by day, only to come out at night to live off the life-giving blood of the living. But to continue his unnatural existence, this human-like vampire had to kill his victims by draining them of their own blood, in the process turning them into creatures of the night, like himself.
Almost every Dracula movie ended with his nemesis, usually Dr. Van Helsing, the determined vampire hunter, finding Dracula in his coffin as the dawn was beginning to appear. He would drive a stake through the vampire’s heart or open a nearby window so sunlight could fall upon the sleeping bloodsucker. Dracula’s centuries-old body usually would rapidly decay into dust. The undead had now died, and the world was freed from this unholy aberration.
But, invariably, in the next film the life-destroying monster, in fact, turned out to have not been truly killed, or one of the poor humans he had turned into a vampire had taken his place to plague the living.
Sometimes Dracula initially would be portrayed as an attractive gentleman, appealing to the ladies (such as in the 1979 movie Dracula, starring a young Frank Langella). But soon his true, evil nature showed itself as he fell upon his human prey and made them into ungodly creatures.
Welcome to the seemingly unending cycle of resurrections of the socialist idea in renewed appealing forms.
The Original Appeal of Socialism: Utopia Now
How very appealing was the socialist idea in the late 19th and early (pre-WWI) 20th centuries! All the burdens of life and everyday work, all the seemingly unjust inequalities of material wealth observable in society, and all the uncertainties of health care and old age would be lifted from the weary shoulders of the common man with the arrival of socialism.
Humanity would be freed from the shackles of capitalist “wage slavery” and everyone would be provided with all the necessities and amenities of material existence, with all living in an equality of social justice, and oppression and tyranny abolished around the world.
What a life-draining nightmare was set loose on mankind! From the Bolshevik Revolution in Russia in 1917 through all the other communist “victories,” either through Soviet conquest or domestic revolutions and civil wars like in China or Cuba, the harshest and most terrible tyrannies fell upon all the luckless peoples given a socialist paradise to live within.
Socialist Reality of Tyranny and Crushed Freedom
Civil liberties were abolished, with no speaking or writing permitted other than the official line of the ruling Communist Party. Central planning meant that the government determined what was produced, where, by whom, and in what quantities. Every person’s educational opportunities, living quarters, and employment were assigned and commanded by the state in the name of the collective good.
Dissent, disagreement, or even suspected lack of enthusiasm for the advancement of the bright, beautiful socialist future (as defined and dictated by those at the helm of the “people’s state”) was met with arrest, imprisonment, banishment to slave-labor camps, or death by torture, starvation, or execution.
Human life was stripped of privacy, with everything anyone did or said being potentially reported by informers and everyone potentially under surveillance by agents of the secret police. Fear and suspicion were inseparably intertwined with any interpersonal relationship or association, whether in the government-assigned workplace or with neighbors in government-owned apartment complexes.
Friendships, therefore, were precarious relationships that could end up in betrayal and a knock on the door in the middle of the night from the secret police that could result in an individual or an entire family disappearing without a trace.
It was not enough for the socialist state to command and control your public words and deeds. Propaganda and indoctrination were used in an attempt to manipulate and mold how people thought about the world and themselves. The contents of the individual’s mind were to be a product of the central plan as much as the types and quantities of the physical goods produced at “the people’s” factories. (See my articles “Living the Life of the Lie, Part I”  and “Tyrants of the Mind and the New Collectivism.” )
Human Cost and Material Poverty of Socialism in Practice
The human cost of the great socialist experiment to remake humanity for a new, collectivist heaven on earth did not come cheap. Historians of the communist experience around the world have estimated that as many as 200 million people — innocent men, women, and children — have been killed in the socialist meat grinders: 64 million in the Soviet Union and up to 80 million in China, with millions more in the other socialist societies around the globe. (See my article “The Human Cost of Socialism in Power.” )
Did these sacrifices for that better socialist future pay off? Did socialism deliver on its promises? In every centrally planned society, shortages, shoddy goods, and stagnant standards of living enveloped the lives of the vast majority of the citizens of these countries. Anyone who had the opportunity to visit the Soviet Union (as I did in its last years) could not help but notice the zombie-like emptiness in the faces of many on the streets of Moscow as they trudged on foot from one government retail store to another in desperate search for the basic essentials of everyday life.
Long lines of people waited at one store to purchase some poor-quality consumer item or basic food products. At other stores, there were empty shelves with no customers. All the stores were manned by listless, bored, and indifferent government employees just waiting for their shifts to end. (See my articles “Witness to the End of Soviet Power: Twenty-Five Years Ago”  and “The 25th Anniversary of the End of the Soviet Union.” )
What else could be expected from an economic system that prevented any individual initiative or incentive to work, save, and invest, now that private enterprise had been abolished and declared the basis of exploitation and injustice? (In the last five years of the Soviet Union, the Communist Party leader, Mikhail Gorbachev, had allowed small and limited private business enterprises, and these, however few and restricted, were the only pockets of economic vibrancy.)
The Austrian economists, especially Ludwig von Mises and Friedrich A. Hayek, had shown already in the 1920s and 1930s that the nationalization of private property and the end to market competition and a market-based price system did away with the possibility of any rational economic decision-making. To reasonably determine what to produce, with what methods of production, and in what relative amounts, they explained, there needed to be some effective method of economic calculation — that is, determining the relative value of what goods consumers wanted and the most efficient ways to use the scarce means of production (land, labor, capital) to best advantage in satisfying consumer demand.
But with no market-based prices reflecting actual supply and demand conditions in changing circumstances, a centrally planned economy was in a sense flying blind. Its outcome is what Mises once entitled one of his short works on this topic: planned chaos. (See my article “Why Socialism is Impossible.” )
Vampire-like, socialist regimes drained the life force out of the societies they ruled. No ambition, no drive, no prospects for a better and happier life was the material and psychological state to which socialism reduced humanity in those parts of the world in which communism had triumphed.
The only opportunities for a better life came from being one of the Communist Party bloodsuckers of the ruling elite. They had special stores, special medical clinics, special holiday resorts, special living accommodations, special opportunities to travel abroad to other socialist countries or even “the enemy” West from which forbidden goodies could be brought back home. The rest of the society was truly the exploited masses from whose meager and government-misdirected labor those limited privileges and prosperity came for the ruling Red Draculas of the communist state. (See my article “How Communism Became the Disease It Tried to Cure.” )
End to Socialist Planning and Rebirth of Market Prosperity
The last decade of the 20th century saw the collapse of Marxian socialism in the Soviet Union and the captive nations in Eastern Europe that were conquered by Stalin at the end of the Second World War. The death of Mao Zedong in 1976 was followed in the 1980s with economic reforms in China that did not change the political stranglehold of the Communist Party over that country, but did introduce a variety of limited and controlled market-based institutional transformations that have brought radical improvements in the everyday lives of hundreds of millions of people.
Many underdeveloped countries in what used to be called the third world turned away from the model of Soviet-style central planning in the 1980s and 1990s and put the people on more market-oriented paths to material and social betterment. Indeed, in some of these countries, abject poverty and frequent starvation have been nearly eradicated by the introduction of freer markets and competitive entrepreneurial activity.
Dracula Rises! Socialism Once More From the Grave
But, like Dracula rising once more from the grave, socialism has been making a comeback among academics, a growing number of other intellectuals, and college students. It is reflected most recently in the Democratic Party primary win of Alexandria Ocasio-Cortez (who was a Bernie Sanders activist in 2016) over an established Democratic incumbent in a New York City congressional district. She hails as a member of the Democratic Socialists of America (DSA).
On the website of the DSA, it outlines its promise of and hope for a new “progressive” socialist America to replace the oppressive and exploitive current American system of “neoliberalism,” the left’s catchall label for capitalist things they hate and wish to overturn.
The DSA’s supporters insist that theirs will be a truly democratic society. A small handful of wealthy capitalists should not dictate and determine the economic direction of the U.S. economy for their own private profit. No, the country’s future should be in the hands of all the people through democratic decision-making.
Workers should collectively manage factories and enterprises, and the society as whole should ensure or provide a large array of free things for everyone: health care, child care, education from kindergarten through college, and housing and transportation would all be “publicly provided to everyone on demand, free of charge.” (In reality, nothing is truly free, as everything comes at the expense of something else.) Also, everyone would be guaranteed a universal basic income.
Plus, the workweek would be reduced and vacation time increased to give everyone more leisure so as to create work opportunities for any of the unemployed who might still wish to be employed even in a world of all this free stuff provided by the government. (How and who is to pay for all these free items remains an unanswered question, other than a general presumption that the rich will be appropriately taxed to foot the bill.)
Democratic Socialism Means the Tyranny of the Meddler
Since everything would be politicized with government involvement even more than currently in America to supply this promised life of post-scarcity existence, supposedly democratic decision-making would be extended to, well, everything. The DSA says the Senate should be abolished and the entire electoral process replaced with a system of proportional representation in more directly democratically elected bodies. There would be “civilian boards for various government services, program councils (at the national, state, and local levels) for those who receive government services, and municipal and state-level citizens assemblies that would be open to all that would be tasked with making budget decisions.”
Anyone who has ever gone to town hall meetings knows there is nothing democratic about the people who show up to speak out on agenda issues and nothing democratic about the voting of the local councilmen. The number of attendees is mostly small and the attendees are bee-in-their-bonnet busybodies. They are clearly people with too much time on their hands possessing political and ideological axes to grind, with the desire, 9 times out of 10, to foster regulations, controls, and taxes on others so they can achieve their local social-engineering goals.
A handful of municipal meddlers speak out at these town hall council meetings, creating the impression through their sincerity and vehemence that they are voicing the real needs and interests of the community. Where are the vast majority of the citizens of that community? The actual majority of that town or city are going about the normal and ordinary business of life: coming home from work, spending time with their families, doing chores around the house, out shopping for food or other family necessities, or just having some down time with friends before the next day of work begins.
Private Productive People vs. Political Busybodies
This ordinary and normal majority comprises the ones producing the goods and services in the private sector, which represents the source of prosperity. They are busy managing their personal and family affairs to keep them (hopefully) in financial order; they are seeing that their houses and neighborhoods are kept in order by mowing the yard, repainting a fence, or participating in some church or charity good works out of a personal sense of right, calling, or duty.
For most of them, politics never enters the equation; but, nonetheless, their actions actually keep society running smoothly on a day-to-day basis. They represent what William Graham Sumner (1840–1910) once called the “forgotten man,” who peacefully produces all the things representing the wealth of nations, which the socialist planners and regulators want to get their hands on.
To shift even more decision-making away from the private sphere of business enterprise and individual and family self-responsibility to the political arena means to transfer control over people’s lives from themselves to the professional and amateur busybodies who show up at those government meetings and influence the way the elected representatives vote.
Those elected representatives don’t a bit mind having the power and authority to make such decisions, since the money they decide how to spend is the trough from which they buy the support of those whose votes they need to stay in office. Plus, their power and authority allow them to increase the duties of the local bureaucrats, who easily find ways to use the regulatory and redistributive powers placed in their hands to serve their own interests, both career and ideological.
The more control is transferred out of the hands of the private citizenry in the form of private enterprise, voluntary associations, and personal responsibilities concerning those affairs of everyday life and into the hands of these “democratic” socialists, the more the tyranny of the pressure group cliques and the more the community know-it-alls end up running everyone’s life.
Extend that from the affairs of municipal administrations to the state and federal governments, and soon there is little that happens that the political regulators and social planners would not be in charge of, and far more intensively than they are already.
Similarly to how Dracula’s attractive smile was transformed into bloodsucking fangs draining away the life of those initially mesmerized by him, the Sirens’ call for “free” everything (which in reality someone will have to pay for) under the umbrella of democratic fairness and justice soon metamorphoses into a tyranny of politicians, bureaucrats, and “democratic socialists” determined to use the political process to impose their petty minority prescriptions for a better world on all of us. The arena of individual autonomy decreases and the prison walls of collectivist control tighten and grow higher around everyone.
Have no doubt that this includes not only health care, retirement pensions, public housing, guaranteed jobs, and minimum incomes. The new “democratic socialist” agenda, like that of the “progressive” left in general, whether its supporters choose to consciously label themselves as socialists or not, is to micromanage language, human relationships, social status, and group classifications of victimhood vs. privileged. (See my articles “Democratic Socialism Means the Loss of Liberty,”  “‘Liberal Socialism’ Another False Utopia,”  and “Campus Collectivism and the Counter-Revolution Against Liberty.” )
The newly fashionable idea of democratic socialism is nothing less than the same tyranny of all the earlier forms of socialism experienced over the last 100 years in more explicitly brutal forms, just more rhetorically enveloped in the appeal of participatory democracy than the earlier cries for a dictatorship of the proletariat.
It remains the same life-draining Dracula returned once more from the dead.
[Originally Published at the American Institution for Economic Research]