This November’s choice between capitalism and socialism is not about whether you are rich or poor right now; it is about which of those two you wish to be tomorrow.
The inescapable lesson of economic history is that free market economies make everyone unequally richer, while state-controlled economies make everyone equally poorer. Which do you prefer – rich or equal? Free people overwhelmingly choose rich, which is why socialism can only be imposed by force or fraud.
Nobel-winning economist F.A. Hayek’s profound insight was that socialism fails because all of the information needed to make rational choices for millions of people can not possibly be known. Conversely, capitalism works because all of the information we need to make rational choices is known – it is known to us, and we make our own choices according to our own self-interest.
Self-interest is not immoral; it is simply the public interest reduced to its smallest indivisible component part. In fact, self-interest is the only kind of interest there is. If it were possible to establish a public interest by government decree, we would not need divorce lawyers. And if State power can not bind two people who love each other, how could we expect it to herd 300 million strangers?
The simple answer is we can’t, and we are proving Hayek’s theorems daily. It has been nearly four years since the election of 2006 that gave control of Congress to Nancy Pelosi and Harry Reid. No one will confuse them with Ayn Rand and Milton Friedman; their agenda is anti-capitalist and socialistic, if not definitively socialist. The results speak for themselves: 15 million people have no jobs, the average work week for those who do has declined to 34.1 hours, property values have shrunk, the markets are still down, and the dollar has weakened. We are getting poorer.
People do not save, invest and produce in order to benefit the State; they do so to benefit themselves and their families. That is why our economy has not, does not, and will not respond to the prompting of the President’s socialist economic agenda or the deceptive pleadings of his minions. Federal Reserve Chairman Bernanke finally spoke the truth last month when he told Congress that it will be years before the jobless situation improves - years.
Chairman Bernanke is not clairvoyant; rather, he understands a basic economic principle: the bigger the rake, the less the take. Having learned nothing from their failures, our socialists in Congress plan to impose the largest tax increase in the history of the world this fall when they repeal the Bush tax reductions enacted almost a decade ago. This is the plan for reducing their deficit – to increase yours.
Think about the effect that just one of those tax increases – the inheritance tax – will have on job creation. The rate increases from 0% to 55%; children will have to sell the family business just to pay the death tax. Now, do you think this will encourage more people to start new family businesses? Congratulations! You and the Chairman of the Federal Reserve understand that people will not risk their life savings and work like a dog to bequeath their rewards to the IRS.
However, our President and his socialist colleagues in Congress don’t get it. They are obsessed with their own jealous resentments and their brains are marinated in leftist economic gibberish.
Confiscating earnings from high earners does not make the poor richer anymore than cutting the heads off of tall people makes short people taller. All it does is increase government power and control over rich and poor alike, which is what the upcoming tax debate is really all about. It has been what all of the debates have been about for quite some time, now.
Recent polls show that 75% of Americans trust free markets, not government, to secure their prosperity. Less than 30% believe the President’s economic stimulus plan has worked. Less than 20% approve of the job Congress is doing. Congress should listen to the People; we have it right, and they have it wrong. Any fool can see that now, unless they work in the media or teach in a University.
It is not complicated: reduce taxes, cut spending, shrink government, de-regulate markets, and let us live free and prosper – that is the answer to our economic problems, not higher taxes and bigger government. Prosperity is not an entitlement program; it can not be legislated into being and delivered by the apparatus of the State. It is the product of free people pursuing their individual self-interest; engaging in voluntary economic cooperation and adding value in the marketplace.
Liberty is prosperity, and vice versa. Candidates who get this deserve your support in the upcoming elections, regardless of party affiliation or endorsement; candidates who don’t deserve to be shelved, regardless of party affiliation or endorsement.
Want to save the nation? Find a candidate who gets it and help them win their campaign for liberty.
"Moment Of Clarity" is a weekly commentary by Libertarian writer and speaker Tim Nerenz, Ph.D. Visit Tim’s website www.timnerenz.com to find your moment and order his new book, "Tooth Fairy Government."