Understanding Socialism Part 3: Why Socialism doesn't work

Understanding Socialism Part 3: Why Socialism doesn’t work

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Plymouth Plantation

In 1620 a group of around 100 pilgrims set off for the Americas, the majority were English Puritans escaping from the religious persecution they faced in England. They sought to escape the strict conforms of the Church of England and practice their Christian beliefs as free men and women. They created a new settlement called Plymouth in Massachusetts and immediately began to build. The story of their first harvest with the assistance of the local Indians is the basis for the Thanksgiving holiday celebrated in America today, however, there is another aspect of this story which is the theme for this particular blog.

Upon settling, the pilgrims created a system where all property was jointly managed, everyone would contribute what they could, and take what they needed. In April 1621, Governor Carver died and was replaced by William Bradford. Much of what we know of the history of Plymouth is from Bradford’s writings.

By 1623 a famine had decimated the Plymouth population which had received many new arrivals since its settlement. In his writings, Bradford made notes that the pilgrims in desperation were attempting to sell their clothes and bed coverings for food, some had become servants to the Indians for payment of corn. One of the core problems was that the young men refused to work hard in the fields, as they felt it an injustice to work harder than others for only the same benefits, while Women felt like slaves performing the communal chores.

Bradford identified that the problem was related to what he called ‘Communism’, which he believed caused discontent. The leaders decided on a change, allotting each family 50 acres of land for their own use. The change was immediate, with one settler stating that the land allotment ‘gave such encouragement to every person where all of them followed their particular labors with singular alacrity and industry’. The fortunes of the settlement turned, with both men and women willing to work long hours in the fields planting and harvesting corn, with many women even working the fields with their young ones alongside them. Productivity increased so much, that within three years there was an abundance of Corn, cattle, swine, poultry and other provisions, bringing prosperity for the entire Plymouth settlement.

The form of communal collectivism did not work in this community, however, a simple transition to a privately owned land and a free market, transformed the community in a very short space of time. 

Human Drive

One of the fundamental problems with Socialism can clearly be seen in the Plymouth Plantation story. Socialism replaces the individual with the community, it removes the concept of personal achievement in order for everyone to be equal. 

Under Socialism, if an individual were to have a personal goal, then that would take them outside the circle of equality. According to Marx, it would create competition, so cannot be allowed, because if everyone cannot achieve the stated goal, then no one is allowed to achieve the stated goal. However, this Socialist concept dismisses one of the essential ingredients that causes humans to thrive, and that is the need to create and set personal goals so life is worth living, something the Plymouth Plantation did not take into account when it settled.

Scientists have documented that when an individual achieves a goal the brain releases Dopamine, this creates strong feelings of pleasure. The release of Dopamine then creates the desire within the individual to set new goals, creating a positive repeating cycle. This whole system of goal setting is essential for personal self-esteem and also results in greater productivity. The absence of goal setting in individuals creates nihilism and a sense of meaninglessness, causing individuals to exist without purpose who contribute nothing to society. On a larger scale, a society that does not have a system which encourages individual responsibility taking and personal achievement, sees increases in suicide rates from its citizens. It is this sense of meaninglessness that Socialism creates within a society, as they are taking away from individuals the very thing they need to survive.

Socialism creates no new wealth

A government gets its money from its citizens through taxes. Citizens who earn an income pay taxes, citizens who start businesses pay taxes on the earnings of the business, citizens who buy taxed goods on local and imported goods pay taxes, citizens who pay fees for government services are paying taxes, you get the idea. The government does not have money of its own, it’s sole source of income is through its citizens.

The more money a government’s citizens earn through wages or private enterprise, the more money the government gets through taxes. So, in order to maximise taxes they can earn through business, they need to stimulate business growth. There are three essential ingredients a society needs to stimulate the creation of wealthy and successful businesses, these are creativity, innovation, and entrepreneurship. Without each of these three ingredients, business growth stops. Free market economies encourage this, which is why the wealthiest countries in the world all have free market economies.  

The belief in a Socialist society comes from those that look at the large existing wealth of a country with a free market economy. They think that by taking ownership of the businesses and redistributing the continuing profits, everyone will be well off. When they take over, for the first few years everything goes well. That is because they are living off the created wealth generated from the free market economy. In the background, however, the wheels of creativity, innovation, and entrepreneurship have stopped. In time, the money runs out, and because the government now owns all of the businesses, there are no entrepreneurs left with their creativity and innovation to keep stimulating the economy. Eventually, poverty becomes the norm for the citizens, and in many cases starvation.

All of what I have said here can be summed up in the phrase ‘Socialism creates no new wealth’. It simply cannot, as it takes away the very thing that a wealthy society needs to exist.

Socialist governments destroy their productivity

In ‘Understanding Socialism Part:2’ I described how Stalin and Mao Zedong took the farmland off the farmers, and either imprisoned them or murdered them. This concept is a core principle of Socialist doctrine.

All of the best farmers have worked hard at their craft, often times the knowledge of best farming practices comes down from the prior generations, allowing farmers to build on a solid foundation of knowledge. Due to this accumulated knowledge, many of these farmers become successful, not only financially, but productivity-wise as well. As they are successful, Socialists see them as part of the bourgeoisie class, as oppressors that have somehow oppressed the poor. The socialist inevitably comes in and takes the land off these farmers and assumes control of the land.

This scenario has been repeated time and again in Socialist countries. As I write now, the South African government is implementing changes to their constitution, to allow them to take farmland off white farmers for no compensation. Zimbabwe recently went through the same scenario.

When the government takes away societies best farmers, the inevitable happens, not enough food is grown to feed the population and a famine follows. This happened in China and the USSR, as well as Venezuela, who as I write now is in the middle of a famine due to Socialism. The same will happen in South Africa as happened in Zimbabwe, as has happened in other Socialist countries. In Zimbabwe, they realised their error and have since tried to reinstate some of the white farmers.  

In order for a country to feed itself, it needs its best farmers. To have the best farmers, the farmers need the incentive to farm. The incentive is that they will be able to profit, or be able to have a valuable farm to hand to their descendants, or to create a profitable farm so they can eventually sell the farm, retire and enjoy the remainder of their days. Take these incentives away, and you take away the food sources that you need to feed your citizens.

Socialism creates a victim mentality

Businesses do not create instant wealth, if they did, everyone would start one. The creation of a business takes time and effort. Before an entrepreneur becomes wealthy he has generally gone through years of hardship. Sometimes an entrepreneur will go through bankruptcy due to a failed business, lose their home and for many years struggle financially. An entrepreneur, especially in the early years will go through years of not earning enough, making sure the workers are paid first and the bills paid on time. This does not even account for the enormous hours worked and stress an entrepreneur endures in the creation of a business. After many years of striving, the entrepreneur will finally experience success and begin to earn a good income. That income is the reward for the years of hardship and letdowns. Imagine going through this experience for many years, to finally achieve success, and then have someone who has never put themselves through this same hardship tell you that you have oppressed them, and you must now share the profits of your business with everyone, or worst yet, hand the business over to the government. That is Socialism.

Socialism is nothing less than theft by those who have not achieved success, and often not even tried. It takes the success of others and claims it as its own. Imagine a childless woman claiming rights to the child of another woman, Socialism does this with economics.

The main problem with this type of mentality is that It creates a victim mentality. Rather than encouraging those who lack, to educate themselves and to strive for greatness, it removes hope and tells them that their situation is their lot in life. It also tells them that their situation is due to the oppression of someone else, creating division within the community.

Final thoughts

As I have stated in a previous blog, I am not saying that we should not have systems in place to care for the vulnerable and those who experience times of needs. I absolutely believe that a safety net is needed to ensure the dignity of all. However, Socialism is not the answer, as all it does is punish those who work hard and achieve, and who are an essential component of a successful society. Ultimately the government loses its tax income from the entrepreneur and everyone ends up losing by ending up in poverty.

"Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy; its inherent virtue is the equal sharing of misery"
Winston Churchill