Socialism is Spending Others’ Earnings

A reader with the disharmonious name of Unconcord comments:

“Crony capitalism” is the free-market answer to “not true communism.” Much fewer deaths – so far; China might change that – but still, it works like gravity on the worshippers of the bottom line.

My comment: I can only assume I misunderstand your remark, because, on the surface, it is absurd.

A word of clarification is needed here:

Socialism is the theory that rationing goods and services by government fiat is more efficient than distributing goods by a pricing system governed by the consumers, that is, by the law of supply and demand.

In effect, Socialism hence is the attempt to price goods and services without a price system, by fiat.

Naturally, and inevitably, this leads to shortages, as scarce goods are underpriced (hence distributed in fewer numbers or fewer places than needed) and abundant goods are overpriced (left to rot on shelves despite current need).

This also applies to wages and services.

When distributed by free market mechanisms, the workers with rarer skill or in more demand command higher wages, and those with more common skills or less in demand command lower. When these workers are set to tasks by taskmasters according to government fiat, regardless of their natural wage, skilled workers are underpaid hence deterred from honing rare skills, and common workers overpaid, hence deterred from the efficient use of what talents they have. Services most highly in demand hence become even more rare, which then requires even stricter rationing, etc.

When, as is inevitable, the rationing of goods and services leads to widespread poverty and misery, the socialist apologist claims that “no true communism” has ever been tried. This is because the theory requires goods and services to be produced by men and given away regardless of the reward or punishment, incentive or dis-incentives of the system.

The theory, in effect, requires reality to be unreal in order to work, and so of course, by that crooked definition, “true” communism, that is, the communism that operates in defiance of the laws of logic and the laws of reality, has never been tried.

This is because it cannot be tried. The blueprint calls for building a spherical pyramid.

But there is no such thing as a spherical pyramid, because by definition pyramids come to a point and spheres do not. So the dishonest apologist can always claim the blueprints are not being followed. That is true, but trivially true. It is not an excuse. The blueprint were not followed and never will be because they cannot be followed because they are an Escher drawing, something that cannot actually exist in three dimensions. A round pyramid is a contradiction in terms. It is illogical.

Likewise, a system where price efficiency is incentived by incentives rewarding price inefficiency has never been tried because it cannot be. It is illogical.

On the other hand, the free market system not only works, it is the only honest and morally upright system for dealing with the exchange of goods and services between strangers.

Crony Capitalism, otherwise known as Fascism, is socialism on a limited scale, namely, where the special friends, exortion victims, or bribery partners of government officers are granted legal privileges or public monies denied their competitors, or those competitors are singled out for special regulatory burdens.

Unlike the difference between theoretical and actual socialism, Crony Capitalism or Fascism is a corruption of free market mechanisms, a deliberate attempt to jam and misdirect those mechanisms for the benefit of a private party.

So if and when an apologist for the free market calls a particular corrupt practice by an industry that has bought a politician or been subject to political extortion “Crony Capitalism” he is doing the exact and precise opposite of what a socialist apologist does when he calls any and all examples of socialism in action illegitimate.

“Crony Capitalism” only exists when a free market system has been partly taken over by socialist ideas and when certain industries or economic activities are subject to daily and minute regulation.

One clue of the difference between socialist apologists and capitalist apologists is that there is not a single example anywhere in the world, nor ever will there be, of socialism producing the expected results of socialism put in practice.

(The best one can find is socialism where the remaining parts of the economy still operating by free market principles have not yet been sufficiently hindered by socialist corruption or inefficiency, and the socialist takes credit for result produced in spite of, not because of, his efforts.)

Likewise, there is not a single example, nor can their be, of price inefficiencies arising from the unhindered operation of the pricing mechanism.

This is a tautology: by definition, the natural market price is the price toward which the opposite pressures of supply and demand push the price of goods by offering maximum monetary reward, when those pressures are allowed to operate in the absense of government hinderance.

Crony Capitalists are like cops who take bribes from the mob to leave their crack houses and cathouses alone, that is, a type of abuse or corruption that can only take place when the majority is not corrupt. Likewise, Crony Capitalism can only exist as a parasite on an otherwise healthy economy, whose healthy it will inevitably corrupt until and unless the sickness is purged or reformed out of existence, and honest business practices return.

So, if I understand you, your claim is that apologists for capitalism calling capitalism operating as it is meant “not crony capitalism” is a “one true Scotsman” fallacy akin to when socialists claiming all socialist theory when put in practice is not true communism.

If so, this is a false claim, and, indeed, the exact opposite of the truth.

There is no such thing as an socialism that produces wealth. No one and nothing, not even in a theoretical utopia run by archangels, can laws reward waste and punish wealth creation, with the end result less waste and greater wealth creation.

And, again, there is no such thing as a Crony Capitalism or fascism without a previously healthy body of wealth accumulated by honest labor.

Dismissing all capitalism, that is, all investment, as innately dishonest — which I hope is not what you meant to imply — is a logical absurdity and a moral outrage. It is basically saying all honest labor is dishonest, all property is theft.