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These protestors in the Occupy movement demand an equal distribution of wealth and income in America. Without really knowing why, they hate Wall Street, big banks, and corporations, and are determined to eat the rich in a socialist revolution. When a generation comes of age that believes that it can vote or coerce its way to prosperity by seizing the wealth and property of others who are believed to be privileged, it has often marked the beginning of the end of democratic republics. The march down the road to despotism begins.
A thousand years from now, historians, if there are any, will probably conclude that the greatest, and by far most destructive, failure of the last hundred years has been socialism. As an economic and political system it has created more poverty, crushed more human enterprise, suppressed more personal liberties, and been responsible for the cold-blooded killing of more people than any other creed since the invention of the wheel. It is also the most seductive of ideologies, attracting not just the working and lower classes, but also the university educated, the young, entertainment figures, media icons, and often the best and brightest in societies all across the world. Despite its dismal record of failure, socialism has retained that appeal and is indeed making a comeback in, of all places, the last bastion of free enterprise and individualism, the United States of America.
The socialist progressive believes that income inequality and the concentration of wealth in too few hands have destroyed the American middle class and is quite simply unfair, leaving it up to a wise government to make things equitable and fair for all. The demands of the new socialists are not modest ones. They want every fast food worker, widget turner, and manual laborer to be able to have a postwar middle class lifestyle, complete with home ownership and a two-car garage with two cars inside. They want the government to provide all persons residing in the United States — and anyone who can get here by any means — with free, first-class medical care, including hip replacements, organ transplants, prenatal care, birth control, cancer treatments, thousand-dollar hepatitis-C and AIDS drugs, and all without rationing health care. They also want the government, by taxing the 1-percent highest income earners, to provide a free university education to anyone who asks for it. On top of all this, they want to combine open borders with an expanded and very generous social welfare system. Of course, the corporations and banks are to be penalized for making too much money and environmental despoliation. It is a formula for economic suicide and the real end of the American dream, and, if this agenda is somehow instituted, it will be done for what its proponents earnestly believe are the best of intentions.
These best of intentions have been the story of socialism since Karl Marx was writing his manifesto in the library of the British Museum. In the late 19th and early 20th centuries, socialists believed that the new socialist man would not need government, that it would disappear along with war since the socialist workers of the world would never fight each other, only their class enemies. Socialist political parties formed in France, Germany, Britain, Russia, and the United States, gaining millions of adherents in those countries during that period of industrial unrest. However, when war came in 1914, it was nationalism that trumped class differences and French, German, British, Russian, and later Italian and American working class conscript soldiers enthusiastically killed each other on an industrial scale. On the home front, socialist peace movements, strikes, and propaganda were suppressed by all the wartime governments, fearful of revolution at home and loss of moral at the front. The U.S. socialist leader Eugene Debs, a three-time Socialist Party candidate for president who won 6 percent of the popular vote in 1912, was imprisoned for sedition and not released until 1921. In France, socialist newspapers, subsidized by Germany, were suppressed and the editors jailed, while in Germany and Russia socialist-inspired labor strikes were put down with armed force and the ringleaders ruthlessly punished.
Ultimately, it was an embittered 43-year-old, professional revolutionary Russian exile living in Switzerland who would make socialism in its most radical form, communism, the state doctrine of a major world power. The Russian exile was Vladimir Ilyich Lenin, and the major world power was Russia. Lenin created the prototype of a society of equals in which, as George Orwell decades later described it, some were more equal than others. Government did not disappear as the early socialist theorists predicted, but became the arbiter of all human activity. In a collectivist society, the individual would count for nothing and had value only in his ability to serve the state. The prosperous members of the old society were declared obsolete enemies of the Revolution, arrested by the Felix Dzerzhinsky’s Cheka, the state secret police, and liquidated without mercy in the first of countless mass murders by socialist regimes from Moscow and Beijing to Havana and Hanoi. Lenin wasted no time in establishing the gulag labor camp system for those refusing to conform, which would be the lasting monument to Soviet achievement for the next 80 years to be replicated in similar fashion by all other totalitarian socialist tyrants to come from Hitler to the Castro brothers and Kim Jong-un. In a collectivist society and even among the new progressive socialists of our time, the one thing that can never be tolerated is a dissenting opinion, which they so vividly demonstrated outside the cancelled rally of a controversial Republican candidate in Chicago.
During the 1920s and 1930s, the excesses and failures of free-market capitalism seemed to prove that socialism either of the Soviet variety or a nationalist one would be the wave of the future for mankind. New York crusading newspaperman Lincoln Steffens visited the Soviet Union in 1919 and famously said, “I have seen the future, and it works.” Steffens later changed his mind about communism, but a succession of visitors to the Soviet Union and other Communist states would come away with the same starry-eyed enchantment after seeing this utopian future. For these converts to the dream, most of them, like American socialist journalist John Reed, author of Ten Days That Shook the World, free-market capitalism was nothing more than greed and materialist excess, while socialism seemed to offer a world of selflessness and collective cooperation in a utopian future, whether that future utopia was in the Soviet Union, China, Cuba, Nicaragua, Zimbabwe, or Venezuela.
Unfortunately, all too many of these useful idiots have been Americans, among them prominent journalists, actors, musicians, civil rights figures, and politicians. The politicians included a Brooklyn-born Vermont mayor named Bernie Sanders traveling to a sister city in Sandinista Nicaragua and honeymooning in the Soviet Union in 1988. For Sanders the future witnessed by Lincoln Steffens almost a century ago still works, and he has convinced millions of American self-described progressives, most of them woefully ill informed and politically naïve, that a form of that future will work here. Sanders certainly intends to make it happen if he is elected president, not an impossibility in this era when the far right and far left dominate both major parties. He has emerged as the most influential American socialist politician since Eugene Debs at a time when free-market capitalism and traditional American liberties have never been held in lower regard by so much of the U.S. population. Socialism is indeed resurgent, and its tide will not recede without the vigorous and well-informed opposition of citizens who value personal liberty and do not feel entitled to share in the earned or inherited wealth of others.
That is indeed the essence of socialism, the feeling that you are entitled to share in the wealth of the people who produced it. The very idea of creating and accumulating personal wealth is an act of theft against the public. How often have you heard that the wealth of this nation is like a pie that is divided among the entire population with each person getting an unequal piece of that pie? This is called a zero sum view of economics, and it is widely held in almost every American university, public service union, media outlet, and bureaucratic agency. Its message is reinforced with a ubiquitous stream of progressive propaganda from movies, television, education, and the popular culture that over time influences the thinking of almost all Americans. Who does not believe that big banks are responsible for the financial crisis, that corporations are not paying their fair share of taxes, that the rich are undertaxed and need to pay more, and the middle class is shrinking because of corporate greed in moving their jobs outside the country? Well, me for one, but I am in a very tiny minority, and it is shrinking with each election cycle.
In reality our big banks are national assets that we should nurture, our great corporations are the economic engine of the nation that should be provided with tax incentives and regulatory relief to keep jobs at home and send exports abroad, and the rich make their own pie and we should be thankful that there are so many who are willing to work so hard to make us all so prosperous that not even the poorest among us is without a microwave, cell phone, color TV, and central heating. For only in a country where some individuals can become fabulously wealthy can the majority of the people share in that prosperity.
No rational person should ever be concerned about the concentration of national wealth in the hands of the top 1 percent, for the very reason that wealth is not a zero sum game in a free-market economy and it is not their wealth being concentrated. It is that simple. You had nothing to do with producing that wealth; therefore, you have no right to any part of it. Once you reject the politics of social envy, life becomes much less complicated and stressful. You no longer need Bernie Sanders or some other progressive power seeker to steal part of another person’s wealth for you. Being a thief and voting for legalized thievery undermine good citizenship and over time produces a culture of dependency that is very hard, if not impossible, to reverse. And, in the end, the free stuff is not worth the price.
Government-mandated equality is always an equality of misery, and that equality is the mortal enemy of liberty for it can only be achieved though coercion. When individuals are free to be unequal, which is as nature intended, they achieve, excel, take risks, and fall flat on their faces, but the fruits of their labor, cerebral or physical, never legally belong to anyone else. When government uses coercion to redistribute the wealth of others, it assumes the role of extortionist, not much different from a Mafia protection racket in the mob-run sections of New York and Chicago in the early part of the last century. Fans of the comic book and cable TV series The Walking Dead will recognize the character of Negan and his Saviors who extort half of all the possessions and half of all that is grown and produced from all the other communities in the post-apocalypse world in which those characters inhabit. Negan’s Saviors are the ultimate expression of a socialist government, using the coercive power of violence to extort from those who only want to be left alone.
Justice Oliver Wendell Holmes was quoted as saying that “taxes are the price I pay for civilization,” and I have no argument with Justice Holmes. It is only the progressive income tax, a socialist objective since the time of Karl Marx, that imposes often considerably higher tax rates on the most successful to achieve some kind of income equality, where I draw the line. The progressive income tax was the socialist camel poking its nose under the tent when the first national income tax since the Civil War was imposed on the nation in 1913 after the ratification of the 16th Amendment. The public was sold on the income tax with the promise that it would soak the rich, which proves that very little has changed as far as human nature is concerned. Only a fair flat rate tax, or a simple two-rate system like the one that came out of the short-lived 1986 Tax Reform Act, can promote the creation of wealth, which is the only thing I know that builds and sustains a middle class.
Senator Sanders calls for the top marginal tax rate to be at least 70 percent for incomes that he considers excessive and for the federal minimum so-called living wage to be raised more than 100 percent to $15.00 an hour for all workers. I will tell you what the consequences will be if such insane policies are ever adopted. Sheltering income would become the national pastime with offshore accounts, gold and real estate investments proliferating, and federal revenues going down. The stock market would plunge as it did in the 1970s with long-term damage to retirement accounts and the nest eggs of retirees. Corporations would rush to move corporate headquarters and manufacturing operations overseas. The traditional summer job for teenagers would disappear, and entry-level employment would be hard to find as automation replaced the hiring of unskilled workers. There would be noticeably fewer cashiers, bank clerks, and fast food workers to take your order at the local burger franchise. An underground, cash-for-goods-and-services economy would flourish outside the taxed mainstream economy. The private sector middle class would shrink to pre–World War II levels, and the only middle class that survives would be the unionized government workers, who would become an ever-larger part of the labor force.
Winston Churchill famously was reported to have said that anyone under the age of 25 who is not a socialist has no heart and that anyone who is still a socialist at 40 has no head. There is certainly truth to this as the young are in the vanguard of all revolutionary movements and are voting for leftist candidates in much greater percentages than in the past. They form the angry mobs of outrage who intimidate conservative speakers and stop their free speech on university campuses; riot on the street of Ferguson, Missouri, to protest the police shooting of a strong-arm robber and hooligan; and adopt coercive utopians like the cold-blooded executioner “Che” Guevara as their heroes. If a socialist does win the nomination of the Democratic Party, it will be young voters who make it happen, and, if a progressive Democrat with a socialist agenda wins the White House in 2016, it will be largely thanks to young voters across racial, ethnic, and gender lines and those older generation voters who remain forever child-like in their world view. When the brave new world of progressive America fails, as is inevitable, they will somehow never find a reason to blame the failure on socialist policies. All of which again shows why youth is wasted on the young.
Income inequality and the concentration of wealth are universal and historical realities that no government conceived by man will ever change. In free-market economies the wealthy generate additional wealth, which benefits everyone, and entrepreneurs and small business owners become successful and use their gains to create still more wealth. Individuals who succeed in free societies think like successful people, and individuals at the bottom tend to live in a culture of dependency and have a mindset of failure. Governments can’t change that; individuals can only change themselves. In a socialist economy, the same kind of concentration of wealth and income equality exists, but it is dishonest and venal. Government thugs, bureaucrats, union officials, and holders of public office are the beneficiaries of a spoils system that leaves the vast majority of the citizenry lining up for essential goods and rationed health care and living regulated lives of drudgery.
A glorious example of socialism in action is on what President Kennedy accurately called “the imprisoned island of Cuba.” In the crumbling and almost destitute Cuban worker’s republic, the elite of the Communist system, who in reality own everything, are more selfish and less generous than any 1 percent of producers, entrepreneurs, speculators, and idle rich capitalists who ever existed. That is why Fortune magazine has year after year named the Castro brothers as among the wealthiest people on the planet with numerous luxurious homes, estates, and extensive properties, all quite fictitiously and with a straight face owned by the Cuban people. These octogenarian tyrants along with the Communist Party and the Cuban armed forces possess and exploit virtually all the wealth on that once rich and prosperous island nation, making the former dictator Batista look like a petty thief in comparison.
More than 10 percent of the Cuban population has fled the island, most of them to Florida, since Fidel Castro rode in a jeep into Havana in January 1959. The most productive, ambitious, and talented Cuban citizens and those guilty of income inequality found permanent exile in the United States. Among their children are two candidates for the presidency in 2016. When socialists come to power anywhere in the world there has always been someplace to escape. More often than not, that place has been America. The great tragedy would be the success of a radical politician with a socialist agenda in winning the White House by promising free stuff to government-dependent and ill-informed voting blocs. For if free-market capitalism disappears here, there is no place in the world left to run. This is where individuals who treasure personal liberty will make their last stand.
When I look into the angry progressive face of a Senator Bernie Sanders, the little voice inside me cries out for me to buy gold, always the best insurance against economic madness by governments intent on waging war against the marketplace. The huge crowds that gather to hear Sanders and cheer his mantra of social envy and rage against income inequality scare the dickens out of me. I will be the first to admit that he is authentic, honest, self-effacing, and without guile, a genuine true believer of the utopian dream that is socialism. Authenticity is not, however, always a desirable characteristic in a politician. If I am to be robbed, my personal preference is to be robbed by an amoral thief who risks prison rather than by an authentic collectivist overflowing with compassion for the alleged victims of the banks and corporations and legally robbing the taxpayers with impunity.
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The last line of defense against a government at war with the marketplace is gold. Gold is a terrible investment in fast-growing economies with sound fiscal policies and strong currencies, but it is essential as insurance against progressives and socialists making promises to provide free or virtually free college tuition, free health care, expanded entitlements, and a guaranteed level of income along with open-door borders to welcome all newcomers. The result is a national debt that will continue to rise far beyond 100 percent of the annual GDP and eventual default. The problem with socialism, as Lady Margaret Thatcher famously said, is that you eventually run out of other people’s money.
Maybe the socialist resurgence in America will fail, but I fear it is only a rising storm. Nothing left but to buy more gold shares, vote for business-and-investor-friendly nationalist candidates, and hunker down as Western civilization continues its long grim slide toward barbarism.
Praising income inequality for it is an inevitable byproduct of liberty.
Ray Lyman worked for Paladin Press for more than 20 years, during which he authored Paladin’s popular line of military history calendars. Another function he so ably filled was chief historian and fact checker. In the days before Google, Ray was our go-to guy on any historical, political, military, or current events question. Through this column, Ray is simply resuming that role for Paladin.